Ottawa holds fast to clean power rules amid blowback from Prairie premiers

The federal government’s new draft regulations for a clean power grid are being widely applauded by environmental groups but drew immediate fire from some provinces. Despite the blowback, Environment and Climate Change Minister Steven Guilbeault says he won’t back down.

Guilbeault said Ottawa wants to work collaboratively with all provinces and territories but not at the expense of climate action.

“Of course, we want to have a good and harmonious relationship as much as we can, but not at the cost of doing what we need to do … [and] what we committed to Canadians and our international peers [we would] do,” he told Canada’s National Observer.

The draft regulations announced Thursday are designed to clean Canada’s power grid by requiring electricity systems across the country to bring all planet-warming greenhouse gas emissions down to zero by 2035 –– barring some exemptions.

Concerns that existing fossil fuel plants could be retired before they’ve been paid off and that renewable energy may not be as reliable as fossil fuels are driving a serious backlash from provinces like Alberta and Saskatchewan, which still burn natural gas to generate electricity.

Ottawa acknowledged it is expensive to decarbonize the grid. However, it noted provinces, territories and utilities will need to invest more than $400 billion in the coming decades to replace and expand their power generation even without the rules and said that’s why it's committing billions of dollars worth of tax credits and other measures to help provinces make the transition.

Alberta Premier Danielle Smith, whose province has over 500 active gas fields and generates roughly 90 per cent of its power from fossil fuels — approximately 54 per cent from natural gas and 36 per cent from coal — was quick to attack the regulations, calling them “unconstitutional” and “irresponsible.”

“Alberta’s government will protect Albertans from these unconstitutional federal net-zero regulations,” she said in a statement. “They will not be implemented in our province — period.”

Smith added the “only” positive of the draft regulations is that they are still a draft, meaning there’s time for her government to try to make Ottawa cave using a recently announced working group between Alberta and the feds set up to discuss climate and energy policies.

“If this alignment is not achieved, Alberta will chart its own path to ensuring we have additional reliable and affordable electricity brought onto our power grid that is available 24 hours a day, 365 days a year.”

Saskatchewan Premier Scott Moe also went on the offensive, saying the regulations would “drive electricity rates through the roof and leave Saskatchewan with an unreliable power supply.”

“Our government will not let the federal government do that to Saskatchewan people,” he said.

The Canadian Climate Institute estimates that for the average household in Canada, spending on energy will fall 12 per cent by 2050 as expensive fossil fuels are replaced with cheaper and more efficient renewable alternatives. Similarly, the federal government estimates nearly $29 billion in “net benefits” –– referring to things like job creation and savings on health care –– for Canadians by 2050 by transitioning off fossil fuels.

Guilbeault told Canada’s National Observer it’s “fair to say that we don’t see eye-to-eye” with premiers like Smith and Moe when it comes to fighting climate change.

“I also think it would be fair to say that pretty much everything we do seems unconstitutional in their view,” he said, pointing to provincial challenges to carbon pricing and impact assessment legislation and sabre-rattling from the provinces over the federal government’s proposed cap on oil and gas sector emissions.

“They challenged the [carbon] pricing all the way to the Supreme Court [and] we won, and guess what? They're all implementing carbon pricing now, whether they're using the federal system or they're using their own.

Guilbeault added it's important for the federal government to recognize there can be a difference between what premiers say and what the people in those provinces think should happen.

“I look at the backlash following the [renewable energy] moratorium announcement in Alberta [and] I think we're not the only ones who feel that government is going in the wrong direction,” he said.

As Smith promises a fight with Ottawa over clean electricity rules, a recent poll from Abacus Data found 64 per cent of Albertans support the federal government’s clean electricity regulations. That figure jumps to an overwhelming majority of 71 per cent of Canadians nationwide supporting the rules.

A crucial step

A clean power grid is widely seen by experts as a vital step to reaching the country’s international commitment under the Paris Agreement to hit net-zero emissions by 2050. That’s because the power grid is the backbone of the economy. A clean grid means people and businesses will pollute less when they use electricity, making it a crucial step for industry to lower its own emissions. Clean power also paves the way for Canada to cut down on emissions from other activities, like heating homes and driving vehicles, by electrifying buildings and transportation.

Under “modest” assumptions that demand for power will grow 1.4 times by 2050, the federal government estimates the rules would cut at least 342 million tonnes of greenhouse gas emissions by then.

Environmental advocacy organizations widely applauded the draft regulations for taking a significant step forward by requiring new pollution performance standards for power generation that should tilt investment towards renewable energy. However, they noted loopholes in the text that could ultimately allow more fossil fuels to be added to provincial power grids and be in operation well past the 2035 target if they meet certain criteria.

That includes things like equipping natural gas power plants with carbon capture technology that hits the performance standard, allowing plants built before 2025 to operate up to 20 years past their commissioning date (meaning a plant built in 2024 could operate until 2044) before the regulations kick in, and other “flexibilities” like burning fossil fuels on a limited basis when demand can’t be met by renewables or in emergency circumstances.

In statements, the Pembina Institute said the draft regulations were a “landmark” that provides “regulatory and policy certainty for investors, companies and communities.” Environmental Defence said the rules would “deliver significant emissions reductions,” but noted that as currently drafted, they won’t be enough to actually hit the goal of zero emissions in 2035 given the loopholes.

Still, “this is the right target for Canada,” David Suzuki Foundation clean energy manager Stephen Thomas told Canada’s National Observer. “It's the same target that the [United Nations Intergovernmental Panel on Climate Change], the International Energy Agency and all of our G7 partners are trying to meet.

“Meeting this 2035 target for electricity is the only credible path for Canada meeting its climate targets overall.”

Thomas said the “influence of the fossil fuel lobby” can be seen in the details of this draft regulation, and pointed to concerns with grandfathering in natural gas power plants without carbon capture technology built before the regulation comes into force and allowing natural gas plants to be used for backup purposes.

“The bottom line here is that fossil fuels are not clean electricity,” Thomas said. The point “of this regulation is to get a clean electricity system by the year 2035, and we believe that fossil fuels have no place in that.”

The loopholes that allow fossil fuel plants to be grandfathered in or run during peak demand on their own are “not the end of the world,” Thomas said, but “taken together, they really add up on the grid.” He notes that in 2035, when the goal is to have zero emissions from power generation, Canada is still anticipating around nine million tonnes of CO2 emissions on the grid.