Canada needs more clean energy. Paying for it should be an election issue

OPINION: It’s normally a matter for the provinces. But each party has included climate planks in their platforms — so they should be talking about energy planning during the campaign
By John Michael McGrath - Published on Aug 31, 2021
Any substantial move away from fossil fuels will require Canada to substantially increase its use of non-polluting electricity. (Larry MacDougal/CP)



On Monday, the Liberal party released more of its election platform — instead of a single, consolidated document release, it’s opted to release it like The Mandalorian — which fleshes out previous commitments on climate policy. Notable commitments include more money for heavy industry to transition to less polluting methods (as announced earlier this summer, Algoma Steel will receive $420 million to produce low-GHG steel) and capping emissions from the oil and gas sector with the intent of reaching net-zero emissions of greenhouse gases by 2050.

The Liberals would also establish a “Pan-Canadian Grid Council,” a body that would work with the provinces to “make Canada the most reliable, cost-effective and carbon-free electricity producer in the world.” It’s interesting that they’re proposing to dip federal toes into an area that’s normally the jurisdiction of the provinces, and it might come to nothing — either because the Liberals lose the election or because the council ends up being largely irrelevant (like the National Infrastructure Bank, whose reason for existing still isn’t clear).

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But that doesn’t mean there shouldn’t be federal interest in electricity policy over the coming decades. Every national party (bar Maxime Bernier’s Peoples Party) is trying to be taken seriously on climate policy in this election, and it’s now settled law that the federal government can, at the very least, impose minimum national standards on the stringency of pollution pricing. And parties are certainly not being shy about proposing measures that would increase the consumption of electricity — rebates for electric cars, for example — so there’s some argument that they should help pick up the tab for electricity production and transmission, too.

The problem is substantially larger than electric cars, however. It’s been clear for years now that any substantial move away from fossil fuels will require Canada to substantially increase its use of non-polluting electricity. Gasoline and diesel cars get replaced over time with electric vehicles; natural-gas furnaces and water heaters get replaced with electric heat pumps. There are definitely sectors of the economy that we don’t have answers for yet — heavier industry, concrete production, and others — and maybe the eventual answer will be a limited form of carbon sequestration, which sees carbon dioxide captured and stored in some kind of hopefully permanent manner.

But while it’s easy enough to craft a brief paragraph describing that broad transition in the energy system, the scale of the undertaking I’ve described is enormous. Gigawatts of new power generation need to be commissioned, planned for, and connected to the grid. And the grid itself, the literal physical wires connecting the user to a steady stream of electrons, will require billions of dollars in investment.

A recent study from Strategic Policy Economics looked specifically at how much new electrical infrastructure Ontario will need in coming years and estimated that the province will need new megawatts equivalent to twice our current nuclear and hydroelectric generation. The report was commissioned by the provincial Power Workers Union, which is not a disinterested observer on the topic of energy choices, but very nearly any serious attempt to project these trends into the future will find more or less the same answers. The problem becomes even more daunting if we want to rely on such fuels as hydrogen or synthetic e-fuels (where carbon dioxide captured from the air is converted into substances like gasoline or aviation fuel), because these processes are inherently inefficient and would require even more electricity.

So, in the future, we’ll need a lot more power than we currently use. The question is who’s going to pay for it. According to the conventional model, most or all of these costs are borne, in one form or another, by the people who use the electricity: they end up on your hydro bill. The problem for climate policy is that all of this is going to be expensive, and, in Ontario, voters recently turfed a Liberal government with a decent climate record in part because they were sick of their hydro bills going up.

The federal government could step in and help pay for this infrastructure: it’s a necessary and unavoidable part of any kind of green-energy transition, and the feds have billions of dollars in carbon-tax revenue to spend — and that revenue will increase if the Liberals remain in power and raise the carbon tax, as promised. That would keep hydro rates low while functionally making polluters pay for some of the costs of environmental policy. To reiterate: The federal parties are all happy to push the demand side of this equation with subsidies for electric vehicles and other measures. They can show up for the supply side, too.

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