Canadians pay among the lowest prices for electricity in the world, and the chair of a Senate committee that has been holding fact-finding get-togethers with citizens who benefit economically from those low rates isn’t sure they’re willing to pay what Europeans do to decarbonize the country’s power sector.
“Environmentalists say we should be like Denmark and Germany,” says Sen. Richard Neufeld, a former B.C. provincial politician who chairs the Standing Senate Committee on Energy, the Environment and Natural Resources. The committee has been holding meetings on university campuses and elsewhere across Canada to gather information for a series of interim reports. It will release a final report later this year or in early 2018.
“Citizens of Denmark and Germany pay 45 cents a kilowatt-hour for electricity, compared to an average in Canada of eight to 10 cents. If consumers in Canada had to pay that, there would be a revolution,” Neufeld says.
Neufeld points to Ontario, where electricity rates have doubled since the provincial government phased out all coal-fired power and provided heavy subsidies to bring on more solar, wind and other more costly options, as what could happen in the rest of Canada if power rates skyrocket. The Liberal government in that province, which phased-out coal and turned to costlier alternatives, has consistently trailed badly in the polls.
The committee released a 59-page report, Positioning Canada’s Electricity Sector for a Carbon Constrained Future, in late March.
Neufeld, who was the mayor of Fort Nelson before serving as the MLA for Peace River North from 1991 to 2008 then being appointed to the Senate in 2009 by former prime minister Stephen Harper, should know how voters in Canada can react to governments they believe are no longer responding to their needs. The former Liberal B.C. government, which he represented in several cabinet posts, including as minister of energy, mines and petroleum resources, recently lost an election to a coalition of the New Democrats and the Greens after more than 15 years in power.
Neufeld, who represented an area of B.C. that is very economically reliant on oil and gas development and owned an energy-related business in the region, is unabashedly pro–fossil fuels.
He’s also concerned about the radical economic shift that would be required to meet Canada's Paris Agreement commitment to cut CO2 emissions by 30 per cent by 2030 and what that would “hit Fred and Martha [i.e., average Canadians] in their pocketbook.”
He has said policymakers “must be mindful of passing down…costs to consumers and making it unaffordable.”
The committee’s deputy chair, Quebec-based Sen. Paul Massicotte, a former business executive who was appointed to the Senate by former Liberal prime minister Jean Chrétien in 2003, is more of an optimist about reaching the goal. It would require Canada, on track to emit 742 megatonnes of CO2 by 2030, to remove 219 megatonnes from its annual emissions toll.
Commenting on another report released by the Senate committee, Decarbonizing Transportation in Canada, he says “some minor changes to how we travel and how we ship goods could have a significant impact on our greenhouse gas emissions.”
Neufeld is not so sure.
“The rest of the world calls us energy hogs,” he says, but, given Canada’s climate, its extensive land mass and other factors, it’s unavoidable that Canadians will use more energy than more populous nations with a smaller geographic footprint.
“You can drive across Germany and Switzerland in a day,” he says. “You can’t do that in Canada.”
He says many of the younger Canadians the committee met with on university campuses, as well as the professors, hold an unrealistic view of the country’s electricity sector. “The students and professors all wanted to shift radically to the use of renewables, such as solar,” he says. “But how realistic is that in the Arctic, where they don’t get any sun for several months during the winter?”
In fact, according to the Senate report on Canada’s electricity sector, the country already has one of the cleanest power sectors in the world, with 80 per cent of its electricity coming from sources that do not emit greenhouse gases (GHGs). Almost 60 per cent of the country’s power comes from hydro, with nuclear power providing 16 per cent, and wind, solar and other renewables about 3.5 per cent.
The GHG-emitting power sources—which include coal-fired power, now being phased out in most parts of the country, and natural gas–fired power—are responsible for most of the remaining electricity.
Because Canada has such clean power sources, power is only responsible for 11 per cent of the country’s GHGs. It’s also only responsible for 2.5 per cent of global electricity consumption. In 2014, Canada used 550 terawatt-hours of power, with the industrial sector responsible for 43 per cent of total consumption and households for 33 per cent.
The Senate report highlights some steps that could be taken to make the power system even cleaner and more efficient, including the development of “smart grids” and power-sharing between provinces and between the U.S. and Canada.
The move toward a national carbon tax, along with regulations to phase out coal-fired power, will also lead to a lower carbon footprint from the sector, the report concludes.
But Neufeld, a conservative who worries about the impact of any further moves to decarbonize one of the world’s lowest-carbon power systems, insisted the Senators add that any such steps should be taken without creating “undue hardship” for Canadians from an economic standpoint.
“You can always do more,” says Neufeld, but he adds that Alberta and Saskatchewan, where much of the thermal power use in Canada is generated, simply have no logical alternative.
“They have very little hydro potential,” so they need to use fossil fuels.
Alberta has committed to shutting down its coal-fired plants by 2030, and Saskatchewan is also moving in that direction. While renewables will play an increasing role in those provinces, Neufeld says the shift should be gradual “without disrupting their economies.”
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The challenge of remaining economically competitive with the U.S., now led by Donald Trump, a president who doesn’t believe in climate change and is eliminating or reducing regulations, was highlighted in the report.
“We need to be competitive with the U.S. because they are our largest trade partner and market,” Neufeld says. “At the end of the day, we should do what we can do without unduly harming Canada’s economy, but we should not set targets that are unrealistic.”
And the final report the Senate committee will produce should reflect the need to be realistic, he says.
As the conservative, fossil-friendly member of the committee, he will continue to advocate that Canada is a nation that is economically reliant on fossil fuels and a shift away from them would devastate the country’s economy.
And he adds that he will continue to show concern for the impact of what the shift to a lower-carbon economy will have on “Fred and Martha.”
Senate also looking at transportation sector
While a shift in Canada to the use of more electric vehicles (EVs), biofuels, public transit and other alternatives to the use of fossil fuels could play a role in decarbonizing the country, it would come at a cost to consumers and, in the end, wouldn’t allow the country to meet its Paris Agreement commitment.
That was the conclusion the Standing Senate Committee on Energy, the Environment and Natural Resources reached in Decarbonizing Transportation in Canada. The report says transportation can play a large role in helping the country remove 219 megatonnes from its annual GHG emissions toll by 2030.
But, although all forms of transportation are responsible for 23 per cent of the country’s emissions now, no amount of decarbonization in its transportation sector will solve the problem.
“If all cars, trucks, planes, trains and ships were to disappear from Canada by 2030, we would still fall far short of meeting our national GHG-reduction commitments,” the Senate committee concludes.
The report cites an International Energy Agency estimate that suggests meeting the world’s goal of limiting a global temperature rise to two degrees Celsius would require seven out of every 10 cars to be EVs. That compares to just one of every 100 vehicles now.
The proportion of EVs in Canada is even smaller than that, despite generous subsidies from governments in Ontario and Quebec.
And to make that shift, the report says a significant investment in EV infrastructure is required.
Then there is the cost to consumers since EVs are significantly more expensive than gasoline- or diesel-fuelled vehicles. The committee says lower-income Canadians would be most affected by the shift, just as they will by higher carbon taxes in the future.
Neufeld is a skeptic about the entire goal of decarbonizing Canada’s transportation economy, pointing out the reality of rural Canada is much different than that in Vancouver, Toronto or Calgary.
“The people who are buying EVs can afford them without a subsidy, and they live in cities,” he says. “But what do you do if you live in Fort St. John? The infrastructure isn’t in place, and it takes 20 minutes just to get to work.”
In addition, most rural British Columbians own pickup trucks, and not many of those are as available as EVs.
As a politician who represented an area that is economically reliant on fossil fuel development in a country where many people need to drive thousands of kilometres a year to get to work or leisure or other daily activities, Neufeld doesn’t believe the “green economy” can replace the fossil fuel economy anytime soon.
In the cross-country Senate meetings, there was the constant theme that renewables were the answer.
But he points out fossil fuels are used to produce petrochemicals, which affect every aspect of Canadians’ lives, along with transportation fuels and other products. He thinks adapting to climate change might be a better course.
“I don’t deny climate change, but let’s commit ourselves to more reasonable moves,” Neufeld says.
However, he also acknowledges that Canada does need to act to deal with climate change or the financial and human cost of dealing with it in the future will be greater.
The Senate committee will be focusing on five sectors that could help the country decarbonize. Aside from the power and transportation sectors, for which it has already produced reports, it will produce reports on the oil and gas sector, the industrial sector and buildings. In total, they are responsible for 80 per cent of Canada’s GHG emissions.
“We will release interim reports on each sector and a final report in late 2017 [or possibly early 2018] that will make recommendations to the government on how Canada can best achieve its targets in a way that doesn’t break the bank, doesn’t hobble the economy and doesn’t put Canadians in the poorhouse,” the committee members write.
And it left no doubt there will be a cost.
“Canadians will be left with significantly increased costs of living,” the Senators write.
“Finally, one of the biggest impediments to hitting our targets is Canadians’ reluctance to change their habits. We won’t get close to reaching our goal if we won’t adapt our lifestyle regarding energy consumption.”
However, the members add, paraphrasing those who spoke before them, “any delay in responding to climate change will only impose a much greater cost and greater consequences to our economy, lifestyle and to living conditions of the next generations.”