Cities Can Charge Gas Firms for Road Use

Summary#

• This bill lets Ontario cities, towns, and the City of Toronto charge natural gas companies fees for using municipal roads and related services.

• It also says the Province cannot later make a regulation that limits a city’s power to charge these fees.

• The bill takes effect when it becomes law.

• Key changes:

  • Cities and local boards can charge a fee to a gas producer, gas distributor, gas transmitter, or gas storage company.
  • Fees can cover services, activities, costs, or the use of city property tied to equipment like pipes, conduits, poles, cables, and other works placed on or under municipal roads.
  • The fees apply when that equipment is used as part of the company’s business.
  • Provincial regulations cannot put conditions or limits on this local fee power.

What it means for you#

• Households using natural gas

  • Your gas bill could go up if your utility passes new city fees into rates, subject to approval by the Ontario Energy Board (the energy regulator).
  • The impact would likely vary by city, since each city could set its own fee.

• Renters in gas-heated homes or apartments

  • If building operating costs rise due to new gas fees, landlords may pass some costs on, depending on local rules and leases.

• Small and large businesses using natural gas

  • Operating costs could increase if gas rates reflect new municipal fees, with amounts differing by location.

• Municipalities and the City of Toronto

  • New ability to charge gas companies for the use of local roads and for related services (for example, permits, inspections, road repairs after digs).
  • Possible new revenue to help pay for road upkeep and utility coordination.
  • Need to design and administer a fee by-law and billing process.

• Gas companies

  • May face new fees in some or many municipalities for equipment located on municipal roads.
  • Could seek to recover these costs in rates, which would need approval by the energy regulator.

Expenses#

Estimated fiscal impact: likely increases municipal revenues; effects on household and business gas bills would depend on local fees and regulatory approval.

• No direct provincial spending is created by the bill.
• Municipalities may see higher revenues and some new administrative costs to set and collect fees.
• Gas distributors may apply to include these fees in customer rates, which the Ontario Energy Board would review.
• No publicly available information.

Proponents' View#

• Helps taxpayers: Cities can recover real costs of managing road cuts, permits, inspections, and repairs tied to gas infrastructure, instead of general taxpayers footing the bill.
• Local control: Each city can set fees that reflect its own conditions and costs.
• Fair use of public space: Private companies pay a fair price to use public roads for their business.
• Climate responsibility: Shifts more costs to fossil fuel companies, aligning with the “polluter pays” idea.

Opponents' View#

• Higher bills: Gas companies may pass fees on to customers, raising home and business heating costs.
• Patchwork fees: Different charges across cities could create confusion and higher administrative costs.
• Double charging risk: Companies may already pay property taxes or other charges; new fees could stack on top.
• Investment concerns: Added costs and uncertainty could slow maintenance or upgrades to gas systems.
• Disputes and delays: Questions over what counts as a fair fee may lead to more reviews and conflicts at the energy regulator.