Northern Ontario mayors speak out over loss of natural gas pipeline loans

Premier Kathleen Wynne might be getting the freeze from northern Ontario mayors and CAOs after the government announced it would cancel a program designed to offer loans for natural gas pipelines along the Highway 17 corridor between Thunder Bay and Sault Ste. Marie.

Leaders of the affected communities were quick to denounce the cuts in a press release Monday, saying the entire gas program is now "in jeopardy."

"Today's announcement effectively shrinks a $230 million commitment, $200 million in loans and $30 million in grants, to a $100 million grant," Wawa CAO Chris Wray said.

"We had a business plan to repay money that the government is now taking away."

Wray said they had been working for over two years with Northeast Midstream — a Toronto-based group that focuses on expanding natural gas service — on plans for the distribution network.

The Natural Gas Access Loan program was rolled out in Ontario's 2016 budget to assist the communities of Marathon, Schreiber, Manitouwadge, Terrace Bay and Wawa — areas currently not served by natural gas.

The mayors estimated that homeowners and businesses already pay up to four times more for space and water heating than other parts of Ontario.

According to the press release, the Northern Ontario Heritage Fund Corporation anticipated more than $6 million a year in savings after the network's completion.

Manitouwadge Mayor Andy Major said the reduced funding means residents in the north will likely feel the pinch.

"There are limited alternatives for communities in the north, and many homeowners and businesses struggle with energy costs, " Major said, adding that "a solution to make living in the north more affordable was presented to this government and is being ignored once again."

Superior North MPP defends program changes

The changes to the subsidization of natural gas projects in Ontario are being defended by the Liberal MPP that represents the north shore region.

In a written statement to CBC News, Michael Gravelle said that offering grants — which communities don't have to pay back — rather than loans will bring "meaningful expansion" of natural gas in Ontario, adding that under the changes, money available through grants will rise from $30 million to $100 million.

"Our government will continue to work with local municipalities as to how the expanded grant program can work for them," Gravelle was quoted as saying in the statement.

Gravelle added that municipalities and First Nations communities will be able to work with utilities to bring forward project proposals to be considered for funding, and that the program will be launched in the spring.