Planning for Power: Overview of Ontario’s Integrated Energy Plan

On June 12, 2025, the Government of Ontario (the “Government”) released its inaugural Energy for Generations: Ontario’s Integrated Plan (“IEP”) to Power the Strongest Economy in the G7.

The IEP combines existing and new policy initiatives into one definitive plan through to 2050, for electricity, natural gas, hydrogen, storage, and other energy sources – to make the economy more competitive, resilient and self-reliant over the long term. The four guiding principles of the IEP are affordability, security, reliability and clean energy.

Simultaneous with the release of the IEP, the Minister of Energy and Mines (the “Minister”) issued two enabling directives to the Ontario Energy Board (the “OEB”) and the Independent Electricity System Operator (“IESO”), that bind those respective organizations to the IEP.

Overview of the IEP

Energy Efficiency

Energy efficiency is a key component of Ontario’s energy plan. The Government is committing $10.9 billion over 12 years to energy efficiency programs to help families and businesses save money and manage their energy use during a period of rising demand.

The IEP highlights a suite of new programs that will help achieve the aim of energy efficiency, including:

• Home Renovation Savings Program;
• Peak Perks for Small Businesses & Residential;
• First Nations Community Building Retrofit Program; and
• Remote First Nations Energy Efficiency Program.

Integrated Energy Framework

Beginning in 2025, Ontario will initiate a systematic five-year cycle of integrated energy planning, aimed at developing a comprehensive plan to address all fuels and resource types together, including electricity, natural gas, hydrogen, renewable natural gas, and biofuels to enable whole-system decision-making through to 2050.

This will be supported by coordination mandates to IESO, the OEB, and the Ministry of Energy and Mines (the “Ministry”) in order to simplify planning.

Both the OEB and IESO have been invited to participate in an ongoing forum on energy planning.  They have been directed to report back to the Ministry by the end of the year on planned changes to the processes for regional and bulk system electricity planning, and opportunities to streamline processes led by both organizations.

Nuclear

The IEP states that nuclear energy will continue to serve as the backbone of the province’s electricity system to meet the province’s growing electricity demands. This aligns with legislative changes enacted as part of the Affordable Energy Act, 2024, which established the prioritization of nuclear power to meet future increases in electricity demand.

The commitment to nuclear energy as a key component of Ontario’s energy system involves supporting nuclear refurbishments at Bruce Power, Ontario Power Generation’s Darlington Project to develop four SMRs totaling 1,200 MW and the refurbishment of the four Pickering B reactors between 2027-2034, which will re-enroll approximately 2,000 MW of baseload supply. The IEP also outlines potential opportunities for utilizing Ontario's nuclear expertise and medical isotope production to expand into international markets.

Hydroelectricity

The IEP outlines Ontario's intention to expand and refurbish the province’s existing hydroelectric fleet. This includes directing IESO to initiate the Northern Hydro Program by March 31, 2026, in order to re-contract 26 hydroelectric facilities. Ontario also plans to proceed with pre-development work for the proposed Ontario Pumped Storage Project, which is expected to provide up to 1,000 MW of electricity storage, along with a series of competitive procurements for new electricity generation and storage.

Procurement

The IEP identifies the Long-Term RFP as a central mechanism to secure new capacity and energy for Ontario’s electricity system, with the objective of delivering cost-effective outcomes for energy consumers. In anticipation of Long-Term 2 procurement kicking off shortly, the Province has asked IESO to report back on options for a separate procurement stream for strategic long-lead projects with the intention of launching the procurement in the immediate future. The IEP indicates that this would include resources such as certain new hydroelectric generation and long-duration energy storage – projects that may offer long-term system value but require more time to develop and bring into service. The hope is that this stream would help ensure Ontario can continue to plan and diversify its supply mix with assets that support long-term reliability and system flexibility.

The Role of Natural Gas

The IEP formally introduces Ontario’s Natural Gas Policy Statement and binds the OEB and IESO to the policy for all adjudication and planning through the Ministerial Directive. In short, the policy recognizes the important role of natural gas across Ontario’s grid and that a premature phase-out of natural gas electricity generation would hurt consumers and the economy.

The Natural Gas Policy Statement contained within the IEP highlights that natural gas is required to provide the IESO with greater flexibility to manage peak electricity demand and defines a path for the continued expansion of natural gas for home heating, and economic development.

Building More Electricity Transmission

The IEP highlights the need to be able to move power more efficiently from where it is generated to demand centers and focuses on transmission infrastructure as the key to ensure that electricity flows reliably across Ontario – avoiding “bottlenecks”. The IEP discusses several new development and expansion transmission projects, and several proposed and ongoing consultations and studies across the whole province, indicating the need for additional infrastructure in the province.

The IEP also focuses on how the province is already streamlining transmission development. Some examples include:

• moving all transmission projects into Ontario’s Class Environmental Assessment process, which is expected to reduce development timelines by up to one to two years for large projects; and
• exempting transmission lines wholly funded by commercial, industrial, or generator customers from requiring Leave to Construct approval from the OEB.

Ontario’s Future Electricity Grid 

The IEP states that Ontario's 59 local distribution companies (“LDCs”) need to strengthen their infrastructure, adopt new technologies, and deliver services more efficiently and affordably to meet Ontario's increasing electricity demands. This includes grid modernization, major capital investment, quicker response to storms and major events, and improved cybersecurity.

To address these needs, Ontario is developing new regulations aimed at reducing the initial capital costs for connecting to distribution and transmission infrastructure, including for residential developments and industrial customers. Draft regulations for transmission-connected customers are expected to be posted for public comment shortly and the Province states that these regulations may be implemented later in 2025.

Indigenous Leadership and Partnership

The IEP recognizes that Indigenous communities are central partners in Ontario's energy future, and should have more opportunities to participate in project development and equity partnerships. As such the Government commits to supporting Indigenous involvement through financial mechanisms, capacity-building programs, and policy tools that facilitate participation in both large-scale and community-based energy initiatives. An example of this is expanding the Indigenous Energy Support Program by increasing annual program funding by $10 million, bringing total annual support to $25 million, expanding eligibility to include emerging technologies like battery storage, and launching a new funding stream of up to $500,000 per annum for each remote First Nation to support diesel reduction initiatives.

Ontario as a Global Energy Superpower 

As Ontario brings new nuclear, storage, and other clean energy projects online to meet its electricity demand, it aims to become a long-term supplier of clean energy across Canada and beyond. The final chapter of the IEP summarizes electricity export opportunities and the province’s strategy to reach new electricity export agreements with neighbouring provinces and U.S. states. Additionally, to achieve the goal of becoming an energy superpower, the IEP notes that Ontario supports an east-west energy corridor to expand access to Western Canadian oil and gas while reducing reliance on imports from the United States. Ontario suggests that the federal government should repeal the Impact Assessment Act, due to delays and uncertainty that hinder investment and development.

The Power Group at McCarthy Tétrault is actively monitoring developments and opportunities relating to the IEP. Please do not hesitate to reach out to your McCarthy Tétrault advisors for further information about these measures.