Canada: Ontario 2015 Renewable Energy Outlook: Regulatory And Policy Developments

The market for renewable power in Ontario will continue to be busy in 2015, in no small part because of the continuously evolving regulatory landscape. The year was kicked off by the merger of the Ontario Power Authority ("OPA") and the Independent Electricity System Operator ("IESO"). Sold as a move to reduce cost in the sector, the amalgamation may prove to be about more than just trimming bureaucratic headcount. Renewable project opponents are likely to face more disappointment this year, as many battles in 2014 were resolved in favour of project proponents. Solar developers enjoyed brief access to Chinese pricing for panels, but will now have to see how anti-dumping claims brought by domestic panel manufacturers are resolved. Ontario has committed to putting a price on carbon. If implemented, this may help bolster the case for renewables in favour of fossil-fueled generation. Having used the Ontario Power Authority's Feed-in Tariff ("FIT") to nurture a renewable energy industry over the past five years, Ontario is now offering assistance to help that industry succeed in other markets.

This bulletin discusses these emerging developments in more detail. A companion bulletin examines how Ontario's approach to procuring renewable generation is evolving. Together, these bulletins help prepare the sector for another eventful year as project proponents, equity players, lenders and other stakeholders will continue to encounter challenges. Stakeholders who want to have a complete and current understanding of the regulatory forces that shape opportunities in the sector will benefit from this summary of changing political priorities and planning, recent tribunal and court decisions, and the maneuvering of various industry groups and opposition groups.

Stakeholders Must Monitor New IESO to Forecast Policy Direction

The legacy IESO and the OPA amalgamated on January 1, 2015. The amalgamated entity continues under the IESO name and combines the mandates of its two predecessors. It will be responsible for balancing the supply and demand for electricity flow across the province, while also taking on the planning and procurement responsibilities of the late OPA. As discussed below, the amalgamation will have little immediate disruption on the industry, but may herald changes to come in the longer term.

Participants in existing IESO and OPA programs, including FIT and the 2011-2014 saveONenergy program, can rest assured that contracts executed prior to the merger remain binding on the new IESO. All contracts, approvals and other obligations of the two predecessor entities will remain in effect with the new IESO, as will directions given to the OPA. Similarly, programs that were in advanced stages of development prior to the amalgamation, in particular the Large Renewable Procurement program and the new Conservation First CDM programs, will continue to be rolled out by the new IESO.

Stakeholders must continue to monitor sentiment at Queen's Park when planning their activities in the sector. The Minister of Energy will continue to appoint the board, as he did for both organizations previously. The Minister can also issue directions to the new IESO, including with respect to renewable procurement and conservation programs. The new IESO will therefore be carrying out its responsibilities in a policy context determined by the Minister.

At the high level, that policy context will be about controlling the rising cost of electricity in the province. In her recent mandate letter to Minister of Energy, Premier Wynne expressed hope that the amalgamation will provide "savings and efficiencies for ratepayers." Bruce Campbell, who ran the predecessor IESO, has been given the helm of the amalgamated entity. He will be under pressure to streamline the IESO and to find ways of controlling the cost of electricity, both by rationalizing the operations of the amalgamated entity and by looking for new approaches to system planning and operations.

Electricity stakeholders, particularly on the generation side of the equation, may take comfort in being able to deal with one entity instead of two. However, they should not assume that the amalgamation is only about reducing staffing numbers. Rather, they must continue to pay close attention to the new IESO, and the government to whom it is accountable, to forecast where the policy and regulatory wind will blow in the coming years.

Vocal Opposition Shouting into the Wind

Proponents, particularly of wind projects, will no doubt be pleased with certain rulings and policy developments in 2014. Wind opponents were generally unsuccessful at the Environmental Review Tribunal ("ERT") and continued to fail to persuade the ERT and the courts that wind projects harm human health. While opponents had succeeded in 2013 in convincing the ERT to revoke one wind project's Renewable Energy Approval on the basis that the project would harm a protected species of turtle, the Divisional Court overturned that decision in 2014. The case was appealed and we await a decision from the Court of Appeal. In Dixon v. Director, Ministry of Environment, opponents also failed to convince the Ontario Superior Court of Justice that amendments made to the Environmental Protection Act to pave the way for FIT were unconstitutional, although the opponents are seeking leave to appeal that decision.

Two studies undermined key arguments made by wind project opponents. Health Canada published a report in October 2014 concluding that wind turbines can be annoying, but that there is insufficient evidence that they harm human health. In December 2014, researchers from the University of Guelph published a study in the Canadian Journal of Agricultural Economics that concluded wind turbine developments have no effect on property values of nearby homes and farms.

Despite these developments in 2014, opposition to wind projects remains organized and vocal in Ontario. We expect that opponents will continue to try to advance their cause in 2015 at the ERT, in the courts, in the legislature and in the public eye. Proponents will therefore have to include genuine community and neighbourhood outreach as part of their development plans and should be prepared to participate in legal proceedings commenced by opponents.

CBSA Investigation Could Impact Cost of Solar Modules

The supply of cheaper Chinese photovoltaic modules and laminates may be disrupted in 2015. After four Ontario photovoltaic module and laminate producers filed a formal complaint, the Canadian Border Services Agency ("CBSA") has commenced an investigation into allegations China subsidized and dumped photovoltaic modules and laminates. If the CBSA concludes that there has been dumping or subsidizing, the Canadian Trade Tribunal will consider whether there has been material injury to the Canadian industry. If so, a decision imposing anti-dumping and countervailing duties could arrive as soon as summer 2015.

The solar industry faces a difficult division on the benefit of cheaper Chinese panels. The price competition has been detrimental to domestic producers already hard-hit by the removal of the FIT domestic content requirements. On the other hand, developers and other downstream users have benefitted from lower capital costs of solar equipment. There is a relatively tight timeline on the CBSA's investigation, meaning their progress will be important to watch for. A preliminary determination regarding dumping and subsidizing is due in early March 2015.

Developers who are pursuing projects that have yet to be built (whether under FIT or the Large Renewable Procurement ("LRP") may need to plan for the potential price impact of additional duties, including building appropriate sensitivity analysis into financial models and carefully negotiating the terms of any supply agreements.

Ontario Suggests Carbon-Pricing on the Way

On January 13, 2015, Glen Murray, Ontario's Minister of the Environment and Climate Change, announced that the province will introduce some form of carbon-pricing scheme this spring. The initiative will be part of a larger climate change plan that may benefit the renewable power sector in Ontario.

Ontario passed enabling legislation for carbon pricing in 2009 but has not implemented anything specific since. By comparison, British Columbia introduced a carbon tax in 2008 of initially $10/tonne of carbon dioxide (now $30/tonne), which is credited with helping the province reduce fuel use by 16 per cent. There are some indications that Ontario will follow BC's lead with a carbon tax, though there may be a preference to pursue a more complicated carbon trading scheme if a 'tax' is not seen as politically palpable.

In either case, fossil fuel consumption will soon become more expensive in Ontario. This may help bolster the business cases for conservation, efficiency and fuel-switching to renewable energy. Whether this tax or trading scheme will be a boost to the province's renewable energy industry will depend on how high the price on carbon is set and how quickly it rises. It will also depend on whether any of the revenue generated by the scheme will be redirected back into the renewable sector (as is the case in Alberta's emissions framework) or if the government will instead opt for "revenue neutral" tax cuts (as is the case in BC).

Ontario Tries to Export its Success

The Ontario market for renewables has been booming in the past years, but that boom cannot continue indefinitely. As a result, the government is pursuing at least two policies to help participants continue their Ontario-grown success in markets outside of the province.

In her mandate letter to the Minister of Energy, Premier Wynne asked the Minister to collaborate in the promotion of Ontario's energy expertise abroad. This could pair up nicely with the provincial government's $250 million three-year innovation funding commitment to support innovative firms in the sector. Though details are limited at this stage, efforts to boost the profile of Ontario's energy expertise – particularly in renewables – could help companies that have been successful locally grow internationally.

Secondly, the government has reiterated its commitment to the development of a provincially-led Canadian Energy Strategy. Energy Ministers from all 13 provinces and territories have been working on the strategy, which is expected in the summer of 2015. Current indications from the Council of the Federation's August 29, 2014 "Communique – Canadian Energy Strategy" suggest that the strategy will include a greater emphasis on increasing and diversifying the supply and distribution of clean and low-carbon energy, a welcome benefit for Ontario companies in renewables looking for growth. The strategy should facilitate more interconnected transmission infrastructure to improve inter-provincial electricity trade. This emphasis on transmission infrastructure is consistent with the government's support for smart grid technology. Better transmission infrastructure will be a boon to the Ontario power system as it will help stabilize Ontario's supply of electricity and improve capacity for cross-border trade.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.