The Ontario government is not considering changing its law that prevents municipalities from charging Enbridge Gas for building pipelines on public land, despite calls to do so.

“I’m not aware of any contemplation of amending the current policy,” Ontario Energy Minister Stephen Lecce told reporters during a Jan. 7 press conference in Toronto.

Last November, Waterloo Region became the second Ontario municipality, after Guelph, to resist renewing these agreements. Doing so would have meant locking in for another two decades of offering free space to pipelines that carry natural gas, which is largely made up of methane, a potent greenhouse gas that traps heat in the atmosphere.

Through longstanding regulation, the province prohibits municipalities from charging for the right of way used for natural gas pipelines. 

The law requires municipalities to enter into franchise agreements with natural gas providers, allowing them to build pipelines under roadways and surrounding lands without charge. Enbridge Gas has these agreements with more than 340 municipalities, the details of which are negotiated through the Ontario Energy Board, a non-partisan regulator mandated to uphold provincial law.

These are unique arrangements in Canada; in provinces including British Columbia and Alberta, municipalities can charge gas companies that want to build pipelines on their land. 

Along with Waterloo Region and Guelph, both Ottawa and Toronto have argued changes to these agreements would give local councils a much-needed source of revenue, along with the ability to move away from fossil fuels and reduce emissions in their cities. 

“Were the province to amend its regulation and city council decided to apply a land-based charge to Enbridge’s use of the right of way, it could generate between $73 million and $293 million in total annual revenue,” according to City of Toronto staff, based on how such charges are applied elsewhere.

As of December 2025, neither Guelph nor Waterloo had received an official response from the province. 

In his Jan. 7 response to a question from The Narwhal about potential changes to the policy, Lecce deferred to the Ontario Energy Board. The board has announced a full review of these agreements in spring 2026 — the first since 1999. That will play out at the board alongside individual cases about Guelph and Waterloo Region’s agreements with Enbridge Gas. 

“The Ontario Energy Board is an independent adjudicator,” Lecce said. “They make sure that any cost that is borne on the ratepayer is prudent. … I have confidence in the [board].”

A spokesperson for Enbridge Gas previously told The Narwhal the company would not comment on the upcoming hearings, but that the board “reviews and approves every agreement to make sure it’s fair and in the public interest.”

Regardless of the board’s decision, the government would have to amend the Municipal Act to allow municipalities to charge gas utilities for pipeline right of way going forward. Ontario Green Party Leader Mike Schreiner, who is the MPP for Guelph, has twice tabled a private member’s bill proposing this amendment, with the latest iteration awaiting second reading. 

The upcoming Ontario Energy Board hearings between Enbridge Gas and the municipalities come in the wake of the board’s 2023 decision, when it ordered the company to stop passing down the cost of new gas hookups to homeowners on their bills, arguing cleaner and more economical alternatives exist. In early 2024, the Ford government made the unprecedented decision to overrule the regulator’s decision. After that, the government created a new energy policy that keeps natural gas, a fossil fuel, in Ontario’s supply mix until at least 2050. 

When asked if the government would accept the board’s decision on franchise agreements, Lecce said, “We want to seek alignments with the [board].” 

“We respect their independence, and obviously, I’m not going to entertain hypotheticals that may or may not come down the pipe in a year or two or three,” he added. “Our message to the [Ontario Energy Board] … is we want to focus on the economy, keep costs down.”

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Enbridge Gas will face Waterloo Region in a hearing before the Ontario Energy Board to renew an agreement that would allow the company to continue building pipelines on public land without charge for another 20 years.

Such agreements “are in the public interest” and “work for communities, customers and the province as a whole,” an Enbridge Gas spokesperson has told The Narwhal.

The hearing comes after Waterloo Region resisted renewing its contract with Enbridge Gas, known as a model franchise agreement, in November. Doing so would have locked the municipality into offering free land to the company that sells natural gas, which is largely made up of methane, a potent greenhouse gas that traps heat in the atmosphere. These agreements also absolve Enbridge Gas of responsibility for removing outdated pipelines, leaving the costs and labour of doing so with cash-strapped municipalities.

Waterloo Region’s refusal to re-sign follows a similar decision by Guelph in late 2024, which Enbridge Gas will contest in a hearing in 2026.

“We respect the [Ontario Energy Board’s] jurisdiction and will not comment on the details of the Waterloo Region application,” Enbridge Gas spokesperson Chloe Mills told The Narwhal in an emailed response on Dec. 24. 

As a regulated utility, the company is required to participate, Mills added. “This is a long-standing legislated process that ensures transparency and fairness — it’s not about one party taking another to the [board], but about following statutory requirements,” she said.

Ontario law requires municipalities to enter into agreements with natural gas providers, allowing them to build pipelines under roadways and surrounding lands without charge. Enbridge Gas has these agreements with more than 340 municipalities, the details of which are negotiated through the energy board, a non-partisan regulator mandated to uphold provincial law.

The Ontario Energy Board has announced a full review of these agreements in spring 2026, the first since 1999. That will play out alongside the company’s push for Guelph and now Waterloo Region to renew. The request to weigh in on the region’s refusal was laid out by the board in a letter issued to the company on Dec. 19, and confirmed to The Narwhal by a board spokesperson.

“The Ontario Energy Board confirms that Enbridge [Gas] has filed an application for the renewal of a municipal franchise agreement with the Regional Municipality of Waterloo,” Tom Miller, board spokesperson, said. 

A spokesperson for Waterloo Region said it is not able to comment on the hearing as “the matter is ongoing.”   

Elected officials from Waterloo Region and Guelph, along with energy lawyers and experts, have previously told The Narwhal these agreements are misaligned with goals to reduce emissions quickly, as scientists urge a shift away from gas and other fossil fuels to mitigate the worst impacts of global warming.

We’re suing the RCMP to fight for press freedom

In November 2021, photojournalist Amber Bracken was arrested by the RCMP while on assignment for The Narwhal. So we launched a lawsuit to take a stand for press freedom. Now, we’re in the middle of our trial.

City councils in both Ottawa and Toronto have shared similar concerns with the Ontario government. Representatives from the municipalities have said the agreements amount to a subsidy for the fossil fuel company. 

Enbridge Gas says these claims are “simply not true.”

The Narwhal sent the company questions about these agreements four business days before publishing a story Dec. 17, on Waterloo Region’s decision not to renew. After that story was published, the company responded to the questions in an email, in which Mills told The Narwhal the Ontario Energy Board has determined the terms of the agreements “exist to defend the interests of our customers.” 

“In the Region of Waterloo alone, we serve over 105,000 customers — including homes, businesses, schools and hospitals that rely on natural gas every day,” Mills said. “The [agreements] ensure that communities continue to have ready, affordable access to the energy they rely on every day.”

Enbridge Gas says fees for use of roadways ‘would simply be passed on to customers’

In the Dec.17 statement from Enbridge Gas, Mills said the franchise agreements “provide a uniform standard that protects both customers and municipalities with clear, consistent rules for building, maintaining and upgrading gas infrastructure.”

“This keeps projects safe and costs predictable,” she continued. “This standardized approach means everyone plays by the same rules and prevents one-off local deals that could drive up bills for families and businesses.”

But in recent years, many Ontario municipalities have been implementing localized plans to reach net-zero emissions by 2050. Unique initiatives range from green building standards that prioritize electric heating over natural gas connections in some cities and towns to building multi-use roadways that include bike lanes and walking trails in others.

Cities are also looking to install more fibre optic cables to ensure access to fast internet, upgrade stormwater systems to handle flooding and more sewage intake, bury transmission lines to protect them from extreme weather and build transit.

In light of all this, Waterloo Region and Guelph argue it no longer makes sense that Enbridge Gas — a for-profit company — gets to use much-needed underground space for free. Meanwhile, in provinces like British Columbia and Alberta, where pipelines are built in greater numbers, municipalities can charge gas companies that want to build pipelines on their land.

Mills said these provinces have different laws and ownership rules for public utilities. If Ontario changed its laws to allow the same, Mills said, “Additional costs would simply be passed on to customers. Our system helps keep energy affordable and allows for customer choice.” Enbridge Gas can apply to the Ontario Energy Board for approval to increase rates, as it recently did.

Mills also noted gas utilities do pay municipalities in the form of property taxes. And while provincial regulations do not allow municipalities to charge utilities for the use of roadways, they are able to charge gas utilities — as well as electricity and telecoms — for the administrative costs of issuing permits, she added.

She said any municipality that wants to change its agreement “must show the [Ontario Energy Board] there’s a good reason for it that is unique to the municipality and the [board] will decide whether a change is warranted.” 

Mills added that the board “reviews and approves every agreement to make sure it’s fair and in the public interest.” 

Miller, with the Ontario Energy Board, declined to comment on the individual cases, or the broader review of the agreements. He confirmed the review will happen in 2026 and said it would be “informed by recent applications” and “examine the need to update certain provisions” of the model franchise agreements.

The upcoming Ontario Energy Board hearings between Enbridge Gas and the municipalities come in the wake of the board’s 2023 decision, when it ordered the company to stop passing down the cost of new gas hookups to homeowners on their bills. In early 2024, the Ford government made the unprecedented decision to overrule the regulator’s decision. 

“While it is always the prerogative of governments to make policy and seek to pass laws, our approach has not changed,” Miller told The Narwhal in an email. “The independence and transparency of decisions is fundamental to a healthy regulatory model, allowing for impartial, evidence-based decision-making that fosters confidence in the sector by regulated entities, investors and the public that we serve.”

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A pivotal shift in Ontario’s relationship with natural gas seems to be underway, with Waterloo Region becoming the second municipality to resist renewing a contract that allows Enbridge Gas to build pipelines on public land for free.

Guelph took a similar stance a year ago, ultimately deciding not to sign the contract. It would have locked the city in for another two decades of offering free land to the company that sells natural gas, which is largely made up of methane, a potent greenhouse gas that traps heat in the atmosphere.

As scientists urge a shift away from gas and other fossil fuels, agreements like this continue to absolve Enbridge Gas of responsibility for removing outdated pipelines, leaving the costs and labour of doing so with cash-strapped municipalities. 

Since 2000, Waterloo Region, Guelph and around 340 other Ontario municipalities have made such agreements with Enbridge Gas — a unique arrangement in Canada. In provinces like British Columbia and Alberta, where pipelines are built in greater numbers, municipalities can charge gas companies that want to build pipelines on their lands. 

So when councillors at the Waterloo Regional Municipality, which includes the cities of Waterloo, Kitchener and Cambridge, learned their agreement with Enbridge Gas was set to expire in May 2026, they hit pause. In a Nov. 19 meeting, councillors instructed staff to make some big changes to the agreement.

“We have a for-profit enterprise that uses public property and generates a profit from that,” Waterloo Regional Councillor Matt Rodrigues told The Narwhal. “That’s concerning.”

Enbridge Gas did not respond to The Narwhal’s questions by publication time.

Both Waterloo Region and Guelph have argued they are not entirely opposed to Enbridge Gas building pipelines, but that they want to be paid for any use of their lands as the pressure on local coffers increases.

Both municipalities have also argued for the choice to stop subsidizing natural gas infrastructure if needed, to make way for other, cleaner forms of energy that weren’t as abundant or cost-effective when these agreements were last signed. Locking into a new 20-year agreement would limit municipalities’ ability to respond to climate change and reach net-zero emissions by 2050, they say. 

“It just made sense not to sign on the dotted line just because it was slid across the table,” Cam Guthrie, mayor of Guelph, told The Narwhal. “In today’s world, there’s choice. Twenty years ago, there weren’t heat pumps, but now today, there are. So our residents can choose what kind of infrastructure they want their homes and businesses to be connected to.”“We live in a world with technology and changing innovation, which, to me, makes it more valid that we don’t have to lock into such contracts for such a long time.”

But provincial law requires municipalities to sign these agreements. So Enbridge Gas is taking Guelph to the Ontario Energy Board, a non-partisan regulator, to compel the city to sign that dotted line. Meanwhile, city councils in both Ottawa and Toronto have also asked the province to change their agreements, and the board has announced a full review of them in 2026. It will be the first review since 1999, and is intended to “examine the need to update certain provisions” of the agreement, a board spokesperson told The Narwhal. 

As Guelph and Waterloo Region, with a combined population of almost 900,000 people, challenge an energy giant, the next 20 years for municipalities across Ontario hinge on what happens next. 

Here’s everything you need to know about the agreements and the brewing local fight to change them.

So how does Enbridge Gas get free access to build its pipelines, exactly?

The technical term for these contracts are model franchise agreements. Broadly, they serve as agreements between Ontario municipalities and utilities that set the terms under which certain industries can build under public roadways and surrounding lands. These include natural gas, electricity and telecommunications, all three of which are identified as a public good and therefore granted free access to public land. 

At the time these agreements were formed, Enbridge Gas was a Crown corporation, known then as Consumers’ Gas Company. It became a for-profit company in the late 1990s and gained a near-monopoly on natural gas distribution in Ontario. The latest version of the agreement was written in 2000 and, even without Guelph and Waterloo Region, Enbridge Gas still holds this contract with roughly 340 of Ontario’s 444 municipalities, according to its public statements, locking each into a 20-year contract allowing the company to build pipelines on public land without any charge. 

That means Enbridge Gas can build a pipeline along municipal roadways, technically known as a right of way, without paying any rent or land-based fee.

The Narwhal spoke to ten people, including local elected officials, energy lawyers and environmental advocates, all of whom described these agreements as a subsidy for a fossil fuel giant at a time when many cities are looking to reduce their emissions.

When these agreements were made, “gas was considered a transition fuel from coal, and it was still considered a public good,” Kent Elson, an energy lawyer, told The Narwhal. “We’re now at a stage where it’s very clearly inconsistent with a net-zero future. So we’re subsidizing something that’s not a public good anymore.” 

Is your municipality’s model franchise agreement with Enbridge Gas up for renewal? Let us know.+

If you’re not sure, ask your elected officials or contact the municipality. And email us: editor@thenarwhal.ca

These agreements also don’t mandate gas utilities to pay to remove old or abandoned pipelines. (For comparison, telecommunication utilities are required to cover the cost of removing old equipment under federal law.) And if the pipeline needs to be moved to widen a sewer system, for example, municipalities have to pay 35 per cent of the cost — a huge expense. 

Until now, municipalities have “signed these agreements like zombies because we have been led to believe we must,” Leanne Caron, a Guelph city councillor, told The Narwhal. “But it’s a kind of historical hangover from a past era where the utility was actually public, and it made no sense to charge a public utility for the public right of way.” 

Why do Guelph and Waterloo Region want to change their agreements with Enbridge Gas? 

For three reasons. 

First: money. Both municipalities want the ability to negotiate fees for using their land. This could generate much-needed revenue for local emissions-reduction and energy conservation efforts. Both also want Enbridge Gas to be 100 per cent responsible for the costs of removing or replacing pipelines, a real concern as cities move away from gas and the pipelines that deliver it. 

Second: climate change. Both municipalities are concerned these agreements create an unfair playing field for lower-emissions forms of energy, such as heat pumps. “This is about fairness and challenging the status quo,” Caron said. 

These model franchise agreements between Ontario municipalities and Enbridge Gas were written before a climate emergency was declared. They were written before broad recommendations to shift away from fossil fuels to ward off the impacts of global warming, which include an increasing number of severe storms, floods and wildfires — all of which Ontario and Canada have faced in recent years.

Lastly: independence. Both municipalities want more control over their lands, their energy supply and the agreements that manage both.

Since the agreements were first written, Ontario municipalities have faced massive growth, doubling in population since 1971. That has resulted in increased demand for local infrastructure to support more housing. Today, competition for underground space is fierce, as cities look to install more fibre optic cables to ensure access to fast internet, upgrade stormwater systems to handle flooding and more sewage intake, bury transmission lines to protect them from extreme weather and build transit. 

Local governments are arguing it no longer makes sense that Enbridge Gas — a for-profit company — gets to use this much-needed space for free, while almost everyone else has to pay. 

So, what’s stopping Guelph and Waterloo Region from just negotiating new agreements with Enbridge Gas? 

Well, the law. 

Provincial regulation doesn’t allow municipalities to charge fees to build utilities under roadways. Both Guelph and Waterloo Region have asked the Doug Ford government to change the regulation, but neither council has received an official response yet. 

As has been the case since June 2024, no one from the premier’s office or the ministries of Energy or Municipal Affairs responded to questions from The Narwhal. 

Both municipalities could appeal to the Ontario Energy Board, but the independent energy regulator is also mandated to uphold provincial law. 

Not signing is the only option at present. In the event the regulation changes, it means these two municipalities won’t be locked into a 20-year agreement to provide free access to their lands. In the interim, the agreement continues as is on a month-by-month basis. 

Do municipalities outside Ontario allow fossil fuel companies to build on public land for free? 

Not really.

British Columbia, Alberta, Saskatchewan, Manitoba and Nova Scotia allow municipalities to charge utilities to build on their land, which has raised tens of millions for certain cities. 

For example, per Ottawa’s letter to the government, Edmonton has been charging gas utilities access fees since 1915. There, utilities pay 32.9 per cent of delivery charge revenues to the municipalities to use their right of way. If the Edmonton approach were applied in a city a little bigger than Guelph and Waterloo Region combined, the annual compensation would be approximately $66 million, according to calculations from the City of Ottawa.

In Calgary, the city’s website says revenue collected from similar fees “contribute to keeping property taxes low” and also “invested into new facilities and other amenities” that “are carefully designed to benefit Calgarians directly.” 

Are there any other municipalities considering not renewing their agreements with Enbridge Gas?  

Not that we know of, but both Ottawa and Toronto have expressed concerns.

In March 2024, Toronto City Council — whose agreement looks slightly different from others across the province — asked the Ontario government to change the regulation around its agreement to allow it to charge for-profit gas utilities for using public land. City staff noted, “A key difference between the use of the right of way for natural gas and all other uses is that natural gas is a fossil fuel that causes climate change.”

In 2022, Ottawa asked the government for something similar, noting the 20-year contract is misaligned with pledges to lower emissions by 2050. In its letter, the city asks the board to consider allowing municipalities to recoup five per cent of gas revenues from Enbridge Gas. 

Guelph’s Mayor Guthrie said other Ontario mayors are “poking and prodding” on this issue “because these types of contracts are applicable across almost every municipality.”“So we’ll see how it goes, and we’ll see what happens next in both the Ontario Energy Board general review and with the specific review of the city of Guelph and Enbridge.”

Enbridge Gas is taking Guelph to the Ontario Energy Board. Why — and what can the board do? 

Enbridge Gas wants Guelph to sign the franchise agreement as is and has also told Waterloo Region council to do the same. 

In a public presentation, Enbridge Gas representatives told Waterloo council that the board has “regularly denied” municipal proposals to amend the agreement, and that signing one “does not obligate customers to continue using natural gas.”

In a filing with the board, the company has said it “does not support” any of Guelph’s proposed amendments and asks the board to compel the city to follow the law and renew. In the same filing, the company states it would be “inappropriate” for the board to consider Guelph’s suggestions as it “could have cascading implications” on other municipalities. A decision from the board is expected in spring 2026.

Looming above all of these future board reviews and deliberations is the outcome of Enbridge Gas’s last big case at the Ontario Energy Board. In early 2024, the Ford government overruled the regulator’s decision that Enbridge Gas should pay the cost of new gas infrastructure upfront, or put it on developers, rather than continuing to pass it down to homeowners on their bills.

“It is always the prerogative of governments to make policy and seek to pass laws,” Tom Miller, a board spokesperson, told The Narwhal in an email. “Our approach has not changed.”

This next decision could be even more significant. If Guelph and Waterloo Region are successful in changing the terms of their agreements — with numerous other municipalities potentially following suit — it could mean a future where pipelines no longer create a void in government coffers, and instead make space across Ontario’s energy landscape for green technology.

Updated on Dec. 22, 2025, at 3:25 p.m. ET: This story has been updated to correct a line saying Enbridge Gas pays a percentage of its natural gas delivery charge back to the City of Edmonton. In fact, Enbridge Gas does not operate in Alberta. Other natural gas suppliers pay 32.9 per cent of that charge to Edmonton for their use of pipeline right of ways.

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Energy giant Enbridge’s emissions-conscious entity, Sustain, has stopped offering clean energy options to commercial developers, leading several industry sources to question the company’s commitment to helping its customers move away from fossil fuels.

In 2022, the Calgary-based energy company, primarily known in Ontario for the delivery of natural gas through its subsidiary Enbridge Gas, created a separate entity called Enbridge Sustain. It was established to offer “dependable and convenient energy solutions to help homeowners, developers and commercial customers in Ontario reduce their greenhouse gas emissions and energy costs,” according to a company press release at the time. These products included geothermal heating systems, solar panels, hybrid heating and electric vehicle chargers for high-rise condominiums and large commercial construction projects.

Those offerings have been scrubbed from the Sustain website, which now focuses solely on providing heating and cooling solutions to residential homeowners. 

Sean Mason, the founder of the energy-efficient building company SEAN, told The Narwhal that Sustain has said it will honour its existing contracts, including for a project his company is working on in Barrie, Ont., a 73-unit townhome and condo community with geothermal heating and cooling systems. But going forward, SEAN will have to look for other low-emissions suppliers.

It “was a good partnership with sean.ca and I’m sad it’s gone [to be honest],” Mason said in an email. 

Along with Mason, The Narwhal spoke to eight other sources across industries and organizations, including one other that, like Mason, works directly with Sustain. All of them shared their names and connection to the energy industry with The Narwhal but requested public confidentiality, citing fear of professional retribution. The confidential sources told The Narwhal some developers who have contracts with Sustain have not had their queries to the company answered for several weeks. 

They also said that since October 2024, nearly two dozen employees responsible for bringing clean energy solutions to developers have been laid off or reassigned to the parent company. The changes have significantly reduced the Sustain team from approximately 40 employees to under 20, sources said. Some of those let go had been with the parent company for decades or were seasoned experts in clean energy solutions, according to sources as well as public profiles. 

In an emailed statement, Kendra Black, spokesperson for Enbridge Gas, confirmed that Sustain will honour existing contracts but did not confirm any layoffs. She called the changes “a recalibration to ensure our efforts are directed where they can have the greatest impact.” 

“Enbridge Sustain remains a platform in Enbridge’s decarbonization efforts and Ontario’s energy future,” Black wrote. “We have made a strategic decision to streamline operations and focus on areas with stronger, more immediate demand. While we are pausing some commercial offerings, this is not an exit from low-carbon initiatives.” 

Black did not answer questions about how many employees Sustain has today, why the restructuring was needed or how this restructuring will change Sustain’s impact on emissions and clean energy adoption. She also didn’t specify where Enbridge, and Sustain, sees “stronger, more immediate demand.” 

The onset of the climate emergency — and the need to move away from fossil fuels — has posed an existential threat to Enbridge. Public urgency around finding lower-emissions solutions has grown, while improved battery technology and the decreasing costs of energy from wind and sun threaten to replace methane-heavy natural gas and other fossil fuels that create greenhouse gas emissions and exacerbate global heating. In recent years, Enbridge has argued in public hearings at the Ontario Energy Board, in letters to politicians and in public advertisements that its business remains vital because it is facilitating the energy transition by offering cleaner sources of energy, including hydrogen fuel.

Enbridge Sustain was an innovative venture into the energy transition, which several sources said had the potential for a huge impact on the way construction is done in Ontario — where buildings account for 24 per cent of the province’s greenhouse gas emissions. In a December 2022 interview, a senior Sustain executive told industry publication Sustainable Biz Canada Enbridge considers itself “an energy company, rather than just a gas utility that delivers one form of energy to customers,” that is “trying to figure out what role … can we play with customers to navigate and figure out energy transition?”

Ontario construction slowdown a likely cause of changes to Enbridge Sustain, sources say

Public information about Sustain is sparse because, unlike its parent company, it was created as an unregulated business that is strictly separate from natural gas operations. That means it doesn’t have to publicly report its financial health. The company has received $200 million in federal financing through the Canada Infrastructure Bank for retrofits across colleges, universities, multi-residential buildings and hospitals. Enbridge Gas is also the main provider of home energy retrofit funding in Ontario, supported by both the provincial and federal governments; both Enbridge Gas and Sustain offer home energy retrofits.

Sustain does not appear in Enbridge’s annual shareholder circular or financial outlook over the last three years. The company did tout Sustain in two corporate sustainability reports, which are published publicly every year. In 2022, it included a short line on a timeline detailing the company’s “emissions leadership.” The one released this May includes what appear to be early signs of change in the commercial offerings by Sustain: while solar, hybrid heating and electric vehicle charging are mentioned, references to geothermal have disappeared. 

Sources told The Narwhal the changes started last October. They say geothermal and hybrid heating were the first to be cut from commercial sales, followed by electric vehicle chargers. Sources suggested several possible reasons for these decisions. Market conditions have changed drastically since Sustain was set up three years ago, with construction across Ontario significantly slowing down, which sources said limited developer interest in clean energy investments. Plus, the federal industrial carbon price further complicated things, simultaneously creating incentives for adopting clean technology while also increasing the cost of construction for large developers in the short-term.

Collectively, sources said that both Enbridge and the construction industry have withstood economic changes before, and they believe a strong commitment would make the commercial arm of Sustain viable, though perhaps on a longer timeline than Enbridge had planned.

“They had opportunity to rule that market given their relationship with developers [but the] market turned against them,” Mason’s email said. 

The decision to wind down Sustain for new builds comes after a battle last year with the Ontario Energy Board, which Enbridge won. Last year, the board ordered Enbridge to stop charging homeowners for new natural gas hookups — its choices were to foot the bill itself or charge developers. At the time, the board noted that natural gas and its infrastructure would likely cost residents more in the long run than clean energy solutions like heat pumps, which Sustain offers. The Ontario government overruled the board in that case, meaning Enbridge is still able to pass down its new infrastructure costs.

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In early October 2023, a senior bureaucrat in the Ontario Energy Ministry emailed an Enbridge official with a “sort of urgent” request. 

Newly released internal documents show that Premier Doug Ford had called the natural gas giant that month to discuss delays in obtaining a natural gas connection for a facility whose name is redacted in the documents. The issue was so important, Ford made the call on a weekend. The following day, per the emails, the premier was set to meet with the president and CEO of Enbridge and the executive vice-president of Enbridge Gas in Etobicoke, Ont., where Ford resides. 

“I really need to know what this is and what the status is and what the next steps are,” the government official said in their email to Enbridge Gas. 

The communication is just the latest example of the close relationship between Ford’s government and Enbridge, at a time when the government is setting out its long-term energy plans. Those plans include expanding natural gas infrastructure and codifying Ontario’s dependency on the fossil fuel, which is largely made up of methane, a greenhouse gas that causes global heating.

It’s part of a 3,532-page document package containing hundreds of government briefings and emails from 2021 to 2023. They reveal provincial officials acted as liaisons between Enbridge and the public, with one bureaucrat in contact with the company on a daily basis. They also show elected officials, including Ford himself, in talks with the company’s top leadership.

The documents were obtained via freedom of information legislation and shared with The Narwhal by an energy expert. Enbridge Gas, the Ministry of Energy and the premier’s office did not respond to The Narwhal’s requests for comment.

“Natural gas is fundamental as an insurance policy to keep the lights on,” Energy Minister Stephen Lecce told reporters when he announced the province’s new long-term energy plan on June 12. Without natural gas, he said, Ontarians will experience “liability issues, blackouts and higher energy costs.”

Time and again, the Ford government has come out in support of projects proposed by Enbridge Gas, the $50-billion, Calgary-based private company with a near-monopoly on gas distribution in Ontario. Most notably, the government overturned a decision by an independent regulator that would have forced Enbridge to stop passing down the costs of new gas hookups to Ontarians — all to protect the company’s bottom line, according to internal documents The Narwhal reported on last year. 

Enbridge and natural gas already run deep in Ontario. The fossil fuel is the primary source of heating for three-quarters of homes in the province. But the onset of the climate emergency — and the need to move away from heat-trapping greenhouse gases such as methane — is absent from the Ford government’s actions or long-term energy plans.

The grid is already dirtier as a result: in 2021, the electricity system was 94 per cent emissions-free, but has now dropped to about 84 per cent. The Ford government has promised a near-emissions free grid by 2050, but is veering in the opposite direction. 

Here’s what you need to know about the Ontario government’s long-term future — and past —  with natural gas. 

Internal documents illustrate close relationship between Ontario officials and Enbridge Gas

Internal documents in the newly released package show Enbridge Gas regularly emailing officials in the Energy Ministry to inform them of project proposals in different communities. This included battery projects and pipeline expansions, as well as any opposition to either. 

These emails show that in 2023, the Energy Ministry told someone wanting a connection that it would put them in touch with a staff member “who talks to Enbridge every day.” This was just one example of the ministry’s involvement in guiding the expansion of natural gas, from offering homeowners suggestions on how to get hookups, to relaying detailed constituent complaints about delays in Enbridge providing natural gas connections. The ministry also relayed residents’ questions about subsidies for switching to heat pumps, a government-funded program Enbridge administers. 

In several instances, senior government officials in the Energy Ministry, including the minister’s chief of staff, asked Enbridge staff to show support for proposed energy laws. “Continued support for this legislation is critical to success, it would be great to see Enbridge at committee as well, and a supportive letter to legislators would also be helpful!” a senior official wrote to company representatives in November 2023. In response, the company created one-page documents detailing why it felt that various laws would increase access to reliable power across the province. 

“As a responsible gas supplier, Enbridge Gas maintains transparent communication with all levels of government in the regions where we operate,” Enbridge Gas spokesperson Leanne McNaughton told The Narwhal in April 2024. “This helps us ensure that our residential, commercial and industrial customers continue to have access to a resilient energy source of their choice.” 

Enbridge staff also took the opportunity in these back-and-forths to offer advice to the government about the future of the province’s grid. In one such note, the company said, “Achieving the goals of a coordinated energy system in Ontario will be difficult, if not impossible, unless Enbridge Gas has an equivalent seat at the system planning table.” 

Ontario’s energy plan keeps natural gas in the mix until 2050 — 10 years longer than experts say is necessary

The long-term provincial energy plan released June 12 is a 152-page document titled “Energy for Generations.” It’s a compilation of promises already made to deal with the energy supply crisis ahead: a lot more nuclear (which will take years to get up and running), a lot more energy efficiency programs (to replace those the Progressive Conservative Party scrapped when it came to power) and a lot more natural gas — one of Ontario’s cheapest and last remaining fossil fuel-based sources of energy. 

One slightly new aspect of this plan is Ontario’s first official natural gas policy, which codifies what this government has been arguing for many years: that the methane-heavy fossil fuel is “vital” and “critical.” 

“There is no alternative,” Energy Minister Lecce said repeatedly as he unveiled the plan, especially in this time of rising demand for power. That demand is spurred by the electrification of transportation and buildings, as well as the push for more power-hungry data centres to facilitate artificial intelligence. The government is also attempting to integrate electricity and heating in its new “coordinated energy planning” approach, and proposes that both be increasingly generated by natural gas.

The province has been weighing its use of natural gas for several years. In a government-commissioned report The Narwhal reported on in December — which was withheld from the public until now — experts urged the province to phase out natural gas and drastically increase nuclear and wind energy to reduce emissions.

The Independent Electricity System Operator, the Crown agency in charge of balancing energy supply and demand, has projected that natural gas could be phased out by 2040 without causing much disruption. 

Ontario’s new long-term energy plan deviates from the operator. The government projects the fossil fuel will be used until at least 2050 and then sparingly, as various nuclear facilities in refurbishment come back online. About this two-decade-plus stretch, the plan says, “This will result in a short-term increase in electricity system emissions.” 

When asked about the discrepancy between experts’ climate caution and his government’s plan, Lecce said, in order to maintain reliability, the government will not phase out natural gas.  

Ontario directs independent energy board to enable ‘continued rational expansion of the natural gas system’

Part of the government’s new natural gas policy is a directive to the Ontario Energy Board that its decisions weigh “allowing gas utilities an opportunity to earn a fair return on investment, and enabling the continued rational expansion of the natural gas system.”

The Ontario Energy Board is the independent regulator for electricity and natural gas in the province, tasked with approving and denying plans set out by energy companies. Its job is to implement policy set by the provincial government and to keep industry accountable, ensuring decisions are financially responsible and in the public interest. 

The province’s new order comes just over a year after the Ford government made the unprecedented move to overturn the energy board ruling that would have forced Enbridge or developers to pay for natural gas hookups in new homes, instead of passing the cost on to homeowners. At the time, the board justified its ruling — which came after a year-long deliberation involving tens of thousands of pages of documents, public hearings and dozens of interviews across the energy industry — as being more economical for ratepayers and in line with transition to renewable energy. The board found that the energy transition will likely make natural gas “a stranded asset,” financially unviable or socially unacceptable as lower emissions energy sources, like electric heat pumps, increase and improve.

The internal emails recently shared with The Narwhal show that in the lead-up to that decision, officials with Enbridge Gas were communicating with bureaucrats about how various board proceedings were delaying the company’s ability to build pipelines and other natural gas infrastructure. 

Company officials shared briefings with the province that said certain environmental advocacy groups had delayed Enbridge’s board approvals. The briefings said over the course of 2023, the company had faced “several outstanding issues” with the board, “including weighing into policy decisions, regulatory approval delays and determining based on their views of climate change if ‘gas is good.’ ” 

In the documents, the company stated delays it attributed to the board had increased project costs and forced it to pause construction. 

“If the government would like to see these [natural gas expansion] projects proceed, they must work with the [Ontario Energy Board] to create the regulatory certainty needed,” company officials wrote repeatedly to officials in the Energy Ministry and to various MPPs. Enbridge representatives also asked the government how the company could earn back investments as they wait for board decisions. 

“These ongoing delays for residential, business and Indigenous communities waiting for access to reliable, affordable natural gas … are unacceptable.”

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On the morning of the 2024 U.S. election — and a day after Canada released new details of its proposed oil and gas emissions cap — Enbridge Gas President Michele Harradence made a rare public address to tell investors and policymakers that Canada has “a tangle of regulatory knots” that need to be loosened. 

Harradence was before the crowd in downtown Toronto to celebrate Enbridge’s transition from a company operating 12 gas streetlamps in downtown Toronto, some 176 years ago, to becoming North America’s largest natural gas utility, serving seven million homes. 

The energy giant has spent the last year fighting battles in Ontario to maintain methane-heavy natural gas as the main source of heating at a time when municipalities are trying to shift from fossil fuels to reduce emissions. One of those battles took place at the Ontario Energy Board, which ruled last December that Enbridge stop passing the cost of connecting new homes to natural gas onto homeowners. That landmark decision was overruled by the Doug Ford government in February after senior officials consulted with Enbridge and weighed the impacts on the company’s bottom line, according to reporting by The Narwhal. 

All of this has led to questions about Enbridge’s influence on energy policy in Ontario. Harradence’s speech at Toronto’s Empire Club, a nonprofit that hosts talks by politicians and industry leaders on current topics, was a warning call to governments to “simplify the regulatory burden on the energy sector” or risk losing energy investments to the United States. 

“Energy investors look at Canada and they see a tangle of regulatory knots, an unwelcoming tax climate and tepid, fragmented incentives that cannot compete with those that are on offer next door,” Harradence told the crowd. “We need to simplify the regulatory burden on the energy sector. The goal should be clear, well-designed regulatory frameworks that offer certainty to investors and regulatory processes that get us to a yes or no in a reasonable time frame.”   

Harradence singled out the federal government’s Bill C-59, a new federal bill that includes provisions designed to restrict misleading advertising about emissions-reduction and sustainability efforts — also known as greenwashing — with possible penalties. Last June, Enbridge became the subject of a Competition Bureau complaint alleging it was falsely marketing natural gas as “clean energy” and “low carbon” to Ontario homeowners along its pipeline expansion route. In one ad, the company says “natural gas is cleaner than other fuels and can help reduce your home’s carbon footprint.” But the methane in natural gas is a strong heat-trapping compound that accounts for a third of Ontario’s emissions. 

Harradence didn’t address the specifics of Enbridge’s fight against such complaints, but said Bill C-59 “introduces extraordinary penalties against businesses for making environmental claims as measured by an inadequate, undefined standard,” she said. “Quite simply it muddies the water and that uncertainty chases away investment.” 

She shared similar sentiments about the federal government’s oil and gas emissions cap, which is expected to be finalized next year as the first legislative attempt to limit the sector’s rising carbon emissions. Harradence said Enbridge is “incredibly responsible … the most responsible in the world.” 

“So the idea of having more rules, more regulatory complexity, I just don’t think it’s necessary,” she said. “We’re already demonstrating how responsible operators we are.” Enbridge, like most Canadian energy firms, discloses the emissions it produces in day-to-day operations, but does not report the emissions created when its products are used. One shareholder group has proposed the company start accounting for these end-user emissions, which it estimates make up about 80 per cent of oil and gas companies’ overall emissions, but Enbridge urged staff to vote against it.

Harradence emphasized that the Ontario government also had work to do to reduce “regulatory complexity.” While she repeatedly touted recent energy announcements by Premier Doug Ford and Energy Minister Stephen Lecce to take an “all-of-the-above” approach to meet skyrocketing energy demand (75 per cent increase in the next 25 years), she also sent a word of caution. 

“The reality is, it’s becoming increasingly challenging to track energy investments to Ontario,” she said. “That’s due at least in part to a regulatory environment that’s clearly out of step with the government’s goals on economic development and housing affordability.” (The Ontario Energy Board, which is the provincial regulator, said installing new gas infrastructure will cost homeowners more in the long run, in its now overruled decision to apply that installation cost to Enbridge.)

Throughout her remarks, Harradence maintained the importance of natural gas without mentioning its undue impact on the environment. 

“We need all energy resources to fuel the economy, to keep costs down and to reach net zero. More nuclear and more oil, more renewables, more carbon capture, more efficiency, more innovation and more natural gas,” she said. 

“If we want to get serious investment in Canada, we need to start with energy, investing in reliable, resilient, cost effective energy, and that includes natural gas.”

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Four days before Christmas 2023, a senior Ontario government official was on the phone with top executives from Enbridge Gas getting their take on a landmark announcement that could impact the fossil fuel giant’s bottom line and the future of natural gas in the province. 

The call came hours after the Ontario Energy Board, an independent regulator, released a 147-page decision ordering Enbridge Gas to stop passing down the costs of new natural gas connections to homeowners on their monthly bills. Starting in January 2025, the board said Enbridge Gas would have to ask developers to pay these costs in full and upfront, or risk paying them itself. The board had come to this conclusion after considering how climate change is forcing an energy transition that will likely make natural gas — made up largely of heat-trapping methane — less socially acceptable and therefore less financially viable. 

Describing this as a “disappointing decision” in emails with the top executives at Enbridge Gas, the ministry official, David Donovan, shared the energy minister’s public response promising to overrule the board 25 minutes after it was posted, and asked the company to keep the government informed on “next steps, communications and otherwise.” Donovan was then-energy minister Todd Smith’s chief of staff from July 2021 until June 2024, and previously served as a senior government affairs strategist for Enbridge between September 2013 and August 2018.

Internal records released through freedom of information legislation to the advocacy group Environmental Defence, and shared with The Narwhal, show both the government and Enbridge Gas had been anxious about the direction of the Ontario Energy Board and this decision in particular for weeks. It was the subject of several calls, text messages and emails, including between Smith and Enbridge Gas president Michele Harradence. 

The Narwhal reviewed 577 pages of internal communications between energy officials and Enbridge staff from October to December 2023. They reveal how that dialogue informed the Doug Ford government’s unprecedented decision to overrule the Ontario Energy Board, and how to present it to the public using language about the future of natural gas. Altogether, it illustrates a company concerned about the future of its product and a provincial government which appears to be sympathetic to those concerns and listening closely.

In a statement to The Narwhal, Enbridge Gas spokesperson Kendra Black said the company “works closely with all levels of government and provides regular updates and information on a number of topics,” including board decisions. “As part of our regular engagements with the Government of Ontario, we provide updates on all facets of our operations and projects that impact Ontario residents and businesses,” Black wrote.

No one from the energy minister’s office responded to The Narwhal’s requests for comment.

More than once, the energy board has publicly expressed in its rulings and proceedings concerns about natural gas becoming “a stranded asset” — uneconomical and socially unacceptable as lower-emission energy sources increase and improve. The board has questioned whether new infrastructure like pipelines should be built or old pipelines repaired, and whether companies like Enbridge Gas should have their massive budgets approved by the board without considering all these risks. 

“Enbridge is getting nervous that the regulator is now taking seriously what the risk is and where it should lie,” Ian Mondrow, an energy lawyer with the firm Gowling WLG in Toronto, told The Narwhal. “The future of natural gas is a risky business right now, riskier than it used to be.” 

Mondrow is clear: there is “nothing untoward” about a big company talking to a ministry or vice versa. But, along with past communications that showed the Ford government weighed heavily how the energy board decision would add “substantial” costs to Enbridge Gas, these new records show the company’s communications with the government are frequent and “more intense than I would have expected,” he said.

“[The records] seem to indicate a growing concern at Enbridge regarding the future of regulatory treatment of natural gas in Ontario,” Mondrow said. 

Here are three key takeaways.

Energy officials consulted closely with Enbridge before and after responding to Ontario Energy Board decision

The records show Enbridge and government officials were in close communication for at least two months before the board’s decision to relieve homeowners of the cost of new gas infrastructure, and especially in the days and weeks before the decision was released. 

Then-energy minister Smith and Enbridge Gas president Harradence held monthly meetings during that period. (Smith was moved to the Ministry of Education in June and resigned on Aug. 16, to reportedly join the private sector.) In one meeting, held two weeks before the board’s decision, they spoke about the potential outcome, per text messages between Smith’s director of policy and an Enbridge Gas strategist. “Curious if government has insights on delay,” the strategist said in a text message to Smith’s director of policy after their bosses’ call — and as the holidays inched closer. 

On Dec. 20, the day before the board’s decision, the policy teams at the Ministry of Energy and Enbridge Gas met for their regular virtual meeting, scheduled for every two weeks.

Their seemingly shared concerns came to a head the next day — Dec. 21 — when the Ontario Energy Board released its decision to put the cost of new natural gas hookups on Enbridge, according to the new records. That day, Donovan, Smith’s chief of staff, directly consulted the president, vice-president and other officials at the fossil fuel company to get a “quick response on a number of questions” about the impact of the decision from Enbridge Gas’ perspective.

On Dec. 22 — 30 minutes before the government released its scathing response objecting to the board’s decision — an Enbridge policy advisor sent an email to Donovan thanking him for “the government’s early engagement” on the issue and arguing that the decision “will have detrimental impacts to the affordability challenges facing Ontarians.” In his public response later that same day, then-energy minister Smith said the decision would “slow or halt the construction of new homes, including affordable housing.” (Independent experts have said the board’s decision would actually decrease costs for homeowners.)

“Enbridge has skin in the game here,” Mondrow said. “Why would you take their corporate line and attack the regulator? As a ministry practice, that’s completely inappropriate.” 

Donovan sent out the energy minister’s published rebuttal to the decision, asking the president and vice-president of Enbridge Gas for additional information, including the “cost impacts” to various housing customers. “It would be helpful to have a few ‘scenario’ examples from run-of-the-mill to worst case,” he said.Harradence responded in five minutes, saying they were working on it. 

“We’d appreciate it if you keep us informed with Enbridge Gas’s next steps, communications and otherwise,” Donovan continued. “And we hope you can still salvage some downtime this holiday season and look forward to continuing to work together in the new year.” 

These records show “how closely Enbridge and the government are intertwined in their strategy,” Jay Shepherd, an energy lawyer, told The Narwhal. “The idea that the government would jump and say something and ask Enbridge to give them the data to support it, well, the government shouldn’t do that.” 

Provincial energy officials and Enbridge Gas staff had long shared concerns over the independent regulator

In many of the communications, Enbridge flagged for ministry officials the energy board’s failure to provide “regulatory certainty” in the months leading up to the decision. 

Shepherd said the phrase is “a buzzword” utilities use when they oppose a change in rules or policies. 

Energy regulation is complicated. In Ontario, the government sets energy policy that then guides the Ontario Energy Board’s decisions on which projects and investments to greenlight. Companies such as Enbridge Gas or Ontario Power Generation then make those plans a reality. 

Right now, the Ford government has no policy on how to heat new housing developments — whether by installing natural gas connections or using electric options like heat pumps. 

“This has created a lot of uncertainty,” Mondrow said, “and also a legitimate political objective for the Ford government. They need to make a policy on the continued role of natural gas in heating new housing.” In January, the government’s expert panel on electrification and energy transition asked for the same thing. 

The absence of a policy has left a void that the board is trying to fill — something that Enbridge is seemingly concerned about. 

“Enbridge is freaking out and rightly so,” Shepherd said. “The trend in society is to move away from fossil fuels and Enbridge is in the business of fossil fuels.” 

In the records, Enbridge Gas officials sent periodic project updates to then-energy minister Smith, his staff and the MPPs of the ridings where projects were located. The updates regularly highlighted challenges in getting the green light from the board for various gas expansion construction efforts in places including Bobcaygeon, Dresden, Sandford, Port of Johnstown, Hastings County and Kitchener. Enbridge officials were adamant that if the government wanted to see natural gas expansion projects proceed, “they must work with the [Ontario Energy Board] to create the regulatory certainty needed.” Such communications were also sent to the premier’s office. 

Delays and denials from the board were “unacceptable,” company officials said repeatedly. “Continued setbacks consume resources, project scope, feasibility and waste dollars and ultimately cost customers more dollars that could be better spent.” 

One senior ministry official responded to a concerned Enbridge staffer by text message: “I’ve asked the ministry to regroup on this.”

Mondrow explains that energy regulation is about balancing interests, and that requires institutions like the Ontario Energy Board to consider what the private sector wants alongside public needs and benefits. “For the government to step in to serve one interest over the other runs the risk of the wrong outcome,” he said.

Enbridge staff and government work together on public messaging about energy transition and challenges

In several instances in the records, Enbridge staff informed the government of their communications plan around various projects and concerns. 

In briefing notes about natural gas expansion efforts that were paused or delayed by the Ontario Energy Board, the company outlined its “high-level tactics” to inform the broader community. This included media statements and materials to customers and local communities about the need for natural gas infrastructure and the so-called environmental benefits of natural gas (even though it is a major source of pollution, more potent than carbon dioxide). Enbridge also included paid online posts targeted to readers in the impacted project areas that would advise customers on how they can advocate to the government for more connections to natural gas.

In at least two instances, government officials directly suggested communication tactics to Enbridge Gas. Donovan told one company official to make sure Enbridge contacted all MPPs about a provincial bill that would prohibit underground infrastructure owners and operators, like Enbridge Gas, from charging fees to help other companies locate buried utilities when doing their own construction. 

“Continued support for this legislation is critical to success, it would be great to see Enbridge at committee as well, and a supportive letter to legislators would also be helpful,” Donovan wrote. 

Enbridge staff also routinely emailed the energy minister’s office with social media posts and other online items, including an Enbridge-sponsored post in The Globe and Mail about carbon capture and storage opportunities in Ontario.

“Making sure you’ve seen this positive piece,” the Enbridge official wrote to members of the energy minister’s office.“Excellent piece by Enbridge,” one government official responded. 

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Across Ontario, there are municipalities that want natural gas and don’t have it. Others have it, but crave a future less dependent on fossil fuels. 

The common denominator is Enbridge, an energy behemoth that wants to keep both kinds of Ontario municipalities on its balance sheet. 

But their relationship is increasingly complicated.

For more than 70 years, the $50-billion Calgary-based private company has held a monopoly on natural gas distribution in Ontario. Enbridge delivers the methane-heavy fuel — one of Ontario’s cheapest and last remaining fossil fuel-based sources of energy — through its network of pipelines that crisscross the province, heating three-quarters of homes. 

But the onset of the climate emergency — and the need to move away from fossil fuels — has posed an existential threat to Enbridge, the likes of which it has never experienced. Just as mobile phones replaced the landline, cheap energy from wind, water and sun threaten to replace natural gas and other fossil fuels that create greenhouse gas emissions and exacerbate global heating. 

“Enbridge is fighting for its survival,” Jay Shepherd, an energy lawyer, said in an interview. “They’re in this sort of death spiral. The people in Enbridge understand that Enbridge is not going to look the way it looks today 10 or 20 years from now.” 

The company is doing everything possible to delay the inevitable, Shepherd said. This includes small investments in cleaner energy sources that are still being developed and evaluated, like hydrogen and “renewable” natural gas, which is methane captured from organic waste. But it mostly means doubling down on natural gas infrastructure at the local level. 

Since the beginning of the year, Enbridge Gas, the company’s natural gas subsidiary, has been publicly asking local councils across Ontario — in Toronto, Hamilton, Ottawa, Kingston, Guelph, Whitby, Niagara Region, Grey Highlands, Durham, Severn, Prince Edward County and dozens more — to support its natural gas expansion plans for the rest of this decade. That’s the same decade within which many of these municipalities have committed to achieving significant climate action. Enbridge has long tried to influence towns and cities to stay on or expand their use of natural gas, but its latest efforts seem like a full-scale defence of a fossil-dependent business model, even as both sentiments and technologies shift elsewhere. 

To understand this latest approach and the recent history of Enbridge’s influence, The Narwhal and The Local reviewed several hundred pages of documents filed at the Ontario Energy Board, and letters sent to local councils. Over the last three months, we also spoke to 22 people who work in and with Ontario’s energy sector. That includes five former Enbridge employees and multiple municipal staff, local councillors, energy officials and lawyers. Almost all requested confidentiality, citing fear of professional retribution as their ongoing work includes continued engagement with Enbridge. Because of this, we have used single pseudonyms throughout this story for those who asked not to be named publicly. The Narwhal and The Local have verified each person’s identity and position.

Collectively, their first hand accounts and analysis illustrate the lengths Enbridge has gone to in order to boost natural gas. The company has financially supported municipalities in developing energy plans and sponsored events such as town halls and council meetings to discuss them with the public. It has given municipalities money to help research new energy solutions, and paid for studies and marketing material that stress the importance of natural gas. And, according to sources, the company has directly intervened in apparent attempts to silence and stymie opposition from municipal staff and environmental experts across Ontario. 

In one example found in filings at the Ontario Energy Board, Enbridge Gas tried to discredit criticisms made by officials at City of Ottawa — which has an energy transition plan that requires it to move away from natural gas to achieve net zero — about the company’s lack of meaningful municipal engagement on an aging pipeline. In detailed arguments, the company said the city’s submissions were “incomplete or inaccurate” and “strategically filed” to impact Enbridge’s expansion plans. Enbridge Gas told the board it had “actively participated, in good faith, on a number of fronts” with the City of Ottawa to “further progress on energy and climate change issues.” (The board sided with the city and denied the project.)

In a statement to The Narwhal and The Local, Enbridge spokesperson Leanne McNaughton added the company “work[s] closely” with over 312 Ontario municipalities, “prioritizing their energy needs and collaborating to advance their climate-action goals.” 

“Our unwavering commitment to these stakeholders is demonstrated through various activities such as sharing crucial information, conducting impactful meetings to discuss projects and presenting at municipal councils,” McNaughton wrote. 

On the surface, much of what sources described to The Narwhal and The Local falls within the realm of lobbying — a regular practice in Canada’s political system that sees business, special-interest and advocacy organizations attempt to solicit or sway policies and practices. But often, private interests are in deep tension with the public interest. In Enbridge’s case, the question is whether pursuing profits from the continued use of fossil fuels aligns with domestic and international pledges to limit global warming and mitigate the worst impacts of the climate emergency. 

“They’re a big company; big companies have power,” Shepherd said. And in his opinion, “They’re fighting a losing battle. But it may well be true that they can stave it off for a little while by being very effective as lobbyists.” 

“But in the end, individual people — your kids, my kids, the next generation — are going to make choices and these choices are not going to be fossil fuels,” he said. Enbridge, Shepherd said, is “just buying time.” 

And its clock has started ticking a lot faster of late — a countdown bringing Enbridge’s relationship with municipalities to the fore. 

“I think Enbridge is scared,” Henry, a staff member at an urban Ontario municipality, said in an interview. “Enbridge refers to the Ontario gas distribution business as their ATM. Right now, everybody is on gas, but soon people will start going off it. That’ll start to bite [Enbridge] because all of a sudden what’s profitable will no longer be.” 

“And whether we like it or not, we’re all going to feel Enbridge’s pain at least for a little while.” 

Ontario municipalities caught between energy regulator, energy company and energy minister

In Ontario, all energy companies are obligated to work with both municipalities and the Ontario Energy Board to deliver electricity and heat to residents. The board is an independent regulator mandated to ensure the natural gas and electricity industries are operating in a way that is financially responsible and in the public interest.Enbridge has to secure agreements with a city or town before building new natural gas infrastructure. Such accords span decades and give Enbridge leave to construct and maintain pipelines, and share its costs with municipalities and residents alike. 

“Enbridge is good at giving money here and there to keep relationships sweeter,” Henry said in an interview. “Anything under $100,000 here or there is chump change for them, with big benefits: it gets them goodwill and stops municipalities from being pointy-headed.” 

One way Enbridge secures these agreements is by sending a specialized team to municipalities to engage in discussions about, and negotiate and advocate for, natural gas. This team falls under Enbridge’s conservation department, but its job is to ensure the expansion of natural gas. “These Enbridge employees are strongly incented to get results,” William, a former municipal energy official, said in an interview. 

According to business plans filed at the Ontario Energy Board in 2021, Enbridge set up this team in 2020 with an administrative budget of $1.66 million “in an effort to further support” a growing number of municipalities that were creating or implementing climate change and energy plans. Enbridge told the board that almost a quarter of the province’s 444 municipalities were “seeking the kind of leadership and financial support from Enbridge Gas that would lead to broader and deeper partnerships to lower energy costs and reduce energy use and [greenhouse gas] emissions.” 

To build these relationships, Enbridge began delivering information sessions on how to create plans that would achieve climate targets. It helped municipalities collect data and test new technology. And the company provided funding for local governments to “offset” the costs of creating and implementing climate and energy plans. 

“Recognizing the essential role of municipalities in shaping and advancing climate action, Enbridge Gas has established a dedicated team of specialists to support these initiatives,” McNaughton said in an email to The Narwhal and The Local when asked about the team. “We are committed to emission reduction action.”

Over the next few years, the company expanded the team in size and budget. In 2022, the company posted a job for a “senior advisor, municipal energy solutions,” who would need to “advocate for the continued use of natural gas and its role as a low carbon option in the development of municipal energy plans” — even though the use of the methane-heavy fuel contributes significantly to global heating. The advisor would also have to “communicate internally key threats identified through interactions with municipalities and assist in developing solutions to offset these threats.”

“Once you get a community tied into an agreement, they could never leave,” William said. 

“It became a de facto process that muted any municipal fights over the need for natural gas,” George, a former Enbridge employee, said in an interview. In fact, the only way a community can exit such an agreement is if the Ontario Energy Board, an independent regulator, allows it. 

To date, the board has not done so. 

Last year, the southwestern Ontario municipality of Leamington was denied when it asked the board not to renew its agreement with Enbridge for another 20 years. Documents show the municipality said it was “being forced” by Enbridge to enter a new agreement it “objects” to, which required Leamington to bear a significant portion of the cost of relocating gas systems, particularly when needed to maintain municipal drains. Enbridge, which has been the sole gas supplier for Leamington since 1889, countered that if the relocation costs weren’t split upfront, the company would have to pass them on to consumers. Because of this, the board decided the agreement had to be renewed “in the public interest.” Leamington lost an attempt to appeal in March. 

For Enbridge, these long-term agreements are important because the company only makes money when buildings are connected to its infrastructure. And it makes money whether or not gas is used. “If they have a connection that is only used during a blackout once every 10 years but sees the user pay monthly costs for that connection … well, the value of that is still high,” Phillip, an energy utility official, said in an interview. “The value becomes diminished when you start to tell people there is an alternative and they don’t need natural gas infrastructure. If you’re not expanding in the utility world, you’re dying.” 

That’s the blow the Ontario Energy Board delivered to Enbridge last fall. 

In October 2022, the board took on what would become one of the largest and most consequential cases in its 64-year history: a review of Enbridge Gas’s plans up to 2030 in light of the energy transition needed to curb climate impacts. To ensure fairness and fiscal responsibility, energy companies submit business plans to the board for review every few years.

In Enbridge’s case, the board spoke to nearly three dozen stakeholders and reviewed thousands of pages about Enbridge’s plans to generate more than $16 billion in revenue, much of which would be made from continuing to charge Ontario homeowners for new connections to natural gas.

As part of its review, the board questioned whether or not natural gas should be the assumed future of energy in Ontario — and decided otherwise. In a stunning decision released last December, two out of three commissioners on the review panel said the company could no longer charge Ontario homeowners for new natural gas connections. The board argued that since climate commitments would render gas pipelines useless, it was unfair to charge customers for infrastructure with an expiry date. The board said these costs would have to be paid upfront by developers or Enbridge itself.

The decision shook the entire industry. A mere 15 hours after its release, the Doug Ford government vowed to overrule the independent Ontario Energy Board with legislation that would allow Enbridge to charge customers for new hookups for 40 more years. The province also pledged to weaken the board’s oversight power. Legislation cementing both moves passed last month. 

By Enbridge’s estimate, the board’s decision could have wiped out $300 million of revenue this year and billions of dollars over the next five years — an impact government staff weighed heavily in internal discussions. 

It could also have effectively ended the era of natural gas in Ontario. 

Enbridge Gas responds to regulator ruling with missives to municipalities

George, the former Enbridge employee, said the Ontario Energy Board “went for the jugular” with its decision to shift the cost of natural gas hookups off of consumers — and the company responded in kind. 

“Enbridge has been lobbying for itself for forever. Of course, as a business, it wants to keep it going,” George said. “The board’s decision meant Enbridge now had to fight for its life.”

Weeks after the decision, Enbridge Gas began sending city councils across Ontario letters asking that they support the Ford government’s legislation — a move one rural deputy mayor called “a blanket public relations effort.” 

“Enbridge Gas consistently provides municipalities across Ontario with detailed updates on several items that may impact energy services provided to their communities,” company spokesperson McNaughton said in an email. These updates included information about Enbridge’s board submissions and the government’s legislation to overrule the board, she said, “recognizing the impact of these developments on the future of Ontario’s economic development, competitiveness and emissions reduction goals.” 

The Narwhal and The Local reviewed a dozen of Enbridge’s letters to municipalities, which were publicly posted as part of city council agendas. Each followed a template, slightly amended to reference local energy challenges and plans. Each was also tailored to include Enbridge’s local investments, which support energy expansions but also “greenhouses, grain dryers, industrial parks and any new businesses or housing developments seeking access to natural gas,” according to one letter sent to several municipalities.  

“Enbridge is effectively using municipalities as pawns,” Kent Elson, an energy lawyer who represents advocacy group Environmental Defence at the Ontario Energy Board, said in an interview. “They are using municipalities to impact policy and using municipal residents to grow their system … And they’re in hyperdrive because they’re scared for their life.”

In its letters to rural municipalities, which often have an insufficient energy supply and limited energy expertise on staff, Enbridge reiterated each community’s need for natural gas. In April, Enbridge wrote to Grey Highlands, for example, and promised to deliver an expanded gas pipeline in return for the council’s support before the board. According to Geoff Shea, West Grey councillor, “the letter had this tone of aggression, which I thought was inappropriate.” 

“It didn’t seem level-headed or responsible,” he said in an interview.  

“Traditionally, having natural gas come to your town means your community is being taken more seriously by the powers-to-be because it’s a thing grown-up towns have,” Shea said. “But [in the letter], they made it seem like we were lucky to be getting natural gas. They were acting with a sense of entitlement.” 

In its letter to Toronto city council, Enbridge argued the board’s December 2023 decision would increase the cost of housing and put aspects of the city’s climate plan “at risk” — even though the same plan demands the city rapidly move its buildings away from natural gas. 

“It was the first instance I’ve seen where a utility has weighed in, in that nature,” James Nowlan, the City of Toronto’s executive director of environment and climate change since 2022, said in an interview. “But it did not influence our work or our assessment of [the Ford government’s legislation overruling the energy board] or our advice to council.” 

“We have a difference of general opinion with Enbridge,” Nowlan said. He explained that the city does work closely with Enbridge, which sits on Toronto’s climate advisory group and provides natural gas to many residents. But the city is also heavily focused on moving away from natural gas, something mandated for new buildings in Toronto’s net-zero strategy, called TransformTO.

“We have expressed all this to Enbridge,” Nowlan said. “They understand the city’s position. We just have differences in views of what our city’s energy transition looks like.”

Several municipal sources who spoke to The Narwhal and The Local noted the same disconnect. Enbridge’s message to municipalities after the Ontario Energy Board tried to prevent new connection charges was a wide-ranging, pointed insistence that natural gas is still great and still needed. 

“The stakes are high,” Maline Giridhar, vice-president of regulatory and business development at Enbridge Gas, wrote in the letter to municipalities. “It is critical to realize that the affordability of a system that ensures Ontarians have the heat they require, and that businesses have the energy they need is in jeopardy by the [Ontario Energy Board’s] decision.” 

Giridhar reminded municipalities how cheap and useful natural gas is — “it provides twice the energy of electricity at a quarter of the cost on an annual basis” — without mentioning its harms. She wrote the company is “committed to achieving net-zero greenhouse gas emissions” without offering details on how. She also said the loss of revenue from the board’s decision “will lead to difficult investment choices” — which seemed like a reminder of the financial support municipalities receive from Enbridge for energy planning and other community-based support. The Narwhal and The Local asked an Enbridge spokesperson what it meant by “difficult investment choices” but did not receive a response.  

“Constraining access to natural gas through a reduction in capital will significantly limit the future development of essential energy infrastructure vital to Ontario’s economy, from which all Ontarians benefit,” Giridhar wrote in the letter. “As local leaders across the province, your voice matters, and we encourage you to take action.” 

Lawyer Shepherd reiterates several times that, unlike most Ontario energy utilities, the energy giant is a private company. “We should not expect Enbridge to act in the public interest. That’s not what they do,” he said. “They act in the interests of their shareholders. And if they need to be a bully to do that, they will absolutely be a bully.” 

Several local officials who spoke to The Narwhal and The Local confidentially were quick to note that Enbridge’s lobbying — aggressive and influential as it might be — does not eliminate municipalities’ agency to make decisions about the future of energy in their community. A new report released this month shows that between 2013 and 2022, Ontario saw the largest increase among provinces of residents paying for natural gas expansion. But there may be a shift happening. Many cities and towns, starting with Hamilton in February, have passed resolutions supporting the Ontario Energy Board’s decision and opposing the provincial government’s move against it. On the other hand, several big rural municipalities still seeking natural gas have voted the opposite. Underlining this split is a universal concern about providing affordable electricity to Ontarians, particularly for home heating, while also considering the climate, cost and energy concerns of future generations. 

The letters have cast a slight chill on local energy planning, sources say. Where there was once a lot of chatter about moving away from natural gas in Ontario, there are now whispers. Insiders say Enbridge’s power maintains a stronghold — for now, anyway. 

“Our voice does matter,” said one rural deputy mayor. “But it’s hard to be heard when the voice at the other side of the table is an energy giant worth billions of dollars.” 

“We can’t not talk to them,” the deputy mayor added. “It’s more challenging than saying ‘thank you, next.’ We have to maintain an ongoing relationship and discussion because, for better or worse, Enbridge is going to be here for a long time even if their role is the distribution of something we’re trying to eliminate from our cities as fast as possible.” 

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Enbridge is encouraging employees to reject a shareholder proposal that would require the energy giant to report how much pollution is being caused by the fossil fuels it sells to customers. 

On April 22, the Calgary-based gas giant emailed all staff about its upcoming May 8 annual general meeting, which will be held virtually this year. Shared with The Narwhal, the email is titled “It’s important for Enbridge team members to vote on meeting items of business.” One of the main items is a proposal asking the company to measure and report the total emissions output of its business.

The email says staff should oppose proposals such as this one, noting that it originates with “active opponents of Enbridge and the oil and gas industry.” The company’s email says these “opponents” purchase a minimum amount of shares required to submit proposals and then “leverage mainstream and social media to draw publicity to their causes.” 

The email also says staff contributing to the company’s employee savings plan are “most likely an Enbridge shareholder” and would have until May 1 to cast their vote. 

“It’s weird,” Adam Scott, director of Shift Action, a non-profit that works with pension funds and investors on climate issues, told The Narwhal. “It feels overly defensive … It’s a bit off for management to feel like they have to reach out to staff to vote against a [shareholder] resolution.”

In the email, Enbridge highlights a proposal from Investors for Paris Compliance, a group that aims to hold publicly traded companies accountable for their net-zero commitments by purposely buying shares in order to propose and vote on climate issues. The group is an Enbridge shareholder and is calling on the company to disclose what are known as Scope 3 emissions, which are not produced by a company, but its customers. 

In a statement to The Narwhal, Enbridge spokesperson Jesse Semko confirmed the company “shared information with employees, many of whom are shareholders, to remind them of the upcoming [annual general meeting] and to provide information on how they can vote.” 

“We also provided information on the company’s approach to tracking and reporting Scope 3 emissions,” Semko said. 

Experts put the climate impacts of business into three categories. Scope 1 is pollution produced directly from a company’s operations: since Enbridge primarily delivers oil and gas, that would mean emissions created in transporting the fuels. Scope 2 are indirect emissions created by the use of energy to run a business — the emissions created at the utilities Enbridge purchases electricity from to conduct its operations. 

Finally, Scope 3 are indirect emissions created from the use of a company’s products by its consumers. For Enbridge, this means the pollution created by the use of the oil and gas it transports through its pipelines when people and businesses drive their vehicles, heat their homes and manufacture other products. 

“Scope 3 emissions are a reflection of the market you do business in,” Duncan Kenyon, director of corporate engagement with Investors for Paris Compliance, told The Narwhal. “We’re not saying shut down oil and gas. We’re saying be transparent about the risk in your investments.” 

Most Canadian energy firms disclose the emissions they produce in day-to-day operations — so Scope 1 and 2 — but not those created when their products are used. Doing so would likely increase the environmental impact reported to investors and the public. By one estimate, a company’s Scope 3 emissions can be more than 11 times greater than its direct emissions. Investors for Paris Compliance estimates about 80 per cent of Enbridge’s emissions come from the use or combustion of its products. 

Kenyon says Scope 3 emissions show how a company is preparing to do business in a climate emergency, as demand for fossil fuels decreases and the use of renewables increases. He explains investors “will be taking on a financial risk by investing in companies that expect oil and gas demand to go up to justify its business.” 

The message in the internal email is similar to what Enbridge asked other shareholders in public documents filed in advance of the May 8 meeting. A company spokesperson told The Narwhal the email to employees “summarizes” the public documents: both communications argue that Scope 3 emissions are difficult to report because Enbridge cannot “accurately and reliably” track all the ways its products are used. 

This reason is more bluntly reiterated in the company’s April 22 email to staff. “Scope 3 emissions are indirect emissions not produced by the company and not the result of activities from assets owned and controlled by the company,” the email reads, with bolded emphasis. “The reality is that there are significant challenges involved … because it would involve the tracking of products — not owned or sold by Enbridge — that move on and off system.” 

“They’re twisting themselves in a knot to find excuses for not reporting these emissions,” Kenyon said. 

In both the staff email and public filings, the company notes that there are “no clear regulatory guidelines or widely accepted methodologies” that dictate how to report on end-use emissions from products that Enbridge moves but doesn’t own.

Scott says it isn’t so complicated.

“The truth is Scope 3 emissions reporting is a little bit imperfect but not that challenging,” Scott said. Enbridge is “misleading” investors by saying it’s not possible or needed, he adds.

By reiterating its reasoning for a no vote in a “pointed” way, Scott believes Enbridge’s email to staff is “a way of weaseling out of showing everyone how exposed their business is to the climate emergency.” 

The Narwhal sent Enbridge a detailed list of questions. The Narwhal asked for the company’s response to concerns it is not giving shareholders enough information to properly evaluate the climate-related risk of investing in Enbridge. The company was also asked to respond to concerns that it is exaggerating the challenges of calculating Scope 3 emissions, as well as for its plan to reduce these emissions. 

In a lengthy response to The Narwhal, Semko repeated the arguments stated in the email to employees and the documents for shareholders. 

The case for Enbridge to report Scope 3 emissions 

Scope 3 reporting gives investors an idea of a company’s total emissions impact. Scott says the accounting of these emissions is “probably the most important measure of the climate-related financial risk for a company because it really signals how dependent the company’s business model is on selling high-emissions products and how exposed the company is to the energy transition.”  

Put another way: without this information, investors cannot properly assess how a company will meet its sustainability and climate commitments, or remain profitable if demand for fossil fuels drops. 

This is the third consecutive year Investors for Paris Compliance have tabled this resolution at the Enbridge annual shareholders meeting. Each time, Enbridge urged shareholders to vote against it, but an increasing number have broken with management’s recommendation. In 2022, 23 per cent of Enbridge investors voted in favour of Scope 3 reporting or abstained, a number that grew to 28.5 per cent in 2023. 

“That’s more than a quarter of the ownership of the company openly disagreeing with management,” Scott said. ‘That’s a pretty substantial problem for Enbridge’s management to deal with.” 

Enbridge did not answer questions about why it’s position hasn’t changed in response to investor concerns. The company said it takes Scope 3 emissions seriously. Since 2009, Enbridge has tracked a limited amount of Scope 3 emissions, measuring emissions created from employees’ business-related air travel and natural gas consumption by utility customers. Both increased in the last two years, according to the company’s 2023 sustainability report. 

But Investors for Paris Compliance says what Enbridge doesn’t report is likely much greater, estimating the company’s Scope 3 emissions have grown by about 76 per cent since 2014. With more pipelines planned or proposed, this number may increase by an additional 27 per cent.

Enbridge told The Narwhal it disputes these calculations, describing them as “simplistic and superficial.”

The company also said the calculations were “highly misleading” since they “contain incorrect estimates and assumptions, as well as unrecognized and inconsistently applied calculation methodologies.”

Enbridge reiterated that calculating Scope 3 emissions that result from an energy pipeline is “an extremely difficult and complex task” but that it still plans to “expand” the number of Scope 3 emissions categories it reports on this year.

“The challenge is magnified on a transportation system like ours which stretches across North America and involves several interconnecting pipelines — some of which are not owned or operated by us — that take product on and off our system at various points. It also involves the tracking of products — not owned or sold by Enbridge — that move on and off our system,” the company said in an email to The Narwhal. “As a result of these and other complexities, it is currently not possible to accurately and reliably track, measure and report this information.”

Over the last few years, California and the European Union created new financial disclosure policies to compel companies to report Scope 3 emissions to investors. Australia will enforce disclosure rules this year. In March, the U.S. Securities and Exchange Commission opted out of mandating Scope 3 emissions reporting — which Enbridge cited in its statement to The Narwhal, noting the commission’s “concerns about the unreliability of Scope 3 emissions data at this time.”  

Meanwhile, Canada is lagging. The Canadian Sustainability Standards Board, which writes the rules for financial regulators, released new draft regulations in March that would make Scope 3 emissions reporting mandatory for Canadian companies. They could go into effect in 2027 if adopted, though whether that will happen is still uncertain. 

But as a multinational, Enbridge’s reporting practices are guided by four different national and global guidelines — some created by investors actively engaging with companies like Enbridge.

“This is core material financial information, not soft environmental stuff. Will the company be profitable long-term? Is Enbridge reliant on a business model rooted in emissions?” Scott said. “Enbridge is spending more time fighting than it would take to disclose this … It’s a bit of desperation here from Enbridge.” 

— With files from Carl Meyer

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When Ontario Energy Minister Todd Smith publicly decried an independent regulator’s decision to force a fossil fuel giant to pay for new household gas connections, he argued it would drive up the cost of new homes and delay construction. But internally, senior officials in Premier Doug Ford’s office noted the decision would create a “magnitude” of costs for Enbridge Gas and developers, internal emails reveal.

Officials made the observations in late December, hours before the government announced an unprecedented decision to overrule the Ontario Energy Board. The intervention came soon after the independent energy regulator ordered Enbridge Gas on Dec. 21 to stop passing down the costs of new natural gas connections to homeowners on their monthly bills. 

In a 147-page decision, the board told the fossil fuel giant that, starting in January 2025, it would have to ask developers to pay these costs in full and upfront or risk paying it themselves. The board considered how climate change is forcing an energy transition that will likely make natural gas useless and financially unviable, or “a stranded asset.” Despite its name, natural gas is a significant contributor to the climate crisis, as it is made up mostly of methane, a heat-trapping chemical compound and powerful greenhouse gas. 

The board found that homeowners would pay more if natural gas is not weaned off now, first to help cover the costs of natural gas connections and then for retrofits when the fossil fuel is no longer used.

But internal records released through freedom of information legislation to Environmental Defence, an advocacy group, and shared with The Narwhal, reveal how high-ranking staff in Ford and Smith’s offices, as well as the Ministry of Municipal Affairs and Housing, discussed a public relations strategy around overriding the regulator’s decision with legislation that would ultimately put homeowners on the hook for the costs.

The emails also reveal staff in Ford’s office were expecting government lawyers to object to their intervention, but said they wanted to proceed despite the risks. The same staff made extensive edits to the energy minister’s response to link it more closely to housing costs, interest rates and inflationary pressures — three of Premier Ford’s focuses in his public messaging over the last several months. Per the emails, high-ranking staff in the energy minister’s office also communicated with Enbridge before and after the decision was released. 

“The most glaring thing in these documents is that Enbridge clearly has very good access to the highest levels of this government,” Keith Brooks, programs director with Environmental Defence, told The Narwhal. “We see staffers working after hours to issue this press release and essentially do Enbridge a favour.” 

No one from the premier or energy minister’s office cited in these documents responded to The Narwhal’s request for comment. 

A timeline of Ontario’s response to the energy board decision

At 6 p.m. on Dec. 21, the board — an independent regulatory body — released a 147-page decision that would prevent Enbridge Gas from passing the costs of connecting new homes to natural gas onto homeowners. 

After reviewing Enbridge Gas’ plans for the next five years, the board argued the company’s proposal would lead to “an overbuilt, underutilized gas system” as the world moves away from fossil fuels toward renewable energy. Homeowners have historically paid connection charges off incrementally on their bills over 40 years, but starting January 2025, the board said Enbridge Gas would have to charge developers for the full costs upfront instead — or cover it themselves. The board said the requirement could push developers to consider more eco-friendly, economical alternatives such as heat pumps to cool and heat buildings. 

Some 15 hours later, on Dec. 22, at 9:30 a.m., Energy Minister Todd Smith responded in a statement, vowing to introduce legislation to reverse the decision that he said would add “tens of thousands of dollars” to the cost of building new homes. That legislation — the so-called Keeping Energy Costs Down Act — was announced on Feb. 22, and debated at government committee hearings earlier this month.

The internal correspondence appears to show how the premier’s office was significantly involved in crafting the energy minister’s statement. 

At 11:47 a.m. on Dec. 21, David Donovan, Smith’s chief of staff, set up a Microsoft Teams meeting marked of “high” importance. Titled “Urgent Touch Point: New Homes/Natural Gas,” he invited 15 people across the premier’s office and Energy and Housing ministries. This included Patrick Sackville, Ford’s chief of staff, and Travis Kann, Ford’s deputy chief of staff for strategic communications. 

“Hi folks, I hate to send this invite today, but the Ontario Energy Board will release their Enbridge rate decision late today, regarding natural gas rates and new natural gas connections,” Donovan wrote in the meeting invite. “My experience in this sector has me significantly concerned that I think we need to raise to this level. If incorrect, we will cancel or down-grade this meeting before 5 p.m.” (Donovan served as a senior government affairs strategist for Enbridge between September 2013 and August 2018.)

By 5:55 p.m. — minutes before the Ontario Energy Board’s decision was released publicly —  officials in the Energy Ministry were circulating a draft official response. Staff dismissed any possible legal concern in favour of strong messaging on the board’s decision before government lawyers had a chance to review the statement. “Legal will inevitably flag risks with pausing a decision and signalling legislation. We need to tell them that we understand those risks and are proceeding,” Kann wrote. 

Staff dismissed the legal risks again after they were submitted by lawyers, but the risks are redacted from the documents.

“We’ve had this risk flagged to us countless times before and each time it isn’t in any way a material factor. We need to proceed with saying we will introduce legislation otherwise the message is weak,” Kann wrote. “Please get the statement live.” 

Staff consulted Enbridge Gas before energy minister’s statement was released

The documents also show that high-ranking officials from the energy minister’s office communicated with Enbridge Gas for input on the statement. 

Before the government released its statement on Dec. 22, Sackville, Ford’s chief of staff, asked for an additional change to ensure the minister commented on potential impacts on the costs of building houses. 

“Also would be great to add something about the magnitude of these costs — I expect it to be tens of thousands of dollars in additional costs,” he wrote in an email. “Additionally, the consequence of this decision would be slowing/halting thousands of new units of housing (including affordable housing) across the province. Need to keep costs down and improve certainty to keep building in face of all other headwinds.” 

Both of those thoughts are in the final version of the statement, in some cases, word for word.

Donovan responded to Sackville’s email by suggesting they avoid specific cost amounts because they don’t know the financial implications of the decision yet.

“Enbridge will get us more tomorrow morning,” Donovan wrote. In a briefing note shared with the minister after this email conversation, government officials noted that “the upfront costs incurred by Enbridge to connect new customers are substantial.” (The impact of transferring these costs to developers have since been found to be minimal.)

The same day the government released its statement, an Enbridge official expressed the company’s gratitude in an email sent to Donovan, Sackville and others. “We appreciate the Ontario government’s ongoing efforts to support our common priorities to deliver reliable, affordable and sustainable natural gas to Ontario homes and businesses across the province,” the official said. 

The internal documents also show that in January, the company reached out to the premier’s office for a meeting between Sackville and a senior Enbridge executive based in Calgary. 

In a lengthy email response to The Narwhal, Enbridge Gas spokesperson Leanne McNaughton said the company held “informational briefings” with the Ontario government on its application to the board.

“As a responsible gas supplier, Enbridge Gas maintains transparent communication with all levels of government in the regions where we operate,” she wrote. “This helps us ensure that our residential, commercial and industrial customers continue to have access to a resilient energy source of their choice, especially when disinformation can damage energy and housing affordability.” 

“Enbridge Gas has been transparent and consistent in its communications with all stakeholders about the [Ontario Energy Board’s] decision,” she said. 

McNaughton said this transparency included “debunking and avoiding untrue claims” like the fact that the government’s legislation to overrule the board will pass the costs of natural gas hookups to Ontarians or increase their monthly energy bills. “This is simply not true,” McNaughton said. She argued that the board has yet to approve the new rates for natural gas beyond 2024, so any increase has yet to be confirmed. 

McNaughton said the board’s decision “would increase the cost of building a new home or opening a small business at a time when Ontario faces a housing and affordability crisis.” 

“Sharing such misleading and inaccurate information to serve certain agendas could have damaging ramifications on affordability,” she added.

Independent experts have said the board’s decision would decrease costs for homeowners, while the government’s legislation that overruled the board will have “virtually no effect on affordable housing in the province.” 

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In a rare move, the Ontario government is overruling an independent energy watchdog to ensure Enbridge Gas can continue to pass the costs of natural gas expansions to homeowners.  

The so-called Keeping Energy Costs Down Act, announced on Feb. 22, fulfills a promise made by Energy Minister Todd Smith last December. Smith objected strongly when, days before Christmas 2023, the Ontario Energy Board — an independent arms-length regulator mandated to protect the interests of energy customers — released a landmark decision telling Enbridge Gas to stop subsidizing its plans to expand infrastructure for methane-heavy natural gas by charging buyers of new homes for connections. 

After reviewing Enbridge Gas’ plans for the next five years, the board argued the company’s proposal would lead to “an overbuilt, underutilized gas system” as the world moves away from fossil fuels toward renewable energy. The board told Enbridge Gas, whose parent company reported an annual revenue of $43.6 billion last year, to charge developers the costs of connecting new customers to the gas system. Homeowners have historically paid connection charges off over 40 years, but starting January 2025, developers would have to pay in full and upfront. The board said the requirement could push developers to consider more eco-friendly, economical alternatives such as heat pumps to cool and heat buildings. 

The day after the board’s decision, Smith vowed to overturn it — the second time a government has challenged the Ontario Energy Board — as he said the requirement would increase the prices of new homes by “tens of thousands of dollars.” The Ford government has consistently supported the use and expansion of methane-heavy natural gas, arguing repeatedly it is more affordable than alternative options and ignoring its effects on global heating. While Enbridge Gas promotes natural gas as a “low-carbon” fuel, so-called natural gas is largely made up of methane, a heat-trapping chemical compound and powerful greenhouse gas.

New act gives minister increased authority over and above Ontario Energy Board

Ontario’s Bill 165 gives the energy minister new powers to determine who pays for natural gas hookups and over what time period. If the bill passes, the minister intends to allow Enbridge Gas to charge homeowners for 40 years — or until at least 2065, 15 years past the 2050 target set by Canada to reach net-zero emissions. 

The minister is also giving himself greater authority over who pays the costs of new natural gas pipelines; the act exempts a number of natural gas pipelines from the board’s oversight altogether. This move is likely to impact another expected board decision about Enbridge’s plans for a $358-million natural gas expansion in the Windsor area.

These powers would stand for at least five years. 

The new bill also strips away some of the Ontario Energy Board’s independence, giving the minister the ability to make the board hold additional public hearings on any issue related to natural gas.

“This reduces transparency and accountability while promoting decision-making via backroom lobbying,” lawyer Kent Elson told The Narwhal in an email. He represented the advocacy organization Environmental Defence when it intervened in the case before the board.

Ontario Energy Board’s Enbridge Gas decision was ‘irrational’: Smith

If Ontario’s Bill 165 passes, the government will ask the board to reassess Enbridge Gas’ plans, as Smith said it is “incumbent” the board factor in the government’s policies. The government will also appoint a new chair for the board this spring (the previous chair passed away in July), and release an official natural gas policy.  

Enbridge Gas is also challenging the board’s decision at Ontario Divisional Court; it is unclear how this legislation would impact those legal proceedings. Neither the company nor the Ontario Energy Board responded to requests for comment by publication time. 

Smith told reporters this legislation was needed because the board’s decision was “rushed” and “irrational.” The board members went “straight outside of their lane” and the decision was “a huge departure from the realities of our energy system,” he said. 

“This was a wrong decision that was made without proper consultation,” Smith said, adding energy stakeholders and developers weren’t heard by the board in open hearings that involved many stakeholders. “What we’re actually doing is ensuring we never have to intervene again.” 

“This is not going to just benefit Enbridge,” Smith said. “It’s going to benefit communities that are asking for it. … My goodness, what’s going to power these heat pumps if we don’t have nuclear and natural gas facilities?”

Some energy lawyers are surprised by the minister’s hard stance. Several told The Narwhal this legislation could improve the board’s process if enacted reasonably but the minister’s attacks on the board make that unlikely. “The degree to which the government has openly criticized the [board] is unprecedented,” Ian Mondrow, an energy lawyer with the law firm Gowling WLG in Toronto, said.

Debate comes as Ontario government pushes to build 1.5 million homes by 2031

The Ontario Energy Board’s year-long decision-making process involved tens of thousands of pages of documents analyzed in public hearings, and dozens of interviews with experts across the energy industry. It also heard from stakeholders such as the Federation of Rental-housing Providers of Ontario and the Building Owners and Managers Association. The board considered the perspective of the province’s Independent Electricity System Operator, including its policy on decarbonization and the energy transition. The board also considered the government’s own policies, including its stated goal of building 1.5 million homes by 2031 with a focus on increasing affordable housing.

Smith told reporters rural communities want natural gas because “it’s a low-cost way to heat their homes.” The issue of cost is a point of debate: the board is meant to ensure Ontario energy consumers pay fair prices for reliable energy, and said in its decision the expansion of natural gas will force homeowners to incur high retrofit costs to shift from fossil fuels in the future, along with the costs of pollution. The decision also explicitly and repeatedly mentions “support for electric heat pumps as an alternative to gas heating equipment,” finding the operating cost of a new all-electric house that uses a heat pump is lower than a new house reliant on gas.  

“Once again, we have the Ford government intervening in a way that benefits, in this case, a wealthy corporation at the expense of everyday Ontarians,” Mike Schreiner, leader of the Ontario Green Party, told reporters after Smith’s announcement. “Just like they opened the Greenbelt and helped a handful of wealthy, well-connected insiders, this is the exact same story.” 

Updated on Feb. 22, 2024, at 8:20 p.m. ET: This story has been updated to clarify that not all natural gas pipelines will be exempted from oversight by the Ontario Energy Board.

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