For 20 years, Enbridge has run pipelines beneath the roads and parks in Guelph, Ontario, without paying a cent to the city.
Now, with Guelph’s franchise agreement with Enbridge set to expire in April, city council and local advocates are demanding that the gas company pay to use the land, ending what they call a long-standing fossil fuel subsidy.
Most provinces require gas companies to pay millions in fees to municipalities — but Ontario prohibits municipalities from collecting such fees.
Guelph City Councillor Leanne Caron said a clause is needed in the new agreement, requiring Enbridge to pay fees if the Municipal Act is ever amended to allow municipalities to charge them. In that scenario, Enbridge would have to start paying city fees immediately, rather than waiting for the next 20-year renewal, she said.
The city is determined not to sign another two-decade contract without significant changes that reflect today’s realities, she said. “Fossil fuel companies are contributing to the climate crisis, and they need to pay the cost.”
“It would be irresponsible to lock ourselves into an outdated agreement without any flexibility,” she noted. “We’re not asking for this to apply to telecommunications companies, solar distributors, or other energy providers — just for-profit fossil fuel companies.”
The Ontario Energy Board (OEB) has scheduled a hearing on Guelph’s franchise agreement in June. Caron said Enbridge attempted to block the city and local environmental group eMERGE from participating. That move was denied by the board, shows a document Caron shared with Canada’s National Observer.
Canada's National Observer reached out to the OEB and Enbridge for comment but did not receive a response in time for publication.
“They want to advocate for their own benefit without the public having equal standing in the process. But that’s not fair — that’s not how the system works,” she said.
If Guelph was able to charge fees at the same rate as other provinces, it could generate about $8.5 million per year in revenue — money that could fund climate initiatives, Caron said. By not charging Enbridge a fee, the city is effectively subsidizing one of Canada’s most profitable fossil fuel giants, she added.
“We’re trying to incentivize the transition to heat pumps and other alternative clean energy sources,” she explained. “It’s harder to do that when we continue subsidizing an aging energy source.”
Caron is also calling on the Ford government to amend the Municipal Act to allow municipalities to charge these fees.
If Guelph gains the ability to charge municipal easement fees, the revenue should go directly into the city’s climate action plan to help achieve net zero by 2050, she said.
“This gives us an opportunity to attempt — hopefully successfully — to claw back some of those public subsidies that fossil fuel giants like Enbridge are getting,” agreed Evan Ferrari, executive director of eMERGE, an advocacy group participating in the hearing.
Ferrari emphasized the issue goes far beyond Guelph and urged other municipalities to do the same. “This is a big, bad, large fossil fuel company operating in front of every one of our houses, and we need to do something about it.”
Guelph is not alone in this fight.
Toronto is also pushing for a regulatory change to the Municipal Act to end a multimillion-dollar fossil fuel subsidy that allows Enbridge to use municipal underground infrastructure without paying fees.
The City of Ottawa also called for an amendment to the provincial act to allow municipalities to charge fees for the use of public rights-of-way.
Last year, Mike Schreiner, Ontario's Green Party leader and MPP for Guelph, introduced a private member’s bill to end the “free ride” for fossil fuel companies — including giants like Enbridge — that don’t pay a cent for pipeline access, leaving taxpayers to subsidize their oil and gas infrastructure.
That bill died when the session ended, but he plans to reintroduce it this year.
“We shouldn’t be subsidizing fossil fuels at a time when we’re facing an affordability crisis and a climate emergency,” Schreiner said. “B.C., Alberta, Saskatchewan, and others allow municipalities to charge for fossil fuel infrastructure. Alberta has been doing this for 100 years, and the fact that Ontario prohibits municipalities from doing this is wrong.”
Schreiner said it’s up to municipalities to decide how to use the funds, but praised Guelph’s decision to invest in climate action.
He also criticized Ford’s government for its historic support of Enbridge and other fossil fuel companies. He pointed to the Keeping Energy Costs Down Act, which overrode an OEB decision that would have limited Enbridge’s ability to fund gas expansion projects using ratepayer money. Schreiner believes Ford’s close ties to fossil fuel interests make it unlikely that his government will support the Green Party’s bill.
However, Schreiner remains hopeful that mounting pressure from municipalities will push the Ford government to reconsider amending the Municipal Act to allow cities to charge such fees.
Abdul Matin Sarfraz / Canada’s National Observer / Local Journalism Initiative
Comments
I wish Guelph the best of luck.
They may wish to consult with Metro Vancouver cities on their experience with TMX running through their streets, lanes, parks, sensitive habitat and geologically unstable areas. In addition, what are exactly the legal rights of municipalities vs the practices of big oil pipelines backed by senior governments?
The city if Burnaby found TMX personnel to be bad faith actors even when the city worked with them to ease the application for permits. In the end city staff were summonsed to appear before a Hollywood style kangaroo court then called the National Energy Board, a legalistic structure designed to be a rubber stamp for the fossil fuel industry. The third degree antics pulled by industry lawyers on city staff would have been instantly shot down in a real court of law and the industry side found in contempt.
The NEB automatically approved the ability of TMX to skip over applying for city permits everywhere. However, Burnaby produced a 39-page affidavit detailing how TMX lied, delayed, obfuscated, failed to produce key engineering documentation and falsely blamed the city for "delaying" the permits.
The TMX narrative about "city delays" entered the echo chambers of Postmedia outlets, like the Calgary Herald, as well as the Globe and Mail in a column by a journalist I used to respect who failed to do his research. I wrote to him and explained how he was misled by the misinformation issued by TMX and sent him a link to the affidavit posted only on the Burnaby website.
The reaction by these media outlets was silence. As soon as the affidavit was posted in the NEB results, the Calgary Herald editorial board members who previously parroted the industry line merely stopped making the false accusation about city-led delays. They failed to acknowledge that it was their TMX friends who caused all the delays while working behind the scenes to have the NEB allow them to avoid permits altogether.
But I was very disappointed when the Globe journo didn't print a retraction or apologize to Burnaby, or bother to reply to my email. However, his own narrative changed after that and he became more critical of TMX.
I suppose some victories are meant to be quiet.