Alberta
The electricity price cap in Alberta is gone. What now?
Many Albertans have been reading the news about higher regulated electricity rates in December, after the price cap on energy rates was scrapped by the province. Even though this was announced by the Government of Alberta in late October, as part of the new budget, people only started to hear more about it on November 30. That was when the regulated energy providers announced their new power rates; this time, without a cap on prices.
The program was created by the NDP government in 2017 to cap energy rates for residential and small business consumers. Regulated rate (RRO) consumers wouldn’t pay more than 6.8 cents per kWh, meaning that any costs above that threshold were paid by the province. The main goal behind the cap was to protect consumers from rate spikes and, consequently, financial uncertainty.
In order to predict how your energy bills (and your wallet) could be impacted by this change, we need to take a look at historical prices, future market trends and what prices would’ve been this past year without the cap.
How the 6.8 cents/kWh price cap worked
Regulated electricity rates in Alberta change every month. Although the prices need to be approved by the Alberta Utilities Commission (AUC), they can be affected by multiple factors, including politics, natural disasters, economic reasons and more.
In the past 10 years, electricity rates in Alberta went as high as 15.06 cents/kWh and as low as 2.88 cents/kWh. The cap provided protection for Albertans as the government subsidized any prices above 6.8 cents/kWh.
The effects of the electricity price cap in Calgary in 2019
According to the Utilities Consumer Advocate (UCA), regulated electricity rates in the Calgary area (ENMAX) went above the 6.8 cents/kWh during most months of 2019, except for March, April, May and June.
- January: 7.727 cents/kWh
- February: 7.009 cents/kWh
- March: 5.914 cents/kWh
- April: 6.067 cents/kWh
- May: 6.390 cents/kWh
- June: 6.391 cents/kWh
- July: 8.434 cents/kWh
- August: 8.805 cents/kWh
- September: 7.590 cents/kWh
- October: 6.736 cents/kWh*
- November: 7.399 cents/kWh
- December: 7.320 cents/kWh
*According to the UCA, prices still reached the price cap in October, although they were officially 6.736 cents/kWh.
This means the average price would’ve been approximately 7.15 cents/kWh, which makes quite a difference in energy bill terms, considering that the average household in Canada consumes around 1,000 kWh per month. After an entire year of high electricity rates, this difference looks even larger.
The effects of the electricity price cap in Edmonton in 2019
In the Edmonton region (EPCOR), the difference between what consumers paid and what they would’ve paid without the cap is even more noticeable. According to the UCA, regulated prices went above the 6.8 cents threshold in all months except for March.
Without the cap, the average price per kWh in the Edmonton area in 2019 would’ve been 7.84 cents/kWh.
- January: 7.733 cents/kWh
- February: 7.189 cents/kWh
- March: 5.991 cents/kWh
- April: 6.981 cents/kWh
- May: 6.990 cents/kWh
- June: 7.231 cents/kWh
- July: 9.578 cents/kWh
- August: 10.191 cents/kWh
- September: 8.2 cents/kWh
- October: 7.342 cents/kWh
- November: 8.63 cents/kWh
- December: 8.069 cents/kWh
Are my electricity bills going to increase in the months ahead?
Now that the price cap is gone, many households and small businesses are concerned about facing higher utility costs in the months ahead.
Power prices reached historically low averages in 2017, but the average rate in Alberta was 7.3 cents/kWh for the 2002-2018 period, which is considerably above the price cap, especially in cents/kWh terms.
The future of electricity prices is still unclear. Consumers will have to wait and see whether rates will go up or down. We can expect to see RRO prices fluctuate slightly more now that they are free to go above the 6.8 cents/kWh threshold, as it happened in December and for most of the time in 2019.
Agriculture
Why Canadians Should Care About Land Loss
Why Canadians Should Care About Land Loss
Developments are increasingly taking over Canadian farmland. Farms once took up much of Canadian land. However, that case is not true today. Only about 5% of Canada’s land is considered prime farmland. This prime land borders one of Canada’s fastest-growing regions, and once suburban development overtakes it, Canadian farmers will have a challenging time providing food for the cities.
Farmers in Canada make their livelihood by planting, growing, harvesting and distributing food to the Canadian populations. Without land, both farmers and the rest of those living in Canada will not get fresh, Canadian grown produce.
Here are some reasons why Canadian farmers should care about land loss:
- Farmland Provides Food
While this is an apparent reason, it’s an essential one. Prime farmland in Canada produces food for major Canadian cities. As farmers continue to lose land, they have to rely on a smaller acreage to make the same amount of food — if not more — for the growing population.
Over the past 10 years, almost 1 million hectares of agricultural land has diminished due to development and growing populations. Agriculture continues to adapt to land loss. However, further technological advancements must first take place to grow enough produce vertically rather than horizontally.
- Land Preservation Will Help the Economy
Farmland preservations come with a wealth of economic benefits. Agriculture contributes to the economy through the following ways:
- Sales: For the economy to survive, there needs to be consumer demands and sales. Almost everyone purchases produce, so there will always be a demand for those goods. Without land to grow agricultural products, no sales will be made, and the economy could suffer.
- Job opportunities: Less than 2% of Canada’s population works in the agriculture industry. While it’s not much, that’s still over 750,000 people. Preserving farmland shows a commitment to the industry. Land loss would create job loss. However, maintaining the farmland — and even reclaiming it, along with pastures — could boost the sector and, therefore, the economy. It would provide unemployed people with job security.
- Secondary markets: Farmers are just one part of the food business. Because of farmers and farmland, secondary markets can thrive. These would include processing businesses, restaurants, schools, grocery stores and even waste management companies.
Canadian farmers should care about land loss because standing back and allowing companies to overtake the farmland could seriously affect the economy.
- Farmland Benefits the Environment
Wildlife often depends upon farmland for both food and habitat. Various types of farmland create diverse habitats for many different species. Without land protection, these habitats and food sources would be destroyed, leaving many animals without a place to survive. Many would have difficulty finding a native habitat.
Additionally, growing crops helps eliminate some of the carbon dioxide released into the air. Air pollution could decrease for Canadian cities as long as no more farmland is used for development.
One major problem occurring with Canadian farmland is desertification. This happens when the soil loses nutrients and becomes barren. The urbanization of Canadian farmland is the primary contributor to desertification, which speeds up climate change and harms the environment. Keeping farmland as-is will slow down climate change.
- Land Loss Affects Farmers’ Jobs
Perhaps the main reason why Canadian farmers should care about land loss is because their livelihood could be taken away. If they don’t have the means to keep up with technological advancements in the agricultural industry, they will not be able to continue their jobs if they experience land loss.
Agriculture is an essential industry. Not everyone can pick up the skills needed to grow their own food, and so many people depend upon farmers for nutrition and goods.
Take a Stand to Preserve Farmland
Farmland is a worthwhile and precious resource for many people. Reduction in farmland acreage will hurt Canadian farmers and the rest of the population, the economy and the environment. Taking steps to prevent more land loss can slow the rates of destruction and keep natural habitats thriving for both humans and animalls.
Click here read more stories by Emily Folk.
I’m Emily Folk, and I grew up in a small town in Pennsylvania. Growing up I had a love of animals, and after countless marathons of watching Animal Planet documentaries, I developed a passion for ecology and conservation.
Agriculture
How Canadian Dairy Farms Can Adjust to New Dairy Demand
How Canadian Dairy Farms Can Adjust to New Dairy Demand
Many changes occurred around the world as a result of the coronavirus pandemic. In Canada, while schools and businesses closed, consumers flocked to the supermarkets to buy essentials.
Perishable goods flew off the shelves, resulting in limits being placed on items like dairy and poultry. The standard distribution system schedule put in place for dairy products could not keep up with buyers’ increased shopping.
While retail demand from grocers skyrocketed, orders from the foodservice industry plummeted. This has resulted in unforeseen fluctuations in the dairy market.
Hotels, restaurants, schools and eateries are closed or operating at limited capacity. As a result, there is now an enormous surplus of milk that has nowhere to go. Farmers are not equipped with storage spaces to accommodate the excess supply. Unlike agriculture products like potatoes, milk has to be sold immediately or risk spoilage.
Cows will continue producing milk, regardless of fluctuations in the market. While farmers have the option to reduce the size of their herd or change diet or nutrition, these things could prove detrimental when the market stabilizes.
The Supply Management System
A supply management system controls production quotas and imports for Canadian dairy, chicken, turkey and eggs. It was established in the1970s to coordinate production and demand while simultaneously controlling imports. By operating under this method, prices are stabilized for both producers and consumers.
A national agency represents each industry, and they are in charge of setting production levels that match provincial demand. Farmers in each province are allocated production quotas that are meant to prevent surpluses or shortages.
The original quotas were based on consumer needs pre-pandemic. As a result of these unforeseen events, farmers must now adjust to the new Canadian dairy demand. Here are four main ways farmers can adapt to the changing times.
- Dump the Milk
Producers say that discarding raw milk is inevitable at this stage. Farmers are reporting that they have been asked to take turns dumping milk. Although they’re paid for it, the waste could amount to as much as 5 million litres every week.
This disposal method is unsustainable and should only be utilized while the market is above capacity. Cows must continue to be milked to keep them comfortable and healthy, and production must continue to ensure product availability in retail stores.
- Donate to Food Banks
Rather than dumping milk, some farmers have begun donating to food banks to support Canadians in need. While this is a positive form of dispersing the milk surplus, it has the potential to overwhelm food banks that may not have the storage capacity to support this influx.
Additionally, the raw milk provided from farmers must be processed, which complicates the standard donation process.
- Improve Operations
Dairy farmers should focus on improving operations to become more efficient and cost-effective. Many producers have begun investing in updated equipment and robotics to save time and money. Competition is set to increase as a result of import growth projected for the next decade. To maintain a market edge, operations should be improved and simplified wherever possible.
- Expand or Retire
In 2019, the Canadian federal government announced an aid package valued at $1.75 billion to compensate supply-managed dairy producers over an eight-year period. The Dairy Direct Payment Program is one part of this aid package and provides $345 million payments as compensation during 2019 and 2020.
The aid package was proposed as a result of import shifts. The Canadian government has opened part of its domestic market to foreign producers as part of several free-trade negotiations. To adapt to increased competition from foreign products, Canadian producers should plan to expand their operations or retire. Larger farms will be able to sustain demand while simultaneously upgrading their methods to be constantly improving.
Smaller producers may not be able to afford the necessary production updates to keep up with competitors.
Future Demand
These are unprecedented circumstances. As schools, businesses and restaurants reopen, dairy demand will increase. With indoor capacity requirements and shifts in consumer trends, consumption levels will undoubtedly continue to fluctuate.
While farmers should take steps to dispose of surplus responsibly, they should not halt production or decrease their operation size.
Read more from Emily Folk
I’m Emily Folk, and I grew up in a small town in Pennsylvania. Growing up I had a love of animals, and after countless marathons of watching Animal Planet documentaries, I developed a passion for ecology and conservation. You can read more of my work by clicking this link: Conservation Folks.
Canadian Federal Government Taking Measures to Reduce Impact of COVID-19 on Agriculture