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What would a minority government mean for energy and environmental policy in Ontario?

Recent polls are pointing to a minority government coming out of the October 6th Ontario election. It may be useful to reflect on the potential implications of such an outcome for energy and environmental policy in the aftermath of the election. Baring any unexpected developments over the remaining few days of the campaign, the NDP is almost certain to emerge holding the balance of power between the Liberals and Conservatives (the most recent Laurier Institute seat projection (http://www.lispop.ca/Ontarioseatprojection.html), based on September 26 polling data is Liberals 46, PCs 42 and NDP 19). Despite a solid effort by new leader Mike Schreiner the Greens seem on track to a 4th place finish, with a slight loss in their popular vote relative to 2007 (5-6% seems likely relative to 8% in 2007), and are unlikely to elect any members.

Although the NDP and PCs have come to share considerable ‘pocketbook populist’ policy space, particularly with respect to the removal of the HST from electricity, natural gas and gasoline, party history and the overall distance between the two mean that the possibility of a Hudak government supported either formally (e.g. via an accord similar to that signed between David Peterson and Bob Rae in 1985) or informally on a vote by vote basis, by the NDP, is remote.

The much more likely outcome is a continuation of Dalton McGuinty’s Liberal government, with some form of support from Andrea Horwath’s New Democrats. Predicting the direction of such a government offers some challenges. The Liberal platform, for its part, is decidedly thin on new commitments on the energy or environment fronts. A vague promise to expand the greenbelt, an option first presented in the party’s 2007 platform, seems the only new element. The remainder of the platform focuses on past achievements and the continuation of existing initiatives like the Green Energy Act, transit funding and mining development in the far north.

The NDP platform is more substantive on energy and environmental matters, presenting clear opposition to new nuclear construction or refurbishment projects, major new commitments on energy efficiency and combined heat and power, and maintaining the FIT program for small and community based renewable energy projects. Larger renewable projects would however be moved into the hands of a recreated Ontario Hydro, an institution whose principal successor Ontario Power Generation, has no experience in developing renewable energy sources other than hydro, and is noted for its institutional commitment to hard path technologies like nuclear and coal.

Otherwise the New Democrats have committed to increased funding for public transit, continued participation in the Western Climate Initiative’s greenhouse gas emission cap and trade system, Anti-SLAPP (strategic lawsuits against public participation) legislation, protecting public participation rights under the Liberal’s “Open for Business” inspired reform of the environmental approvals process, and action to transfer a greater portion of recycling costs onto product manufacturers and importers.

Given all of this it is possible to speculate on the possible directions for the 2011 version of a Liberal-NDP accord.

Energy
• Both parties have committed to a phase-out of coal-fired electricity. It will almost certainly proceed.
• The new build nuclear projects contained in the Liberal’s Long-Term Electricity Plan would almost certainly not proceed. As I have noted in previously blogs the proposed two new reactors at Darlington were already in serious doubt, given declining electricity demand, rising cost estimates and, with the recent sale of Atomic Energy of Canada, the lack of a viable vendor. The need to make peace with the NDP could provide the government with a way out on the projects.
• Although a renewed commitment to energy conservation seems likely, the fates of the Darlington and Bruce B refurbishment projects will be more contentious. Some delay is likely at least as some sort of review of the province’s options is undertaken, perhaps even under the Environmental Assessment Act as the NDP has proposed.
• The fate of the Green Energy Act, particularly the FIT program for larger renewable energy projects, is very uncertain. The popular MicroFIT program for small household and farm level projects is likely to survive given the support from both parties – although probably with reduced rates, particularly for solar. There is far less common ground on the main program. The NDP has yet to clarify how it would maintain the renewable energy industry development aspects of the Liberal initiative if its leadership were transferred to a resurrected Ontario Hydro. Potential compromises include reductions in the FIT rates, or even moves back to competitive bidding (RFPs) for larger renewable energy projects. The continued strong backing of the FIT system by Germany, and the powerful connections the Germans have made between their FITs and the development of what is now a very robust renewable energy manufacturing sector should give the New Democrats cause to rethink the desirability of major changes on the green energy front.
• The NDP's proposal to remove the HST from energy prices has the potential to create some serious challenges as well. Notwithstanding the obvious contradictions with the NDP's emphasis on energy conservation and its implications in terms of revenue losses in the context of the province's overall fiscal situation, the proposal has been central to the party's 'pocketbook populist' campaign, making a compromise with the Liberals on the HST front difficult. A middle way may be to introduce additional tax credits and other supports, especially for energy efficiency investments for low-income households and others for whom energy costs present particular hardships or challenges.

Climate Change
• The government has been backing away from any serious action on reducing the province’s GHG emissions, beyond the coal phase-out, for some time. Although the NDP has committed to continuing participation in the Western Climate Initiative (WCI), the Liberals and NDP have retreated from any suggestion of introducing carbon pricing, especially given the WCI’s difficulties on the US side. Although Quebec remains a potential partner engaged on the WCI cap and trade system, in the short term the most likely outcomes for Ontario are to further reinforce the focus on energy conservation and transit funding.

Land-Use and Transit
• The existing policy framework for land-use and infrastructure planning, established through the 2005 Greenbelt legislation and 2006 Places to Grow Act seems likely to be maintained. Some enhancements to funding for specific transit projects may emerge, although this is complicated by the presence of the Ford administration in the City of Toronto.

Far North
• The NDP’s positions on the north are in many ways even more pro-development than the government’s, which has itself enthusiastically backed the “ring of fire’ and other mining developments and transferred of forest management from the more conservation-oriented Ministry of Natural Resources to the development focussed Ministry of Northern Development, Mines and Forests. Good news on the northern conservation front seems unlikely under a Liberal-NDP alliance.

Anti-SLAPP Legislation
• Some form of anti-SLAPP legislation seems probable, given the backing from both the NDP and the government’s own pre-election advisory panel on the issue. The low cost of such legislation (from a government perspective) makes it even more likely win for the New Democrats and environmental groups pressing for legislation.
Approvals reform and ‘Open for Business’
• With some pushing from the environmental groups (principally CELA and EcoJustice) that have led the criticism of the government’s ‘regulatory reform’ proposals, some movement on their worst aspects may be possible, particularly with respect to their impact on public participation rights under the Environmental Bill of Rights. The legislation was virtually the only part of the 1990-1995 NDP government’s environmental legacy to survive the Harris ‘Common Sense Revolution’ intact.

Waste
• As with some aspects of the energy file, some pressure from the NDP might provide the government with the opportunity for a reset and restart on the blue box and household hazardous waste funding issues, which have been stalled since last summer’s ‘Eco-fee debacle.

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