Confusion reigns in Ontario farm community following leaked report

Wednesday, May 18, 2016

by SUSAN MANN

The Ontario Federation of Agriculture is looking for answers on where rural natural gas infrastructure expansion stands now, in the wake of reports on a leaked provincial government document outlining plans to phase out the fuel’s use for home heating.  

The proposition was spelled out in a document on the government’s proposed Climate Change Action Plan leaked to The Globe and Mail, which published a story on it earlier this week. The government hasn’t officially released the climate change action plan, but said in a May 18 press release it will be made public in the spring.

The plan will “describe actions that will help more Ontario households and businesses to adopt low and no carbon energy in homes, vehicles and workplaces,” the Ministry of Environment and Climate Change release says. The release was issued to announce the government passed legislation Wednesday enabling Ontario to join the North American carbon market.

Federation general manager Neil Currie says they’re waiting to see what’s in the final climate change action plan document. However, things are “pretty confused right now.”

The government seems to be going in a lot of different directions, which are conflicting. On the one hand, it talks about prohibiting new buildings constructed after 2030 from being heated with natural gas, and yet it “was also sending signals the rural natural gas expansion program still underway. They’d be looking at agriculture to contribute natural gas to the system.”

However, “those things are not compatible,” Currie notes. “You can’t run a natural gas system in rural Ontario while you’re getting off natural gas in urban Ontario.”

Currie says they have a lot of questions about the government’s plans. “We think there’s the need for a real intense cost/benefit analysis” of the climate change action plan.

There are also many unknown factors, such as would geothermal heating work in rural Ontario and would it have an impact on the “aquifers they’re punching through? What’s the cost?”

Currie says, “Fundamentally we have to ensure that our competitive position isn’t jeopardized.”

As it stands now, the rural natural gas expansion program is still going ahead, Currie says. “There’s an incentive plan there. It was announced a of couple budgets ago and it hasn’t been implemented yet.”

Furthermore, Ontario Energy Board hearings on rural natural gas expansion are ongoing.

“We’re continuing to push for” the rural natural gas expansion program, Currie says. “It’s still the most competitive form of energy we’ve got for the foreseeable future.”

Progressive Conservative agriculture critic Toby Barrett says in a May 16 press release 76 per cent of Ontario homes and businesses use natural gas for heating. Switching the average home to electricity will increase heating bills by $3,000 per year.

As for the increased use of electrical vehicles called for in the plan, Currie says Europe has been experimenting with electrical farm implements. There has also been some research looking into natural gas to replace diesel, “which would be an improvement, as well.”

Garth Whyte, president and CEO of the Canadian Fertilizer Institute, says the government’s proposals in the leaked climate change plan “caught everyone off guard.”

Brenda Dyack, principal research associate with Guelph-based Agri-Food Economic Systems, an agricultural research company, says the plan may have been leaked so the government could see how people would react.

Her areas of expertise include greenhouse gas mitigation, water conservation in agriculture, agricultural research planning, assessment and innovation policy.

“It isn’t always a surprise that this stuff gets leaked,” she notes, adding it’s still important to react. “The squeaky wheel is the one that gets the grease.”

Plamen Petkov, vice president of the Ontario branch for the Canadian Federation of Independent Business president, calls the government’s proposal to phase out natural gas in favour of electric or geothermal heating unrealistic.

“How is this even possible? How is that going to happen? Those are the bigger questions here,” he notes. The federation represents small businesses and has 109,000 members across Canada, including 7,200 agri-businesses. Most of its agri-business members are primary producers.

The targets outlined in the government’s leaked document and  “the time that they have allocated for achieving them, I’m not sure this is even realistic to begin with,” Petkov says.

Members have been calling the independent business federation’s offices looking for more information. Petkov says as of Wednesday it was three days since the information was leaked “and the government hasn’t really confirmed or denied any of it. That creates confusion.”

However, there’s no doubt the climate change action plan will impact the farming industry, Petkov says. “At this stage, it is difficult to quantify it simply because the information is not something that the government has officially provided.”

The plan to increase the cost of fuel and phase out natural gas use “will increase the cost of doing farming,” he adds. “It’s fair to say our members in the agri-business sector are quite concerned about this.”

Since the government hasn’t publicly released the information, Petkov says they don’t know if it’s entirely or partly true or if officials will be making changes “as they go.” The government now needs to specify how they plan to meet any targets that are being set “and how much this is going to cost.”

Petkov notes the government’s climate change plan will add costs for farmers, “no matter how you try to spin this. It will cost more to do farming in the province if the government is going to go ahead with this plan.”

Dyack agrees with Petkov that there will be big potential impacts on agriculture, and on all industries. However, the government is also talking about using the $1.9 billion annual revenue from the cap and trade system to help sectors transition to the low-carbon economy.

Transition funding will be needed because while Ontario is moving to a low-carbon economy, “our competitors are not all” going in that direction, she says. “We end up having to compete here with low-cost imports that don’t have that extra cost built in there, and we could find it harder to export because we’ve got the extra cost in there.”

Whyte says natural gas is an essential element to make nitrogen fertilizer. If the government eliminates its use in the province, then “we’d have to reduce nitrogen use. I think it would be a lose-lose.”

Ironically, the fertilizer sector has been working on a program, recognized by the provincial government, to reduce nitrous oxide emissions from farms.

The program “can reduce nitrous oxide emissions from farms by 30 per cent” compared to current levels, he notes. “We have some really positive initiatives that can be done today that we need to get the government to try and focus on, rather than just trying to phase out natural gas.”

Whyte adds that for the fertilizer sector phasing out natural gas use “is not a solution right now.”

Dave Buttenham, CEO of the Ontario Agri Business Association, declined to comment on the specifics in the leaked report. However, he did say he’s concerned after reading newspaper accounts of what’s in the document and will be taking a close look at the climate change plan once the government releases it.

“I can’t really comment on a leaked document,” he says. “It does raise concerns, though, with respect to the content of it.” BF