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Energy

Strong domestic supply chain an advantage as Canada moves ahead with new nuclear

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8 minute read

From the MacDonald Laurier Institute

By Sasha Istvan

Canada has two major advantages. We produce uranium and we have an established supply chain.

The pledge from 22 countries, including Canada, to collectively triple nuclear capacity by 2050 drew cheers and raised eyebrows at the United Nations Climate Change Conference last fall in Dubai. Climate commitments are no stranger to bold claims. So, the question remains, can it be done?

In Canada, we are well on our way with successful and ongoing refurbishments of Ontario’s existing nuclear fleet and planning for the development of small modular reactors, or SMRs, in Ontario, New Brunswick, Saskatchewan and most recently Alberta.

The infrastructure required to generate nuclear energy is significant. You not only need engineers and technicians working at a plant, but the supply chain to support it.

Over five decades worth of nuclear generation has allowed Canada to build a world class supply chain. Thus far it has focused on servicing CANDU reactors, but now we have the potential to expand into SMRs.

I first became interested in the CANDU reactor after working as a manufacturing engineer for one of the major fuel and tooling suppliers of Ontario Power Generation and Bruce Power. I witnessed firsthand the sophistication and quality of the nuclear supply chain in Ontario, being particularly impressed by the technical expertise and skilled workers in the industry.

The CANDU reactor is the unsung hero of the Canadian energy industry: one of the world’s safest nuclear reactors, exported around the world, and producing around 60 per cent of Ontario’s electricity, as well as 40 per cent of New Brunswick’s.

Having visited machine shops across Ontario, it’s evident that Canadians should take pride that the expertise and technology required for the safe generation of nuclear energy is available here in Canada.

As Canada looks to grow its nuclear output to achieve net-zero goals, its well-established engineering and manufacturing capabilities can make it a leader in the global expansion of nuclear energy as other nations work to make their COP28 declaration a reality.

Canada has two major advantages. The first is that it is a globally significant producer of uranium. We already export uranium from our incredible reserves in northern Saskatchewan and fabricate unenriched uranium fuel for CANDU. Canadian uranium will be an important ingredient in the success and sustainability of a nuclear renaissance, especially for our allies.

The second is that we have an established and active supply chain. While new nuclear builds have slowed dramatically in the western world — a result of the fallout from Chernobyl and Fukushima, as well as competition from cheap natural gas — Bruce Power and OPG are in the midst of major refurbishments to extend their operations until 2064 and 2055, respectively.

Bruce Power has successfully completed the first unit refurbishment on schedule and within budget, with ongoing work on the second unit. OPG has accomplished refurbishments for two out of its four units at Darlington, with the latest unit completed ahead of schedule and under budget. These multibillion-dollar refurbishments have actually grown our nuclear supply chain and demonstrate that it’s firing on all cylinders.

SMRs are the next phase of nuclear technology. Their size and design make them well suited for high production and modular construction. Investing in the supply chain for SMRs now positions Canada for significant economic gains.

OPG plans to build four GE-Hitachi BWRX-300 reactors, with the first slated for service as early as 2028. This first-of-a-kind investment will help identify and overcome design challenges and develop its own supply chain. That will benefit not only their project but those that follow suit.

SaskPower is planning to proceed with the same SMR design, as well as the first pilot globally of the Westinghouse eVinci microreactor; New Brunswick is moving ahead with the ARC-100, both for its existing nuclear site at Point Lepreau as well as in the Port of Belledune; and OPG and Capital Power recently announced a partnership to explore a nuclear reactor in Alberta, including the potential for the BWRX-300.

While the bulk of the nuclear supply chain is currently located in Ontario, other provinces have already been investing in the development of local capacity.

All this activity sets Canada up to leverage first-mover advantage and become a significant global provider of BWRX-300 components. Canada will not only see the economic benefits during initial construction but also through sustained demand for replacement parts in the future.

Nuclear energy has already made a significant contribution to the Canadian economy. In 2019, a study commissioned by the Canadian Nuclear Association and the Organization of Canadian Nuclear Industries showed that the nuclear industry accounted for $17 billion of Canada’s annual GDP annually and has created over 76,000 jobs.

Notably, 89 per cent of these positions were classified as high-skilled, and over 40 per cent of the workforce was under 40. This study, conducted before the announcement of SMR plans, was followed by a more recent report from the Conference Board of Canada on the economic impact of OPG’s SMR initiatives. The study found that the construction of just four SMRs at OPG could boost the Canadian GDP by $15.3 billion (2019 dollars) over 65 years and sustain approximately 2,000 jobs annually during that period.

Public perception of nuclear is improving. In 2023, the percentage of Canadians wanting to see further development of nuclear power generation in Canada grew to 57 per cent compared with 51 per cent in 2021.

As well, the Business Council of Canada has voiced its support for nuclear expansion, emphasizing Canada’s strategic advantages: political and public backing across the spectrum, coupled with a rich history of nuclear expertise.

Nuclear energy is dispatchable, sustainable and a proven technology. As nations move to achieve their climate goals, it has one other major benefit: a supply chain that is wholly western and in Canada’s case almost totally domestic.

While the critical minerals and manufactured goods required for batteries, wind and solar energy rely heavily on China and other politically unstable or authoritarian countries, nuclear provides energy independence. Canada is well positioned to help our allies improve their energy security with our strong, competitive nuclear supply chain.

Sasha Istvan is an engineer based in Calgary, with experience in both the nuclear supply chain and the oil and gas sector.

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Business

Premiers fight to lower gas taxes as Trudeau hikes pump costs

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From the Canadian Taxpayers Federation

By Jay Goldberg 

Thirty-nine hundred dollars – that’s how much the typical two-car Ontario family is spending on gas taxes at the pump this year.

You read that right. That’s not the overall fuel bill. That’s just taxes.

Prime Minister Justin Trudeau keeps increasing your gas bill, while Premier Doug Ford is lowering it.

Ford’s latest gas tax cut extension is music to taxpayers’ ears. Ford’s 6.4 cent per litre gas tax cut, temporarily introduced in July 2022, is here to stay until at least next June.

Because of the cut, a two-car family has saved more than $1,000 so far. And that’s welcome news for Ontario taxpayers, because Trudeau is planning yet another carbon tax hike next April.

Trudeau has raised the overall tax burden at the pumps every April for the past five years. Next spring, he plans to raise gas taxes by another three cents per litre, bringing the overall gas tax burden for Ontarians to almost 60 cents per litre.

While Trudeau keeps hiking costs for taxpayers at the pumps, premiers of all stripes have been stepping up to the plate to blunt the impact of his punitive carbon tax.

Obviously, Ford has stepped up to the plate and has lowered gas taxes. But he’s not alone.

In Manitoba, NDP Premier Wab Kinew fully suspended the province’s 14 cent per litre gas tax for a year. And in Newfoundland, Liberal Premier Andrew Furey cut the gas tax by 8.05 cents per litre for nearly two-and-a-half years.

It’s a tale of two approaches: the Trudeau government keeps making life more expensive at the pumps, while premiers of all stripes are fighting to get costs down.

Families still have to get to work, get the kids to school and make it to hockey practice. And they can’t afford increasingly high gas taxes. Common sense premiers seem to get it, while Ottawa has its head in the clouds.

When Ford announced his gas tax cut extension, he took aim at the Liberal carbon tax mandated by the Trudeau government in Ottawa.

Ford noted the carbon tax is set to rise to 20.9 cents per litre next April, “bumping up the cost of everything once again and it’s absolutely ridiculous.”

“Our government will always fight against it,” Ford said.

But there’s some good news for taxpayers: reprieve may be on the horizon.

Federal Conservative leader Pierre Poilievre’s promises to axe the carbon tax as soon as he takes office.

With a federal election scheduled for next fall, the federal carbon tax’s days may very well be numbered.

Scrapping the carbon tax would make a huge difference in the lives of everyday Canadians.

Right now, the carbon tax costs 17.6 cents per litre. For a family filling up two cars once a week, that’s nearly $24 a week in carbon taxes at the pump.

Scrapping the carbon tax could save families more than $1,200 a year at the pumps. Plus, there would be savings on the cost of home heating, food, and virtually everything else.

While the Trudeau government likes to argue that the carbon tax rebates make up for all these additional costs, the Parliamentary Budget Officer says it’s not so.

The PBO has shown that the typical Ontario family will lose nearly $400 this year due to the carbon tax, even after the rebates.

That’s why premiers like Ford, Kinew and Furey have stepped up to the plate.

Canadians pay far too much at the pumps in taxes. While Trudeau hikes the carbon tax year after year, provincial leaders like Ford are keeping costs down and delivering meaningful relief for struggling families.

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Economy

Gas prices plummet in BC thanks to TMX pipeline expansion

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From Resource Works

By more than doubling capacity and cutting down the costs, the benefits of the TMX expansion are keeping more money in consumer pockets. 

Just months after the Trans Mountain Expansion (TMX) project was completed last year, Canadians, especially British Columbians, are experiencing the benefits promised by this once-maligned but invaluable piece of infrastructure. As prices fall when people gas up their cars, the effects are evident for all to see.

This drop in gasoline prices is a welcome new reality for consumers across B.C. and a long-overdue relief given the painful inflation of the past few years.

TMX has helped broaden Canadian oil’s access to world markets like never before, improve supply chains, and boost regional fuel supplies—all of which are helping keep money in the pockets of the middle class.

When TMX was approaching the finish line after the new year, it was praised for promising to ease long-standing capacity issues and help eliminate less efficient, pricier methods of shipping oil. By mid-May, TMX was completed and in full swing, with early data suggesting that gas prices in Vancouver were slackening compared to other cities in Canada.

Kent Fellows, an assistant professor of Economics and the Director of Graduate Programs for the School of Public Policy at the University of Calgary, noted that wholesale prices in Vancouver fell by roughly 28 cents per litre compared to the typically lower prices in Edmonton, thanks to the expanded capacity of TMX. Consequently, the actual price at the gas pump in the Lower Mainland fell too, providing relief to a part of Canada that traditionally suffers from high fuel costs.

In large part due to limited pipeline capacity, Vancouver’s gas prices have been higher than the rest of the country. From at least 2008 to this year, TMX’s capacity was unable to accommodate demand, leading to the generational issue of “apportionment,” which meant rationing pipeline space to manage excess demand.

Under the apportionment regime, customers received less fuel than they requested, which increased costs. With the expansion of TMX now complete, the pipeline’s capacity has more than doubled from 350,000 barrels per day to 890,000, effectively neutralizing the apportionment problem for now.

Since May, TMX has operated at 80 percent capacity, with no apportionment affecting customers or consumers.

Before the TMX expansion was completed, a litre of gas in Vancouver cost 45 cents more than a litre in Edmonton. By August, it was just 17 cents—a remarkable drop that underscores why it’s crucial to expand B.C.’s capacity to move energy sources like oil without the need for costly alternatives, allowing consumers to enjoy savings at the pump.

More than doubling TMX’s capacity has rapidly reshaped B.C.’s energy landscape. Despite tensions in the Middle East, per-litre gas prices in Vancouver have fallen from about $2.30 per litre to $1.54 this month. Even when there was a slight disruption in October, the price only rose to about $1.80, far below its earlier peaks.

As Kent Fellows noted, the only real change during this entire timeline has been the completion of the TMX expansion, and the benefits extend far beyond the province’s shores.

With TMX moving over 500,000 barrels more per day than it did previously, Canadian oil is now far more plentiful on the international market. Tankers routinely depart Burrard Inlet loaded with oil bound for destinations in South Korea and Japan.

In this uncertain world, where oil markets remain volatile, TMX serves as a stabilizing force for both Canada and the world. People in B.C. can rest easier with TMX acting as a barrier against sharp shifts in supply and demand.

For critics who argue that the $31 billion invested in the project is short-sighted, the benefits for everyday people are becoming increasingly evident in a province where families have endured high gas prices for years.

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