An uncertain future for green energy in Canada
The waning commitment of the provinces to renewable energy is unfortunate. But its relative low cost could see it make a political comeback.
In the time between setting her panel title for the CBA Environmental, Energy and Resources Law Summit in Vancouver and standing to introduce it earlier this month, moderator Sarah Powell felt it necessary to add a question mark, presenting it on the day as: Canada’s Green Energy Shifts West?
If recent changes in provincial politics have injected that note of uncertainty, Powell, from Toronto’s Davies Ward Phillips & Vineberg LLP, pointed out there were some unassailable facts that remain: in 2018, natural gas production in Canada edged out coal for the first time; renewables will be the fastest-growing energy industries over the next five years; and, as renewables become more cost-effective, we will see a large and rapid expansion.
Bonnie Hiltz, VP Energy and Environment Practice at Sussex Strategy Group, said that while climate change is likely to be a key distinguisher in this year’s federal election, at the provincial level, the stakes are different. Federally, policy is focused on decarbonization and the phasing out of coal, but provinces with less reliance on carbon products for revenue, have less motivation to develop renewable energies, and push back from those provinces will likely impact pricing. Nevertheless, she noted, the relative low cost of renewable energy has shown to trump ideology, at least in the U.S., where even conservative states have shown support based on price alone.
She outlined the rise and fall of investment in renewables in Ontario, where the 2008 recession prompted a dramatic shift in policy centered on building up manufacturing and creating jobs that would require a large volume of electricity capacity. “Their renewable strategy was based on a slow and steady RFP model that generated a very good price,” she explained, noting that a wave of investment followed. “I don’t think that will repeat itself out here [in B.C.]”
Since the election of Doug Ford’s Progressive Conservatives, however, policy has changed yet again, and 758 pre-construction renewable energy projects have since been terminated. Some for reasons as simple as rural Ontarians not wanting to look at wind farms.
“There are no existing plans in Ontario to procure infrastructure,” she said, adding that the prospects for renewables in the province are now “very low.”
The prospects in Saskatchewan are, she said, similarly poor, and in Alberta, what once looked promising is now uncertain. The former NDP government had very ambitious decarbonization targets, but Jason Kenney and the United Conservatives have vowed to revisit the issue of coal closures, and quickly introduced legislation to scrap the climate tax. While the UCP haven’t been opposed to renewable energy per se, Hiltz said that the challenge is where the funds will come from to build it.
Looking at the situation in B.C., Chad Day, President of the Tahltan Central Government, said that his nation—with a territory the size of Portugal—had systems in place to work with proponents and governments looking to move forward with energy infrastructure. A thorough internal engagement process that gives every band member a voice has been in place since 2005; 2800 of the nation’s 4000 members are adults with voting rights.
“I represent the collective title and rights,” he said, detailing the various ways the Nation had ensured a strong economic return for access to their land. Their relationship with Alta Gas has garnered $30 million in wages to Tahltan households, he said. In the past fiscal year, $2.1 million (37.5 per cent) of tax revenue went back to impacted First Nations.
Day noted that the Tahltan created their own corporation and negotiated employment contracts and training apprenticeships as part of the agreement, making jobs for 350 people over the three years of construction, with wages in the $80,000-$100,000 range. “Once up and running these plants only have maybe 40 jobs,” he said.
Asked who funds the lengthy negotiations, Day was clear: “You want to negotiate with us? This is the budget. It’s Aboriginal Law 101—the province, the proponent, the federal government, they pay 99 per cent of the costs. You have to be patient. You have to be creative. And,” he added, “don’t be cheap.”