“Ford’s Ontario Out of Step with Canada’s Energy Future” by David Robertson

Early in June, Canada’s Energy Regulator (CER) issued its 2023 annual report on Canada’s Energy Future.Inadvertently, the evidence in the report points a damning finger at the energy and climate policies of the Ontario government. But before getting to that point a few general comments about the report.

This year’s report stands out for a couple of reasons. First, because it is the first time in its history that the CER has asked and answered the question—what does our energy future look like if Canada is to achieve net zero emissions by 2050? Net zero emissions by 2050 is official government policy. The second reason? The report makes it clear that a net zero emission future is not compatible with the current level of oil and gas production.

The report projects a shift from fossil fuels to electricity: “Electricity becomes the cornerstone of the net-zero energy system.” It goes on to conclude: “In a future with ambitious global climate action, global demand for fossil fuels falls steeply, reducing oil and natural gas prices and Canadian production of those commodities.” That short statement reinforces what climate activists have long argued—there is no alternative to phasing out oil and gas. Either we do it in a planned and progressive way that protects families and communities or the international market does it more chaotically and with more casualties.

Either way the multinationals extracting oil from the tar sands and those building pipelines and those championing LNG terminals are headed for trouble. (But then again Canada could choose to save the multinational fossil fuel companies instead of Canadian families and the climate).

The extent of the fossil fuel decline in Canada is spelled out in the report: “Fossil fuel use drops by 65% from 2021 to 2050 in the Global Net-zero Scenario, and by 56% in the Canada Net-zero Scenario.” These scenarios are the cornerstone of the Canada’s Energy Futures report. The CER modelled three scenarios. One assumes no new climate policies other than what is in place in 2023. Another assumes that Canada does what it takes to achieve net zero emissions and the third is that, not only Canada, but the rest of the world achieves the stated goal of net zero emissions by 2050.

The report is a modelling exercise and with that comes whole sets of assumptions, some of which will pan out and others that will not. The report makes a number of assumptions, for instance, about the technical capacity and commercial viability of carbon capture and storage and direct air capture of CO2. If these assumptions are overblown, which they probably are, then the decline in oil and gas production will be even higher than the 65% or 56% indicated in the report.

The Ontario Connection.

The CER report provides three appendices. Two of these provide evidence of Ontario’s failed climate leadership.

Appendix 1 provides a list of climate policies across the country that are relevant to achieving net zero by 2050. In BC, for example there are 8 policy initiatives ranging from rebates for electric vehicles to energy efficiency performance standards. In Quebec among the half dozen or so initiatives there is a reference to the cap-and-trade system. And so on across the country.

In the section on Ontario, the largest and richest province in the country, there is one entry and that refers to the relatively insignificant plan to require “15% ethanol content in gasoline and 4% biodiesel content in diesel by 2030.” Ontario is the province with the least relevant climate initiatives when it comes to the CER modelling exercise. Once again, we have a report that paints Ontario as a climate outlier.

Ontario’s climate sins are not only those of omission. Ontario has a whole set of wrong and harmful climate policies. Bad energy choices are among them.

The CER is quite clear. If we are to achieve our climate protection goals, we need to phase down oil and gas. As the CER was writing those conclusions Ontario was choosing to build more gas fired electricity plants and to support Enbridge’s gas pipeline expansion throughout the province. The Ontario government is committed to burning fossil fuels to produce electricity. Just as bad, the government is providing hundreds of millions in subsidies to Enbridge corporation to encourage homeowners to hook up to fossil gas heating systems when, as the CER makes clear, those systems need to be replaced by electric heat pumps.

Ontario is consistently out of step with climate science and technological developments. And those missteps are costing Ontario families. The calculations provided by the CER reinforce the point. Natural gas combined with carbon capture will be much more expensive that wind powered electricity and solar energy.

Another of Ontario’s costly missteps is the government’s commitment to small modular nuclear reactors. SMR’s are an expensive and untested technology. The CER report indicates just how expensive they are. In its Appendix on Technology Assumptions the CER projects the costs of various energy technologies to 2050. It compares the capital costs of solar energy, wind power, small modular reactors, and other technologies in a section on electricity generation. Here are the numbers for the best-case scenario of reaching net zero emissions by 2050.

• The capital cost of solar power is projected to be “$535/kW by 2050.”
• The capital cost of wind will be “$1,630/kW by 2050.”
• The capital cost of SMR’s will be “$6,519/kW by 2050.”

Of those three technologies the most expensive will be small modular reactors. SMR’s will be 12 times more expensive than solar in terms of capital cost. The Ford government’s enthusiasm for small modular reactors will increase the cost of electricity to Ontario families. It is the most expensive form of electricity. It is also one of the bad energy choices favoured by the Ford government.

Admittedly, 2050 seems a long way off. But what is clear in the CER report is this: If the federal government doesn’t confront the fossil fuel elephant in the room, we will not get to net zero emissions by 2050. And if Ontario continues to lag most of the world in climate action, we will pay too high a price in our energy bills and every day in heightened climate risks.