Advancing Critical Transmission Expansion in the Toronto Area

This proposal was the subject of public consultation via the ERO, alongside early rights-based consultation and engagement with potentially impacted Indigenous communities.

The ministry received feedback from public stakeholders and Indigenous communities on the proposed approach to advancing the Toronto Third Line project. While many submissions expressed support for initiating a competitive procurement process, certain First Nation communities and organizations raised a range of considerations related to potential impacts on Aboriginal and Treaty rights, the timing and scope of environmental studies, and the design of consultation and economic participation approaches.

One submission proposed an alternative selection process to directly assign the project to a specific experienced Ontario transmitter, citing the scale, complexity and urgent need for the new line. Multiple alternative selection processes (including direct assignment) were assessed by the Ministry following the recommendation of the Third Line project in the Toronto Integrated Regional Resource Plan. Based on analysis provided by the IESO as well as feedback received from other public stakeholders during the ERO submission, including strong interest from experienced transmitters, the ministry has determined that a competitive procurement offers an important opportunity to secure value for Ontario ratepayers by inviting transmitters to compete with one another on price. A competitive procurement can also minimize the risk of delays in project development by soliciting bids exclusively from a pool of transmitters with the technical expertise and experience necessary to build this unique and complex project.

A few submissions expressed concern with the procurement timelines for the Toronto Third Line project, noting that there could be impacts (e.g., inflationary impacts) if the project is delayed. To address these concerns, the ministry is directing the IESO to endeavour to complete the competitive procurement process in an expedient manner and ensure the contract with the transmitter incents project delivery on a timeline that is aligned with meeting Ontario’s growing electricity system needs.

Several submissions expressed concern with an evaluation framework / selection process weighted heavily on the project costs contained in applicants’ bids. These submissions raised the importance of non-cost related factors, such as technical experience, the use of Ontario supply chains and experience working with Indigenous communities. Through the Directive, the ministry is directing the IESO to evaluate bids based on multiple criteria that are linked to provincial priorities, including affordability (i.e. bid price) as well as experience establishing partnerships with multiple Indigenous communities, any commitments to offering certain levels of economic opportunities in the project to Indigenous communities; and any commitments to sourcing certain percentages of total project costs from Canadian materials and Canadian labour suppliers.

Several submissions also expressed concern with embedding early bid prices into an IESO contract. Their primary concern was the high level of cost uncertainty associated with HVDC-related equipment at the bid stage, meaning that early estimates obtained from vendors may not closely reflect actual prices. Given the importance of maximizing the competitive benefits of a RFP process to secure value for ratepayers, the Ministry is also directing the IESO to develop and incorporate cost containment mechanisms in the contract with the transmitter, emphasizing that this must be in a manner that is commercially reasonable. This direction to ensure the framework is commercially reasonable recognizes that proponents will be required to submit some cost categories for the procurement that will contain inherent uncertainties.

The ministry received supportive feedback for establishing qualification requirements that would limit eligibility to proponents with relevant experience in designing, developing and mitigating the environmental impacts of similar underwater transmission lines. Some submissions emphasized the need for a balance between requiring proponents to demonstrate significant technical experience without unduly restricting competition. Based on this feedback and the considerable technical complexity of the Toronto Third Line project, the ministry is directing the IESO to require proponents to demonstrate experience building, developing and operating both underwater transmission projects and HVDC projects. Through its continued development of the RFP documents, the IESO will establish the exact qualification requirements that proponents must meet to be eligible to participate in the procurement.

The ministry also received supportive feedback for requiring proponents to demonstrate previous experience engaging, consulting and / or establishing economic partnerships with Indigenous communities. Several submissions recommended requiring specific experience working with Indigenous communities in Canada or in Ontario. Several First Nation communities recommended requiring proponents to commit to offering at least 50% Indigenous equity participation in the Toronto Third Line project, as well as opportunities for other forms of economic participation through supply chain, training and employment opportunities. Several submissions also emphasized the importance of early and meaningful engagement by transmitters with Indigenous communities, as well as capacity funding to enable engagement and participation in the project. Other submissions recommended that the IESO consider proponents’ plans for Indigenous economic participation as part of the bid evaluation process, including equity and non-equity benefits.

Through early consultation, some First Nation communities shared their view that economic participation is closely tied to rights and communicated long-term partnership expectations for a project of this scale. Communities underscored the importance of early involvement in project development and governance, as well as aligning project structures with Nation-to-Nation relationships and treaty-based contexts.

Some communities also raised broader considerations regarding procurement approaches and their views around benefits flowing to rights-holding Nations.

First Nation communities also noted that, while procedural aspects of consultation may be carried out by a project proponent, the Crown retains responsibility for ensuring that consultation obligations are fulfilled. The ministry is directing the IESO to require proponents to demonstrate a record of experience working with Indigenous communities in Canada throughout the development of an infrastructure project within Treaty or traditional territories, including project-related engagement and rights-based consultation. The contract will also require the transmitter to carry out, to Ontario's satisfaction, Indigenous consultation requirements, if any, specified by the ministry.

Additionally, the IESO must require proponents to submit an Indigenous Engagement and Participation Plan, which includes: a plan for Indigenous engagement prior to and following key project decisions (including related capacity funding support); any proposed minimum economic commitments for Indigenous communities including any equity participation and non-equity commitments, such as opportunities to participate in the Project’s supply chain, as well as training and employment opportunities; and, a plan to support Indigenous communities in accessing and navigating equity and non-equity economic participation opportunities. Further, the ministry is directing the IESO to consider, as part of the evaluation criteria, proponents that can demonstrate a record of establishing economic benefit arrangements with multiple Indigenous communities and proponents that commit to offering certain levels of economic participation opportunities in the project to Indigenous communities.

The Ministry also received supportive feedback for evaluation criteria that considers proponents’ commitments to maximize Ontario and Canadian businesses’ participation in the project. Based on this feedback and in alignment with the principles of the Buy Ontario Act, 2025 and related directives and policies, the Ministry is directing the IESO to prioritize/recognize proponents that commit to the use of Canadian goods and services in their supply chains, which could include efforts to support the manufacturing of certain products in Ontario.

Several submissions raised concerns about the potential for environmental and land use impacts. Some of these submissions recommended that applicants provide a plan to avoid impacts or recommended coordination and early engagement by the IESO and the transmitter on the design of the project.

Through early consultation, some Indigenous communities raised concerns regarding the potential for environmental and cultural impacts associated with the proposed underwater transmission line. These concerns included potential impacts to submerged cultural heritage and archaeological resources within Lake Ontario, as well as effects on fish, fish habitat, benthic species, and broader aquatic ecosystems. Communities emphasized the need for marine archaeological and environmental studies to be undertaken early in the project lifecycle, as well as access to related technical information and findings. Some communities expressed a desire to see these studies undertaken prior to the issuance of a directive.  Concerns were also raised regarding the cumulative effects of existing and planned development on Lake Ontario.

In Ontario, the routing for transmission lines, including measures to mitigate any potential environmental and land use impacts, is determined through the Environmental Assessment and permitting processes. As part of this process, it will be the responsibility of the selected transmitter to consult with Indigenous communities, engage with impacted landowners and to coordinate with relevant jurisdictions and organizations (e.g., municipalities, conservation authorities, federally regulated lands, etc.) in the development of the final route.

Based on some of the concerns identified, the Ministry is also directing the IESO to require the proponent to prepare an environmental effects monitoring program for the project and to comply with all environmental laws and regulations, including the Environmental Assessment Act.