Rationale for Exemption to Public Comment:
The Ministry of the Environment and Climate Change (the Ministry) is posting this Information Notice on the Environmental Registry for the purpose of informing the public that a decision has been made by the Lieutenant Governor in Council to make a regulation under the Development Corporations Act (DCA) to establish the Ontario Climate Change Solutions Deployment Corporation.
The DCA is not a “prescribed” statute under the Environmental Bill of Rights, 1993 and therefore notice is not required to be given. However, the Ministry recognizes the importance of this regulation to implementing Ontario’s Climate Change Action Plan and believes this information is important to share with the public.
In June 2016, Ontario released a Climate Change Action Plan setting out actions to help the province meet its 2020, 2030 and 2050 greenhouse gas emission reduction targets and facilitate the province’s transition to a prosperous low-carbon economy.
The Action Plan committed to the creation of a new entity to complement Ontario’s cap and trade program by using a portion of proceeds to significantly increase deployment of low-carbon technologies that will help households, including low-income households, small and medium enterprises, and industry reduce their carbon footprints.
On December 15, 2017, the Ministry posted an Information Notice regarding its proposal to establish the Ontario Climate Change Solutions Deployment Corporation by regulation under the DCA. After considering the comments received, a decision has been made to implement the proposal. O. Reg. 46/17 came into force on February 17, 2017. The public-facing name of the corporation will be announced at a later date.
The corporation’s activities will focus on reducing market barriers to deployment of low-carbon technologies, including through improved access to information, incentives, and strategic use of financial de-risking tools to encourage greater private sector investment, emphasizing absolute greenhouse gas reductions through activities such as fuel-switching, energy storage, use of renewable energy and deep energy retrofits.
The final regulation available on Ontario’s e-Laws website can be accessed via the link in this Information Notice.
Additional Requirements Applicable to the Corporation
As noted in the December 15, 2016 Information Notice (attached), as a provincial agency created by regulation, a number of statutes and government directives will apply to governance of the corporation.
The key requirements will be reflected in a Memorandum of Understanding between the Ministry and the corporation, which will be published on the corporation’s website once finalized and signed by the Minister and the Chair of the Board. Additional public reporting requirements (fulfilled by publication on the corporation’s website and to be reflected in the Memorandum of Understanding) include:
• Annual mandate letter from the Minister;
• Minister-approved annual 3-year Business Plan;
• Annual report with audited financial statements; and
• Expense information for appointees and senior management staff.
Effect(s) of Consultation on Decision:
The draft regulation was posted for a 46-day public review and comment period ending January 30, 2017. All comments received during the comment period were considered as part of the decision-making process by the Ministry in the development of the final regulation. The comments are available for public viewing by contacting the contact person listed in this notice.
The Ministry received a total of 40 comments in response to the posting. Overall, the comments received were supportive of the Ministry’s proposal to establish an agency to provide one-window access to relevant programs (existing and new); engage in activities to reduce market barriers; and, in particular, use financing tools to leverage public funds. Comments generally related to the object and structure of the corporation, and the design of programs to be delivered by the corporation.
The following summarizes concerns that were raised and how the Ministry considered them in development of the final regulation.
Object / Programs
Comments were received recommending that the object and/or program development provisions of the draft regulation (sections 3 and 6) specify that certain areas of programming may or shall be within the corporation’s mandate, including commercial, institutional and mixed-use buildings, production of raw materials and crops, and particular financing activities.
Ministry Response: The regulation does not prohibit the corporation from developing programs in the above areas or restrict the types of financing activities the corporation may engage in. No changes were made in response to these comments.
Program Priorities and Clarity of Terms
Comments were received regarding the emphasis in section 6(3) of the draft regulation on (1) maximizing absolute greenhouse gas reductions and (2) stimulating use of technology that supports “fuel-switching”, “energy storage” and “deep energy retrofits”. Some comments indicated that greenhouse gas reductions should be the sole primary emphasis; some indicated that greater clarity was needed with respect to 6(3)(1) and 6(3)(2). Comments also expressed concern that the activities listed in 6(3)(2) were too limiting.
Ministry Response: Language in the regulation was revised to place primary emphasis on maximizing absolute GHG emissions, but interpretation of this phrase has been left open for further refinement as program design work continues. In addition, the regulation has been revised to indicate the list of activities is not exclusive (by adding “such as”), and the activities listed have been refined for added clarity. The Ministry believes that it has struck the right balance between providing specificity to the corporation and allowing flexibility for the corporation to develop programs that suit changing market conditions.
Research & Development
Comments were received seeking clarity regarding and/or recommending inclusion of research and development of new/emerging technologies within the corporation’s mandate.
Ministry Response: The intent is that the corporation will specialize in addressing market barriers inhibiting adoption of commercially available technologies that reduce greenhouse gas emissions. While the activities of the corporation are expected to result in “market pull” (and thus stimulate research and development of new technologies), the regulation indicates that the corporation will not provide incentives or financial tools for research and development of technology. Other activities in the Climate Change Action Plan encourage low-carbon innovation. The regulation language is, however, intended to leave open the potential to support innovative application of technology, for example, in a production process, where the technology is not necessarily available in a retail setting off the shelf.
Addressing Market Barriers
Comments were received recommending that the corporation’s object more clearly reflect the mandate of addressing market barriers.
Ministry Response: The regulation was refined to add “addressing”, as well as “researching”, market barriers to the corporation’s object.
Coordination with Existing Programs / Consultation with Stakeholders
Comments were received recommending that the corporation be required to avoid duplication of existing Conservation Framework / other related programs; avoid competing with existing available financing; avoid adding confusion in the marketplace; collaborate, co-ordinate and/or consult with existing program and financing providers.
Ministry Response: The Ministry understands the importance of leveraging existing offerings, infrastructure and expertise, and is addressing the above-noted concerns through program design, ongoing discussions, the MOU to be entered into with the corporation, and other means. The regulation has been revised to specify that the corporation shall maintain a website that includes information about its own programs as well as similar programs offered by others.
Comments were received emphasizing the importance of tracking outcomes and establishing performance measures.
Ministry Response: The regulation now includes a provision requiring the corporation’s website to include information on how the corporation is monitoring its programs and what it is doing to improve them. Note that performance measures and tracking are part of the corporation’s reporting requirements as a provincial agency (including its public annual report), and as part of the Ministry’s process for seeking approval for obtaining funding from the Greenhouse Gas Reduction Account.
Comments received cautioned that the Minister’s directives power must not undermine independence of OCCSDC.
Ministry Response: The directives power has been retained to ensure the Minister’s ability to provide direction to the corporation should the need arise. The Ministry recognizes the importance of using this power with restraint.
Comments received recommended, with respect to section 9 of the draft regulation, specific areas of Board expertise or representation and/or broadening areas of Board expertise for appointees.
Ministry Response: It is critical that the corporation has board members with broad expertise including knowledge of Ontario’s energy system and how technologies can reduce greenhouse gas emissions from both businesses and households. The Ministry has broadened the provisions regarding the experience and expertise for potential appointees.
In addition, the Ministry has added or revised areas of collective experience and expertise to include “Finance”; “Working with low-income communities”; “Ontario’s energy system”; and “Corporate governance". The Ministry has not included “representatives” from particular sectors, as requested by some commenters, due to the nature of the Board (skills-based rather than stakeholder-based), but notes that individuals from sectors identified by commenters are not excluded from Board membership under the Board of Directors provisions.
Decision on Regulation:
On December 15, 2017, the Ministry posted an Information Notice regarding its proposal to establish the Ontario Climate Change Solutions Deployment Corporation by regulation under the DCA. After considering the comments received, a decision has been made to implement the proposal. The Ontario Climate Change Solutions Deployment Corporation was established through O. Reg 46/17, which came into force on February 17, 2017.
Senior Policy Coordinator
Ministry of the Environment and Climate Change
Climate Change and Environmental Policy Division
Air Policy and Climate Change Branch
77 Wellesley Street West
The documents linked below are provided for the purposes of enhancing public consultation.
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