GREEN: PM’s proposed ‘electricity’ regs may leave Canada out in cold

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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.

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The CERs would hit hardest provinces that rely on fossil fuels to generate electricity: Alberta (89% fossil fuels), Saskatchewan (81%), Nova Scotia (76%) and New Brunswick (30%). Not so much Ontario (7%) and Quebec (1%), 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.”

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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 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 such efforts are relatively slow to develop, are expensive, and are often accompanied by periods of electrical system destabilization.

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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%, far outpacing the 34% 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% and 46%, respectively, while the average increase in electric costs for the rest of Canada was only 14%. 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.

Kenneth Green is a senior fellow at the Fraser Institute.

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