Canada’s Electric Car Mandate to Increase Grid Demand 23%, Ratepayer Costs Unknown, Says Government

A charging port is seen on a Mercedes Benz EQC 400 4Matic EV at the Canadian International AutoShow in Toronto in a file photo. Mark Blinch/Reuters

To power electric vehicle charging stations in the coming decades, Canada’s power grid will have to expand by 23 percent—and it’s uncertain how much that will cost ratepayers, according to Natural Resources Canada (NRCan).

The government announced in December that all new vehicle sales must be zero-emission by 2035. Conservative MP Warren Steinley asked NRCan to say how much this would impact electricity use and its costs. The answer came in an Inquiry of Ministry tabled last week, first reported on by Blacklock’s Reporter.

NRCan estimates the additional electricity needed will be 3.4 percent over current levels by 2030, 16.1 percent by 2040, and 22.6 percent by 2050. It said the projected costs “are currently being developed.” The majority of the costs will come from upgrading the grid, it said, rather than transmission.

A 2022 report by the Canadian Climate Institute looked at the affordability of Canada’s energy transition. It said investment in expanding grid infrastructure “will in turn affect electricity bills. Absent policy interventions, costs of the expanded system will be borne by residential, commercial, and industrial consumers.”

It continued, “For lower-income households, who may not have the financial means to adjust their behaviour and energy sources, energy affordability is a key issue.” It suggested the federal government give money to the provinces (which are in charge of energy), taking the funds through income tax rather than through rate-paying.

Canadians will still pay more for electricity, but the institute said the disproportional impacts on lower-income Canadians will be less this way.

A 2017 Senate report had said, “The prospect of higher electricity rates is a reminder of the real dollars-and-cents costs ordinary Canadians will face in the transition to a lower-carbon economy.”

NRCan said the government is investing billions in initiatives to support the energy transition goals. “This makes the Government of Canada a significant partner in financing clean electricity on a pan-Canadian basis.”

Environment and Climate Change Canada (ECCC) also responded to Steinley’s question with very different responses to NRCan’s. While NRCan estimated an increase of nearly 23 percent in electricity demand by 2050, resulting from EV mandates alone, ECCC estimated an increase of only 2.2 percent.

ECCC said the mandate “is not expected to lead to significant increases in electricity prices.” It did not elaborate on its lower estimates.

The Inquiry of Ministry looked only at the expanded electricity needs arising from the electric vehicle (EV) mandate. They did not look at the expanded electricity demand that will come from other government emission-reduction goals, such as for home heating.