Ontario's Bill 40 Proposes Expediting Regulatory Approvals for Energy Infrastructure Projects

On June 3, 2025, the Ontario government introduced Bill 40, the Protect Ontario by Securing Affordable Energy for Generations Act, 2025, to expedite regulatory approvals, allowing Ontario to build and deliver an affordable, secure, reliable and clean energy system and to increase domestic investment in local energy infrastructure projects.

To achieve these objectives, Bill 40 proposes important changes to Ontario’s Electricity Act, 1998 and the Ontario Energy Board Act, 1998.

Proposed amendments to the Electricity Act, 1998 (Electricity Act) include:

• Expanding the purposes of the Electricity Act to include supporting economic growth and the development of low-carbon hydrogen in a manner consistent with government policies. The Independent Electricity System Operator's objectives would also be amended to include supporting economic growth (Electricity Act, section 1 and subsection 6(1)).
• Allowing the government to introduce new regulations permitting payments to electricity generators, distributors and the Financial Corporation to be funded by the legislature, rather than solely by ratepayers (Electricity Act, new subsection 25.34(2)).
• Introducing bespoke requirements for the connection of high-demand load facilities, such as data centres, to electricity distribution and transmission systems. Connection requirements may include criteria regarding economic development and job creation (Electricity Act, new section 28.1).

Proposed amendments to the Ontario Energy Board Act, 1998 (OEB Act) include:

• Expanding the Ontario Energy Board’s (OEB) objectives to include supporting economic growth in the electricity sector. Economic growth is added as a mandatory consideration for granting applications for leave to construct electricity transmission or distribution projects (OEB Act, subsection 1(1) and section 96).
• Granting the OEB’s Chief Executive Officer the authority to issue internal procedural policies, clarifying that non-compliance does not affect the validity of any action. Amendments also ensure that the proposed new section 28.1 of the Electricity Act prevails over any conflicting OEB orders or licences regarding conditions requiring non-discriminatory access to electricity transmission or distribution systems (OEB Act, new section 13.1 and section 70).
• Permitting the Minister to make payments to electricity transmitters from monies appropriated by the legislature for that purpose, which the OEB must consider when setting and approving rates (OEB Act, new section 78.3).
• Adding provisions respecting deferral and variance accounts for compliance with the country-of-origin procurement restrictions introduced by Bill 5, the Protect Ontario by Unleashing our Economy Act, 2025 (OEB Act, sections 43.1 and 73).

These amendments aimed at expediting regulatory approvals for electricity infrastructure projects come just days ahead of the government’s highly anticipated inaugural Integrated Energy Plan. The legislative framework for this plan was introduced last year by Bill 214, the Affordable Energy Act.

Our team is closely monitoring these legislative developments and the potential implications for your business.

For more information, please contact the authors or any other member of our Power or Energy Regulatory groups.