Budget 2017: a window into Ontario's approach to a low-carbon economy

Ontario celebrated a successful inaugural cap and trade auction earlier this month, with a sellout of 2017 vintage allowances, raising $472 million dollars in revenue for the province’s Greenhouse Gas Reduction Account.

The big question is how the money will be spent. According to law, the proceeds of cap and trade must be spent on actions that help to reduce greenhouse gas emissions in the province. Ontario’s 2017 budget show us the answer, or at least some of it.

Under the banner of Transitioning to a Low-Carbon Economy, the budget outlines a list of five priority measures, totalling $734 million of the projected $1.9 billion to be raised from the cap and trade auctions this year. Here’s what’s included:

  • $377 million through the Green Ontario Fund to make it easier for households and businesses to adopt proven low-carbon technologies.
  • $200 million in funding in 2017–18 for schools to improve energy efficiency and install renewable energy technologies.
  • $85 million to support additional retrofit activities in social housing apartment buildings across the province.
  • $50 million in commuter cycling infrastructure to give Ontarians a safe and low-cost commuting alternative between residential communities, workplaces, major transit stations and other destinations.
  • about $22 million in electric vehicle charging infrastructure across the province, including at government facilities.

These commitments were hardly headline-grabbing in a budget that increased healthcare spending and delivered free prescription drugs to children and youth, but they are worthy of a second look.

Ontario’s Climate Change Action Plan (CCAP), the roadmap to meeting the province’s legislated emissions reductions targets, led with the banner commitment to establish a Green Bank. Now called the Ontario Climate Change Solutions Deployment Corporation (OCCSDC), the goal of the entity is to “help homeowners and businesses access and finance energy-efficient technologies to reduce greenhouse gas pollution from buildings.”[1]

According to the CCAP, the entity would build on best practices from two well-established models: Efficiency Vermont, the first statewide energy-efficiency utility in the U.S., and the New York Green Bank, a state-run financing agency. The OCCSDC’s mission would be to reduce emissions from energy-intensive heat and cooling sources such as old gas boilers, inefficient electric baseboard heaters, and oil furnaces, while increasing the use of available technologies: solar, air-source heat pumps, geothermal systems, vehicle-to-grid energy systems, and energy storage systems.

In support of the low-carbon economy, the OCCSDC appears to check all the boxes: it helps Ontarians reduce emissions and gives them the money to do it. It also provides additional long-term savings from reduced energy bills. Jobs could be generated through energy efficiency and retrofit programs, up to 33,000 of them over five years according a recent report, Building a Green Jobs Strategy.

But the OCCSDC also has the potential to be a catalyst for Ontario’s clean growth economy. By providing an array commercialized clean energy technology innovations created and produced in Ontario—such as smart thermostats and energy storage solutions—there is an opportunity to support companies and create jobs.

Ontario’s 2017 budget provides us with a glimpse of what’s to come over the next year in support of the low-carbon economy. We’ll be watching closely as they open the windows on the policy and program details.

Energy Storage

Energy storage is a clear example of Ontario’s leadership in clean energy technology. To date, the province’s Independent Electricity System Operator has procured 56 megawatts[2] of grid-connected energy storage, representing more than six per cent of all projects installed globally to date (Germany, by comparison, had 67 megawatts installed by the end of 2015[3]). It’s an impressive feat for a jurisdiction accounting for just 0.6 per cent of worldwide electrical generating capacity.[4]

Leading companies include Temporal Power (flywheels), Hydrostor (underwater compressed air storage), Hydrogenics (hydrogen) and Opus One Solutions (integration/management). One newcomer to watch is e-Zn, which has developed a zinc-metal energy storage system with the potential to dramatically reduce the cost of off-grid and grid-connected energy storage. The province’s vibrant energy storage ecosystem inspired the creation of Toronto-based NRStor, led by former Home Depot Canada CEO Annette Verschuren. The company is investing in and helping bring to market energy storage technologies in Ontario and beyond.

[1] Ontario Climate Change Action Plan, Page 8

[2] — includes recent 50 MW and 6 MW through the “Alternative Technologies for Regulation” project (2012). Excludes 660 KW Hydrostor system installed in partnership with Toronto Hydro in Lake Ontario.


[4] Ontario capacity approx. 36 GW (IESO) as percentage of global capacity of 6,418 GW in 2015 (Bloomberg New Energy Outlook, 2016).

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