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Canada Wynne steps back from plan to phase out natural gas in Ontario

Ontario Premier Kathleen Wynne says the province is not banning natural gas in Ontario.

CODIE MCLACHLAN/THE CANADIAN PRESS

Ontario Premier Kathleen Wynne has distanced herself from a draft plan to wean the province off natural gas, the same day a major Calgary-based distributor of the fuel took shots at the Liberal government's sweeping climate blueprint.

Earlier this month, The Globe and Mail obtained a 57-page document outlining a $7-billion Ontario government climate change strategy to dramatically cut the province's carbon footprint. According to the report, a key plank of the plan is new building code rules that will require all homes and small buildings built in 2030 or later to be heated without using fossil fuels, such as natural gas.

However, on Thursday in Edmonton, Ms. Wynne spoke to the controversy about that aspect of the yet-to-be-released climate-change strategy.

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"Let me be clear," she said. "We are not banning natural gas and have no intention to force people off natural gas."

Hours before Ms. Wynne participated in the joint press conference with Alberta Premier Rachel Notley on Thursday, Enbridge Inc. chief executive officer Al Monaco publicly warned against the Ontario plan for a long-term phasing out of natural gas heating for homes and businesses. He accused the province's Liberal government of taking a blanket approach to reducing emissions that threatens to drive up costs for consumers who already face high rates for electricity – and said new generation and distribution capabilities would require a $200-billion investment.

Enbridge has previously pegged the price of converting a single home from natural gas to electricity at about $4,500, while warning of a threefold increase in heating costs associated with the switch. That calculation is based on typical residential use of about 2,400 cubic metres of natural gas a year for home and water heating, according to the company.

"And that would be on top of the cost of converting," Mr. Monaco said Thursday morning at a conference in Calgary hosted by PricewaterhouseCoopers LLP.

"Replacing building heat and electricity would require $200-billion of investment in generation and distribution, just to effectively duplicate what we've already spent on infrastructure. That would more than double electricity rates in a province with very high electricity costs." A company spokesman later described the figure as an internal estimate. It could not be independently verified.

Still, Mr. Monaco told reporters that his firm was working with the government on policies affecting its network of pipelines, which he described as a key asset for the company. Enbridge, the largest natural gas distributor in Ontario and Canada as a whole, said about three-quarters of Ontario residents use natural gas to heat their homes.

Ms. Wynne will speak at a Calgary Chamber of Commerce luncheon on Friday, where the perception that her government is trying to wean Ontario off natural gas is likely to be a contentious issue. The possibility that Ontario could phase out the use of natural gas to heat homes and buildings in the decades ahead not only raised the ire of many Ontarians, but also Albertans, who have seen their oil and gas industry rocked by low global commodity prices for those products, and U.S. production take up more of the North American market.

As a result of the U.S. gas boom, American producers have grabbed a larger share of the Ontario market from Western Canadian companies. Now, most Ontario natural gas comes from the U.S.

The National Energy Board says 18.4 billion cubic metres of natural gas was imported into Ontario from the U.S in 2015, the equivalent to about 70 per cent of the sales in the province that year. However, the Canadian Gas Association cautions that some U.S. exports that first go to Ontario end up in Quebec.

Ms. Wynne insisted Thursday that her government is working to extend natural gas lines to rural and northern communities, to support economic development – "exactly the opposite of what was reported" about her province's climate-change plan.

"I want to directly address the critics who jumped on last week's false media reports suggesting that our plan will ban natural gas in Ontario. That is not true," she said.

The Globe reported earlier this month on the draft Climate Change Action Plan, which contains a preamble signed by Ms. Wynne. The document says the province will change the building code "so that new homes and small buildings built in 2030 are not relying on fossil fuels for their heating and cooling," and that this policy will be expanded to "all buildings before 2050."

The Ontario Premier also spoke about Alberta's climate-change plan that will have a carbon price attached to all transportation and home heating fuels as of 2017, and will also place a hard cap on greenhouse gas emissions from the oil sands – saying it will make national discussions about building new pipelines easier. However, she steered clear of any unequivocal support for projects, including the controversial Energy East proposal.

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"Am I supportive of finding ways to cooperate with Alberta's need to get that product to tidewater? Absolutely," Ms. Wynne said.

"This conversation, which is a national conversation, is a much easier one because of the work that Alberta is doing."

With a report from Adrian Morrow

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