The Globe and Mail published details of a proposed
57-paged comprehensive plan by the Ontario government to address
climate change by significantly reducing the province's carbon
footprint. The plan, entitled Ontario's Climate Change Action
Plan, has apparently been hotly debated in cabinet and is scheduled
to be officially released in June. The government has not denied,
nor confirmed, the details in the leaked document.
Ontario has previously announced the following greenhouse gas
emissions reductions targets: 15 percent below 1990 levels by 2020;
37 percent below 1990 levels by 2030, and 80 percent below 1990
levels by 2050.
The Climate Change Action Plan is reported to include an
aggregate commitment by the government to spend over $7 billion
over the next four years, including:
$3.8 billion to retrofit buildings, including funding to
replace natural gas heating with geothermal, solar power and other
forms of electricity-based heating. A new government
agency—modelled after the Green Bank established by New York
state—is proposed to be created to administer the financing
of solar and geothermal projects.
Currently, 76 percent of Ontario homes rely on natural gas for
heating. In addition to retrofitting existing homes, the plan would
require, through changes to the building codes, that all new homes
built in Ontario in 2030 or later to be heated without the use of
any fossil fuel. This initiative is intended to be expanded to all
Ontario-based buildings prior to 2050.
Not surprisingly, the natural gas suppliers in and to Ontario have
expressed some concern with the proposed phase out of natural gas
for heating; such concerns focusing on the costs to switch fuel
types and the risks associated with reducing heating options. We
note the province has recently been exploring improving natural gas
infrastructure in remote communities, including announcing a $230
million plan to do so in April, 2015. At first blush, these appear
to be inconsistent initiatives and we await the official plan
release in June for some clarification.
The Ontario government's intention to establish a new agency to
facilitate solar and geothermal adoption is a function that may be
able to be handled by the existing Independent Electricity System
Operator—an entity generally regarded as part of the Ministry
of Energy. There have been reported frictions between the Ministry
of Energy and Ministry of the Environment and Climate Change over
control of this role.
$285 million earmarked for programs to incent electric vehicle
(EV) adoption. The government purportedly has set EV adoption
targets of 5 percent of all vehicles sold by 2020, 12 percent by
2025 and at least one EV or hybrid vehicle in every multivehicle
driveway by 2024—a total of 1.7 million vehicles. In order to
meet such targets, the Ontario government will initiate the
a rebate of up to $14,000/EV;
an extra rebate (amount not yet determined) for low and
moderate income households who replace older vehicles with an
free electricity during overnight hours to charge EVs; and
a rebate of up to $1,000 to install home charging.
We note the 2025 12 percent adoption target represents a greater
than 20X increase in the number of EVs sold in Ontario since
$280 million to facilitate the adoption of EV buses by school
boards and the adoption of lower carbon emitting trucks by trucking
$354 million to expand the GO rail network to service more
$176 million in incentives for fuel retailers to sell increased
amounts of biodiesel and 85 percent ethanol blend. In conjunction
with these incentives, the Ontario government in proposing to
regulate that all liquid transportation fuels lower their
life-cycle carbon emissions by 5 percent by 2020.
$1.2 billion to help industrial businesses reduce GHG
The $7 billion in aggregate spending on climate change
initiatives is intended to be generated by the province's
cap-and-trade plan (i.e., by auctioning emission
allowances), which is expected to generate approximately $1.8
billion per year.
We will confirm the details of Ontario's Climate Change
Action Plan upon its official release. If you have any questions
concerning any of the proposed features of the Ontario Climate
Change Action Plan, we would be pleased to discuss them with
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