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blue-sky (verb)
: to offer ideas that are conceived by unrestrained imagination or optimism.
Hosted by Erin O’Toole, President and Managing Director of ADIT North America. Erin is the former Member of Parliament for Durham and former leader of the Conservative Party of Canada. The Blue Skies political podcast explores issues facing Canada and the world in a format that brings together thought leaders for an informed and engaging conversation.
Hon. Erin OToole (00:02.079)
Outside my office here on University Avenue in Toronto is a statue to a great Ontarian. In fact, on University Avenue, the great Grand Boulevard leading up to Queen's Park, the Ontario legislature, there's many statues and monuments, but only one to a single person. And that person is not a former premier. It's actually the person that built Ontario Hydro and the concept of Canada being an early energy superpower.
Adam Beck's statue is literally outside my office window here. And on the plinth that the statue stands upon are all the hydro dams that Beck helped build with what became Ontario Hydro. His mantra at the time was power at cost. He said the gifts of nature are for the public. And at that point, it was tapping our hydroelectric opportunities to
power a manufacturing economy that really helped a young Canada grow. So Ontario's strength came from its hydroelectricity, came from power at cost. And we're here to talk today with the modern Adam Beck, someone that's making sure the next century of power in Ontario, power at cost, competitive power, is going to be available at a time where electrifying the grid at a time there's geopolitical pressures and powers. So today I'm very fortunate to
have a guest that I first met in Curtis, Ontario in 2012 when he came to knock on doors with me. Someone not scared to get his boots dirty and to roll up his sleeves. He later became Chief of Staff in Ottawa, an advisor to Prime Minister Stephen Harper, someone that helped me transition into my office when I became a Cabinet Minister for Minister of Veterans Affairs. But in 2018, Stephen Lecce was elected as a member of provincial parliament.
for the writing of King Vaughan, the area you grew up in and very proud of his roots there. Winning 57 % of the vote in 2018, he quickly became a leading spokesperson to the government, parliamentary assistant to the premier, then in 2019, Minister of Education, serving for the longest period in the modern age for a Minister of Education in Ontario, before becoming Minister of Energy and Electrification in 2024. And his recent reelection, he was reappointed, but this time for Minister of Energy.
Hon. Erin OToole (02:24.911)
and mines. So we've got a lot to talk about with the modern Adam Beck. Welcome to Blue Sky's Stephen Lecce.
Stephen Lecce (02:31.612)
Thank you so much, Erin. Good to be back.
Hon. Erin OToole (02:34.803)
Well, do you remember coming out and knocking on doors? Because I think it was a 2012 by-election. You were kind enough, having basically deviated on your way back to Ottawa from Vaughan to drive down to Curtis to knock on doors. That's when I first saw your commitment to the province, to the country. And we only had about five hours, four hours together, but it was a lot of fun. Do you remember that time?
Stephen Lecce (02:44.428)
Very much so. I even remember walking with donuts. But I will tell you this, what I appreciated in the early moments of meeting you was an optimism about our country.
and it's worth fighting for. And that sense of patriotism and service, think, brushed off on a lot of, let's say, next generation conservatives and public servants. you said you modeled the way. So thank you for what you did in the service of country, because holy smokes, we got a long way to go, people like me.
Hon. Erin OToole (03:32.511)
Well, we do and I think we're in good hands and talk about busy. Let's talk about that. So you became Minister of Energy and Electrification in 2024, now Minister of Energy and Mines and the first really nationally impactful bill that this legislature passed was your Bill 5. And just last week, you announced the first project that was going to have one project.
Stephen Lecce (03:45.772)
you
Hon. Erin OToole (03:59.481)
one process, sort of a fast tracking of these nation building projects, a lithium mine in Red Lake. Tell us a little bit about that and now how you wear the dual hat of both electricity and power generation and the mining critical minerals and that part of our national strategy at the moment.
Stephen Lecce (04:03.601)
Right. Well, first off, be careful what you wish for because
There will be more work sent your way if you are up for the job. And I'm very grateful to the Premier for the confidence. But the bottom line is energy minds, energy policy fundamentally is economic policy. It's security policy. It's what's going to drive our industrial policy as a nation. So it's a really critical portfolio at an important time. And I'm a believer in being a constructive disruptor, as I often say. You got to get in there to shake the system up, the static forces that want the status quo to prevail.
in government bureaucracy, you know, the opposition, we've got to double down on being transformational in government. And I think now is the time post-President Trump where Canadians intuitively recognize we can be much more self-reliant and we ought not rely on the US, on China, on anyone else. We could do it here at home. And I think that message resonates with Canadians. It's perhaps inspiring us to do it, to go big at scale.
with an element of ambition. so, yes, I got appointed as Minister of Mines in May, or rather in the early spring. Within a month, I introduced, yes, Bill 5, which was a plan to reduce the permit timelines by 50%. We are the second slowest in the OECD when it comes to opening a mine. Could take upwards of 15 years. Second slowest in the industrialized world amongst democracies, like, for example, the European Union or the even provinces like Alberta and Saskatchewan.
I believe, and I know we can emerge with a faster permitting system that actually meets the moment. And so we dug into it. I met with miners, First Nations, with businesses, investors, capital markets. The message was clear. We could do this better. And thus we produced one project, one process. I wouldn't say it's a revolutionary error and it's common sense. It's just a triumph of good public policy. This isn't radical. This is just what should have happened 10 or 20 years ago.
Stephen Lecce (06:15.243)
And so we are saying to the market, we're going to cut the timeline in half. We're going to merge with one of the fastest in the G7 of permitting systems with an average turnaround time of 24 months. That is certainty with regulatory capacity to impose maximums on other ministries because of the challenge, Eric, is the line permit comes in, they come to our ministry, then they got to go to the Ministry of Natural Resources, and then they got to go to the Ministry of Transportation, and then they got to go to the Ministry of Forestry. And the way the system used to work is they would
individually have to interface with each ministry. And of course, they don't talk to each other. They can't do it concurrently. So it just stretches these timelines. And I'm like, my goodness, this is how not to do it. And so we got in there with a reform agenda, which is why we implemented that plan. Four months turnaround from the day we introduced it to passing it to implement it. And you know, government does not move fast to transform a regulatory system like this in two quarters.
is an achievement and an achievement for Canada. And so we did use that process. We did use that designation, as you mentioned, yes, for what will be Canada's first and largest integrated lithium mine, a mine plus a processing facility in Thunder Bay plus downstream conversion to produce, manufacture some of the batteries. I this is really an exciting play for the country. And yes, it's, know, self-reliance could be a talking point for some politicians or it could be a plan we're putting in place.
Hon. Erin OToole (07:15.325)
Yeah, it really is.
Stephen Lecce (07:42.504)
And so we have that authority. We used it within two weeks of it coming into force. I think we sent a message to the world. We're open for business. We mean business. And we're going to double down on the most ethical resources on Earth.
Hon. Erin OToole (07:57.62)
Well said, and I think you're seizing that Canadian moment that both provincial governments, federal governments are talking about as trade relationships realign as critical minerals rise to the fore. We've got to show that we can be the leader, the energy superpower for generation, but also key ingredients in the electrification economy. So you talked about all the folks you engaged with with Bill 5. Two questions. First,
Are the capital markets noticing? So we now have mining exploration, great history in Ontario with prospecting, developing the PDEC conference still being a global center. Are the private sector players noticing this 50 % reduction in weight, more certainty, and are they putting their dollars forward to get projects done? And the second piece, Tim Hodson, Federal Resources Minister.
Stephen Lecce (08:44.266)
Okay.
Hon. Erin OToole (08:51.775)
was just talking a G7 critical mineral strategy and so the Globe and Mail today, are you coordinating with the federal government on these projects? Because you had Bill 5, they had Bill C5. We almost see a bit of a rare alignment of this moment and seizing the agenda. So capital markets and how are you interacting with your federal counterparts?
Stephen Lecce (09:17.437)
think there has never been a greater level of excitement about what is happening in Ontario because we have transformed the regulatory system. We have imposed maximums and certainty on the market. We have put $3 billion of equity participation for Indigenous nations to be a part of the project ownership. For example, that's meaningful. That helps support, yes, economic reconciliation, but also getting to yes on fundamental projects of importance to the national interest.
So I do believe there's momentum. We just had Meet the Miners, which is a huge summit, almost like a mini PDAC. I have never, and I mean, I'm not the subject expert. I'm the new guy in the room in mining, but I'm told by virtually every C-suite that was in the room, which represented over $20 billion of investment. They said, we've never felt like there's a greater emphasis, alignment, and frankly, pride in the mining sector than today.
where you have governments enthusiastically promoting. have ads on media, promoting the Ring of Fire. We are working with education partners to inspire kids to see themselves in these good careers. mean, it's a multi-government enterprise-wide effort. And the answer is yes, overwhelmingly there's confidence building that this is the jurisdiction to invest. The federal element is important because look, we may be of different parties, but I think our fidelity is to country in this moment over anything else.
know, Minister Hodgson is the former chair of Hydro One, so I had a relationship with him. We have a good working relationship. And I believe that when we work together, we can really safeguard the jobs that are under attack from President Trump and from a geopolitical adversaries like China. So there is alignment with the feds. In fact, part of the G7 Energy Minister's Summit that's taking place over the weekend, you will see the minister and I stand together.
to make announcements on new critical mineral investments and new critical mineral commitments in the province of Ontario that's going to help further improve, particularly on rare earths, the processing of rare earths, which is so dominant by the Chinese 90 % globally, 93 % of Europe depends on Chinese rare earths. So we have a huge opportunity. And I think in the moment, our governments are working together. When we disagree, we do so respectfully.
Stephen Lecce (11:38.652)
We have disagreed on some energy policies before, certainly, but I appreciate that on critical minerals, we are of one mind, which is to move with speed.
Hon. Erin OToole (11:52.8)
It's great to hear. In fact, I enjoyed watching your announcement on lithium. One of my last press conferences as conservative leader in Ottawa was on the sale of a lithium company that was Canadian headquartered, Canadian financed. But because their minds were in South America, the Globe and Mail was mocking my suggestion that this was a strategic business that we should work with allies on and not.
Stephen Lecce (12:07.985)
Right.
Hon. Erin OToole (12:19.803)
not allow to fall into yet another sector of dominance from China. So it's great you've got the capital markets, you mentioned Indigenous engagement, the ability to have massive partnerships, equity participation. Many Canadians may have seen that some of the only voices really expressing caution about Bill 5 or Bill C-5 were First Nations.
some leaders, are you finding there's more collaboration now and that they're seeing the willingness of the provincial government and the federal government to make sure there's a net benefit for those nations, not just in jobs, but in terms of revenues for the long term? Are those relationships getting stronger?
Stephen Lecce (13:00.763)
Yeah.
Stephen Lecce (13:06.92)
I think so. mean, the fact that we had the chiefs attend the one project, one process designation for Frontier Lithium, I think is a powerful signal. The premier earlier that very morning was with chiefs in the ring of fire announcing another step forward for enabling infrastructures that we actually can start to build those roads and get on with execution on that region. One of the largest multi-commodity
resource regions in the world. And so we see this as a huge value add. There has been meaningful engagement. think, you know, maybe a lesson learned for all of us, including project proponents is do it right. Meaningful engagement include economic participation, be it through equity or other arrangements. These have been the models that have worked. I look at the energy file transmission, every transmission project there and we have undertaken.
For example, the Hydro One has been 50-50 equity. The model works. And the companies do well. The first nations do very well. And for them, it's not just about economics. And I know intuitively you know this, but it's about quality of life. I think they're constantly concerned about their children and the legacy of these investments. And so look, we've got to do our part to improve that quality of life, to displace diesel.
and to invest in infrastructure that will give these kids a fighting chance of success. So I think the industry is aligned with government. And I think there's a great sense of common mission right now that we got to step it up. First Nations understand the broader geopolitical environment, but they just reasonably want to be at the table. And I think if you do it right, we can move projects forward. Case study, a major, the largest integrated frontier
pardon me, lithium mine of its kind can be done in partnership. So tons of precedent. Let's just do more of it and do it with scale and speed because we don't have the benefit of time when the Chinese is buying mineral deposits in Africa and Indonesia and using market distortions that are really hurting our workers.
Hon. Erin OToole (15:23.583)
Great segue, Minister. We don't have the benefit of time in a lot of elements of our electricity grid and in the electrification of that grid. When we first started talking about sitting down for a Blue Skies podcast on this, it was shortly after your Energy for Generations announcement. And that was your response and your department's response to the Independent Electricity System Operator, the IESOs.
sort of clarion call last year that in the next 20 years, we're going to need 75 % more generation into our electricity grid here in Ontario. And to put that in context, know, it's it's approaching doubling what we're generating now, because of not just population growth, but because of data centers and AI and electrification, which is going a little slower now with EVs and other things, but it is coming.
Stephen Lecce (16:21.249)
Right.
Hon. Erin OToole (16:21.449)
Talk about, you would have basically become a new minister and the IESO would have put that report on your desk saying we need 75 % more generation. Talk about your plan and talk about how you've sort of rolled out an approach for both generation and transmission to meet that high bar of almost doubling our electricity generation in the next 20, 30 years.
Stephen Lecce (16:50.758)
You know, I think the demand forecast is sobering. I'm not sure if I can say this, but a bit of a holy shit moment, But, you know, like it's sobering. It's a scale that we haven't seen in the country. I mean, we were, you know, the former government was closing nuclear power plants. They were decommissioning Pickering, 2,000 essential megawatts. And I know you care about Pickering, among other assets in the nuclear capital of Canada and Durham. So
Hon. Erin OToole (16:58.302)
Hahaha.
Stephen Lecce (17:16.197)
you know, obviously a different approach than governments of the past, our the virtue, and I think the strength in our plan is that we're thinking about your children, we are literally building for the future, we have effectively decoupled politics from public policy. I mean, there's no upside politically to building a nuclear power plant that will be built in 12 and 15 years for someone like me. I mean, you know, we may not be on the ballot, we may not be the government, there's no one's going to vote for us in three or four years because we had the fortitude to invest.
Hon. Erin OToole (17:39.967)
you
Stephen Lecce (17:45.285)
today for an asset that may come online in 15 years. But that's the lesson learned from the former liberals, where they are obsessively driven by shortsightedness. And I'm not here to talk a bit about too much about them, other than to make the case that the lesson must be learned. We need integrated approach to energy, not siloed approaches for fuels, natural gas, and electricity. We need a long-term approach, 25-year horizon, not short-term electoral cycles. And we need competition to drive down.
prices for consumers and for rate payers, for everyday families. And the former government, took an approach of, know, sole sourcing. And we now have re-contracted the exact same resource, 30 % less, because we use what the Auditor General says is the only way to procure, which is through a competitive procurement. So we've done something right. We've used long-term approach to energy planning, which is de-risking investments.
but it's also demonstrating to the people of Ontario that for the first time in a long time when it comes to energy policy, we are planning ahead. We're thinking about the future and we're using an all the above approach to maximize the value for the Canadian supply chain. And our government and Premier have a really strong opinion on this. We think nuclear power, yes, technology agnostic, we want all resources to prevail based on lowest costs, but nuclear and basal like hydroelectric are the fundamental competitive advantages we have.
that virtually no jurisdiction in the country has with the exception of New Brunswick. We have that advantage. We're selling a surplus power, but we have a vision to emerge as an energy superpower. We sort of are, but we think we can go from good to great. What does that mean? It means in the IEP, a plan to generate net new 16,000 megawatts of power. That is like eight nuclear facilities, know, generating 2,000 apiece.
power for 16 million homes. And so we have undertaken massive investments and announcements that signal ambition to build. one of the big ones we did in Port Hope was the largest nuclear generator as it proposed on earth, 10,000 megawatts of power, $250 billion gain to the national GDP according to the conference board.
Stephen Lecce (20:00.356)
10,000 permanent jobs. mean, that is nation building. We're going to talk about nation building as some abstraction you'll hear from federal politicians from time to time. That's a project we can do it. Build using Canadian technology, Canadian uranium, Canadian workers.
and know it's an investment that will deliver long-term benefits to the national economy. So yeah, we're thinking big. And I think now's the moment to really double down on Canada.
Hon. Erin OToole (20:29.011)
Well, you got that future demand prediction from the system operator and your energy for generations was a response to it. And let's talk about recent news. You can tell from my Tim Hortons cup, we're recording this on October 31st, Halloween, where we hope our Blue Jays will be dressed with the pendant and the World Series tonight. But last week, you had, go Jays, you had an incredibly interesting announcement.
Stephen Lecce (20:34.019)
Right.
Stephen Lecce (20:51.011)
Go Jays.
Yes.
Hon. Erin OToole (20:57.703)
And it's not Wesleyville. It's not as far as Port Hope in that area, but it's in mild sampling grounds of Bowmanville and Darlington, and particularly the small modular reactor project there. And I'm going to say a few words on it, and then I want your take. Obviously, I was a big proponent of the SMR for there. The federal party supported it. We urged the Trudeau government at the time to lend support. And modular reactors, smaller ones,
Stephen Lecce (21:18.019)
Right.
Hon. Erin OToole (21:24.915)
have the potential to be something that we can use in the Arctic, useful remote sites. If we can get the cost down and if we can get the modularity, the ability to construct them here and move them somewhere, they could be a very versatile asset. So that site in Darlington is really going to be the first Western world site to really commercializing the SMR, the Small Modular Reactor. But what was super exciting last week, not
Stephen Lecce (21:48.194)
Mm-hmm.
Hon. Erin OToole (21:52.362)
just to see you, the Premier, the Prime Minister, everyone in my old hood, but was the fact that there's innovative financing to it as well. You had the Canada Growth Fund and the Build Ontario Fund taking equity positions in the project. So talk a little bit about the SMRs and just how that innovative financing model could be a bit of the example of how we can scale using public
investment and oversight, but also private capital and innovation.
Stephen Lecce (22:26.226)
I was in actually both of your quote unquote hoods because while the premier and prime minister were in Durham, I was in Nova Scotia, which I understand you also spent a few years out there. And I was with Premier Houston, who's now the minister of energy, as you know, announcing that they are starting on to the SMR deployment. So it was a really cool tag team on the same day, SMRs expanding out east, doubling down on investment in material.
Hon. Erin OToole (22:35.783)
Yeah
Hon. Erin OToole (22:41.79)
Yeah.
Stephen Lecce (22:50.144)
And you are absolutely right. We are leading the first. So just a moment for Canadians. Let's be boastful. We never are. On this issue, we should. We are building the first small modular reactor in the G7 before the Brits and the Americans and the Japanese and very advanced democratic economies. We are leading the way through OPG in Ontario. Yes, we're building a fleet of four. We are very proud of this because it adds value to Canada's economy. $39 billion. It's going to create just for the construction.
Hon. Erin OToole (22:58.559)
Mm-hmm.
Stephen Lecce (23:19.049)
At a time when people are facing unemployment, when we know that a lot of construction workers are looking for employment opportunity, this will create 18,000 construction jobs. It already is because unlike many of our competitor technology, SMR tech, that is conceptual. It's a deck on a screen. We're building ours. Like what we can go to more where we can meet, do this podcast at Darlington. could physically see cranes building out the first of four that will be right on Lake Ontario.
The first movers advantage we are leaning into. We own part of the IP of the reactor, we sell them abroad, we earn revenue, our supply chain is benefiting. Think about this, 80 businesses to date are already contracted to build out small-modge reactors for Ontario and the world, including countries like Poland, I was able, fortunate to be there to announce an agreement with that government to help build out their nuclear fleet using the same tech. We have market penetration, you're gonna find this ironic, into America.
Tennessee Valley Authority, the largest American public utility, joined forces with the largest Canadian public utility through OBG to build out this specific Gia Tachi SMR. And so it's an exciting time for the supply chain, $500 million of investment already secured. And yes, it's backstopped by or supported by federal provincial investment through their respective infrastructure banks, if you will, or financing authorities.
that helps to de-risk for the rate payer. Look, it's first of its kind. And we understand there was advantage being first, but there's an element of risk we have to manage and mitigate for the rate payer and taxpayer. So we appreciate federal contribution. I'm grateful for the provincial contribution too. Don't take that for granted. But if we can reduce the cost per megawatt hour and thus make them more viable when it comes to competition globally, we're doing something right. There's an estimate of $150 billion of annual organic SMR
growth. There's a real demand for these, as you know, the Gulf, the Asia Pacific, in North America, Europe, the applications are limitless, they could literally be anywhere you mentioned the Arctic, it could be the desert, it could be the Sahara, it could be literally anywhere on earth. That's what gives these various effective technologies its viability 300 megawatts is power for 300,000 homes, it's a continuous asset for 65 years. So we're proud of it.
Stephen Lecce (25:43.221)
We're doubling down on it and we are expanding the fleet across the country for Alberta and Saskatchewan, New Brunswick and now Nova Scotia who've said, yes, they want to explore deployment of this technology so that we can reduce the cost per unit. The first unit cost will drop by half, but it's how we build number four. And then for the Alberta, Saskatchewan, New Brunswick and Nova Scotia is watching, they may want to be aligned for five or six. And so the point is we're going to keep lowering the cost if we use a fleet approach to development.
I'm very excited about this because 80 % of this build at least, and I negotiate this personally with the CEO, 80 % of the build of those SMRs are made in Ontario products. That's an awesome achievement for this country when we need people to get good jobs and careers, frankly, lifelong careers. And so that's what we're investing in, an economic play that supports energy security.
Hon. Erin OToole (26:38.911)
It's great ambition. so, yeah, congratulations. you're 100 % right. It will be really when you get economies of scale having the fourth, fifth, sixth, seventh, that you can actually really see if SMRs can live up to their full potential of being rapidly deployable, easy to operate, and the cost per kilowatt hour cheaper or competitive. Our mutual friend Michael Levitt and I co-chaired a study on Arctic sovereignty and proposed SMRs back in 2018.
Stephen Lecce (26:50.08)
Okay.
Hon. Erin OToole (27:08.927)
In part because our entire grid in the north is diesel and you need two years of diesel stored in all of these cities in our Arctic Just in case they're shipping issues. You need to keep lights on so it's a bit of an environmental Time bomb in some of these communities and SMRs have the potential, know 20 20 30 years from now to to be a clean energy reliable source there final question on this minister because
Stephen Lecce (27:22.388)
Yeah.
Hon. Erin OToole (27:38.28)
I love the fact that you're focused on that jobs in Ontario and building out like a generation of highly skilled world class world leading jobs. The uranium in these are, is enriched. And I've talked for a few years about shouldn't Canada be upgrading our own uranium? So the uranium comes from Canthico in Saskatchewan, gets sent somewhere else and gets enriched. Do you think strategically
Stephen Lecce (27:40.448)
Right.
Hon. Erin OToole (28:07.603)
This is something Canada should upgrade, even though I know CanDo does not use enriched, it uses natural uranium, but a lot of other fleets use enriched. Do you see down the road perhaps a public private approach to that so that we can do the full life cycle of not just the SMRs, but other technologies that use enriched uranium?
Stephen Lecce (28:31.263)
So a couple of thoughts. First off, when it comes to security of supply, this has been raised. How do we ensure we can domesticate fuels so we don't have to rely on anyone else? It will be a Canadian company, a subsidiary in the US, that will do the processing of the enriched fuels. Canada is a signatory to the non-proliferation agreement. So it would require us to withdraw. As I understand, Erin, it is a difficult club to enter. They're a bit territorial on letting new entrants in.
Hon. Erin OToole (28:58.771)
Yeah.
Stephen Lecce (29:01.096)
But you asked a question just philosophically, is it in the national interest to do the processing here at home so we don't have to buy from, for example, even a Canadian company, but with the fabrication in the US? We have a second option, a third option of Britain and France in that order. So we have absolute confidence we have supply access for democratic nations. Look, the first meeting I had with the CEO of Chemical, it was in London, England, weeks after my appointment, and I raised this question.
And I think some people in the room thought, I didn't, you know, that I'm just sure they anticipated that question because it's a bit of a, you know, some may have been radical to say like, should we be in the business? I'm not advancing that policy. But I just I was curious. Look, light water technology represents 90 % of the global fleet. 10 % of the global fleet is, is heavy water, like a candy reactor does not require enrichment. So
Hon. Erin OToole (29:36.157)
Yeah.
Stephen Lecce (29:55.344)
Is it in the interest of the supply chain of Canada to compete for that 90 % of the market share? I think that was my curiosity more than anything else. So it is an important question. So my instinct is without maybe taking an absolute yes or no, I think we got to have a serious adult discussion with the feds about is it in the national interest? My instinct is yes. I think we should have this discussion. I think we should contemplate.
Hon. Erin OToole (30:01.023)
Good question.
Stephen Lecce (30:20.286)
domesticating our fuels. do so much of it. We have the second largest supply of uranium. mean, the alternative is Vladimir Putin's. I can't imagine why we'd want to depend on anyone beyond this country. And I think I can speak for companies like Cameco and others, but I think there's an interest in expansion and diversification. So it's a really important question. And I'd say I'm up for the challenge of having the discussion because I, well, I have confidence in our security of supply. I really would rather have a Made in Canada print.
before it gets sent into any SMR we build in this country.
Hon. Erin OToole (30:54.365)
Well said, I think we do need these important national discussions and we often talk about producing the resources but not upgrading them enough here, whereas you're already talking about the lithium from Red Lake becoming part of the battery supply chain. The more we can upgrade existing resources, you get a second round of economic activity, more jobs, more revenues, more abilities to pay for health care and all these things.
Stephen Lecce (30:59.997)
So thank you.
Hon. Erin OToole (31:20.691)
Blue skies we always try and blue sky where we should be going next. So appreciate your answer there and your clarity on the need to have this conversation. So let's go back to, go ahead. Sure.
Stephen Lecce (31:31.345)
Erin, can I just add one thing? Just because you sort of prepositioned a problem. It's national in scope. We need to end the propensity or the ongoing instinct of governments to send raw materials to other countries for value added processing. Raw bitumen, critical minerals.
even medical isotopes in some applications we're setting it to Europe, we're setting it to the US. It makes no sense. I think the world has fundamentally changed. I know you have been championing this cause of domesticating these investments, but it just now it's, it is inexcusable of governments nationally and federally to not be seized with a public policy reform that's actually going to bring these investments home. So from critical minerals, we are ending the ripping and shipping of our resources.
to the US or to Europe only to then buy back at a premium. It's just, frankly, it's insanity. And you can make the case for pipelines. We need a pipeline. Yesterday, we advanced the next step in a national pipeline discussion with our assessment on how to move product in the country because we are right now, our pipeline from the West to the East goes through the US. The governor of Michigan, a democratic governor, Republican president, they have the same aspiration, undermine our security of supply, our energy dependence, independence.
and our jobs. So I think now is exactly the time for us to have these discussions and frankly, smarten up. Because maybe it was acceptable 20 years ago, it just isn't today. And I think Canadians are rightfully demanding government to have the courage to do the right thing, even if it's not easy.
Hon. Erin OToole (33:09.439)
Well said, that's why you were widely considered one of the smartest folks in Harper's PMO and you just nailed it there. The sovereign capability discussion we're having now, what can we do and be sovereign in? Especially if we're producing the resources, why would we have to depend on buying it back from someone who does higher value added services to it? So I love that way of thinking, Minister, keep pushing that envelope. And as I said, now that projects can be done, I think there's an ability.
Stephen Lecce (33:20.668)
Thank you.
Hon. Erin OToole (33:37.898)
to get private capital to help drive this so that it's not all on the taxpayer, but the government can not only set the orientation, maybe partner and regulate in the public safety and public interest, but if projects can get done, there is private capital. Pension funds, they love utility investments. They love this sort of certainty. So well done. Let's bring it back though. I started with Adam Beck, you know, and we started tapping all the little hydro resources, Ontario.
And then as a result of that power at cost, the public power, we had this patchwork of generation and then each municipality tended to own the local distribution. So, you you take it from the big Niagara Falls and then plugging it into the individual house was usually your town, your community. They're now called LDCs, Local Distribution Companies.
Stephen Lecce (34:07.878)
Right. So.
Right.
Hon. Erin OToole (34:35.087)
in that when I was going to law school and did some electricity laws, a lawyer, had at 1.300 of these, then it went down to 200, now it's around 60. Quebec has one, Alberta has one. Talk about this for a moment because I think last week or in recent days, you've created a panel, the Pulse panel, the panel for utility leadership and service excellence that are gonna kind of look at
Stephen Lecce (34:47.163)
Okay. So thank you.
Hon. Erin OToole (35:04.255)
some of this aging capacity, a of a governance nightmare. Where do you envision that panel going? What have you seized them with to see if we can be more efficient and secure in terms of electricity reliability and service excellence?
Stephen Lecce (35:26.648)
It's such an important question because look, if we want to emerge as a competitive or as you we hear from the prime minister, the premier, the strongest economy, the G7, that we need our institutions, we need our agencies, we need our infrastructure, we need our, the entire ecosystem that supports or disables investment in this country to be modern and to be ushered from the 19th century into the 21st century.
not a comment on the utility or their leadership. think we do good work in the province, but I believe we need to play a challenge function to create the infrastructure that will move capital into the country. And thus, we've got to look at our utility sector with really two overarching themes. One is how do we improve performance? How do we strengthen sort of good to great principle? How do we really just level up given the new world order we live in? We're speed.
will be an advantage on connection timelines and things like this, quality of services and standards. The second element is capitalization. Look, we're trying to keep energy rates low. We're the only government that has done that. We've kept them below inflation or at inflation since 2018, no commodity. That's an important achievement for family affordability. You know where we came from when hydro rates are the formal liberals. They'd increased just so much, $1,000 more a year. So we knew we had to take action on stability of price.
But our challenge is we got to build. When you're building, you're investing. We got to spend money. The Electricity Distributors Association of Ontario is estimating $120 billion. So the question is, for those watching, utilities are owned overwhelmingly by municipalities, as Erin mentioned. And look, that means municipalities who, they get dividends from utilities, they're reinvesting those dividends into their municipal services, not necessarily into the grid. So we have a deferred main, this backlog.
coupled with this massive demand for investment to build for the future. And so it raises a question. And it's one of these things where I just think it's like, let's have an adult discussion on how do we capitalize the build out so that it's not exclusively born on what I will often say is grandma, like the rate payer, fixed income pensioners. Like honestly, if we do nothing, just try if the status quo prevails, and I just did nothing.
Stephen Lecce (37:47.897)
all my friends, you many of you look at governments in the past, they did reports on this, they do the problem as well socially, they didn't do anything. Maybe they were challenged by the politics of it. But look, at the end of the day, doing nothing means 100 % of these increases, these costs to invest to build will be born on families and businesses. It's an option. I just don't think it should be the only option. I think we should be looking seriously at ways to infuse more investment into the sector, maintain
public ownership, Canadian ownership, etc. But we've got to ensure that the utilities have the investments they need to build. If we don't build out, that means we are saying no to manufacturers or farmers or greenhouses or other industrial demand that wants to come to the province. And I'll tell you, if the premier heard that a company was declined because we don't have the infrastructure, the transmission, the generation required to build, I'd, you know, I'd rightfully get in a lot of trouble.
So I'm personally motivated to fix this problem, because I've enjoyed the assignment. to be obviously facetious, we just got to do the right thing here. And I'm a big believer in, as I was in my last portfolios, it's OK to lean into difficult assignments. think that people will engender people's respect, even if they're difficult decisions. Just do the right thing. And I believe in that. I've always believed in that. And I'm to keep doing it.
Hon. Erin OToole (38:45.384)
Yeah
Stephen Lecce (39:13.206)
And I got to give credit. The association municipalities of Ontario. Have endorsed this review and the utilities that Julie said. That's a incredible sweet spot to have both of them on side, so we're keep working with them in good faith and get this right, but we gotta look for change because I cannot and I will not accept the status quo when every other agency of government is
with a bias of action, I just can't accept a system that was built for generations past.
Hon. Erin OToole (39:50.816)
100 % well said and I think Premier has full faith in you and if he doesn't either he might pour a bottle of Crown Royal on your desk or something and say take care of this. We can see when he wants to get something done he makes his point. I wrote a piece on the biggest public safety risk we face as a country today is not terrorism, it's not you know other things or as the Trudeau government at one point said climate change was our biggest public safety risk.
It's actually a cyber attack on our critical infrastructure, the grid, our financial system. As we also have this dispersed and sort of complicated distribution network and multiple generation sources, that brings more cyber risks to our grid. We've seen from Blackout 24 years ago how it can paralyze the economy.
Stephen Lecce (40:24.025)
Okay. I'm go ahead turn it over to
Hon. Erin OToole (40:47.359)
Is grid security and this resilience piece something that you and your team are looking at as well? And is that going to factor in energy security to the work the Pulse, the service excellence panel will look at to make sure we're not just building out the power supply, the electricity generation, but we're protecting our grid from foreign bad actors.
Stephen Lecce (41:11.891)
I think it's a very important point and frankly it's a very real liability for the state. It doesn't get a lot of attention but I think it is one of these sort of ticking time bomb issues that in the absence of action we are creating vulnerability for everyday people. We've seen vulnerability of grids abroad. There is a great deal rise of cyber attacks and
a desire to destabilize our economy. So absolutely would argue this is one of our whys. How do we protect the system, build resilience, even just more weather events taking place in the country? How do we get people connected back to the grid quicker? Being offline, the winter storm we had, it's tough. Families in Simcoe region, five, six days without power, I can't imagine. It's tough to go through one or two of those days as we've all probably been through inevitably in our lives.
So it's just about the idea of strengthening the systems that we protect our economy, we protect our data, and frankly, we protect the quality of life that power helps deliver for families. And I think it's one of these issues that we ought to be more self-aware of. The Ontario Energy Board has, under my request, made clear of utilities to strengthen investments on grid resilience and protections.
I'd argue there's more work that we got to do here. So you've profiled a problem that needs a better solution. And I'm committed to, through this Pulse panel, to come up with recommendations on making sure that our integrated grid is much more, is bolstered and inoculated from the increase of risk that CSIS and others have reported as happening almost daily.
Hon. Erin OToole (42:54.727)
Yeah, no, that's good. think that's something your panel could be seized with. And this is also an opportunity and we'll segue into our last segment of the blue skies today is if you consider the grid as a critical national security asset, you can show domestic preference for work on the grid, meaning you much like Mr. President Trump has done with steel, aluminum.
the auto, he's leveraging the security aspects of those commodities and sectors to show domestic preference and to tariff others. Work in and around the grid has a national security dimension. And I really think building up sovereign domestic capability to protect the grid, to fix it, to upgrade it is part of this national conversation. And that's what I want to talk about. since the engagement
Hon. Erin OToole (43:48.644)
with President Trump and the worsening of relations and tariffs and the Premier has been a very strong voice for Ontario and for Canada throughout this time. We've had five or six municipalities starting with Ottawa in February, Toronto, Oakville, Windsor, a number of municipalities passing by Canada or by Canadian motions at their council. Yet the
LDCs, the distribution companies, the Toronto Hydro, the Ottawa Hydro that they own are not buying Canadian. When you also think about the security needs for us to have a supply chain that is capable to keep our grid protected and strong, is this an area that you think given the public oversight of Ontario regulating the OPG having a public interest mandate to also
Stephen Lecce (44:46.742)
Yeah.
Hon. Erin OToole (44:47.123)
do what the province is doing in terms of building out the Ontario economy. Do you think that this could be a trial area for truly supporting the Canadian infrastructure innovators, suppliers, so that we have a strong domestic force? they, should LDCs be buying Canadian almost more than anyone else?
Stephen Lecce (45:08.795)
So the short answer is we can do more. I believe we must do more. So much so that I introduced the bill before the legislature, literally before the House as we speak, Bill 40, it's securing energy for generations that it's predicated on a concept of
allowing utilities to essentially buy Canadian product, even if through a competitive procurement, the Chinese option is slightly less expensive. Look, normally, I think we as free market believers and go with the lowest cost. In this moment, energy policy is industrial policy. see this one is the same. And thus, we've said to utilities, to be fair to them, they had to go at lowest cost as the nature of the competitive tension. We're now saying through the bill, you can create a variance account.
You can buy the Canadian even if the alternative is slightly lower than. We want to create support jobs. We want to support key industrial sectors. So that's the first principle. We are literally through law enabling that outcome of more procurement in this country. The good news is at a macro level outside the utility sector, just the things that I'm more directly responsible for, because as you know, utilities are owned by municipalities, but we have a role to play.
But the things we directly are involved with is our generators. Think of OPG or Bruce, a private company, but they both of whom are procuring well over 80 % of the supply chain on any nuclear refurbishment. 80 to 90 % stays in Ontario. It's an amazing story. Hydro One, private company, of course we have a large stake, but a private entity. Now we're looking at roughly 93 % of their spend, of their $2.9 billion annual spend stays in this province and country.
and I've still said to them, well, that is good. I'm challenging you to do better. And they've all committed. Since we made that challenge, we have a company called, for example, Northern Transformers. Awesome company, happens to be in Vaughn. That's not why I'm promoting it. It just happens to one of the very few companies. Okay, I'm promoting it for that basis, but shameless plug. But look, they put 200 million bucks in to expand it in this field. Why? Because OPG and Hydro One, their biggest customers, have given them guarantee of
Hon. Erin OToole (47:05.407)
Yeah.
Please do, please do.
Stephen Lecce (47:18.728)
of product for the next five to 10 years. They invested a quarter of a billion dollars to build out more of these, more of the transmission infrastructure that are so desperately needed in the world. Awesome story, Canadian workers, Canadian supply chains, Canadian steel, Canadian labourers, like it's just the win-win-win we want. So we are going to do more of this. We're going to double down on it. and frankly, we're going to be very honest with Canadians in this moment, whatever the cost, do what's right, back Canadian business, back a Canadian worker.
Maybe in time, we'll be back on the show to talk about if that policy should soften or not in one or two or three years, who knows. But in the immediate term, this is where we're at. I think Canadians expect it.
Hon. Erin OToole (48:03.571)
Wonderful, I'm just gonna do a quick break there. Mac, are we still getting this? Because I'm seeing and trying to reconnect notice.
Team O'Toole (48:13.296)
Mine was connected the whole time. It said recording the whole time and I had no issue.
Hon. Erin OToole (48:18.815)
Okay. Okay.
Stephen Lecce (48:21.896)
Same, was seemed a little clean.
Hon. Erin OToole (48:23.839)
Are you getting me? I just said this thing pop up. That's why I kind of talk.
Okay, I'm gonna then just pick up from there. This is the last question, Stephen, that I basically ask you about a positive story from your time in public life. I didn't tell you about that, but something that, whether it's a small thing, a big thing, something that you're proud of, I always try and end on a positive note, hence the blue skies theme. So I'll clap and we'll pick back up from there, okay?
Stephen Lecce (48:32.895)
Sure.
Stephen Lecce (48:52.021)
Sure.
Hon. Erin OToole (48:59.977)
Well, thank you. Great discussion on blue skies. We can see why the Premier and Ontarians know you as one of the most capable members of provincial cabinet. Minister, you've been given big tasks, including during the pandemic, and you always met them with a plan and with building relationships, reaching out and great communication. It's been wonderful to talk with you today. And
Stephen Lecce (49:23.709)
Shh.
Hon. Erin OToole (49:24.703)
You started helping in your community as early as 13. You've been an advisor to prime ministers. You're the right-hand person to the premier here in Ontario. You've been elected multiple times. Blue skies is about honouring public service. What is something that you were a part of, whether as a political advisor, whether as a minister or as an MPP could be in your amazing writing of King Vaughan in that area, or it could be
something you did representing the province on the world stage, what's something that you really take away as having a positive impact for the province and for yourself that you said is worth all the slings and arrows that public servants and political leaders get these days? What's something that you'd like our Blue Skies listeners to know about?
Stephen Lecce (50:16.468)
I'd say maybe two quick stories. The first is I'm a proud immigrant to the country. My family, my parents came in the late 50s and my mother in early 60s. And they came like many post-war immigrants on the basis of just seeking economic opportunity. Many people came here fleeing persecution, so the stories are different, but the same parents, same outcome. They wanted a better life for themselves and their children.
Look, I just think about my grandfather and father who they came through Ellis Island in New York. I was in New York and I pulled up my grandfather's signature. It's an X because my grandfather, my nono, was a wonderful man. He was illiterate. And I don't say this, you know, maybe when I was younger, I was a bit embarrassed to admit it to you. But it's like, honestly, I get emotional thinking that my grandfather, this man who couldn't speak the language, didn't know anyone. He's a guy that, you know,
like made it to the country and did something amazing and created a family and his grandson is then as elected public servant. It's just such a cool, beautiful story of what's possible in Canada. And I don't want young people to lose the hope because like if I can do this, I'm telling you folks, anyone can do this. It's, it's still an amazing country. We have so much to fight for. And with all the division in the world, like let's be proud that that story is still possible. That like, I know like an illiterate immigrant that their son or grandson could achieve.
Hon. Erin OToole (51:38.931)
Yeah, the opportunity of Canada.
Stephen Lecce (51:39.055)
And I think the second thing is, yeah, like it's like, still an amazing place. We are, we are on the right side of history, our values, our story and our future, I think is bound limitless by opportunities. If we just believe in ourselves and we come together as a country. Second thing is maybe a bit more germane to the file. I'm, I'm in, I'm in a mine first time in a mine deep in a mine at Sudbury. And I meet this Canadian system, you know, some guy, a miner, and I presented him with the flag.
And it was such a cool experience, a proud, you could tell a true patriot just loves our country. He's a son of a miner, so it's regenerating. And I just like, by chance, I happen to have a big flag and I posted on my social media. And it was such an amazing moment because frankly, it explained our why Canadian workers in a Canadian mine, ethically sourcing resources for the world. And I'm like, oh my God, I wish every Canadian could see this. A guy of pride.
using the most ethical, highest environmental labor, human rights standards on earth. Here we are in the heart of a mine. It brought it home for me. And it's people like him and his family and other men and women who work within the industry that are proud of our country and our values. So all this to say, I conclude this with a message of hope and pride in country and just say to people like, let's not lose hope. I know we're under attack, but I actually think the unity of Canada
and the large scale investments we're making to really create one Canadian economy, pipelines, ports, national infrastructure. It gives me hope that our future for our children will be much better off. So just thank you for allowing me to share that story about my late grandfather and remind people that Winston Churchill said it best, never, never, never give up. And I know our country won't.
Hon. Erin OToole (53:33.631)
What a great optimistic way to end the program. And I'll tell you, looking down, that grandfather would be very proud that not only did Canada provide the opportunity, his grandson went on to be the Minister of Education and made sure that new Canadians had access to opportunity. That optimistic note is what Blue Skies is all about, Minister. From the blue skies and looking down on everything to the bottom of a mine in Northern Ontario, you're bringing...
a vision, a leadership and an optimism that our country needs because while we do have challenges and we do have some division and we do have a challenging world we're living in, my goodness, the resources we have, resourcefulness of our people and just the opportunity to thrive and to exceed means we can do a lot and we can take care of folks that are vulnerable along the way. So thank you for blue sky, nuclear energy.
your energy for generations, the pulse panel, the SMRs in Darlington. You've got so much on the go. Thank you for blue-skying with us today.
Stephen Lecce (54:38.353)
Thank you. This is awesome. Really appreciate it.