If the shortsighted OEB decision goes through, fewer new connections will be made and fewer homes will be built
The Ontario Government is at a make-or-break point in the housing affordability crisis.
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Ontario’s bold goal of building 1.5 million homes by 2031 reflects the urgency to tackle this problem with pro-growth policies. We need all hands-on deck from every level of government – but a recent decision by the Ontario Energy Board (OEB) is about to derail Ontario’s housing plans.
Last December, the OEB decided to reduce the budget for Enbridge Gas by $250 million and ended Enbridge’s 40-year amortization period for new natural gas connections in homes.
This method allowed consumers to pay down the cost of new natural gas connections in their home over an extended period of time.
The OEB’s bad move to upend Ontario’s long-standing approach to finance infrastructure like natural gas over time puts new neighbourhoods and desperately needed new homes in jeopardy.
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To sustain community growth, Enbridge needs to have the funds to extend natural gas lines across the province. Under the current model, the costs of new connections are amortized over 40 years, across all users. That means more communities get connected and more homes get built.
If the shortsighted OEB decision goes through, fewer new connections will be made and fewer homes will be built. Those that do get built will be more expensive and homebuyers will need to pay the entire hookup cost upfront, adding thousands to the price of a home.
This head-scratching overstep by the OEB will push affordability further out of reach for Ontarians, and put provincial and municipal housing targets at risk. Such one-size-fits-all policies will be particularly harmful to Ontario’s smaller and northern communities, where energy infrastructure is not well-developed.
There is a dangerous knock-on effect of the OEB’s bad call. In 2022, I was part of Premier Doug Ford’s Housing Affordability Task Force. We recommended the province create a municipal services utility corporation model for water and wastewater. This model allows the cost of new infrastructure, like sewer lines, to be financed over time – like a mortgage – offering greater financial flexibility and keeping the price tag of utility infrastructure from reaching homeowners. This new approach alone could take up to $50,000 off the price of a new home.
In OREA’s recent report, Analysis of Ontario’s Efforts to Boost Housing Supply, we are calling to get this done and bring affordability closer to home.
Sadly, the OEB decision to eliminate long-term financing for natural gas risks sidelining this valuable tool for water and sewer construction as well. The Ontario Government needs to reverse the OEB decision and ensure that additional barriers aren’t created for aspiring homeowners.
OEB’s role is regulation, not policymaking. The Minister of Energy is contemplating legislation to fix this mess and Ontario REALTORS® support him. The Ford Government should get it done.
As Ontario works to build 1.5 million homes by 2031, the need for natural gas will only continue to grow. To support affordable homeownership, I encourage you to reach out to your MPP and express your support for long-term financing of Ontario’s natural gas lines, water, and wastewater.
If we want to create more Canadian homeowners, we should not whack them with this massive upfront bill for infrastructure that will last for generations.
– Tim Hudak is the CEO of the Ontario Real Estate Association, Canada’s largest provincial real estate association
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HUDAK: Decision by Ontario Energy Board threatens housing progress
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21.02.2024
If the shortsighted OEB decision goes through, fewer new connections will be made and fewer homes will be built
The Ontario Government is at a make-or-break point in the housing affordability crisis.
Subscribe now to read the latest news in your city and across Canada.
Subscribe now to read the latest news in your city and across Canada.
Create an account or sign in to continue with your reading experience.
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Ontario’s bold goal of building 1.5 million homes by 2031 reflects the urgency to tackle this problem with pro-growth policies. We need all hands-on deck from every level of government – but a recent decision by the Ontario Energy Board (OEB) is about to derail Ontario’s housing plans.
Last December, the OEB decided to reduce the budget for Enbridge Gas by $250 million and ended Enbridge’s 40-year amortization period for new natural gas connections in homes.
This method allowed consumers to pay down the cost of new natural gas connections in their home over an extended period of time.
The OEB’s bad move to upend Ontario’s long-standing approach to finance infrastructure like natural gas over time puts new........
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