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Bill 165 - Keeping Energy Costs Down Act, 2024

Unifor top-line position#

  1. Primary concern: Enbridge is outsourcing work to third-party contractors, returning to a situation where it is becoming a "virtual utility".
  2. The OEB should be provided the capacity to ensure Enbridge fulfills its obligations to maintain its infrastructure and limit methane leaks.

Background#

  • Name: Enbridge Inc.
  • Traded on the TSX, NYSE.
  • Headquarters: Calgary, AB
  • Subsidiaries: Enbridge Pipelines, Enbridge Gas Inc.
  • Unifor members in Ontario: 1300+

Enbridge is a multinational, publicly traded, and fully financialized natural gas and oil pipeline and utility company. It operates in Canada, USA, Mexico mainly, but also UK, France, Germany.

Enbridge is:

  1. a regulated utility in Ontario in the supply of natural gas through its pipeline infrastructure to homes in Ontario.

  2. not allowed to make profit from selling gas. It makes profit from building and maintaining gas infrastructure.

  3. in the process of laying off hundreds of workers and managers across Canada. The savings from layoffs are to support purchases of large utilities in the USA and to pay for increased dividends.

  4. continuing to contract-out work in Ontario where collective agreements allow. This process is by new work being given to contractors or replacing work done by in-house during layoff/retirements with contractors.

  5. not allowed to be a "virtual utility" (i.e., does not do the work itself, but contracts it out to third-parties) as per a 2002 ruling of the OEB.

  6. purchasing contracting companies that it contracts-out Unifor work to. (Actions continue to expand scope to these companies.)

Links of interest:

Summary of Ontario Bill 165#

Bill 165 does the following:

  • Increased ability for the government to intervene in OEB decision making through calling "generic hearings" during OEB deliberations.

  • Forces OEB to seek stakeholder input into all decisions and allows the government to provide the list of specific stakeholders who must be consulted.

  • “Revenue horizon” will be defined by the government and not by the OEB. The shortened revenue horizon" was the main issue Enbridge had with the OEB decision on rates. The OEB decision would have shortened the timelines that Enbridge had to recoup the costs of installing new pipelines. The OEB rational is explained here.

  • The bill will also make it easier for Enbridge to build new gas infrastructure in Ontario.

Potential for amendments on Bill 165#

Unifor's primary concerns:

  1. Enbridge is outsourcing work to third-party contractors, returning to a situation where it is becoming a "virtual utility".
  2. The OEB should be provided the capacity to ensure Enbridge fulfills its obligations to sustain enough in-house expertise to maintain its infrastructure and limit methane leaks.

Public regulation over contracting-out jobs#

Unifor's principle: Public money or specific public regulations changes that directly support new builds should come with strings attached around contracting-out work. Expansion of infrastructure occurring because of either new public funding or specific public regulation changes should be prioritize in-house union work. And, only additional work necessary where in house capacity cannot fulfil that demand for short-term projects should be allowed to be contracted-out.

The reason for this principle is two-fold:

  1. Contracting-out work erodes the bargaining unit to no benefit to Ontario workers.
  2. Contractor work is of varying degrees of quality and it is much harder to guarantee safe deployment of new infrastructure or fixing/maintaining infrastructure.

The question for amendments of this Bill is:

  • How do we protect against contracting-out in a bill or through regulation?

We submit that several options may be available:

1. Prevailing wage protection for publicly supported projects#

Prevailing wage and union protection legislation covering gas work identified by the bill, specifically expanded gas line infrastructure and new connections. Identifying union coverage and wage rates for all workers on projects under regulation and/or receiving government support.

Something like, but not really this:

96.2

c) the Board shall request information on the employment, wage, and union coverage status of the workers employed for the construction of new gas lines and connections to new gas customers.

2. Enforce the OEB "Virtual Utility" ruling#

Focus changes to allow OEB to enforce the "Virtual Utility" ruling from 2002.

The ruling stated that while the OEB can rule that Enbridge was in violation of their requirements, it cannot regulate contract/non-contract employment.

Solution A#

Give the OEB the ability to regulate and/or find out what percentage of all gas work is being done through contractors and/or what percentage of regulated gas connection work is done by contractors.

Purpose:

To establish minimum work employment per amount of infrastructure falling under regulation that must be in house and union.

Because: A standard of in-house work is needed to increase capacity of Enbridge to safely maintain its infrastructure.

Solution B#

Give the OEB the ability to publish who---in-house or contractor---is doing work on different parts of the system publicly.

Methane leaks#

Goal: To support the investment in climate change mitigation along the natural gas infrastructure network by fixing methane leaks.

The federal government has brought in several programs to support this goal. Unifor has recommended that real investment support be provided to all sizes of company to deal with these leaks.

Solution A#

The OEB be allowed to regulate and rule on if necessary investments in mitigating leaks along Enbridge's regulated network are being made.

Establish minimum commitment for leak-mitigation investment.

Establish reporting on leak identification activities, timelines responding to leaks, and fixing leaks.

Solution B#

Allow OEB to establish a review panel on methane leaks across the regulated network.

Allow the OEB to review or re-examine Enbridge's and other company's classification of leaks and whether they are sealing them.

Provide a public report recommending/regulating timelines for fixing different sizes of leaks along the regulated network.