Ontario is calling on Ottawa to revise its proposed electricity regulations after an assessment by its provincial grid operator determined the rules would lead to an extra $35 billion in costs for the province by 2050.
The IESO report determined that even if the province was successful in developing sufficient electricity generation to compensate for restrictions on natural gas, it would incur an additional $35 billion in costs by 2050, Lecce said.
“Ontario cannot support any regulatory approach that imposes thousands of dollars of new costs on consumers while compromising system reliability,” Lecce wrote in the letter.
“While remaining on track to meet its emissions targets, Ontario continues to attract transformative investments in sectors such as automotive and the electric vehicle supply chain, life sciences and advanced manufacturing. Therefore, it is imperative that regulatory frameworks support—not hinder—our economic competitiveness.”
Guilbeault and Wilkinson released a joint media statement saying that affordability remains a key consideration as they work to finalize the rules.
“When factoring in the $15 billion Ontario is estimated to receive from the federal government through Canada’s Clean Electricity Investment Tax Credit by 2050, we are making sure that there are no impacts on Ontario ratepayers, all while building a reliable, clean grid that will create countless good, sustainable, middle-class jobs for decades to come,” they said in the statement.
The new draft requirements are part of Ottawa’s climate change policies, which have established new regulations for the energy sector and other industries across the country. The government has said the CER not only targets emissions but will lead to job creation and attract new business to Canada.
Ontario has been expanding its natural gas generation within the electricity framework, which the province describes as essential to ensure grid reliability while nuclear plants undergo refurbishments in response to a demand that is growing more rapidly than new nuclear and battery storage facilities can be developed.
But that growth has also caused emissions from the electricity sector to grow. The electricity system was 94 percent emissions-free in 2021, but that has since dropped to 87 percent. The province says natural gas generation will help reduce emissions in Ontario overall by supporting broader electrification.
Other Provinces
Ontario is not the first province to find fault with the federal government’s CER. Alberta and Saskatchewan have been vocal about the impact the regulations will have on electricity costs.Alberta’s motion calls for the use of “all legal means necessary” to oppose the implementation and enforcement of the CER in Alberta.
“The Federal Initiative (CER) is already having an extreme chilling effect on investment in Alberta’s electricity generation industry, and further, is slowing investments in emissions reducing technology and projects,” says the motion.
The motion adds that the government will work with entities such as the AESO, the Alberta Utilities Commission, and consumers to eventually achieve the provincial 2050 net-zero target “through incentivizing the advancement of emission reducing technologies and legitimate carbon offsets.”
In Saskatchewan, following the release of the Saskatchewan Economic Impact Assessment Tribunal’s report on the CER in June, the province announced it will not be complying with the regulations when they come into effect.
According to the report, Saskatchewan’s economic growth would be at least $7.1 billion lower and the province would lose at least 4,200 jobs under the CER, in addition to an $8.1 billion negative effect on Saskatchewan’s export sector.
