Written by Zoé St Pierre, Student-at-Law at CELA
In March 2023, the Low-Income Energy Network (LIEN) and Canadian Environmental Law Association (CELA) published Pathway Out of Energy Poverty in Northern Ontario, a report assessing energy affordability programs available to low-income people in Northern Ontario.
Unfortunately, Pathway Out of Energy Poverty in Northern Ontario concludes that there are significant gaps in protection for low-income people struggling to pay their utility bills. With 18 recommendations, Pathway Out of Energy Poverty in Northern Ontario aims to highlight the existing constraints and inequalities that low-income people living in Northern Ontario face.
Energy poverty is the inability to access, achieve and sustain sufficient levels of social and material needs through energy services. Low-income people experience energy poverty when their energy costs rise above 6-8% of their total monthly budget. Even on the Canadian Energy Regulator’s less stringent standard of energy poverty defined at 10% of a household’s monthly budget, it has recently found that 8% of Canadian households experience energy poverty. That is over 3 million people.
A report from the Financial Accountability Office of Ontario found that in 2019, households in rural areas of the province paid over $3,000 on home energy, compared with an average of $2,000 spent by households in large urban centres. This is due to a number of factors that makes the north distinct from other areas. For example, the report examines relevant factors like the way energy is consumed, the sources of energy that are available, the geography, and the high cost of energy.
Energy poverty is especially a concern because of its derivative impacts. Not only do utility bills become harder to pay and can pose financial and psychological stress on a household, but people are also forced to make other tough choices on other necessities like paying their rent or mortgage, purchasing new clothes, and even buying groceries. This is extremely concerning because these things are all essential for people to live.
One of the many recommendations Pathway Out of Energy Poverty in Northern Ontario put forward is to review the Ontario Electricity Support Program (OESP) eligibility thresholds and OESP assistance rates to ensure the program is meeting the needs of low-income Ontarians, no matter where they live across the province.
The provincially funded OESP provides on-bill monthly support for lower-income Ontarians using electricity. Eligible households must have accounts with electricity distributors or sub-meter providers and apply to the program. OESP provides credit directly onto the electricity bills of those accepted into the program for a period of two years, and then the eligible individual must re-apply.
The amount of funding each household receives is dependent on a household’s income and size and it ranges from a monthly credit of $35-$75. For households that are electrically heated or require additional electricity for a medical device, the amount of assistance ranges from $52-$113 per month. OESP is a very important program for people across Ontario, including those living in Northern Ontario. One interviewee noted that for a single person relying on income from the Ontario Disability Support Program or Ontario Works, a $45 monthly credit can make a huge difference and make energy bills and monthly costs much more manageable. However, the energy costs for heating can be over $1000 per month in Northern Ontario. For households with bills that large, OESP levels are far too low. To better serve the vulnerable populations experiencing energy poverty in the North, OESP levels should be raised to reflect the high cost of electricity.
Another key recommendation from Pathway Out of Energy Poverty in Northern Ontario is to create two new assistance programs: an on-bill support program for natural gas users as well as one those who use unregulated fuels, such as wood.
Natural gas prices have risen dramatically in the last five years and there is currently no on-bill support for natural gas users. Interviewees for this report noted that low-income clients often asked about whether a program for natural gas users is available. This clearly shows a need for this type of support, as we know heating with electricity may not always be an option in Northern Ontario households.
In addition to the commonality of natural gas usage, Pathway Out of Energy Poverty in Northern Ontario recognizes that a large number of low income residents in Northern Ontario also use alternative fuel types like wood, propane and oil. Because the OEB does not regulate these types of fuels, there is a gap in the available on-bill supports and programs. Pathway Out of Energy Poverty in Northern Ontario therefore recommends a Ministry of Energy program to provide ongoing monthly assistance for low-income people using nonregulated fuels.
These recommendations are only a few of almost 20. Pathway Out of Energy Poverty in Northern Ontario clearly shows that more needs to be done to assist Northern Ontarians when it comes to their energy needs. Access to affordable and adequate energy is a human right and a necessity, and it is clearly interrelated with other rights, including the right to an adequate standard of living, the right to health, and the right to life.
Energy poverty in Northern Ontario must be met with a policy response that accounts for the real circumstances of people living in Northern Ontario. The issues of energy poverty are particularly acute and complex in Northern Ontario and a response tailored to the uniqueness of that life is essential.
You can read the complete Pathway Out of Energy Poverty in Northern Ontario report here: https://cela.ca/pathway-out-of-energy-poverty-in-northern-ontario/