Mr. Premier: let’s use the right energy in the right place – Subsidies for uneconomical natural gas expansion is not a viable solution for Ontarians
OTTAWA, June 11, 2021 – The Ontario government makes a very important point when they note that “Ontarians deserve access to reliable and affordable heating”. The Canadian Propane Association couldn’t agree more. Providing affordable energy and ensuring Ontarians have energy choice is fundamental and when natural gas makes sense, why not?
However, while the June 9 announcement of Phase 2 of Ontario’s Natural Gas Expansion Program and the $243 million subsidy that goes with it may fulfill an election promise, it does nothing to ensure affordable, low emission, and long-term energy security for rural Ontarians.
“Everyone understands Premier Ford’s commitment in the last election to providing affordable and reliable energy to Ontarians, especially those in rural communities,” said Nathalie St-Pierre, President and CEO of the Canadian Propane Association. “The problem with focusing exclusively on uneconomical natural gas expansion is that taxpayers across Ontario are forced to pay to finance natural gas projects that could not survive on their own while a perfectly comparable energy, propane, is already available at no cost to taxpayers,” indicated St-Pierre.
Propane has just about the same carbon footprint as natural gas but does not require any such large, permanent, and subsidized infrastructure. It is readily available, highly efficient, and, unlike natural gas pipelines, maintains and creates significantly more local employment.
The subsidy to natural gas utilities tips the scales against Ontario’s propane industry which has long provided affordable and cleaner energy to areas of rural Ontario that lay beyond the natural gas pipeline grid.
In a letter to the Premier on June 9, St-Pierre noted, “By funding and promoting the adoption of natural gas, you are inadvertently penalizing the hundreds of propane businesses who have reliably and affordably supplied propane to these communities for decades, without government subsidies or ratepayer contributions. Both taxpayers and consumers of natural gas across the province pay for these ‘uneconomical’ projects through taxes or levies on their gas bills. Propane businesses and their customers receive no such similar treatment. Any upgrades or business improvements are carefully considered and paid for by businesses themselves.”
“Propane provides a realistic and affordable solution to rural Ontarians with a Canadian supply of clean and affordable energy,” said St-Pierre. “Encouraging switching from oil heating to low-emission propane would be a great place to start.”
As St-Pierre indicated in her letter to the Premier, “Ontario communities should have real options for clean and affordable energy, not one that is chosen because costs are hidden or subsidized. Such market interference may result in less choice and fewer accompanying local employment opportunities.”
Let’s use the right energy in the right place, please. And let’s have real choices for Ontarians.
About the Canadian Propane Association
With over 450 members, the Canadian Propane Association (CPA) is the national association for a growing, multi-billion-dollar industry that impacts the livelihood of tens of thousands of Canadians. The CPA develops and produces industry training materials, offers an emergency response assistance plan to its members, and provides advocacy services for the propane industry. The CPA does not monitor or provide an analysis of propane prices or supply and cannot comment on individual businesses’ operations.
For further information, contact: Tammy Hirsch, Sr. Director, Communications, and Marketing by email: email@example.com or phone: 587-349-5876.
The gamechanger here is propane for these communities – not natural gas. The best public policy is one that gives consumers a real choice for clean and affordable energy, not one that is only favoured as a result of subsidies. Let’s have real choices for Ontarians and buy propane from Ontarian retailers.
Ontario government is neglecting these facts:
Fact #1: A clean energy, propane, is already well established in Ontario and in particular, rural and remote Ontario.
Fact #2: Over 100,000 Ontario households or businesses rely on propane as their primary and affordable source of heating. Propane is used in commercial, transportation, industrial and agricultural applications all across the province. Almost half – about 45% – of propane used in Canada occurs right here in Ontario.
Fact #3: Using low-emission propane is affordable and the infrastructure already in place, which means it does not require new and expensive natural gas infrastructure, the costs of which are passed along to taxpayers.
Fact #4: Propane is abundant and available now, with over 125 retailers, 140 large storage facilities, and 817 small storage sites across the province. Propane has the largest network of alternative fuelling stations in the province, with over 100 locations across Ontario and 1,800 in Canada.
Fact #5: The propane industry provides direct employment for over 2,000 families (labour income worth $115 million in Ontario). The propane industry provides over $128 million to the Ontario government in revenues every year.
Fact #6: Propane retailers already make small communities attractive for job creation and for businesses. They are engaged and part of the very fabric of the communities they serve, unlike the natural gas companies which are not located, nor investing locally once a project is completed. And this was particularly true during COVID-19.
Fact #7: Using propane to replace more carbon-intensive heating sources, like heating oil means similar GHG emission reductions as natural gas, but without taxpayers having to subsidize the emission reductions.
Fact #8: Using taxpayers to subsidize the expansion of natural gas while pretending to put money back in the pocket of consumers through lower energy bills is an oxymoron.
Fact #9: We have always argued that competitive utilities should not be allowed to make existing customers responsible for costs associated with non-viable expansions into new areas. The Ontario Energy Board agreed with us. Subsidizing expansions with funds from all customers is not allowed. And nor should using taxpayers’ money for these projects. Yet the government is doing both.
Fact #10: Unlike electricity and natural gas suppliers, propane providers receive no government support.