The Challenge:
Ontario municipalities are facing unprecedented growth, placing immense pressure on local governments to manage infrastructure while delivering environmental, social, and economic outcomes. This growth has triggered a surge in demand for access to the municipal right-of-way (ROW). From essential water and sewer services to natural gas, electrical, telecommunications, and newer low-carbon energy system networks, the space beneath our streets is becoming increasingly crowded.
Historically, municipalities in Ontario have been required by the province to provide natural gas utilities with free use of the municipal right of way. As a result, gas utilities have enjoyed cost‑free access to public land for their infrastructure, effectively forcing municipalities to provide a fossil fuel subsidy. This arrangement shifts this financial burden onto municipalities, which must absorb management, coordination, and maintenance costs associated with fossil fuel pipelines in the right of way.
Compounding this issue, the provincial government grants gas companies the authority to abandon pipelines in the municipal right-of-way without municipal approval, thereby transferring long‑term liability for abandoned infrastructure to municipalities.
This problem has become more acute as some municipalities have begun charging low‑carbon utilities for access to the right-of-way. Doing so undermines local climate policies by reinforcing an unequal regulatory and financial framework that favours fossil-fuel utilities over low-carbon options.
The CAC Response:
By recognizing the emerging challenges of ROW ahead of the curve, the Climate Action Council (CAC) provided the shared infrastructure to reduce the “per-city” cost of analysis and built a critical mass across municipal teams, strengthening their capacity to respond effectively. Through this collective process, CAC member municipalities examined franchise agreements, municipal authority, cost recovery opportunities, and regulatory frameworks. Together, they developed the Model Franchise Agreement Review, a practical and scalable approach that helps municipalities better understand their rights and responsibilities when managing access to the municipal right-of-way.
Providing essential leadership, CAC profiled this issue at a provincial level, coordinating ERO submissions, and supporting municipal resolutions calling on the provincial government to enable municipalities to charge for use of the right of way.
The Impact:
The CAC collective voice has resulted in the Ontario Energy Board (OEB) commitment to review the model franchise agreement, acknowledging the importance of this issue.
When municipalities collaborate through the CAC, they move faster, reduce risks, learn more, and achieve a greater impact together.