Canada powers toward more clean, affordable, and reliable electricity with draft regulations
August 10, 2023 – Toronto, Ontario
From our homes to our businesses to our workplaces, electricity powers our lives. As more Canadians shift to electric vehicles, more homeowners adopt electric heat pumps, and more industries green their operations, an abundant supply of electricity will be required. Building a clean, affordable, and reliable electricity system is not only at the foundation of Canada’s efforts to tackle climate change, it is critical to Canada’s ability to reach net-zero emissions by 2050.
As outlined in Powering Canada Forward: Building a Clean, Affordable, and Reliable Electricity System for Every Region of Canada, published earlier this week, the government recognizes the pace and scale required to transform Canada’s electricity sector and to seize the economic and job-creating opportunities that come with it.
Today, the Honourable Steven Guilbeault, Minister of Environment and Climate Change, in collaboration with the Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources, announced draft Clean Electricity Regulations. The draft regulations are designed to help Canada achieve a net-zero electricity grid by 2035, in close collaboration with provinces, territories, Indigenous partners, industry, and others.
Canada starts from a position of strength. Our electricity grid is already one of the cleanest in the world, with more than 84 percent of electricity generated from non-emitting sources like hydro, nuclear, and wind. The draft regulations will ensure we decarbonize the remainder of our grid, while meeting the needs of increasing demand for electricity. As drafted, they would cut over 340 megatonnes of greenhouse gas pollution between 2024 and 2050.
Just as the United States and G7 partners are doing, setting new rules for cleaner power will stimulate investments in renewable energy like wind and solar, smart grid and energy storage systems, and emerging technologies, such as small modular reactors and carbon capture and storage. Canada is already seeing the benefits. Volkswagen committed earlier this year to build one of the largest battery factories in the world because of Canada’s ability to supply clean and affordable electricity. This plant alone will create 3,000 jobs.
More than $40 billion in new tax credits and other major federal investments will help drive even more economic opportunities through the construction of new power sources and retrofitting of existing plants. The federal government is working with provinces and territories to rollout this funding in a way that supports affordable clean electricity across Canada. If provinces and territories take full advantage of these tools, federal funding is expected to offset more than half the cost of the new investments needed under the draft regulations.
Maintaining household affordability is at the heart of the draft regulations. Electricity is cheaper than home heating oil and gas prices, and as Canadians make the switch, they will save on energy costs. By 2050, as Canadians use more clean electricity, they are expected to spend about 12 percent less on energy. The Government is also helping households with home retrofit programs, zero-emission vehicle purchase incentives, and more, to help Canadians save on their energy bills.
The draft regulations are achievable. They offer provinces and territories flexibility and a technology-neutral approach to decide which technological solutions work best for them, so that Canadians can count on affordable, reliable electricity. The federal government will continue to engage with provinces, territories, Indigenous organizations, utilities, industry, and experts in the spirit of getting this right. A 75-day consultation period will help inform the final regulations, which are expected in 2024.
“If we are serious about tackling the climate crisis, and we want to take full advantage of the opportunities in a clean economy, then it’s time we roll up our sleeves together and build the clean electricity grid of the 21st century. A net-zero grid will serve as the basis for climate actions across the economy, like helping Canadians switch to electric transportation and heating, or the development of new and cleaner industries. The benefits, in terms of good jobs and clean air in our communities, are enormous. Our Government is committed to working closely with all provinces, territories, and partners on delivering the benefits of a clean grid in a way that ensures reliability and affordability to all Canadians.”
– The Honourable Steven Guilbeault, Minister of Environment and Climate Change
“Bringing clean, reliable, and affordable power to every region of Canada is an enormous undertaking. It is a nation-building project that requires significant investments, thoughtful regulations, and our fullest collaboration. Today's announcement brings us one step closer to achieving a clean electricity system for the benefit of all Canadians. We look forward to hearing from provinces and territories, Indigenous partners, and all Canadians during the consultation period of this draft regulation to ensure that it provides the certainty that Canadians want, and the emissions reductions that we must achieve. With a thoughtful, comprehensive, and collaborative approach, we can ensure that every region of Canada thrives in the global race to fight climate change and seize the economic opportunities of a low-carbon future. That will continue to be our focus as we move forward.”
– The Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources
“Cutting pollution in our communities is good for our climate, health, well-being, and economy. Our government is taking real action to fight climate change and improve air quality. Moving to a net-zero electricity grid means cleaner air and healthier communities across Canada.”
– The Honourable Mark Holland, Minister of Health
Canada’s electricity sector has shown strong ability to mobilize capital and grow capacity in the past, all while significantly reducing emissions by phasing out coal. For example, Canada’s total electricity generation capacity almost doubled between 1980 and 2021, while emissions from the electricity sector have decreased to 62 megatonnes in 2020, which is less than half of 2000 levels.
As the Canada Energy Regulator and others point out, all provinces and territories will have to make very large investments in their electricity systems over the coming decades to support the growing demand for electricity. The Government of Canada estimates that, regardless of the implementation of these regulations, it will cost more than $400 billion nationally through 2050 to undertake routine replacements of aging facilities and to expand generation capacity to meet the expected increase in demand. The draft regulations will ensure that these investments result in a clean grid.
Currently, air pollution from the electricity sector contributes to about 150 premature deaths per year in Canada as well as many non-fatal outcomes, with a total cost of $1.2 billion per year (estimated in 2015 dollars).
The proposed Clean Electricity Regulations were developed in close consultation with provinces and territories, Indigenous peoples, and a wide range of stakeholders, including utilities, electricity experts, and environmental organizations. August 19, 2023, marks the beginning of a 75-day public consultation process with these stakeholders. Final regulations are expected in 2024.
Office of the Minister of Environment and Climate Change
Environment and Climate Change Canada
819-938-3338 or 1-844-836-7799 (toll-free)
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