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Renewable Energy, Good Jobs

To achieve a net-zero energy economy, Canada must do more to de-carbonize its electricity profile. To do so, significant public investments in renewable energy and grid integration will be required. We call on the federal government to invest $40 billion over a 5-year period to support the full decarbonization of Canada’s electricity production.

A Renewable Energy Development Strategy

In recent decades, Canada has made progress in de-carbonizing its electricity systems. In 2021, 69% of Canada’s electricity production came from renewable sources, making its grids the fifth greenest in the world. Taking into account both nuclear and renewables, 83% of electricity generated in Canada is emissions-free.

However, there is still work to be done: a portion of Canada’s electricity still comes from non-renewable sources. More importantly, energy demand is set to double in coming decades, and Canada’s electricity systems are not up to the task of meeting future energy needs. Additionally, electricity grids in Canada remain largely disconnected between provinces, leaving regions that lack robust renewable generation capacity dependent on carbon intensive forms of energy production.

Canada’s Renewable Energy Development Strategy should therefore focus on two key priorities:

        1. Expanding renewable energy generation and storage
        2. Developing interprovincial grid integration

This strategy should also work to promote the public ownership of electrical generation, storage, and delivery to combat the increase in prices that comes with energy utility privatization.

Canada has enormous potential to harness the potential of renewable energy. Its coastal regions and inland areas provide major opportunities for wind power, and locations in this country rank amongst the best in the world in terms of direct sunlight for solar power production.

Although the implementation for such an initiative resides with provincial/territorial and municipal governments, the federal  government has a key role to play in initiating, facilitating, and financing the strategic shift to a renewable energy future across Canada.


Key Gaps in the Canada's Electricity Sector

Canada has made significant strides in de-carbonizing its electricity grid. In 2021, GHG emissions from the electricity sector were 46% lower than they were in 1990, and 60% lower than their peak of 129 megatons in 2001.
This is, in part, due to successful phaseouts of coal production and power generation in many regions across Canada.

However, Canada still has a long way to go to green its energy profile. Key gaps stem from an insufficient amount of renewable energy production to meet growing energy demand, a lack of interprovincial electricity grid integration, and an overreliance on the private sector.

Under-investment in renewable energy production

In 2021, the federal government committed to achieving net-zero emissions in Canada’s electricity grid by 2035 through its Clean Electricity Regulations, which are currently under development as of mid-2023. However, Canada’s current renewable energy capacity remains far below levels needed to achieve this goal, as are current levels of federal investment dedicated to expanding the sector. This is a dilemma compounded by the fact that energy demand is expected to double in the coming decades.

The David Suzuki Foundation estimates that for the Canadian electricity grid to be powered by 100% zero-emissions energy by 2050, an average of over 2,200 new four-MW wind turbines would need to be installed each year, along with 160 new 10-MW solar farms annually.

Granted, this scenario assumes the phaseout of electricity production that is non-emitting, despite not meeting the “renewable” designation—namely nuclear power. Nonetheless, even maintaining assumptions that the current level of nuclear energy generation will hold constant despite refurbishment needs, projected public investments in renewable energy are insufficient to meet growing energy demand while greening the grid.

Moreover, current regulations contain a series of loopholes and exceptions that allow for the continued reliance on fossil fuel-powered electricity. For example, the proposed Clean Electricity Regulations contain provisions that allow gas plants to continue emitting greenhouse gases beyond 2035.

A lack of interprovincial transmission

Canada’s renewable electricity systems are largely disconnected from each other and to regions that lack access to renewable electricity sources. This is due to the patchwork nature of provincial energy transmission lines, which can run north-to-south across the border with the United States from provinces like Ontario, Québec, New Brunswick and British Columbia, but rarely cross provincial borders. This situation leaves provinces that lack renewable capacity dependent on non-renewable energy sources, while provinces with excess capacity sell their energy surplus to buyers in the US as they lack the infrastructure to power their provincial neighbours.

This lack of east-to-west grid connectivity stems from the fact that electricity generation and delivery is managed at the provincial level. If one province were to invest in a transmission line to another, it would have to pass the costs of the project onto its existing customers. Because many provinces with excess grid capacity are already oriented to US buyers due to the overwhelming power of the American economy over domestic energy interests, there are a lack of political and economic incentives for these governments to invest in interprovincial connectivity.

Provinces who have the benefit of having largescale renewable energy generation plants have been able to green their electricity grids by phasing out carbon intensive power generation plants. For example, Ontario, which has 7,480 megawatts of installed hydroelectric capacity, was able to phase out its coal-fired generation plants in 2014. Meanwhile, provinces that are not endowed with renewable energy capacity or have not built the infrastructure to harness renewable power, continue to produce high emissions electricity generation. Nova Scotia, for instance, which has just 365 megawatts of installed hydroelectric capacity, relied on coal for 51% of its electricity generation in 2019.

The David Suzuki Foundation estimates that more than 6,000 km of new or upgraded cross-jurisdiction transmission lines will need to be built by 2050 to fully harness the green potential of interprovincial connectivity and to transfer renewable electricity surpluses from provinces with the production capacity to those who do not.

Over-reliance on the private sector

Increasingly the maintenance of Canada’s current energy capacity and the development of new electricity generation has been made through the private sector. This often leads to higher electricity bills for Canadians and a limited ability of the sector to provide good jobs.

Recent decades have seen provinces sell-off of public energy utilities and infrastructure. For example, in 2015 the government of Ontario partially privatized the province’s energy transmission agency, Hydro One. Earlier, in 1992, Nova Scotia’s Conservative premier privatized the Nova Scotia Power Corporation, the province’s sole power utility.

Privatization of Canada’s energy systems has taken place not just through the privatization of already-existing assets, but also through public investment in private sector-led development of new energy infrastructure.

Typically, investment in new wind and solar energy generation in Canada is made through public subsidies towards the private sector. According to the Canadian Union of Public Employees, this formulation has “enabled the rise of private ownership of electricity generation.”

Often, provinces will privatize public goods on the basis this will shore up funds and increase efficiency in the sector. However, these promises often fail to live up to expectations. In the case of Ontario, the privatization the province’s electricity system has correlated with rising costs: retail electricity prices increased 4.3% between 2018 and 2021. This should come as no surprise: private companies—unlike publicly owned agencies—are obligated to maximize profits, meaning they must prioritize their shareholders’ interests over the public’s by keeping costs low and their customers’ fees high.

Bottom Line

Canada’s renewable energy systems are underdeveloped due to under-investment in renewable energy production, an electricity grid that is largely un-integrated, and the outsized role of the private sector.