On behalf of the Ontario…

On behalf of the Ontario Real Estate Association (OREA), we would like to thank you for your public commitment to overturning the short-sighted decision made by the Ontario Energy Board (OEB) related to Enbridge Gas’ rate rebasing application on December 21, 2023.

As you know, OREA represents the province’s nearly 100,000 REALTORS® and supports them in helping people find a great place to call home – something that has become increasingly difficult for many hard-working Ontario families to afford due to a historic lack of supply to meet demand.

Ontario is at a make-or-break point in the housing affordability crisis, and to meet the goal of building 1.5 million new homes by 2031 we must address existing infrastructure gaps. This includes safe, reliable energy sources for both current and new demand. As I outlined in a recent Toronto Sun opinion editorial, the recent decision made by the OEB threatens to derail Ontario’s pro-growth housing plans.

The decision made by the OEB to reduce Enbridge’s capital budget and remove the 40-year amortization period for new natural gas connections—now requiring thousands of dollars to be paid upfront—is in direct opposition to this goal.

Removing Enbridge’s ability to amortize new connection costs effectively ends Ontario’s long-standing approach of financing infrastructure over an extended period of time, and is at odds with a recommendation made by the Housing Affordability Task Force (HATF) to implement a municipal water and wastewater utility model. OREA expanded on this recommendation in our recent Analysis of Ontario’s Efforts to Boost Housing Supply, outlining how this would significantly reduce upfront housing costs by allowing necessary utility expansion to occur with increased financial flexibility. This creates a long-term solution to the challenges municipalities face in funding and building water and sewer infrastructure to support the creation of new homes.

The OEB’s misguided decision will effectively dismantle the very same model currently being used for natural gas, putting new neighbourhoods and desperately needed new homes in jeopardy.

Combined with a $250 million cut to capital this year, Ontario’s ability to grow will be severely limited if the OEB decision stands, jeopardizing provincial and municipal housing targets by putting planned housing, business, and infrastructure projects at risk. Maintaining low-cost, resilient underground energy infrastructure is crucial in delivering reliable and affordable energy for Ontario's families and businesses.

Further, the OEB’s assumption that electrification will be available for all new builds in 40 years does not effectively consider the province’s existing infrastructure gaps, nor does it account for the urgent need to address the housing crisis by building 1.5 million new units. Without adequate funding to extend natural gas lines across Ontario, fewer new connections will be made, and fewer homes will be built. Those that do get built will be more expensive, with homebuyers paying additional hookup costs upfront – adding thousands of dollars to the price tag of a home.

The cost of new connections varies greatly by region, and such one-size-fits-all policies are particularly harmful to Ontario’s smaller and Northern communities, where energy infrastructure is lacking.

As noted in our Small Towns, Big Opportunities report from 2021, if natural gas access was readily available across the province, it would save families, business owners, and farmers billions of dollars in annual energy costs. However, with no alternative financing options available and no plan for energy transition, Ontario’s infrastructure gap will only widen. There is an overwhelming need for cost-effective energy solutions in rural and Northern Ontario; but this work cannot occur without a sustainable financial model. It cannot be overstated that this decision would be another blow for these communities and further interfere with housing expansion across Ontario.

Ontario’s ambitious housing supply goals necessitate new utility connections and infrastructure, including natural gas, to address the rising affordability crisis. OREA is in full support of the Ontario Government overturning the OEB decision by whatever means necessary, including via legislation, to ensure Ontario can build the homes we need to house our population, both today, and in the future.

Yours truly,

Tim Hudak
Chief Executive Officer