Minister’s directive

To: the independent electricity system operator

I, Stephen Lecce, Minister of Energy and Mines (“Minister”), hereby direct the Independent Electricity System Operator (“IESO”) pursuant to section 25.32 of the Electricity Act, 1998 (the “Act”) in regard to the procurement of electricity resources to ensure the reliable operation of Ontario’s electricity system in response to ongoing and growing electricity needs expected in the future, as follows:

Background

In late 2024, the government directed the IESO to launch the Second Long-Term Request for Proposals (LT2), as outlined in the Minister’s Directive to the IESO that was approved by the Lieutenant Governor in Council pursuant to Order in Council 1553/2024 dated November 28, 2024 (November 2024 Directive).

Ontario is taking swift action to protect workers and critical infrastructure from ongoing uncertainty and risk arising from geopolitical tensions. As part of its response, Ontario has developed a broad suite of policy tools to incent Canadian participation in our energy build out, including:

  • The Province released a Procurement Restriction Policy (PRP) on April 4, 2025, effective March 4, 2025, that applies to government entities, including the IESO, and certain Broader Public Sector (BPS) organizations. The new policy restricts organizations from procuring any new goods or services, regardless of the procurement method, from a U.S. business. For clarity, the PRP would not apply to IESO’s procurements that are authorized by legislation such as the Electricity Act, 1998 or by the IESO market rules.
  • In addition to the widespread effect of tariffs on our economy, our government is also conscious of the potential for malicious foreign actors to exploit vulnerabilities in the energy sector (e.g., malware, surveillance, manipulation). To ensure our province’s energy supply and infrastructure remain safe, reliable and secure, our government has enacted the Protect Ontario by Unleashing our Economy Act, 2025 (“Bill 5”) to, among other things, amend the Electricity Act, 1998 and the Ontario Energy Board Act, 1998. The amendments update regulation-making authority and clarify the Minister’s directive making authority to limit the participation of foreign jurisdictions, such as foreign state-owned entities, in relation to the goods and/or services produced by those entities or related entities, in procurements by regulated entities in Ontario’s energy sector. This would enable another mechanism to respond to evolving trade relationships and security threats that harm Ontario’s economy.

In alignment with these policy developments, and further to the amendments made under Bill 5, the government is taking action to support Canadian proponents in the upcoming first window of the LT2 procurement (LT2-W1). The use of weighted evaluation criteria as described in this Directive would help achieve this and thereby incenting Canadian participation in our energy build-out. For clarity this Directive only applies to LT2-W1.

Directive

Therefore, in accordance with the authority under section 25.32 of the Electricity Act, 1998, the IESO is hereby directed as follows:

  1. Clause (h) of paragraph 5 of the November 2024 Directive is amended by adding the following sub-clause:
    “(iv) For the purposes of the first submission window of the LT2 RFP, recognize proponents who have and retain Canadian Status, as defined under clause (l) of this paragraph, provided that the project proposal includes an attestation that the IESO may rely upon in this regard and the attestation is signed by a natural person with the authority to bind the proponent.”
  2. Paragraph 5 of the November 2024 Directive is amended by adding the following clause:
    “l. For the purposes of sub-clause (h)(iv), a proponent has Canadian Status if the following requirements are met:
    1. If the proponent is a natural person, the proponent is ordinarily resident in Canada;
    2. If the proponent is neither a natural person nor Controlled by any other Person (as “Control” and “Person” are defined in the Contract), the headquarters or main office of the proponent are located in Canada; or
    3. If the proponent is not a natural person and is Controlled by another Person (as “Control” and “Person” are defined in the Contract), the Person that ultimately Controls the proponent meets the requirements described in sub-clause (i) or (ii) above, as applicable.”

General

For greater clarity, all other terms of the November 2024 Directive shall remain in full force and effect.

This Directive takes effect on the date it is issued.

Order in Council 870/2025