Ontario Premier Kathleen Wynne’s government is buying gas and other gas liquids company Hydro One to take over its oil and gas business, while a new oil-and-gas pipeline is expected to open next year.
“It’s the first step in taking this transition to a new direction for Ontario and for Ontario’s economy,” Wynne said in an interview with Bloomberg Television.
Wynne is in New York on Wednesday to attend a Global Energy Summit to announce the $3.6 billion purchase, the first time the government has purchased assets.
The purchase, to be paid for by a 1.5 per cent royalty on the price of oil and a 0.9 per cent on the value of gas liquids, is expected in December 2019.
Hydro One’s share price has jumped sharply since its takeover was announced in September 2018.
The company reported record profits for the first half of 2019, after rising by a record 20 per cent in the same period a year earlier.
Ontario’s new Liberal government will announce its full plan for energy in January.
Ontario has about 9.4 million people with electricity needs.
The government has pledged to reduce its reliance on fossil fuels, with the goal of having electricity supplied from renewable sources by 2030.
Wynne said that while the government will not be using any new gas pipelines, it is taking a more active role in other aspects of the energy mix, including reducing greenhouse gas emissions and helping to promote energy efficiency.
“We are going to see more and more natural gas flowing into the province, we are going be looking at our gas distribution system, we’re going to start looking at other options for alternative sources of energy, and we’re looking at all of the opportunities that are there to get more of the province’s energy,” she said.