From the Fraser Institute

By Tegan Hill and Elmira Aliakbari

Amid an ongoing trade war with the United States, which will increase prices for Canadian and American consumers alike, affordable energy is crucial to fuel our daily lives and power the economy. Unfortunately, energy prices have been rising for years, straining household budgets across Canada including in Alberta.

For perspective, from 2002 to 2023 (the latest year of available data) the price of energy (electricity, gasoline, etc.) grew by 105.5 per cent compared to 53.5 per cent for non-energy goods and services. This reflects a significantly higher increase in energy prices compared to other goods.

Why have energy prices increased?

While there are many factors, bad government policy has added fuel to the fire. The list includes the federal carbon tax, which remains in place for large industrial emitters. And Ottawa’s “Clean Electricity Regulations,” which mandate that by 2050, 100 per cent of Canada’s electricity must come from clean energy sources as wind, solar, hydro, etc. To meet this goal, Canada would need to build a massive amount of new infrastructure and technology, potentially driving electricity costs even higher.

Of course, Canadians pay the price for bad policy. Due in part to rising energy prices, in 2021 (the latest year of available data), 11.0 per cent of Canadians lived in “energy poverty”—that is, at least 10 per cent of their household total annual spending paid for energy-related goods such as electricity, natural gas, gasoline and other heating fuels. In Alberta, the number was 10.0 per cent. All told, that’s a lot people in energy poverty.

And energy poverty disproportionally affects lower-income households. For instance, in 2021 across Canada, 22.1 per cent of households earning $31,200 or less, and 20.7 per cent earning between $31,200.01 and $55,000, were in a state of energy poverty compared to only 1.6 per cent of households earning more than $124,000.

When the next federal government—whoever that may be—works with the provinces to develop energy policy, it should understand the significant level of energy poverty in Canada including Alberta, particularly among low-income households. Increasing energy prices further would likely increase the burden on families already experiencing energy poverty and those families at risk of falling into it.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute

From the Frontier Centre for Public Policy

By Maureen McCall

Ottawa’s Clean Electricity Regulations could derail Canada’s energy future. Here’s what we need to do

The federal government’s push to make Canada’s electricity system net-zero is running straight into reality—and it’s not pretty.

Through the Clean Electricity Regulations (CER), the government wants all provinces to eliminate greenhouse gas emissions from electricity generation by 2035. It is an ambitious goal, but one that ignores a basic fact: demand for electricity is exploding, and provinces are struggling to keep up.

New technologies like artificial intelligence are supercharging this demand. AI systems, including tools such as ChatGPT, rely on massive data centres—huge warehouses of computer servers that need constant cooling and enormous amounts of electricity to function. According to a recent Royal Bank of Canada report, if all proposed data centre projects in Canada move ahead, they would consume 14 per cent of the country’s entire electricity supply by 2030. That is roughly the same as projections in the United States, where data centres are expected to use up to 15 per cent of the national total.

This is a serious problem. Provinces such as Alberta and Saskatchewan have already raised the alarm, arguing that the federal regulations overstep Ottawa’s constitutional authority. Energy supply, like natural resources, has traditionally been under provincial control. Alberta and Ontario operate their own electricity markets to attract investment and ensure reliability. Federal regulations threaten to undermine these efforts, adding risk and driving up costs.

The situation is already tense. Alberta, for example, issued multiple grid alerts in 2024 due to shortages and market disruptions. The province is now looking at “behind-the-fence” power solutions, encouraging data centres to generate their own electricity to guarantee stability.

Canada was not always in this bind. For decades, we enjoyed an abundance of clean, affordable hydroelectric power. Provinces like Quebec, British Columbia, Manitoba and Newfoundland and Labrador built massive hydro projects starting in the 1960s, creating cheap power and even surpluses to export to U.S. markets. In 2022, for example, B.C. sent 74 per cent of its exported power to the U.S., while Quebec sent 63 per cent and Ontario an impressive 81 per cent, generating billions in revenue.

But that era is coming to an end. Most of the best sites for hydro dams have already been developed. New projects would require expensive, long-distance transmission lines to bring power from remote areas to the cities that need it. On top of that, growing environmental concerns make new dam construction an uphill battle.

The truth is, there is no quick fix. A 2025 study by the Fraser Institute paints a grim picture: to meet future electricity demand solely with solar power would require 1,680 years of construction. Wind power? About 1,150 years. Even hydro would take close to a millennium. Even if we combined these sources, we are still looking at more than 1,000 years to build enough capacity.

Meanwhile, federal projections estimate that Canada’s electricity demand will double by 2050.

Without significant policy changes, Canadians could soon face the worst of both worlds: soaring electricity bills and the threat of power shortages. Our economy could also suffer as companies and data centres look to other jurisdictions with more reliable power supplies.

So what should Canada do? Here are three practical steps:

1. Scrap the Clean Electricity Regulations. Provinces like Alberta and Saskatchewan are already committed to reaching net-zero by 2050. Federal interference only creates unnecessary political battles and delays investments.
2. Fast-track approvals for new interprovincial transmission lines. Today, building a new transmission line can take more than a decade. Speeding up this process would help provinces share power and avoid costly overbuilding of generation capacity.
3. Launch a major low-interest loan program to build new power infrastructure. We need to dramatically expand our generation and transmission systems, including natural gas-fired plants, to meet future demand.

Canadians deserve a reliable, affordable and clean energy future. But we will not get there by ignoring the realities of rising demand and provincial responsibilities. It is time for the federal government to listen to the provinces, embrace practical solutions and avoid an avoidable crisis.

Otherwise, we are on track for blackouts, higher bills and missed economic opportunities.

Maureen McCall is an energy business analyst and Fellow at the Frontier Center for Public Policy. She writes on energy issues for EnergyNow and the BOE Report. She has 20 years of experience as a business analyst for national and international energy companies in Canada.