Electricity Grid and Network
House of Commons Standing Committee on Natural Resources
Colleen Collins, Vice President
September 25, 2024
I want to thank the members of the committee for this invitation to contribute to your study.
The Canada West Foundation is an independent, non-partisan public policy think tank that specifically focuses on issues that matter most to the West. We advance pragmatic policies based on research and convening, as well, we educate Canadians on these issues.
Your Committee is tasked with the study of Canada’s electricity system. This is no small undertaking precisely because there is no Canadian electricity system — our country has 10 provincial systems. I will focus on the four western provinces.
My first point is that electricity generation and intra-provincial transmission fall clearly within provincial jurisdiction, so it is quite interesting to participate in a study by a House of Commons committee on the topic.
Western provinces have raised serious concerns that unilateral federal action through policies such as the Impact Assessment Act and the Clean Electricity Regulations run afoul of the constitution. And in the Impact Assessment Act decision, the Supreme Court pointedly reminded the federal government of provincial responsibility for electricity.
Electricity generation that is reliable, affordable, and clean is the objective of every provincial government and system operator. However, because an issue is important across the nation does not mean that it is an issue of national concern to be unilaterally addressed by the federal government. Provinces are taking actions to achieve these goals in ways that are consistent with the diverse nature of their resource endowments, geography and system choices and they are cooperating with their neighbours where it makes sense. Canada West Foundation detailed these differences in its report, Electricity Systems Across Western Canada: a Landscape Analysis.
So as a committee I’m sure you will ask what is the appropriate role for the federal government?
Clearly, it is not to create uncertainty that limits investments in emitting and non-emitting generation through the Clean Electricity Regs which are unnecessary, unattainable, unaffordable and unconstitutional as Alberta and Saskatchewan have demonstrated. Or to create uncertainty through delayed implementation for promised investment tax credits and other uncertainties concerning carbon contracts for differences.
Electricity is a system. Actions on one part have implications for others and those implications differ in different provinces. Policies that may benefit Canadians “on average” can have very negative consequences in some provinces as shown research by the Canada West Foundation and the provinces of Saskatchewan and Alberta (and their systems operators). Significantly higher costs will be born by industry and consumers in those provinces for net zero power by 2035 as well as other policies.
The Supreme Court of Canada determined that where federal and provincial responsibilities overlap, each order of government should stay in their own lane – related to their heads of power and work together through cooperative federalism to achieve their goals. This doesn’t only make constitutional sense – it also makes practical sense – especially for complex systems like electricity. Regulations and funding programs that don’t consider the realities on the ground will be counter productive. There is much to gained through true cooperation – and to be sure – consultation is not the same thing.
Second, if we consider inter-provincial interties as an example of an area within federal jurisdiction, a map of electricity generation across the West suggests an obvious idea to ship zero emission hydro electricity from the book-ends of B.C. and Manitoba to Alberta and Saskatchewan. However, as your committee studies the system in more depth, you will find that B.C. and Manitoba simply don’t have spare ongoing baseload electricity to send to Alberta and Saskatchewan. In 2023, B.C. actually imported more electricity from the U.S. and Alberta than they exported and even with Site C coming online at the end of the year, B.C. will soon face serious supply shortages due to increased residential and industrial demand. Manitoba also faces short-term shortages and it will continue to keep its natural gas generation on-line and like B.C. has also issued a call for new renewable generation.
You will also find that Alberta provided 92 per cent of Canada’s new renewable and storage capacity in 2023 (CanREA, January 2024). Without its own major hydroelectric resources or consistent supply from B.C., wind and solar have developed precisely because a) wind and solar resources exist; and b) there is natural gas to provide baseload power. Until storage and nuclear generation can provide the kind of reliability required – natural gas will be necessary.
The largest B.C. – Alberta inter-tie is being restored after years of limited use. Intertie capacity between Saskatchewan and Manitoba increased in 2021, facilitated by funding from the Federal Green Infrastructure program. But there are no new projects in the works, despite available federal funding because there just isn’t the available supply at reasonable cost.
In addition, you might ask, even if sufficient supply existed, would Alberta and Saskatchewan rate payers be willing to pay the same prices as U.S. customers?
As Western provinces seek opportunities to increase reliability, affordability and sustainability there is a role for the federal government to use its spending power in cooperation with the provinces to support emissions reductions that suit their conditions.