Economy
Ottawa’s proposed ‘electricity’ regulations may leave Canadians out in the cold
From the Fraser Institute
In case you haven’t heard, the Trudeau government has proposed a new set of “Clean Electricity Regulations” (CERs) to purportedly reduce the use of fossil fuels in generating electricity. Basically, the CERs would establish new standards for the generation of electricity, limiting the amount of greenhouse gases that can be emitted in the process, and would apply to any unit that uses fossil fuels (coal, natural gas, oil) to generate electricity.
The CERs would hit hardest provinces that rely on fossil fuels to generate electricity: Alberta (89 per cent fossil fuels), Saskatchewan (81 per cent), Nova Scotia (76 per cent) and New Brunswick (30 per cent). Not so much Ontario (7 per cent) and Quebec (1 per cent), which are blessed with vast hydro potential.
In theory, the government has been in “consultation” with electricity producers and the provinces that will be most impacted by the CERs, although some doubt the government’s sincerity.
For example, according to Francis Bradley, CEO of Electricity Canada, which advocates for electricity companies, there is “insufficient time to analyze and provide feedback that could meaningfully impact the regulatory design” adding that the “engagement process has failed to achieve its purpose.” And consequently, the current design of the CERS may impose “significant impairments to the reliability of the electricity system and severe affordability impacts in many parts of the country.”
This was not the first time folks observed a lack of meaningful consultation over the CERs. Earlier this year, Alberta Environment Minister Rebecca Schulz told CBC that an update to the CERs made “no meaningful corrections to the most destructive piece of Canadian electricity regulation in decades” and that CERs “would jeopardize reliability and affordability of power in the province.”
Simply put, with CERs the Trudeau government is gambling with high stakes—namely, the ability of Canadians to access reliable affordable electricity. Previous efforts at decarbonizing electrical systems in Ontario and around the world suggest that such efforts are relatively slow to develop, are expensive, and are often accompanied by periods of electrical system destabilization.
In Ontario, for example, while the provincial government removed coal-generation from its electricity generation from 2010 to 2016, Ontario’s residential electricity costs increased by 71 per cent, far outpacing the 34 per cent average growth in electricity prices across Canada at the time. In 2016, Toronto residents paid $60 more per month than the average Canadian for electricity. And between 2010 and 2016, large industrial users in Toronto and Ottawa experienced cost spikes of 53 per cent and 46 per cent, respectively, while the average increase in electric costs for the rest of Canada was only 14 per cent. Not encouraging stats, if you live in province targeted by CERs.
Reportedly, the Trudeau government plans to release a final version of the new CERs rules by the end of this year. Clearly, in light of the government’s failure to meaningfully consult with the electrical-generation sector and the provinces, the CERs should be put on hold to allow for longer and more sincere efforts to consult before these regulations go into effect and become too entrenched for reform by a future government.
Otherwise, Canadians may pay a steep price for Trudeau’s gamble.
Author:
We’ve discussed the housing crisis before. That would include the destabilizing combination of housing availability – in particular a weak supply of new construction – and the immigration-driven population growth.
Parsing all the data can be fun, but we shouldn’t forget the human costs of the crisis. There’s the significant financial strain caused by rising ownership and rental costs, the stress so many experience when desperately searching for somewhere decent to live, and the pressure on businesses struggling to pay workers enough to survive in madly expensive cities.
If Canada doesn’t have the resources to house Canadians, should there be fewer of us?
Well we’ve also discussed the real problems caused by low fertility rates. As they’ve already discovered in low-immigration countries like Japan and South Korea, there’s the issue of who will care for the growing numbers of childless elderly. And who – as working-age populations sharply decline – will sign up for the jobs that are necessary to keep things running.
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The odds are that we’re only a decade or so behind Japan. Remember how a population’s replacement-level fertility rate is around 2.1 percent? Here’s how Canadian “fertility rates per female” have dropped since 1991:
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Put differently, Canada’s crude birth rate per 1,000 population dropped from 14.4 in 1991, to 8.8 in 2023.
As a nation, we face very difficult constraints.
But there’s another cost to our problems that’s both powerful and personal, and it exists at a place that overlaps both crises. A recent analysis by the Parliamentary Budget Officer (PBO) frames it in terms of suppressed household formation.
Household formation happens when two more more people choose to share a home. As I’ve written previously, there are enormous economic benefits to such arrangements, and the more permanent and stable the better. There’s also plenty of evidence that children raised within stable families have statistically improved economic, educational, and social outcomes.
But if households can’t form, there won’t be a lot of children.
In fact, the PBO projects that population and housing availability numbers point to the suppression of nearly a half a million households in 2030. And that’s incorporating the government’s optimistic assumptions about their new Immigration Levels Plan (ILP) to reduce targets for both permanent and temporary residents. It also assumes that all 2.8 million non-permanent residents will leave the country when their visas expire. Things will be much worse if either of those assumptions doesn’t work out according to plan.
Think about a half a million suppressed households. That number represents the dreams and life’s goals of at least a million people. Hundreds of thousands of 30-somethings still living in their parents basements. Hundreds of thousands of stable, successful, and socially integrated families that will never exist.
And all that will be largely (although not exclusively) the result of dumb-as-dirt political decisions.
Who says policy doesn’t matter?
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Agriculture
Restoring balance between renewable energy, agricultural land and Alberta’s iconic viewscapes
Alberta is known around the world for many things – some of the most breathtaking and iconic scenery on earth, a world-class agricultural industry that puts high-quality food on tables across the globe and a rich history of responsible energy development. Alberta is a destination of choice for millions of visitors, newcomers and investors each year.
To ensure Alberta’s continued prosperity, it is imperative that future energy development is balanced with environmental stewardship, protecting Albertans’ ability to use and enjoy their property, and safeguarding agriculture for continued food security.
Alberta’s renewable energy sector has grown rapidly over the past decade, yet the rules to ensure responsible development have not kept up. As a result, municipalities, agricultural producers and landowners across the province raised concerns. Alberta’s government is fulfilling its duty to put Albertans first and restore the balance needed for long-term success by setting a clear path forward for responsible renewable energy development.
“We are doing the hard work necessary to ensure future generations can continue to enjoy the same Alberta that we know and love. By conserving our environment, agricultural lands and beautiful viewscapes, our government is protecting and balancing Alberta’s long-term economic prosperity. Our government will not apologize for putting Albertans ahead of corporate interests.”
Amendments to the Activities Designation Regulation and Conservation and Reclamation Regulation provide clarity for renewable energy developers on new and existing environmental protections.
These changes will create consistent reclamation requirements across all forms of renewable energy operations, including a mandatory reclamation security requirement. Albertans expect renewable power generation projects to be responsibly decommissioned and reclaimed for future generations. Alberta’s government stands firm in its commitment to protect landowners and taxpayers from being burdened with reclamation costs.
“We want to protect landowners, municipalities and taxpayers from unfairly having to cover the costs of renewable energy reclamations in the future. These changes will help make sure that all renewable energy projects provide reasonable security up front and that land will be reclaimed for future generations.”
Alberta’s government committed to an ‘agriculture first’ approach for future development, safeguarding the province’s native grasslands, irrigable and productive lands. The protection of agricultural land is not only essential to food production, but to environmental stewardship and local wildlife protection.
The Electric Energy Land Use and Visual Assessment Regulation follows this ‘agriculture first’ approach and enhances protections for municipalities’ most productive lands, establishing the need to consider potential irrigability and whether projects can co-exist with agricultural operations. These changes are critical to minimizing the impacts of energy development on agricultural lands, protecting local ecosystems and global food security. With these new rules, Alberta’s farmers and ranchers can continue to produce the high-quality products that they are renowned for.
“Our province accounts for nearly 50 per cent of Canada’s cattle, produces the most potatoes in the country, and is the sugar beet capital of Canada. None of this would be possible without the valuable, productive farmland that these new rules protect. Understanding the need for an ‘agriculture first’ approach for energy development is as simple as no farms, no food.”
The new Electric Energy Land Use and Visual Assessment Regulation also establishes specific guidelines to prevent projects from impacting pristine viewscapes. By establishing buffer zones and visual impact assessment zones, Alberta’s government is ensuring that industrial power projects the size of the Calgary Tower cannot be built in front of UNESCO World Heritage sites and other specified viewscapes, which will support the continued growth and success of Alberta’s tourism sector.
As Alberta’s population and economy grows, it is critical that the province has the additional power generation needed to meet increasing demand. Power generation must be developed in a balanced and responsible manner that promotes environmental stewardship, ensures the continued enjoyment of Alberta’s beautiful landscapes, and safeguards food security by protecting Alberta’s valuable agricultural lands. By encouraging the responsible development of additional power generation with these new regulations, Alberta’s government is listening to Albertans and ensuring the electricity grid is affordable, reliable and sustainable for generations to come.
Summary of Policy Changes
Following the policy direction established on February 28, 2024, Alberta’s government is now implementing the following policy and regulatory changes for renewable power development:
Agricultural lands
The new Electric Energy Land Use and Visual Assessment Regulation takes an “agriculture first” approach.
• Renewable energy developments will no longer be permitted on Land Suitability Rating System (LSRS) Class 1 and 2 lands unless the proponent can demonstrate the ability for both crops and/or livestock to coexist with the renewable generation project,
• In municipalities without Class 1 or 2 lands, Class 3 lands will be treated as Class 1 and 2.
• An irrigability assessment must be conducted by proponents and considered by the AUC.
Reclamation security
Amendments to the Activities Designation Regulation and Conservation and Reclamation Regulation create consistent reclamation requirements across all forms of renewable energy operations, including a mandatory reclamation security requirement. There will be a mandatory security requirement for projects located on private lands.
• Developers will be responsible for reclamation costs via a mandatory security or bond.
• The reclamation security will either be provided directly to the province or may be negotiated with landowners if sufficient evidence is provided to the AUC.
Viewscapes
The Electric Energy Land Use and Visual Assessment Regulation ensures pristine viewscapes are conserved through the establishment of buffer zones and visual impact assessment zones as designated by the province.
• New wind projects will no longer be permitted within specified buffer zones.
o Other proposed electricity developments located within the buffer zones will be required to submit a
visual impact assessment before approval.
• All proposed electricity developments located within visual impact assessment zones will be required to submit a visual impact assessment before approval.
Municipalities
The AUC is implementing rule changes to:
• Automatically grant municipalities the right to participate in AUC hearings.
• Enable municipalities to be eligible to request cost recovery for participation and review.
• Allow municipalities to review rules related to municipal submission requirements while clarifying consultation requirements.
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