Summary#

Bill 40, the Protect Ontario by Securing Affordable Energy for Generations Act, 2025, is enacted as Chapter 22 of Ontario’s 2025 statutes. It amends the Electricity Act, 1998, the Municipal Franchises Act and the Ontario Energy Board Act, 1998. Its stated goal is to support economic growth and develop Ontario’s energy system; those goals do not guarantee particular results.

• It adds economic growth and hydrogen development to energy-sector purposes and objectives. The Independent Electricity System Operator must support economic growth in a way that protects consumers’ interests.
• It requires electricity transmitters and distributors not to connect or reconnect certain large electricity users unless requirements set by regulation are met. The rules may cover data centres and other facilities that meet criteria set by regulation.
• It lets the Ontario Energy Board’s chief executive officer issue internal policies on hearing timelines, decision timelines for delegated staff, and information or documents to be considered. Not following a policy does not, by itself, invalidate an action.
• It allows certain prescribed payments to generators, distributors or the Financial Corporation to be paid from money appropriated by the Legislature, instead of being included in specified amounts recovered from market participants and consumers. The Minister may also pay transmitters from appropriated funds; the Board must reflect those payments by reducing their rates.
• It removes municipal-elector approval for municipal by-laws granting public-utility rights to use municipal highways or operate there. It also expands the Ontario Energy Board’s authority over applications concerning the construction, extension or addition to gas-distribution works.
• The Board must consider economic growth in certain electricity-line approval decisions and must consider reports or other information specified by regulation. Some changes to procurement restrictions apply only if Bill 5 received Royal Assent.

What it means for you#

• Large electricity users, including some data centres: A transmitter or distributor must not connect or reconnect a facility covered by the new rules unless it is satisfied the specified requirements have been met. The bill leaves the coverage criteria and requirements to regulations. A connection request submitted before June 3, 2025, is exempt from this section.
• Electricity consumers and taxpayers: If regulations prescribe certain payments and the Legislature appropriates money for them, those amounts may be paid from public funds rather than recovered from specified market participants and consumers. The bill does not set the amounts or require an appropriation.
• Municipal residents and councils: Electors no longer have to approve the relevant public-utility by-law. The municipality must still pass a by-law setting the terms and period of the right.
• Gas utilities and municipalities: Applications to the Ontario Energy Board may cover rights to construct, extend or add to gas-distribution works, as well as to operate them.
• Electricity transmitters and distributors: The Minister may make payments to transmitters from appropriated funds, and the Board must reduce their rates to reflect any such payments.
• General public: The bill does not itself create a hydrogen program, guarantee energy affordability, or require every large electricity user to undergo a new application process.

Money#

No cost estimate is provided in the available material.

• The bill allows some payments to be made from money appropriated by the Legislature, if any; it does not set an amount or require spending.
• If the Minister pays a transmitter, the Ontario Energy Board must reduce that transmitter’s rates to reflect the payment.
• If the procurement amendments take effect, prescribed companies may be allowed to record compliance costs and interest in accounts that the Board may later reflect in rates. The materials give no cost estimate.

What is unclear#

• Regulations will determine which facilities are covered, what connection requirements and approvals apply, and what happens after a breach. Those details are not in the bill.
• The bill does not set the amount or timing of public payments, or say how much might otherwise be collected from market participants or consumers.
• It is unclear whether the conditional procurement amendments took effect: the supplied material says they apply only if Bill 5 received Royal Assent but does not say whether it did.
• The supplied material does not include the full parent Acts, so the amendments cannot be independently checked against all current provisions. Its explanatory note describes the prior municipal-elector approval requirement.
• The bill does not explain how the new economic-growth objectives will be weighed against other considerations in particular decisions.

Case for#

• A possible argument for the bill is that economic growth and energy planning can be considered directly in electricity-sector decisions.
• Rules set by regulation could let the province set connection conditions for very large electricity users, including qualifying data centres.
• Public funding for prescribed amounts or transmitter payments could reduce some charges or rates, if money is appropriated and the rules provide for it.
• Removing elector approval may make it simpler for municipalities to grant utility rights, while still requiring a municipal by-law with terms and a time period.

Case against#

• The bill leaves important connection rules to future regulations, including which facilities are covered and what approvals they need. Until those rules are known, affected users may not know what will be required.
• The new connection rules can limit access to electricity for covered facilities, and the bill does not set out the full process for approvals or dealing with non-compliance.
• Removing municipal-elector approval reduces residents’ direct say over the specified utility by-laws.
• Public payments could shift some costs from electricity charges to public funds, but the bill provides no estimate of the amounts or their effect on taxpayers.