Tariffs Reignite Opportunities for Regional Cooperation in Canada
For Immediate Release
Tariffs Reignite Opportunities for Regional Cooperation in Canada
Few parts of Canada’s economy are more tightly integrated with the United States than energy. Whether oil and gas or electricity, our rich natural resources have been built to serve Canadians and the large American markets to the south. For electricity, we have a series of robust north-south Canada-US systems. These ties allow different regions to support one another during outages by ramping up production when needed.
These systems rely upon on cross-border cooperation. They commit us to common standards and adherence to a common governing structure based in the United States. However, with the now confirmed tariffs and the increasing frequency of extreme weather events, the question arises: How can Canada build a more resilient energy system, and more specifically a more resilient electricity system.
The Current Challenges
Canada’s energy systems face two main hurdles:
- North-South Dependence: While our grid is reliable, it’s heavily reliant on north-south connections. In the event of a significant disruption, like a natural disaster or a situation where U.S. energy is unavailable, our limited east-west ties leave provinces vulnerable. Canada is a net exporter to the US of electricity and in 2023 exported approximately $3.2 Billion worth of power, while we imported $1.2 Billion.
- Provincial Energy Regulation: Energy regulation in Canada is a provincial matter, limiting federal authority over investment and market decisions. This decentralized approach complicates efforts to create a cohesive national energy strategy that the provinces can support and actively contribute to.
Opportunities for Improvement
- Strengthening Interprovincial Transmission Ties: Projects such as the Atlantic Loop and western transmission initiatives represent opportunities to bolster east-west connectivity. While progress has been slow due to limited federal and provincial commitment, such projects could significantly enhance grid resilience. Most utilities would welcome these ties as an alternative when north-south connections are disrupted but the financial and political capital to make this a priority has hindered progress.
- Standardizing Distribution Systems: The distribution system—poles, wires, and digital infrastructure—is regulated provincially, leading to inconsistencies in design and standards. While this independence allows utilities to tailor systems to their regions, it creates challenges for manufacturers and vendors, who must adapt to different provincial requirements.
The problem is particularly pronounced in the digital space. Distributed energy resources, like solar panels, battery storage, and smart thermostats, often rely on proprietary communication protocols, making integration to utility operating systems costly and time-consuming. The adoption of a common set of standards could simplify this process and reduce costs.
- Promoting Inter-Regional Collaboration: Some provinces already collaborate on resource sharing and bulk purchasing, but there’s potential for much more. By enhancing interprovincial partnerships, we can improve resilience, share costs equitably, and capitalize on economic development opportunities in the clean energy sector.
- Beyond Electricity: Expanding Clean Energy Options: While this discussion focuses on electricity, a clean energy future involves more than just the grid. Innovations such as district heating, underground thermal storage, biofuels, clean hydrogen, and passive home technologies offer exciting opportunities. The provinces, in partnership with the Federal Government should explore these options alongside electricity to build a comprehensive clean energy strategy. This approach helps address energy sustainability, resilience, and provides significant economic development opportunities.
SGIN
The recent tariff threats have highlighted the need for a holistic approach to Canada’s energy security. By strengthening interprovincial ties, standardizing systems, fostering collaboration, and diversifying clean energy solutions, we can ensure a resilient, synergistic, cost-effective, and sustainable energy system for Canadians. SGIN is to working collaboratively to solve some of the biggest challenges facing our society today.
Media Contact:
Greg Robart
Chief Executive Officer, Smart Grid Innovation Network Canada
506-292-3601