Bill 40, Protect Ontario by Securing Affordable Energy for Generations Act, 2025
Chamber
ontario
Stage
Introduced
This Ontario law changes energy rules to support economic growth, regulate large electricity users like data centres, and streamline utility approvals.
Key Changes
- Economic growth is added as an official purpose of Ontario's electricity laws and the Ontario Energy Board's mandate
- Large electricity users like data centres must meet government-set conditions before connecting to the power grid
- The government can use public funds to pay electricity transmitters, with the Ontario Energy Board required to reduce consumer rates accordingly
- Municipalities no longer need a public vote (referendum) to approve utility franchise by-laws — council approval alone is now sufficient
- Development of a low-carbon hydrogen market is added as a goal of the Electricity Act
- Energy companies can be restricted from buying goods or services from certain foreign countries (if companion Bill 5 also passed)
Gotchas
- The removal of the municipal referendum requirement for utility franchise approvals reduces direct democratic input from residents on local utility decisions, transferring that authority solely to elected councils.
- The connection requirements for large electricity users (like data centres) are largely defined by future regulations, meaning the specific rules are not set out in the bill itself and will be determined later by the government.
- The new data centre connection rules do not apply to facilities that had already submitted a connection request before June 3, 2025, creating a grandfather clause for projects already in the pipeline.
- The procurement restrictions on foreign goods and services (Sections 43.1 and 73 amendments) only take effect if the separate Bill 5 also received Royal Assent, making part of this bill conditionally dependent on another piece of legislation.
- If the government makes public payments to electricity transmitters, the Ontario Energy Board is required to lower consumer rates to reflect those payments — but the bill does not guarantee such payments will be made, as it depends on future legislative appropriations.
Who's Affected
- Data centres and other large industrial electricity users seeking grid connections
- Electricity transmitters and distributors
- Ontario municipalities and their residents (regarding utility approvals)
- Ontario Energy Board and its regulatory processes
- Gas distributors, transmitters, and storage companies subject to procurement restrictions
- Ontario electricity ratepayers (potentially affected by rate changes)
Vibes
0 responses
Gotchas
- The removal of the municipal referendum requirement for utility franchise approvals reduces direct democratic input from residents on local utility decisions, transferring that authority solely to elected councils.
- The connection requirements for large electricity users (like data centres) are largely defined by future regulations, meaning the specific rules are not set out in the bill itself and will be determined later by the government.
- The new data centre connection rules do not apply to facilities that had already submitted a connection request before June 3, 2025, creating a grandfather clause for projects already in the pipeline.
- The procurement restrictions on foreign goods and services (Sections 43.1 and 73 amendments) only take effect if the separate Bill 5 also received Royal Assent, making part of this bill conditionally dependent on another piece of legislation.
- If the government makes public payments to electricity transmitters, the Ontario Energy Board is required to lower consumer rates to reflect those payments — but the bill does not guarantee such payments will be made, as it depends on future legislative appropriations.
Summary
Bill 40 amends several Ontario energy laws to make economic growth an official goal of the province's electricity system. It adds new rules for connecting large electricity users — especially data centres — to the power grid, requiring them to meet government-set conditions before they can connect. The bill also supports the development of a hydrogen energy market in Ontario and allows the government to use public funds to help pay electricity transmitters, which could reduce rates for consumers. The bill also changes how municipalities approve public utility projects (like gas lines). Previously, residents had to vote in a referendum to approve such projects. Under this bill, municipal councils can approve these projects on their own by passing a by-law, removing the need for a public vote. This is meant to speed up the process of building or expanding utility infrastructure. Additionally, the bill strengthens the Ontario Energy Board's ability to manage its own hearing processes and adds procurement restrictions that limit energy companies from buying goods or services from certain foreign countries — a measure tied to a companion bill (Bill 5) that was also before the legislature.
Automatically generated from bill text using Claude
Vibes
0 responses
Recorded Votes
| Date | Description | Yeas | Nays | Result |
|---|---|---|---|---|
| Dec 8, 2025 | Third Reading of Bill 40, An Act to amend various statutes with respect to energy, the electrical sector and public utilities. | 69 | 37 | Carried |
| Nov 17, 2025 | Second Reading of Bill 40, An Act to amend various statutes with respect to energy, the electrical sector and public utilities. | 70 | 38 | Carried |