Rural natural gas access touted in throne speech

Wednesday, July 2, 2014

by SUSAN MANN

The Ontario Federation of Agriculture’s proposal for natural gas infrastructure expansion throughout rural Ontario received a boost Thursday when the Ontario government announced in its throne speech it is committing more than $130 billion over the next decade for infrastructure projects.

The spending on provincial infrastructure, such as new hospitals, schools, undergraduate campuses, safer roads, better public transit and all-day, two-way GO regional express rail transportation is a key part of the government’s economic plan “all to support sustainable, economic growth across Ontario,” the government said in the speech read by Ontario Lieutenant Governor David Onley.

Ontario Agriculture and Rural Affairs Minister Jeff Leal confirmed in a telephone interview Thursday the money to fund natural gas infrastructure expansion in rural Ontario will come from the $130 billion fund. The infrastructure expansion “will have a very positive impact in terms of individuals and businesses moving from propane, fuel oil and electricity on to natural gas,” he says, adding there’s an abundant supply of natural gas in North America at good prices. “We want to take advantage of that and enhance economic prospects in rural Ontario.”

Details on how it will work will be in the budget being tabled July 14. Leal says they’ll be working with Enbridge Gas Distribution Inc. in eastern Ontario and Union Gas Limited in western Ontario on the expansion.

There will also be a new 10-year transportation strategy composed of a $29 billion fund dedicated towards “moving Ontario forward,” Onley read. Most of the fund, $15 billion, will be dedicated to transportation projects in the Greater Toronto Area and Hamilton region, while $14 billion is earmarked for projects elsewhere in Ontario “where the guaranteed movement of people and goods is fundamental to growth,” he read.

On the economic front, the government promised to pursue more trade missions “because increased exports are the clearest path to sustainable, continuous economic growth,” Onley read. “This will include trade missions lead by the premier (Kathleen Wynne) to other countries including China this fall.”

The government also committed to reintroducing the $2.5 billion jobs and prosperity fund that was in announced in the May 1 provincial budget that wasn’t pass because the other parties didn’t support it and that triggered the June 12 election. Leal says part of that $2.5 billion fund includes the $40 million annually for the agri-food processing sector. The funding will be used to create jobs, Leal notes. “We’ll be looking at effective partnerships in the agri-food business in Ontario.”

Ontario Federation of Agriculture president Mark Wales says despite the 40 per cent increase in natural gas prices this spring the federation is still keen to see expansion of natural gas infrastructure in rural Ontario. “Natural gas pricing is regulated whereas propane isn’t.” The natural gas price increase of 40 per cent isn’t as steep as the propane price increase of 200 to 400 per cent and “nobody regulates propane. It goes up and it’s drifting back down” but natural gas will always be half the cost of propane, Wales says. The natural gas price is reviewed every quarter by the Ontario Energy Board.

“There’s constantly price increases and price decreases (with natural gas) but always after the fact,” says Wales noting he’s had natural gas for years.  Most of the natural gas price increase this spring was attributed to the cost of transporting the fuel from the Prairies, he notes. Transportation costs are regulated within Ontario but not regulated to Ontario.

For infrastructure expansion, the previous May 1 budget called for a two-year, $100 million a year loan program and a $30 million two-year grant program. But there are a lot of details that weren’t yet spelled out and it isn’t clear how the programs, which are to be managed by municipalities would work, he says. “The budget never actually got debated in the house.”

“The budget is going to be brought back as it was,” Wales notes, adding “the way it’s set up, most of the cost is going to be borne by the consumer who gets the gas.” The federation’s original proposal was that gas customers would pay for most of the costs for expanding the infrastructure but not all of it. “We were always suggesting that a quarter to a third be public infrastructure grant money because there’s a huge public good that will come from getting gas everywhere in rural Ontario.”

Onley said in the throne speech the government plans to bring back the budget on July 14 that was originally tabled at Queen’s Park May 1 provided the debate on the speech is completed “and ask that the assembly move quickly to pass it.”

As for the government’s plan to tie future minimum wage increases to the Consumer Price Index, Wales says that’s one of the pieces of legislation that failed to pass before the election was called and it is being brought back now. “Any increase in minimum wage is problematic, but it’s better to have a predictable increase rather than leave it to the whim of politics.” BF