What Can the Federal Government do to Help Keep Energy Affordable for Canadians?

As the weather starts to turn colder and Canadians brace for another winter, the cost of energy is on many people’s minds. Canadians are all-too-familiar with rising natural gas, propane and hydro bills in winter, and high electricity bills tend to disproportionately impact people like seniors who rely on fixed-incomes.

Our country is blessed with an abundance of energy resources, yet we must remain focused on ensuring that electricity remains affordable for consumers, while seeking new opportunities that our energy resources provide.

While the production and regulation of energy in Canada is primarily a provincial responsibility, there is a strong case for a collaborative federal partner that can bring the provinces together, and establish a shared vision for our energy sector. Indeed, the federal Crown has a clear duty to consult First Nations on energy projects and respect inherent and treaty rights of aboriginals.

Ensuring that we have affordable energy today and into the future will not be easy. Canadians and public policy advisors are looking for greener, cheaper solutions for our energy future. Fossil fuels are increasingly difficult to get to and there is decreasing tolerance for the ecological debt we are leaving to future generations.

Monk argues that Canadians are looking for greener, cheeper solutions for our energy future.

Monk argues that Canadians are looking for greener, cheeper solutions for our energy future.

To solve this challenge, the federal government needs to begin with a clear and pragmatic vision, and follow through with clear policies to get the job done.

Canada was recently ranked eleventh out of 12 major economies in terms of energy efficiency by the American Council for an Energy-Efficient Economy. Finding energy efficiencies in our homes, businesses and institutions is the low-hanging fruit, yet only 8 per cent of homes have had a retrofit, and many buildings operate at 50 per cent below their potential efficiency. The cheapest energy is the energy you don’t need in the first place.

“Our country is blessed with an abundance of energy resources.”

The federal government should never have ended the EcoENERGY Home Retrofit Program which saved hundreds of dollars a year for households, created tens of thousands of jobs in the construction industry and reduced 20 million tons of greenhouse gas emissions. This is a federal program worth reviving and expanding.

There are many other avenues for federal leadership. The federal government can provide loan guarantees for clean energy projects to create affordable and stable sources of power for provinces. They can also reduce reliance on expensive and polluting diesel generators in Canada’s remote and northern communities by investing in clean renewable power. Ottawa should provide continued investment in Sustainable Development Technology Canada, an essential agency that is getting new, clean technologies out of the laboratory and into our communities.

Canadians understand that energy has been a strong driver of the Canadian economy. In five years from now, the global clean tech sector is expected to be worth $3 trillion dollars a year and hydro, wind and solar power compete quite well with conventional fossil fuels on the open market.

Despite this, our government is too focused on short-term benefits instead of long-term value. We need to position Canada as a world leader in clean technologies that will help us transition to a low carbon economy, and we need to ensure energy remains affordable while we do so.


Perhaps it goes without saying that a key ingredient to affordable energy, is a strong overall economy. Such vibrancy impacts all areas of our lives and advances affordability of all things.

You need only look at the current federal government’s www.actionplan.gc.ca site to get a sampling of some of the initiatives Stephen Harper’s Conservatives have pursued. They note they have invested nearly $5 billion in ecoEnergy initiatives to help Canadians use energy more efficiently, boost renewable energy supplies and develop cleaner technologies.

“A key ingredient to affordable energy, is a strong overall economy.”

The government talks about its ecoEnergy Innovation initiative as being a vehicle that could increase “energy innovation in Canada and many (projects) have the ultimate goal of reducing the cost of energy for Canadians.” They cite the example of the Intelligent Net Zero Energy Buildings project being led by Concordia University. The main goal of that project is to achieve net-zero average annual energy consumption at both the building and neighbourhood levels. The Feds are putting $1 million into that project.

Powers highlights how the average Canadian saw their energy bill rise by 5 per cent in 2014.

Powers highlights how the average Canadian saw their energy bill rise by 5 per cent in 2014.

A recent story in the Globe and Mail demonstrated that the average Canadian saw their energy bill rise by 5 per cent in 2014; an increase that will apparently divert $4 billion from other spending. The report also stated that it is likely energy prices will continue to grow faster than inflation and incomes. According to the article, gasoline accounts for 56 per cent of household consumption. To mitigate this, the government currently runs the EcoEnergy efficiency for vehicles program and the EcoEnergy biofuels program, focused on decreasing reliance on gas and diesel in the long-term and instead trying to encourage the use of more renewable fuels.

Ultimately though there is no magic formula or perfect government program to consistently help keep energy affordable for Canadians. Beware of the snake oil salesman who says there is such an elixir.

Affordable energy is an ever moving target shaped by the economy, innovation, consumption, personal behavior, global appetite, public opinion and political calculus. Nothing comes easy on this front.”


The funny thing about talking about “affordable energy” is I really don’t know what the term means.

Last winter was one of the coldest in generations with plenty of voices calling for governments to do something to keep energy affordable.  Questions were asked in the House of Commons, politicians yelled, and provincially it became political fodder. In Ontario, the NDP ran on a platform that promised to “prevent unfair price increases for natural gas consumers”.  I guess they have a patent on a weather machine that keeps the province mild 12-months of the year (if so, they should have ran ads about it because the election may have turned out differently for them).

But, by mid-July things looked different and the Globe and Mail ran headlines discussing “Four reasons natural gas prices will stay depressed”.

Needless to say, the change in natural gas prices had nothing to do with government action and everything to do with markets actually working.

“A federal government truly concerned about the impact of energy prices on vulnerable Canadians should introduce a guaranteed annual income that takes into account variations in energy prices.”

That isn’t to say there is no role for the federal government to ensure Canadians have affordable energy. As I see it, there are three critical functions for Ottawa to play:

  1. Streamline regulations such that critical energy infrastructure projects can get built in a timely manner. This doesn’t mean there shouldn’t be strict environmental reviews (and I’ve been very critical of the Harper government in this regard) but the federal government can work with the provinces to further improve the approval process without sacrificing legitimate environmental (and First Nations) concerns;
  2. Understand the impact on vulnerable Canadians. When energy prices rise, there is no question this impacts low-income Canadians and Canadians living off of a fixed income disproportionately hard. Subsidizing energy consumption creates a skewed incentive to use more energy and often ends up subsidizing people who don’t truly need it.  Instead, a federal government truly concerned about the impact of energy prices on vulnerable Canadians should introduce a guaranteed annual income that takes into account variations in energy prices (and yes, a guaranteed annual income is an extraordinarily complex policy, well beyond the scope of this article); and
  3. Look at opportunities to energize the North with natural gas or other clean alternatives.  Of all Canadians who are impacted by energy inequality, many First Nations communities are living off of dirty diesel or worse in remote communities. The federal government has an absolute responsibility to move these communities onto natural gas or other cleaner alternatives. The fact that in 2014 we still haven’t done so is appalling.  As well, the availability of clean, affordable energy in the North could drive economic growth that brings further benefits to this part of Canada.
When energy prices rise, this impacts low-income Canadians and Canadians living off of a fixed income disproportionately hard.

When energy prices rise, this impacts low-income Canadians and Canadians living off of a fixed income disproportionately hard.

“The availability of clean, affordable energy in the North could drive economic growth.”

Beyond these three things, there is a much longer list of things I DON’T think the federal government should do. I don’t think the federal government should be subsidizing or giving “loans” for energy infrastructure projects. I don’t think the federal government should be subsidizing businesses to pay energy bills. I am very skeptical that yet another “home retrofitting” program is needed – as great as it was for those of us who were already going to renovate our homes to get that cheque in the mail.

But ultimately, since weather is federal, not provincial jurisdiction, maybe the best thing that the federal government can do to keep energy affordable is to ensure next winter is mild – that shouldn’t be too hard.

According to Silver, Ottawa should look at opportunities to energize the North with natural gas.

According to Silver, Ottawa should look at opportunities to energize the North with natural gas.