By Shannon Joseph

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Opinion: The bill is coming for net zero — and it’s big, both politically and economically Back to video

Governments across Canada and around the world have been promoting both electrification and net zero. That’s fine, go for it. But please stop saying it’s going to be cheap. It isn’t. And voters will find out.

Today, electricity fulfills about 20 per cent of our energy needs. That means 80 per cent of the energy Canadians rely on is from direct use of natural gas, refined petroleum products and other fuels. What is being proposed in Canada’s electricity strategy is not just fewer or even no emissions from our electricity systems. It is to have electricity provide that other 80 per cent.

This is a challenge for two reasons. First, some things — including many industrial processes — simply can’t be done by electricity. Second, the electricity needed to do the rest that could be possible does not exist today. And we are not even close to having it. Electricity is a technology that mobilizes electrons by using a fuel (moving water or wind, uranium, natural gas, coal, oil, sunshine). You need the fuel, you need to build generating capacity and you need new infrastructure to move the electricity to where it is needed.

Getting it all up and running in the next 26 years means Canadians should forget about saving money over the next two decades. We will be spending. Big time. Electricity Canada, the trade association of Canada’s electricity industry, estimates it will cost $50 to $60 billion per year to get the power we need. According to the Canadian Energy Regulator’s Net-Zero Scenario, electricity generation capacity would need to grow from about 152 GW today to 350 GW — or about 2.3 times — to reach net zero by 2050.

This is a huge expenditure in a short time.

“Can it be done?” is one question, and the best answer to that is, maybe. “Who pays?” is another and here the answer is clear. Canadian ratepayers or taxpayers — who are the same people and companies — will get this bill. Will they be able to absorb higher electricity rates, higher taxes or some of both, to cover it?

Today roughly two-thirds of Canada’s energy is used in industrial applications: mining, manufacturing, agriculture and so on. In some provinces, that number is closer to 80 per cent. Directly or indirectly, energy is the jobs and prosperity engine of Canada’s economy. Most of our industries compete globally for investment. For the last decade or so, however, we have not been the investment destination of choice. Will a multibillion-dollar energy bill — or the high taxes to cover such a bill — turn that investment picture around? It seems unlikely.

Quebec, the country’s most hydro-dominant province, has had to turn away industrial projects representing about  21,000 MW in new energy demand — roughly half what the province currently generates — because at current levels of supply it expects to run out of surplus electricity by 2027. The province’s low-cost, low-emission hydroelectricity was very attractive to companies, but it has all been allocated. Hydro-Québec plans to invest up to $185 billion to increase capacity. Will companies return to the province for this low-emission power when its price includes the cost of this expansion?

That’s a question every jurisdiction will have to answer. Ontario currently subsidizes electricity costs to consumers to the tune of  $6 billion annually — a legacy of the now-defunct Green Energy Act. Although Ontario hasn’t electrified anything new, taxpayers are currently subsidizing ratepayers every single day.

These questions of cost are never discussed with the public. But they need to be. The net zero talk you hear is all about being ambitious, enjoying climate dividends and taking advantage of green opportunities. Sometimes there is hand-wringing about how exactly to make all the new electricity. Will it be wind and solar only? What role will nuclear play? Will we allow any natural gas?

That is all a side show. The real question is: How do we get a lot more energy infrastructure built, fast, everywhere in the country and without undue hardship to Canadians, both in terms of household energy costs and loss of industry?

My organization’s recent report, Getting Canada’s Energy Future Right: A consumer lens on energy in Canada, suggests three requirements in answering this crucial question. We need to solve for social acceptability and environmental performance, yes, but also for energy fundamentals: affordability, reliability, safety, security and resilience. Weakening support for climate policy, not just in Canada but globally, is the result of inadequate attention being paid to these fundamentals, which are always going to reassert themselves, especially affordability.

We need to start having an honest conversation now, because the bill for net zero is coming and it’s Canadians who will be paying it. Best not to surprise them.

Shannon Joseph is chair of Energy for a Secure Future.