Brian Zinchuk is editor and owner of Pipeline Online
Minister of Environment and Climate Change Steven Guilbeault rises during Question Period in the House of Commons on Parliament Hill in Ottawa on Thursday, June 13, 2024. THE CANADIAN PRESS/ Patrick Doyle
Read the Government of Canada’s submission, written by Guilbeault
The proposed Clean Electricity Regulations are among the most significant policy moves in recent Canadian history. The fundamental thrust is to all but eliminate fossil fuel combustion from the Canadian electrical grid. On any given day, up to 88 per cent of Saskatchewan’s power comes from natural gas and coal.
If implemented in their current form, they will utterly remake Canada, its economy and society. The Government of Saskatchewan, on June 25, rejected these regulations, based on a report by the Economic Impact Assessment Tribunal, convened under the Saskatchewan First Act. That act, in turn, was brought into law to counter numerous onerous federal climate change initiatives.
Within the tribunal’s report are all the submissions made by numerous companies and agencies, several of which Pipeline Online is publishing verbatim in the coming days and weeks. But perhaps the most significant was the Feb. 15 submission by Minister of Environment and Climate Change Steven Guilbeault, who, with Minister of Energy and Natural Resources Jonathan Wilkinson, is one of the leading figures from the federal government on this front. As such, his submission is the stance of the federal government. Notably, he does not explain how Saskatchewan is to replace all of its fossil fuel-based power in the 10 years, five months and 30 days remaining from today. Here it is, verbatim:
I am responding to the letter of December 28, 2023, sent by the Chair of the Economic Impact Assessment Tribunal, Mr. Michael W. Milani, with respect to the proposed Clean Electricity Regulations.
The proposed regulations were designed to establish performance standards to reduce greenhouse gas emissions from fossil fuel generated electricity starting in 2035. The Government of Canada has determined that without federal regulations to ensure the electricity-generating sector is prepared to supply cleaner electricity from low- and non-emitting electricity generating sources by 2035, the sector would not be on a path that would enable the economy to reach net-zero greenhouse gas emissions by 2050.
There is an urgent need to address climate change and Canada is committed to doing its part. As climate change makes weather patterns more extreme and volatile, weather-related disasters are becoming more frequent and costlier. Without rapid reduction in greenhouse gas emissions, the adverse impacts of climate change are projected to escalate beyond adaptive capacity, affecting disproportionally Canada’s most vulnerable people. In addition to causing catastrophic environmental and human health impacts, climate change will also entail significant social, cultural and economic losses in Canada. In an effort to help limit the worst of these impacts and based on the overwhelming conclusion of climate science, in 2021, Canada joined more than 120 countries in committing to be a net-zero greenhouse gas emissions economy by 2050.
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In order for Canada to achieve economy-wide net-zero greenhouse gas emissions by 2050, the electrification of energy-intensive activities, such as transportation, heating and cooling of buildings and various industrial processes, will be needed. For that electrification to have the desired impact, electricity generation will need to come from low- and non-emitting electricity generation sources, and this will need to happen much earlier than 2050.
Clean, reliable, and affordable electricity will be critical to establishing a net-zero economy by 2050. It will also be an important factor in preserving the competitive position of Saskatchewan in a global market where investors are demanding clean power and where Canada’s largest trading partner, the United States, is advancing aggressively through national clean power regulations and the U.S. Inflation Reduction Act.
That is why the Government of Canada is taking strides to accelerate progress toward a net-zero electricity grid. The proposed Clean Electricity Regulations, along with a suite of complementary programs (e.g. grants programs, investment tax credits and concessional loan programs to support the transition) will work together to support this goal. The Government of Canada is providing more than $40 billion in investments over the next decade to enable the country to transition to a net-zero grid.
Even without the proposed regulations, Saskatchewan would need to make substantial investments in the coming decade to perform routine unit replacements and to meet growing electricity demand. Saskatchewan can take advantage of federal investment opportunities to direct these necessary grid investments toward clean generation sources.
In the United States, the deployment of wind, solar and batteries are significantly outpacing natural gas deployment (www.eia.gov/outlooks/steo/pdf/steo_full.pdf). Coal power is in an absolute decline in both the United States and Canada. Canada is also witnessing growing deployment of renewable energy. The draft Clean Energy Regulations focus on greenhouse gas emissions, are technology-neutral and recognize a continued role for natural gas. All other existing fuels or technologies remain an option for generating electricity under the draft Clean Energy Regulations as long as the resulting emissions comply with the limits of these regulations.
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As requested in the December 28, 2023, letter, Environment and Climate Change Canada confirms that the publicly available Regulatory Impact Analysis Statement (www.gazette.gc.ca/rp-pr/p1/2023/2023-08-19/html/reg1-eng.html) that accompanied the draft Clean Energy Regulations included preliminary
analysis of incremental costs and incremental impacts on forecasted rates attributable to the draft regulations for Canada from 2025 to 2050, which includes disaggregated impacts for Saskatchewan and by five-year periods. As noted, the estimated cost impacts are relatively modest in the context of estimated increased grid expansion required by provinces that will happen with or without the proposed Clean Electricity Regulations. Incremental impacts attributed to these regulations must also be understood within the context of broader energy savings by households as they turn to clean electricity instead of relying on volatile fuel prices to power up their cars and heat their homes in the future. Numerous economic studies, including those conducted by the Canadian Climate Institute (https://climateinstitute.ca/reports/electricity), the Roosevelt Institute (https://rooseveltinstitute.org/wp-content/uploads/2022/05/RI_EnergyPriceStability_IssueBrief_202205.pdf), the International Energy Agency (www.iea.org/reports/world-energy-outlook-2023/secure-and-people-centred-energy-transitions), and Clean Energy Canada (https://cleanenergycanada.org/ report/a-clean-bill) have drawn that conclusion. For example, the International Energy Agency estimates that household energy bills in advanced economies could fall by nearly 20 percent by 2030 as fossil fuel use drops and energy
efficiency gains accrue. Likewise, there are cost savings that may be derived from avoided health costs and climate change impacts that will benefit the governments of Saskatchewan and Canada.
Beyond the comprehensive analysis provided in the Regulatory Impact Analysis Statement on incremental costs and rate impacts attributable to the draft regulations on a national and provincial basis, the Government of Canada has not done additional analysis on the forecasted effect on Saskatchewan electricity rates, estimated cost to the province for complying with these regulations, or forecasted cumulative effects attributable to the regulations for Saskatchewan overall, or the forecasted cumulative effect on the provincial economy by economic sector.
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Since the publication of the draft regulations, Government of Canada officials have met on numerous occasions with key interested parties from Saskatchewan including SaskPower. This engagement has been constructive, and federal officials appreciate and are carefully considering the province’s suggestions on potential additional flexibilities that could address regional needs. Moreover, given that the proposed Clean Energy Regulations are only in draft form, the Government of Canada continues to accept input and recommendations on potential regulatory design changes and other improvements prior to finalizing these regulations and cost-benefit analysis later this year.
Based on feedback received from a wide range and large number of key interested parties, including from provinces and territories, Indigenous organizations, industry, academia and civil society, the Government of Canada plans to publish an update paper containing a summary of feedback received to date and improvements under consideration prior to finalization of these regulations. The final regulations will be published in the Canada Gazette later this year and will be accompanied by a revised Regulatory Impact Analysis Statement, which will include finalized estimates of incremental impacts to costs and rates.
Environment and Climate Change Canada is committed to taking Saskatchewan’s perspective into consideration as the Government of Canada finalizes the proposed Clean Energy Regulations, and the Department looks forward to continued in-depth engagement with the province.
Please accept my best regards.
Sincerely,
The Honourable Steven Guilbeault, P.C., M.P. (il/lui/he/him)
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