TORONTO – A recent report from the Pembina Institute released Wednesday stresses that the next Ontario government should take bold steps in driving the rapid expansion of interprovincial electricity transmission while ensuring that this process supports the shift toward a clean, sustainable economy.

The report suggests that by reducing barriers to interprovincial electricity trade, Ontario could open up new markets for its power that are less vulnerable to the uncertainties surrounding trade with the United States. This could help the province avoid the economic risks posed by these ongoing trade issues.

According to the report, Ontario and Canada are currently facing a “new economic reality,” with trade conflicts and other global challenges threatening economic stability. It argues that no matter how these tensions with the U.S. unfold, Ontario is already entering a period of economic transformation. The report calls for the province to find innovative ways to protect its economy from future disruptions, especially by embracing a clean energy future.

One key message in the report is clear: shifting towards a clean energy economy has the potential to not only reduce living costs and improve the health and comfort of Ontarians, but also to create new industries and job opportunities. The report outlines some of the current developments in Ontario’s electricity grid, electric vehicle manufacturing, consumer adoption of EVs, and building emissions. Based on these observations, it offers several recommendations for the next provincial government to consider in order to accelerate the transition to a low-emissions economy.

While there are positive signs of progress, such as Ontario’s record-breaking battery storage procurement last year and a substantial $11 billion investment aimed at helping electricity consumers better manage their costs, the report also highlights potential challenges. Ontario’s decision to phase out coal helped reduce emissions from electricity generation in the past. However, the report points out that in recent years, the province’s electricity emissions have begun to rise once again. In 2020, Ontario’s grid was 94 percent emissions-free, but by 2024 it is projected to drop to 87 percent emissions-free, mainly due to the expected increase in gas-fired electricity generation as the province refurbishes its nuclear plants.

This trend poses a risk not only to the progress made in cleaning up Ontario’s electricity grid, but also to the province’s energy security and price stability. Overreliance on fossil fuels for electricity generation could make Ontario vulnerable to fluctuating energy prices and potential supply disruptions, as the report highlights. To address these challenges, the Pembina Institute urges the next government to explore new areas for solar energy development, even on prime agricultural lands, and to ensure that both the provincial energy regulator and operator are aligned in supporting the “rapid and ambitious electrification” of Ontario’s economy.

The report also addresses Ontario’s electric vehicle (EV) market, which, despite some progress, still lags behind other provinces. While Ontario has made significant investments in attracting new EV manufacturers, the domestic market remains weak due to a lack of consumer-friendly policies. The province has fewer EV charging stations per capita than the national average and does not offer purchase incentives or rebates for EVs, which many other provinces have introduced.

The report also highlights the growing concern over rising transportation costs, especially for people who are moving farther from city centers in search of affordable housing. Longer commutes add to these costs, but the report notes that EVs can help drivers save thousands of dollars over the long term due to their lower operating costs, despite higher initial purchase prices in some cases. To support this transition, the Pembina Institute recommends that the government introduce income-tested purchase incentives for EVs, along with a comprehensive plan to develop a provincewide charging network.

Another key recommendation is for Ontario to consider manufacturing electric school buses to replace the approximately 20,000 diesel-powered buses currently in operation. This would not only help cut emissions but could also tap into a growing North American market for electric school buses.

The report also highlights another major source of emissions in Ontario: heating and powering buildings. Fossil fuels currently account for nearly a quarter of the province’s emissions, particularly from space and water heating in homes, offices, and other buildings. In response, the Pembina Institute urges Ontario to continue investing in programs that make energy-efficient home retrofits more affordable for residents. The report also calls for updates to the Ontario Building Code to ensure that new residential buildings are equipped with EV-ready parking spaces. Additionally, it suggests that Ontario should incentivize and regulate the removal of gas infrastructure in new construction projects.

However, the report also notes that the provincial government has recently taken steps that could undermine some of these efforts. Last year, the government overruled a decision by the Ontario Energy Board regarding who should bear the costs of new natural gas connections. Instead of requiring developers to cover these costs, the government decided that ratepayers should foot the bill, which the report argues could hinder progress toward cleaner, more sustainable energy solutions in the province.

In conclusion, the Pembina Institute’s report emphasizes that Ontario’s next government must act decisively to position the province for a cleaner, more resilient energy future. This includes expanding clean energy infrastructure, investing in electric vehicles, updating building standards, and ensuring that all policies align with the goals of reducing emissions and preparing Ontario for the economic and environmental challenges ahead.