The Agenda with Steve Paikin (Audio) - Can Ontario Get Energy Planning Right?

Episode Date: June 20, 2025

Ontario minister of energy and mines Stephen Lecce oversees portfolios the government says will drive economic growth in the province in the years ahead. And he's got some big jobs ahead of him. His office is laying the groundwork to meet what the Independent Electricity System Operator says will be a 75 percent increase in electricity demand by 2050. But the plan is not without controversy. See omnystudio.com/listener for privacy information.

Ontario's Minister of Energy and Mines, Stephen Lecce, oversees portfolios the government says will drive economic growth in the province in the years ahead. And he's got some big jobs ahead of him. His office is laying the groundwork to meet what experts say will be a 75% increase in electricity demand by the year 2050. But the plan is not without controversy. For a look at how he's managing those policies and others, we welcome back to the program Stephen Lecce, who's also the PC MPP for King Von, and it's good to see you in that chair again. Thank you. Good to be back. Thanks for coming in.

All right. Let's start simple here. Last week, the government released what it's calling the Integrated Energy Plan, kind of a roadmap for the next 25 years. What's the purpose of the document? It's the first time in any subnational history to lay out a 25-year roadmap for energy security. We need to add four and a half cities of Toronto to the grid,

75% by 2050. Massive undertaking. But unlike jurisdictions east and west and south, we have a long-term plan for economic growth and competitiveness. So what does that mean for you, everyday families watching? It means we're going to have affordable power because we're planning ahead with a 25-year horizon.

Nuclear expansion, hydroelectric expansion, all the above, transmission expansions, the largest energy conservation program in the history of Canada. These are the foundations by which we unlock one strong Canadian economy. As you know, without power, we don't have economic growth. So this is laying the foundation for our kids and grandkids and I think that

intergenerational lens is something often missing from government where politicians are seeking short-term electoral wins. This is, we're not going to get a win the next election on this. This is this is for our kids, this is for our grandkids. Speaking of missing, I think I looked at all 152 pages of the document and don't think I saw a dollar sign. How much is all this going to cost? Well the independent electricity systems operator estimates based on the needs for transmission expansions and for generation expansions it could be upwards of three to four hundred billion dollars. You are

right to note that this is not an insignificant undertaking. It becomes more expensive, more prohibitive. We have reliability challenges if we don't plan ahead. This is the best case scenario because we're starting today with a 25-year horizon. Too often politicians, in my estimation, look to the short-term cycle. The 25-year horizon enables us to grow our economy from critical minerals to manufacturing to obviously to expanding our generation. And the nuclear is the anchor of our economic solution.

When we're expanding Darlington, when we're refurbishing Pickering, and we're adding Bruce C, together we're talking about 16,000 additional megawatts of nuclear power. That's like power for 60 million people. How do you not look at a potential spend of three to four hundred billion dollars and Absolutely, not freak out it is a lot

The cost of inaction means that that number increases the quantum could increase by 20 30 50 75 percent There are jurisdictions around us that are paying Massive premiums because they don't have that proactive lens of public policy. They haven't thought about tomorrow. They're scrambling to get power for today, let alone for future growth. We are in an envious position. The Premier really has an ambitious plan for growth and really this is part of the nation-building vision that I think many premiers and the Prime Minister at all levels of government are talking about. I mean nation-building fundamentally is setting up the foundations for long-term growth.

You need power. We want it to be clean, reliable and affordable. Let me pick up on that because the electricity supply mix in the province of Ontario is a really interesting thing. Presumably the last several governments, which have invested a lot of money to green up the grid, prefer renewables as a, well, we got rid of coal back in 2000 and whatever the heck it was, 2007. Or at least that's when the promise was made.

I want to, Sheldon, bring this chart up here, because it looks like, as we consider in the future, the projected future electricity supply mix, it looks like we're going to be using an increasing amount, just for those listening on podcasts, we got a lot of bar graphs here. The bottom line is we're going to be using a lot more natural gas going forward,

and while natural gas is obviously cleaner than coal, it's not as green as renewables, or as nuclear, or as hydroelectric. So why is there less emphasis on renewables going forward, especially in the mid-2040s? Well first of all what that graph demonstrates to you is that under this integrated energy plan, this long-term plan for growth, we actually get down to 99 plus percent of our grid by your 2050s non-emitting. Think of what an achievement that is without increasing taxes, a carbon tax or a regulation

or a policy that removes options for consumers in the type of cars they're driving. For example, I mean, we achieve net zero 25 years from now by year 2050, which is a huge achievement and between now and then our grid will become cleaner and greener because the percentage of non emitting nuclear power and hydro power is increasing today Nuclear is 50% of our baseload. We're gonna get to 75% under our plan. That's non emitting power. That's that is clean Energy in addition to the expansion of hydroelectric now you speak about renewables We've taken a position unlike the former liberals of not just romanticizing one resource of the exclusion of others I mean, I believe all resources need to compete.

We believe in all the above approach. What that fundamentally means is we're not going to be in the business of soul sourcing winners and losers, which the former liberals did. But you're using more natural gas than they would have thought it was a good idea to do. We're using, in this case, the lowest cost option to keep bills down, because under the former liberals, they increased by 400%. I mean, $1,000 more more per month because they renewed the grid. There's no virtue in sending families or fixing pensioners into energy poverty.

Like honestly that was the effect of their policy. They may have felt good about it. The impact on the ground for everyday people was spending much more for energy where it became some of the most expensive hydro rates on the continent. That's obviously not a good thing in the abstract. Now, I agree with you. We want a cleaner, greener grid. We could achieve that by maintaining the option

of natural gas within the grid. But over time, it's decreased and dwarfed by the amount of non-emitting hydro and nuclear, which this government is heavily investing in. So you can grow your economy and reduce emissions. We already have one of the cleanest grids in the industrialized world. This plan, under our premieres leadership gets us to what the

cleanest like 99 plus percent because we're investing in Canadian tech, nuclear and hydroelectric. I hear what you're saying but I know how old you are and you will be a senior citizen when all that happens. It's a long time to wait don't you think? Well I think it's a sensible plan that gets us to net zero without imposing higher taxes and I think it's a sensible plan that gets us to net zero without imposing higher taxes. And I think most Canadians, most Ontarians, want energy to be reliable and abundant. We actually tested this concept of phasing out natural gas as proposed by the federal liberals, you may recall, the clean electricity regulations.

The provincial liberals had an echo of this policy. The IESO objectively analyzed the... That's the Independent Electricity System Operator. Thank you, sir. Acronym freezing. I know. I hate acronyms. So the Independent System Operator did an analysis and they concluded a phase-out of this, as proposed by the federal liberals and provincial liberals, would lead to system reliability issues,

brownouts, blackouts and increase of prices. We can't have that, obviously. Well, no. I mean, look, in in the abstract they may feel good about their position but the implementation, the impact on the ground is higher rates and reduced reliability and no sensible government would put that at risk. Natural gas to be clear is used as an insurance policy in the province. It's not used for baseload power. It's fired up on the hottest...

Fire up when you need it. When we just need that differential, it represents roughly and historically less than 10% of the mix we are on track for the cleanest greenest grid in the industrialized world which is attracting investment to our province we're proud of that we're also proud that we're keeping rates low and we're not increasing taxes that's I think there's virtue there in a form to make sure energy is affordable when we're dealing with so many economic challenges. I want to talk about elbows up because your government, I think it's fair to say, got

re-elected on a promise to protect Ontario from whatever ravages Donald Trump had in mind and he has a lot in mind. So as a result, the LCBO took all the American-made booze off our shelves, cancelled one of Elon Musk's Starlink contracts. Most of the natural gas, I'm told, for the new and existing power plants for the province is going to be sourced from the United States. Sheldon, chart if you would, because we want to show,

as in again, for people listening on podcasts, this is essentially a chart that shows we're going to be importing from the United States electricity generation sources in a large measure. And I guess I'm wondering, what happened to Elbows Up when we could get some of this stuff, presumably, from Western Canada and not have to buy it from them? Yeah, I think it's actually a really important question.

Because when the question is framed, for example, in Quebec, do you support displacing Donald Trump's natural gas with the Canadian alternative or a Quebec source natural gas alternative? Six in 10 Quebecers say, yes, we're supportive of a pipeline, which you will know and most of your viewers will know. That is a radical change from when the energy policy when

I worked for Prime Minister Harper where it was totally opposed by Quebec, effectively vetoed. So the world has changed. The economics have changed. Geopolitics have changed. But you've got to put Trump's name in that question, or else you might get a bit of a different response. It certainly lifts the response.

It torques it a bit. But the truth is, that's who we're up against today. And to your question, the integrated energy plan actually lays out the key principles, the guiding principles for Ontario's strong support for an east to West energy corridor. That includes East to West transmission grid. It includes East to West pipelines. I believe Ontario has always played in confederation a unifying role.

And I think we should not discount very authentic concerns of Western alienation. The West wants a fair deal. All the more reason to buy electricity generation from them, no? All the reason to support getting their commodities to tidewater. I mean, we need a solution to this. We are landlocked. 80% of our resources of our exports are going to one customer who now has a lot of leverage over us.

Too much, I would submit, and the Premier would agree. So what it means is we've got to build a pipeline east to west. We're offering, obviously, support for that pipeline. One of our foundations and principles is we want to get Canadian steel manufacturers, pipe fitters to build it. We also make clear our interest in a deep sea port in the James Bay to help get our ore or other products, could be liquefied natural gas, to new markets. The vision of energy superpower that governments are speaking about is achieved by ending the landlocking

of our resources. And this is a fundamental imperative for our economy and for our national security. I think now more than ever, the federal government is right to push forward on this vision. And I think there is social acceptability out there. We talked about the phrasing of the question, but generally speaking, post-Trump, Canadians want a solution. We want to be energy independent. we want it to be affordable and yes I would like to displace American or even more so despotic forms of energy we get

Venezuelan petroleum we've got resources coming from Russia this just seems nonsensical and offensive and the energy portfolio we still do a lot of procurement and one of the solutions the integrated energy plan is to phase out and remove the overwhelming dominance of China within the supply chain and energy. 60% of solar, 80% of the wind is built in China. So I want to end the financing of regimes and governments that are undermining our way of life indiscriminately. Does that include the United States?

In the United States, it does actually include a phase out of dependence from the US. We're actually giving more points to Canadian businesses. I would not suggest they're in authoritarian regime. I would submit in this tariff war, we're standing up for Canada by saying we want to buy more Canadian. And we're actually giving incentives in our procurement system, the more points if you are a local Canadian supplier.

Then tell me this, how come, and I know the small modular reactors are the new, you know, they're the flavor of the month for nuclear generation now. And I guess the, you know, a large chunk of the project is Canadian made, but there is US-based technology from GE and Hitachi, which will go into this, and you know, this government, know this government again protect Ontario elbows up why not cancel the American involvement in this and go with Rolls Royce which is British or maybe go with whatever they used to they used to call it can do now it's something else what do they call it now yeah it is can I can realize I can read yeah well first of all there isn't a Canadian alternative of a grid scale commercial SMR that is this viable

So we got to go with the American. No, we've got to go with the most efficacious proven technology This is the first of its kind in Canada to suggest this isn't a Canadian alley value I would I'm not saying you're saying this but for those that may have this curiosity The Conference Board of Canada did a study on the net benefits to Canada's economy. $36 billion net gain, 20,000 Canadian construction jobs, 3,500 permanent jobs will be created here. Because OPG, first of its kind, we are the first country in the G7 to build an SMR. And unlike the British alternative, like you mentioned, the tech they're providing is going to be in service

four to six years after us. Like the RSMR, a small modular reactor, 300 megawatts of dispatchable, stackable power is going to be connected to the grid in your 2029, 2030. The first in the G7, like we just hosted the G7, it's pretty neat that of all those industrial economies, here in Ontario, we are leading the world and we're exporting it.

And we in Ontario own part of the IEP when we sell them. Every time we sell them in Poland, for example, where I was there with Rudy Cazetto a few months ago, the Polish, the Estonians, the Czech Republic, the United States, the largest public utility in America, TVA, Tennessee Value Authority, signed on to build this SMR.

We have market penetration because we have a very reputable technology partner. We have, but we have, unless I missed it, I don't know that we've ever done large-scale nuclear construction of power generation that comes in on time or on budget. And this is a very brand new technology. And I mean, you can't sit here and tell me that you know it's going to be on time or on budget. And this is a very brand new technology. And I mean, you can't sit here and tell me that you know it's going to be on time and on budget by 2029, can you? Well, I think what we can do is ensure

discipline of the schedule and on the budget. Because OPG, who is leading this project, to be fair to them. Like, your assumption is fair writ large, right? Most of these projects haven't been done well on time and budget. But that's not Ontario's, that's certainly not OPG's historic experience. Look, since I became minister, I had to put, or Darlington refurbished this large scale nuclear reactor, roughly 4,000 megawatts of clean power, an amazing nuclear reactor, pickering 2,000 megawatts of power. The Liberals want to close it. I announced the life extension.

In both cases, in Darlington, it is being done on time and ahead of schedule. That is, but I remember the days when Bill Davis's government said, oh it'll only cost three billion dollars to do, and the bill came in at 16 billion. Yeah, listen, there are lessons learned from the past governments. I hope so. Do you think there are? Well, I think they're being applied, Steve, because in this case, look at the record of every large-scale refurbishment of some of the largest reactors on Earth, on time, on budget, and often ahead of schedule.

180 days. When we put Unit 1 at Darlington, roughly 1,000 megawatts of power, 900 megawatts of power, a great example of Canadian leadership in the world. We were the only country amongst the UK, the US, the French, all these large military powers to say, we put our refurbishment back online ahead of schedule and under budget. So I hear you. I understand the challenge.

I'm just curious. No, look, I'm a taxpayer too. But I'm just saying to you, it's pretty incredible that here in Ontario, we can boast with confidence and a wonderful differentiator, a competitive advantage around the world, that we're doing it on time, we're doing it on budget. I'm talking about the large scale. So those lessons will be applied to everything we do.

Of course, first of its kind technology always comes with risk and opportunity, but the fact that we're looking at a $36 billion gain, export opportunities, our supply chain, the Canadian Ontario supply chain, half a billion dollars of commitments to build out the SMRs of the world. So we're now at the center of this export. I think that's pretty neat. And I mean, I think that's pretty exciting when it comes to Canada being at the center of the clean energy economy of the future. And many countries are turning back to nuclear, including those that have turned away from

it because it's the only way to create that baseload reliable, affordable power over the course of, in this case, that's a 65 year asset of continuous power. And so you just, we looked at the alternatives. We actually looked at renewables. We actually put it into press release, which is a bit of an unusual tactic, Steve, because I wanted people to understand like the land cost for an SMR is decided, it's a footprint of a community center. It's very small, very modern.

They don't look like the Darlingtons, if you will. Different tech. You look at a solar alternative, or wind. And by the way, again, I'm talking technological agnostic. We support those resources too. But we looked at those alternatives, because we knew someone would say, but why not choose solar?

Of course, made in China, solar, the great violator of human rights and environmental labor standards. And space loads an issue with that. And it is an issue because it's intermittent. But when you associate the land and the cost for the technology, and then you need the same size battery effectively, we looked at roughly land equivalent to the size of the GTHA to get that type of, to your point, reliability. You have to build three times the volume to hit that type of reliable power source.

So it's more expensive. The levelized cost is still higher than the first of its kind. So we are confident, but we are very much committed to keeping that accountable and protecting the taxpayer. Okay. We've got about five minutes to go here and I want to touch on the other part of your portfolio because you are the energy minister, but you also have responsibility over mines. And one of the things your government has been criticized for lately is this thing bill five, which would allow the government of Ontario essentially to, well you've read some of the

columns about it, there is a lot of concern that there is some running rough shot over people's rights as the attempt to build new infrastructure, nation-building projects, whatever you want to call it, is going forward. I was, and please correct me if I'm wrong, but I was surprised to hear during the debates at Queens Park that all the premiers have been meeting about these, the federal government has been meeting about this because they've got their own C5 that does kind of the same thing, but there was no indigenous representation at any of the tables where this stuff came up and you want to build on their land.

What's going on? Well, I think, you know, the basis for this legislation, certainly the schedule that I'm responsible for on accelerating mining, I just want to start with the problem we're trying to solve, just to level set. We have one of the slowest permitting regimes in the industrialized world. The OECD said we're the second slowest.

In Canada, we are the 10th out of 10th. The last benchmark, this is not a benchmark you want to achieve. We are the worst when it comes to attracting mining investment. Last year, one of the two mines had opened. It took them 16 plus years. Let me follow up on that though right away because I don't know that you can get these mines open any faster What is it 15 years it takes right now 15? You know take upwards of idea. Okay I'm not sure you're gonna get them open any quicker if there are blockades on roads if there are First Nations that aren't consulted

If they are not made a partner to what you are trying to do I'm cutting off your nose to spite your face here. No, I agree with that premise My point is simply to say that the impetus behind this introduction of this bill, the first bill was to eliminate inter-provincial trade barriers, the second bill was to accelerate responsible resource development because we're in a critical minerals race. To your point though, I think actually you have a lot of alignment with our government when it comes to the reality on the ground. We know if we want to do big things, anything really,

particularly when it comes to the lands, indigenous lands, treaty lands, etc. we have to do it in partnership. So why isn't that happening? Well, in the Ministry of Energy and Mines it is happening. Every transmission project we've approved in this province, we've done a billion dollar project, indigenous participation, 50-50 equity. Every single battery project and storage project, the 9 of the 11 so far, indigenous participation, 50-50 equity. Every single battery project and storage project, the 9 of the 11 so far, indigenous participation.

In this past budget, to help realize more ownership over those very projects, we added $3 billion for equity for indigenous to buy in. I did see that. The federal government has $5 billion. We're one province, I mean, a big province, but $3 billion. I think what it demonstrates is a commitment to ensure economic reconciliation.

We have been and we're going to continue to work with them. In which case, why are they, I shouldn't say they, there are some indigenous groups that are on side with what you're doing. There are some others that are saying, you know what? Well, you heard Salma Mokwa, the NDP MPP, the other day, I guess was a week or two ago, saying, you know, it's coming. The blockades are coming. Trouble is coming because you guys are not consulting as you are

obliged to do yeah because of a Supreme Court decision so we got it so I think my the answer to anyone who's inquiring is the government of Ontario like all governments in this country constitutionally must discharge the duty to consult that is not that's that's not a choice right the law doesn't give you the rights to override that this bill that we brought forward does not expedite that. Like that that is a that is a moral and a legal duty of government to meaningfully consult. And you will do that? Well yes and the Supreme Court will require that but the government we don't need the

court to tell us that. Okay. Like intuitively Steve we want to do this in partnership and we want to build together because there's massive opportunity particularly in the north It's why we announced half a billion dollars of funding for increasing critical mineral processing so we end the ripping and shipping of resources Okay, I'm cutting you off here because we're down to our last minute here, and you know the hockey season's over You don't have to rag the puck so much anymore. No, it's important note though. We want to I get you You're very enthusiastic about this stuff, I get it. I'm going to ask you the question I ask Peter Bethlen-Falvey, the Minister of Finance, every budget day, which is, I make a six-figure salary and so do you, and so does he.

And for whatever reason, the province of Ontario is still subsidizing my electricity bill, your electricity bill, his electricity bill, his electricity bill, the Premier's electricity bill to the tune of nearly seven billion taxpayer dollars a year. Why does that make sense? Look the reason why we put forth these energy subsidies in the first place is because hydro rates were so out of control because of really incompetent government of the former liberals. I mean they lost the 2018 election in part under Premier Winn because of really incompetent government in the form of liberals. I mean, they lost the 2018 election in part under Premier win because of irresponsible actions on energy and hydro.

They increased the highest 400 percent. Everyone paid the price. So the government used tax dollars to help reduce the rates, create some stability in the system. Why not direct that against those who need the help? You don't need the help. I don't need the help. Yeah.

I mean, there's always a public policy question on how to do that How to really narrow cast those supports is it based on the square footage of one home because a very wealthy person could live in An apartment downtown. I mean, there's an interesting we've looked at options I mean certainly what I'd say to you is I get your point, but in the meantime We're gonna keep that one. He says the same thing. He says I get your point. No, we're not changing Intellectually, we get it. Yeah, I'm open to you or your viewers' recommendations on how to narrowcast. But what I'd say in the meantime is we want to keep energy rates affordable. That's a strength when it comes to attracting investment and creating a million jobs, which we've done under our premier.

And we're going to keep doing that. We're going to keep ensuring energy is affordable. But with the commitment to phase out these subsidies over time... Really? Well, I think, as you will see... I haven't seen that. It's only going up every year that I've seen. We're trying to bring forth some reduction in that subsidies over time. Really? Well, I think, as you will see, we're trying to bring forth some reduction in that trajectory over time. We certainly want to keep energy affordable. We shall see.

I'm out of time. That's it. That's all. Steve, thank you for nearly 20 years of good public service. We appreciate you. I know we're going to miss the agenda. Well, you'll find something else to watch. It's OK.

I'll move on. But you know what? We've enjoyed having you on these many years because you always come prepared. the agenda. Well, you'll find something else to watch. It's okay. I'll move on. But you know what? We've enjoyed having you on these many years because you always come prepared and you're very good at what you do. You're very tough to knock off your message. And many of us who watch Politics for a Living are quite intrigued to see what's going to

happen to you in the years ahead. And that's all I'll say about that. Thank you, sir. That's Stephen Lecce, Minister of Energy and Mines and the MPP for King Von. Thanks, Minister. Thank you.