Proposed Amendments to the Ontario Energy Board Act, 1998 and associated regulations to modernize leave-to-construct approvals for pipeline relocation or reconstruction projects to build transit and housing faster.

In 2022, the government modernized the Leave-to-Construct (LTC) process for electricity transmission projects. Following this modernization, this posting seeks to receive feedback on a proposal by the Ministry of Energy (ENERGY) to amend the Ontario Energy Board Act, 1998 (OEBA) to fast-track certain energy infrastructure projects through the Ontario Energy Board’s (OEB) leave-to-construct (LTC) process. If passed, government may propose regulations that would prescribe when LTC would apply to a pipeline relocation or reconstruction project. Information on the proposed regulatory amendments is also provided in this posting.

Note that the information provided in this posting is for informational and consultation purposes only and may not represent the final decisions of government or may not be represented in the final legislation or regulations.

As the government commits to building new transit projects, particularly light-rail and subways, relocating electricity and natural gas pipelines can take a significant amount of time for regulatory approvals, even in instances when a utility is moving infrastructure to the other side of the street or a parallel street. This can add time delays to a construction project.

Currently, the OEBA allows the OEB to exempt certain relocation or reconstruction of electricity transmission and distribution lines or natural gas pipelines, from the requirements in the OEBA to obtain LTC.  This posting seeks to receive feedback on a proposed approach to amend the OEBA to allow the government, through regulation, to broaden the exemption from LTC requirements for energy projects to support the government-wide efforts to address timelines related to transit project construction and building homes faster.

The OEBA currently provides an exemption from the requirement to obtain LTC for the relocation or reconstruction of a pipeline unless:

1. The diameter of the line is changed; or
2. The acquisition of additional land or authority to use additional land is necessary.

To alleviate regulatory burden and facilitate key government commitments to build transit and housing faster, ENERGY is proposing legislative amendments to the OEBA to provide that LTC for a relocation or reconstruction of a pipeline is only required if certain conditions set out in regulation are met. Proposed conditions for requiring LTC would apply to any reconstructions or relocations where the pipeline is getting larger, as well as any reconstructions or relocations where the pipeline does not facilitate a priority transit project and requires new land. If a proponent believes a project does not meet this criteria, proponents would be required to file an exemption application with the OEB to demonstrate that the relocation or reconstruction of a pipeline is not subject to the prescribed LTC requirements.

If approved, the proposal could cut timelines and costs for pipeline relocation or reconstruction that would help build transit, roads, and new housing faster to support Ontario’s growing economy and population.

The proposal would also include housekeeping amendments to section 92(2) of the OEBA for improved readability of the existing LTC exemption for relocation or reconstruction of electricity lines.

The proposed legislative amendments and potential subsequent regulations in this posting would have no impacts on the environment. All relevant permits and approvals to ensure environmental, technical and safety requirements from Ontario ministries, authorities and municipalities would still need to be met before proceeding with pipeline relocation or reconstruction projects.

Duty to Consult (DTC) Considerations

The current process for pipeline relocation or reconstruction projects, where a proponent requires LTC because the diameter of the pipeline changes or the acquisition of additional land or authority to use additional land is necessary, is the same as the process that applies to any LTC application to the OEB in respect of a pipeline.

This process includes pipeline proponents notifying ENERGY about the project, typically at the early stages of project development and asking ENERGY to determine if the DTC is triggered. ENERGY then advises the proponent if the DTC is triggered and if it is, delegates the procedural aspects of consultation to the proponent and provides to the proponent for the purposes of consultation, a list of Indigenous communities whose rights may be impacted by the project.

ENERGY notifies these communities that the proponent has been delegated the procedural aspects of the DTC in respect of the project and the proponent conducts rights-based consultation with these communities.

At any time in the process, an Indigenous community that is being consulted or the proponent can communicate project-related DTC concerns directly to ENERGY. 

Prior to granting such applications, the OEB, among other things, determines whether the Crown has adequately discharged its DTC, if triggered.

Under the proposal in this posting this DTC process will continue to apply to LTC exemption applications as described above for pipeline relocations or reconstructions which facilitate a priority transit project or a project by a road authority.

Proposed Regulatory Amendments

If the proposed legislative amendments are passed, ENERGY would propose regulations that set out conditions for when LTC would be required for the relocation or reconstruction of a pipeline. These conditions would apply only if:

A. The diameter of the pipeline increases; or

B. The acquisition of additional land or authority to use additional land is necessary, except where:

1. The pipeline relocation or reconstruction is facilitating a priority transit project[1] or a project by a road authority[2] if the diameter of the pipeline is not increasing; and

• The additional land that is necessary, is under control of the transit project or road authority project being facilitated and meets certain criteria set out in the regulations regarding re-purposing (e.g., the land will form part of a public road allowance upon completion of the transit project or road authority project);
• The cost of the relocation or reconstruction is exclusively paid by the priority transit project or road authority project; and
• The OEB is satisfied that the Crown’s DTC, if triggered, has been adequately discharged.

The proposed regulations may also set out certain procedural requirements. For instance, ENERGY is considering the following approach for inclusion in regulation:

• Pipeline proponents facilitating the priority transit and road authority projects noted above will be required to file an exemption application with the OEB seeking an order for an exemption from LTC for their project.
• Once the filing requirements for the application have been satisfied by the proponent, which will include information about project-related Indigenous consultation undertaken, and any concerns or issues raised to-date and how these have been addressed, the OEB will notify the Indigenous communities that have been identified for rights-based consultation about the application.
• These Indigenous communities, having already been notified about the project and offered an opportunity to consult and share project-related issues and concerns regarding their Section 35 Rights, will each have an opportunity to notify the OEB if they have concerns with the exemption application (i.e., outstanding concerns regarding potential adverse project impacts to their established or credibly asserted Section 35 Rights) by filing a statement of concern.
  • Only concerns related to Section 35 Rights shall be considered.
• If no statement of concern is filed on the exemption request, the OEB shall make a determination as to whether the Crown’s DTC, if triggered, has been adequately discharged based on the record before it.  
• If a statement of concern is filed, the OEB shall determine next steps with respect to its determination as to whether the Crown’s DTC, if triggered, has been discharged.
  • If the OEB determines it should hold a hearing on the exemption application, the hearing will be scoped to whether the Crown’s DTC has been adequately discharged, and only Indigenous communities with concerns regarding potential project-related impacts on their Section 35 Rights may apply for intervenor status. 
• Whether or not the OEB holds a hearing to consider the exemption application, the OEB will determine if the criteria in B(i) are met and, if they are, shall grant the exemption.

For greater clarity, as outlined in A. above, in cases where a relocated or reconstructed pipeline stays the same diameter or decreases in diameter, and where the acquisition of land or authority to use land is not necessary, an exemption would automatically apply and no consideration by the OEB would be required.

[1] As defined in the Building Transit Faster Act, 2020, S.O. 2020, c. 12

[2] As defined in the Public Service Works on Highways Act, R.S.O. 1990, c. P. 49