Bioheat projects cancelled
By Chad Ingram
Published July 18, 2018
A wood-fuelled district heating system for Haliburton Village is cancelled after the province’s new PC government terminated the contract last week, and similar projects proposed for Minden and Highlands East will not proceed.
It was announced in April that Dysart et al had been successful in obtaining a $2.8-million grant from the province’s Municipal Greenhouse Gas Challenge Fund, the monies for which came from Ontario’s cap-and-trade system. That money was to act as the municipality’s equity in the project, which would have been a public/private partnership, half the revenues flowing to Dysart et al and half to a private consortium.
The system was to include a central energy centre, where wood chips would be burned in specialized equipment, heating water in a boiler, that water then distributed throughout a series of underground pipes providing heat and water heating to buildings in the downtown area of Haliburton Village. It was anticipated that business owners could have saved up to 30 per cent on their heating bills, and the project would have created a number of jobs, including at Haliburton Forest, which was to be the wood chip supplier.
“We had heard all the discussions during the election,” said Jamie Stephen of Torchlight Bioresources Inc., the company that initiated the project. During the spring election campaign, now-Premier Doug Ford promised that he would scrap the cap-and-trade system and, with an overwhelming majority government, quickly made good on that promise.
“We didn’t quite anticipate that agreements that had already been signed would be terminated,” Stephen told the paper.
Money had already started flowing to the municipality, a utility corporation to run the Haliburton system had been incorporated, and a seven-member board of directors (three reps from the municipality, three from the private partners and one neutral chairperson) had already been established and had held a number of meetings.
A civil engineer had been hired, and Stephen said they were on track to begin laying pipe in September.
“We were all ready to move ahead, and it’s just really unfortunate,” he said.
“There will be no further disbursements and the agreement will be terminated,” Stephen explained. Any unused cash from the disbursements that had already been handed out will be returned to the province, and the company must submit a plan for the dismantling of the project.
“They want a plan by Aug. 1,” Stephen said. The unused funds must be returned by mid-August.
The move by the province means the project is dead.
“We can’t move forward with the project unless the partner also brings funding to the table,” Stephen said, reiterating that the grant money Dysart et al had received was to act as its equity in the project.
The deadline for the second intake of applications for the Municipal Greenhouse Gas Challenge Fund was in mid-July, and Stephen had applications prepared for a number of similar projects, including one in downtown Minden and two in Highlands East.
“I did write to the ministry to confirm there would be a second round,” Stephen said.
“None of the projects will go ahead,” he confirmed.
Stephen added that in his opinion, the project aligned with priorities of the PC party; job creation, economic development and reliance on Ontario fuel.
Along with the systems in Haliburton County, Torchlight was working on applications for three within the District of Muskoka, and that cluster of municipal district heat systems would have all been fuelled with wood chips from Haliburton Forest.
An estimated five to six jobs would have been created at the forest, and another eight or nine through the cluster of municipal systems.
Haliburton’s Mike Rutter (who has the same name as the county’s chief administrative officer, but is a different person) was to be the equipment supplier for the projects through his company BioThermic.
“In a lot of respects, the Haliburton project was a catalyst for a lot of larger, regional growth,” Rutter told the paper.
“I would hope that what we’re working on has potential to move forward at some point, because there are some fundamental pieces to biomass heat that are universal, in that they have sound benefits, no matter what your sort of political persuasion would be,” Rutter said.
Lower greenhouse gas emissions is one example of the project’s benefits.
“There’s also 20 to 30 per cent cost reduction in heating costs for municipal buildings and businesses,” Rutter said. “We can fix those long-term low heating costs for up to 10 years, so there’s an economic argument.”
Rutter also pointed to local investments and job creation, and said with the sort of district system that was to be constructed in Haliburton, most of the money involved would have stayed in the community.
“With conventional fuel like propane fuel oil, 90 per cent of the funds that you spend leave your community,” he said. “And with biomass, 80 per cent of the funds you spent stay in the community.”
Dysart et al Mayor Murray Fearrey told the paper he wasn’t surprised by the provincial government’s decision.
“All through the election, we heard Mr. Ford say he was going to do away with cap and trade, so it really was no shock to hear he was going to terminate those agreements,” Fearrey said.
He confirmed that Dysart would not have $2.8 million of its own to put up for the project, and that it would not proceed.
“Sitting on the other side of the fence, as much as it was disappointing, [Ford] promised it, and he has to do it,” Fearrey said.
Haliburton-Kawartha Lakes-Brock MPP Laurie Scott, who is a member of Ford’s cabinet, said the contract was terminated since physical work on the project had not yet commenced.
“It hadn’t started yet,” Scott said. “Nothing had been built.”
“I think they are looking at all the programs,” she said of the ongoing review of programs that were in place under the previous government. “I think they looked at each on a case by case basis.”
“It’s no secret that this could be in jeopardy,” Scott said of the Haliburton project, noting the PCs had campaigned on the elimination of the cap-and-trade system.
Scott said the problem with cap and trade was that it put too much burden on the backs of the taxpayers, and lacked transparency in that it was not clear where all the funds were going.
Scott was asked if the project, by creating local jobs and using Ontario fuel, was not in line with the PC vision for Ontario.
Scott responded that it wasn’t necessarily a matter of the government disagreeing with the concept of the project.
“We had to end cap and trade because we promised we would do that,” she said. Scott said the government would be putting some kind of green energy programming in place.
When asked what kind of programming, she said, “I can’t tell you that, specifically . . . but it’s not going to be footed by the taxpayers.”