The loud fights and quiet conversations driving the quest for a clean power grid in Canada

Jonathan Wilkinson, the federal minister of natural resources and energy, has said that developing the clean electricity grid of the future — the cleaner and bigger grid we need to support a a net-zero economy — is a “nation-building project akin to the building of the railway.”

Comparisons to Canada’s great accomplishment of the 19th century require some caveats now. But setting aside the worst elements of the railway’s construction, the comparison suggests both the importance of the work and the effort that will be required to finish it. From conception to the last spike, the national railway project took 14 years to complete.

So how’s it going so far?

“I think it’s going better than what a lot of people might think when they hear different things in the media,” Wilkinson said in an interview last month.

The minister said this at the end of a year that saw no small number of stories about federal-provincial conflicts over electricity. A new year of headlines began in earnest this week when the Alberta government tried to drag the federal government’s clean electricity regulations into a debate about the province’s grid and its ability to withstand a recent cold snap.

But maybe the great nation-building project of the 21st century isn’t going so badly after all. Or maybe it doesn’t have to.

In one respect, Canada is already a long way down the track toward building the kind of clean grid it needs. Approximately 80 per cent of the electricity used in Canada comes from non-emitting sources.

But Canada’s grid also isn’t a single, integrated system. Each province governs its own grid and interprovincial integration is limited. And that 80 per cent figure hides some important regional differences.

More than 90 per cent of the electricity consumed in Ontario, Quebec, British Columbia and Manitoba comes from non-emitting sources. But less than 20 per cent comes from non-emitting sources in Alberta and Saskatchewan.

“I think the biggest challenge is the disparity across the provinces in terms of starting points,” said Blake Shaffer, an economist at the University of Calgary who specializes in electricity markets. “This isn’t sort of a ‘woe is me Alberta’ comment. It’s more of a reality check, that it’s massively transformative for Alberta and Saskatchewan and to a slightly lesser degree, Nova Scotia.”

Eliminating the remaining emissions from Canada’s electricity supply is also only half of the job. Total electricity generation will have to be 1.6 to 2.1 times greater by 2050 as the population grows and as electricity becomes the dominant energy source for powering cars and home heating.

Greening the grid faces many obstacles — local opposition to energy projects, affordability concerns, a lack of grid connections between provinces. To that end, the Canadian Climate Institute has promoted the idea of “electric federalism” — of the federal government using its convening authority and fiscal resources to drive change and ease the transition.

The value of getting around a table

Wilkinson came to federal politics with a background in provincial government. He was a negotiator for the province of Saskatchewan during the Charlottetown Accord process and later managed federal-provincial matters for Roy Romanow’s NDP government. That experience evidently has informed his approach to the resources portfolio.

At his initiative, the federal government in 2022 began establishing a series of “regional tables” on resources and energy with provinces — official forums where federal and provincial officials could discuss priorities and potential collaboration. Seven provinces had signed up by the end that year, two notable exceptions being Alberta and Saskatchewan.

Saskatchewan remains a holdout. Wilkinson said he received a 14-page letter from the provincial government explaining why it wasn’t interested. But Alberta and the federal government eventually agreed to create a “working group” last summer. (The tables focus on more than electricity.)

“I think what I learned from [working in Saskatchewan] is that provinces are really different,” Wilkinson said. “The concerns are different. The economies are different. The opportunity sets are different. And trying to deal with them all through the same prism is really hard.”

Alberta has been the loudest opponent of federal climate and energy policy. But Wilkinson still speaks positively about the work being done behind the scenes. The fact the working group is continuing, “even amongst the war of words on the clean electricity regs and the cap on oil and gas emissions, would tell you that both sides think that there is progress being made,” he said.

But for the sake of accommodating Alberta’s situation — and perhaps reducing discord — the federal government might need to be even more flexible as it finalizes its electricity regulations. Shaffer and University of Alberta professor Andrew Leach have argued as much. And Wilkinson seems inclined to show at least some flexibility.

“I don’t think Alberta is questioning the need to green their grid. But they are questioning the pace. We probably have a view that it can go faster. And so we’ve been trying to actually understand and look at how we might be able to address some of their specific concerns,” he said.

“Hopefully, when we get to [finalizing the regulations], Alberta will see that we have reflected seriously on some of the things that they have brought up.”

(Shaffer argues the Liberals also erred by presenting the regulations in terms of “net-zero” — a phrase that obscures the flexibility that will still exist after the regulations come into effect in 2035.)

Beyond the noise and conflict, the federal government has advanced agreements with British Columbia, Nova Scotia and New Brunswick — though the latter fell short of the full Atlantic Loop megaproject that the federal government had been eyeing for three years.

Wilkinson said the government spent a “long time pushing a string up a hill on the Atlantic Loop” but a few obstacles stood in the way. Quebec said it couldn’t be sure it would have the electricity to export, while Nova Scotia and New Brunswick chose to focus on the benefits of building up their own supplies of clean energy.

“I think the fundamental point at which we actually were able to re-vector the conversation was when we said, ‘OK, let’s talk about what your plans are and what you are actually interested in doing,’ and accepted that they had a different perspective,” Wilkinson said.

For New Brunswick, that meant support for biomass. Nova Scotia’s priority is offshore wind. The two provinces also have committed to expanding a grid intertie between them. Tory Rushton, minister of natural resources in Nova Scotia, says the short-term goal for his province is to get off coal power — but the long-term vision is to become an exporter of clean energy.

What the federal government can offer

Wilkinson has slowly (and perhaps reluctantly) become a more assertive debater in the House of Commons. But he is also still a process-minded policy wonk — the sort of person who says things like “re-vector the conversation.” Discussing the federal-provincial tables, he said they have “regularized communication channels.”

Communication matters in a federation. So does the trust Wilkinson says good communication can build. The minister also said he hopes the new Canadian Electricity Advisory Council — a panel of experts known colloquially as the “grid council” — will become an important “generator of ideas” for both governments and electricity regulators.

Ottawa also comes bearing gifts of cash. In the fine print of the clean electricity regulations, the federal government says it has committed $40 billion toward helping provinces and territories with electrification — enough to cover more than half the incremental costs of implementing the new rules.

Wilkinson said he believes the investment tax credit for clean electricity is the first federal tax credit ever offered to provincial public utilities. He said he’s also aware that provinces might need additional support to build transmission lines (the proposed tax credit was designed to cover transmission between provinces, but not transmission within provinces).

The minister also makes a basic economic argument — that the ability to offer clean electricity is going to attract businesses and industries that want or need to keep their carbon footprints in check.

“At the end of the day, nobody has an interest in a grid that’s not reliable. Nobody has an interest in a grid that’s not affordable,” he said. “And we all have an interest in a grid that’s not emitting.”

For those reasons, the nation-building project of the 21st century might not be impossible. It might even be inevitable. But it also won’t be easy or quick.