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Kaisha Bruetsch: The economic case for clean electricity is now undeniable—just ask Ontario


A boy walks across a field towards wind turbines as the sun sets north of Orono, Ontario on Tuesday Dec. 18, 2018. Doug Ives/The Canadian Press.

Over the past year, the Ontario government has begun to lay out a vision for transforming how the province generates, stores, and uses electricity. This includes important investments in Ontario’s clean-energy future—investments that need to be followed with even more ambitious policy to grow the province’s low-carbon economy over the coming decades.

The government’s recent procurement of nearly two gigawatts of battery storage is nothing short of transformational. Battery storage projects at this scale would have been unimaginable even five years ago. The new batteries are coming hot on the heels of five gigawatts worth of new wind and solar capacity announced last year. Soon, renewable energy and batteries will meet the electricity needs of millions of Ontario homes.

This new clean energy investment represents a change in direction for the government. But anyone still suggesting that Premier Doug Ford has flip-flopped on renewable energy may not be keeping up with the pace of technological change. The economic case for new clean electricity is now undeniable.

Ontario’s prior missteps with clean electricity are well known. The previous government’s Green Energy Act offered renewable energy project developers guaranteed premium prices for their power that far exceeded fair market value. It threatened to undermine energy affordability in the province. The Ford government quickly repealed the Green Energy Act when it was elected in 2018 and until recently was reluctant to risk driving up energy prices by making new investments in renewables.

Six years later, we’re in a new economic and technological reality. The cost of batteries has plummeted by 80 percent in the last decade. Since the repeal of the Green Energy Act, the cost of wind power has fallen 40 percent and the cost of solar roughly 30 percent. Ontario’s Independent Electricity System Operator (IESO) now expects to pay less than half as much for new renewable energy generation than in the mid-2000s. More cost declines are forecast. The investment case for zero-carbon energy will only get stronger.

The challenges facing the provincial government now are not what they were when they took office. Demand for electricity is set to grow steadily for the first time in decades, much of it driven by industry: as the government acknowledged last year, “access to clean energy is a critical input for businesses making investment decisions.” IESO forecasts that electricity demand will increase 60 percent by 2050, or about two per cent per year. The new supply required to meet that demand is the equivalent of adding a new large CANDU reactor to Ontario’s grid every two to three years.

That rate of demand growth could even accelerate with the right supporting policies. For Ontario to fully lean into its electricity advantage, some modest policy changes can help produce economy-wide incentives to ensure supply keeps up with demand for low-carbon electricity. For instance, as we argued in a recent report on nuclear power, Ontario can build on its clean electricity advantage by making small tweaks to the province’s Emissions Performance Standards program. Adjusting benchmarks for electricity generation to zero would put non-emitting generation on a level playing field with other power producers.

The regulatory thicket confronting project developers must become easier to navigate. Now is the time to have hard conversations about permitting, siting, and Indigenous engagement to facilitate the long-term buildout of Ontario’s grid.

In the short term, the government can focus on leveraging the comparative advantages of different forms of zero-carbon electricity in order to limit the need for new transmission and distribution lines. Renewables should be sited as close as possible to areas of high anticipated load growth; similarly, batteries should be sited to minimize line losses and maximize dispatchability. New nuclear projects should be built on the sites of existing reactors. The government should consider prosumer policies that can make electricity more affordable, and develop them with utilities and energy service companies.

If Ontario dreams of a world where natural gas power plants equipped with carbon capture are a part of the grid, now is also the time to develop a workable regulatory framework for using the pore space underneath Lake Erie that can hold that captured carbon, as part of a broader carbon management strategy.

The Ontario government has hard problems that it needs to solve quickly—incoming Energy Minister Stephen Lecce needs to take bold steps to build on Todd Smith’s significant work on this file.

One thing’s for sure though—any skepticism about the government’s supposed about-face on zero-carbon electricity is misplaced. These days, a sound climate policy is a sound economic policy, and vice versa.

Ontario is reimagining its low-carbon future. That vision starts with electricity. Continuing to expand on its ambitions will help the province grow its low-carbon economy and deliver long-term benefits for all Ontarians.

The Weekly Wrap: Poilievre proves he’s no empty populist with capital gains pushback


Conservative Leader Pierre Poilievre in the House of Commons on Parliament Hill in Ottawa on March 18, 2024. Sean Kilpatrick/The Canadian Press.

In The Weekly Wrap Sean Speer, our editor-at-large, analyses for Hub subscribers the big stories shaping politics, policy, and the economy in the week that was.

Normally the Weekly Wrap covers three important or interesting topics from Canadian policy and politics over the previous week. This week, however, it only covers one topic. That’s partly because my family and I are on vacation in North Carolina and in part because I think there’s one story that deserves heightened attention.

This week, the Trudeau government tabled a parliamentary motion to effectuate its increase to the capital gains inclusion rate first announced in April’s budget. The motion passed with the support of the New Democrats and the Bloc Quebecois and will take effect on June 25.

The Conservatives ultimately voted against it. This may not seem like a huge surprise. But the party’s opposition to the capital gains tax hike wasn’t necessarily a sure thing. As I wrote last week, its growing support from working-class Canadians and the inherent challenges of being seen to defend preferential tax treatment for high-income earners were causing the Conservatives to be somewhat diffident in their response to the pending tax increase.

That changed this week. In a comprehensive and effective 15-minute video, Conservative leader Pierre Poilievre outlined the flaws of raising taxes on capital during a sustained period of economic stagnation and why he and his colleagues would rightly oppose it.

I’ll come back to the video in a minute. But it is worth dwelling on what an extraordinary policy this is. Even if one accepts that it will affect a relatively small number of taxpayers—though analysis for The Hub by leading tax economist Jack Mintz estimates that the number of Canadians affected will be much higher than the government’s own projections—the notion that it won’t have negative economic effects belies virtually everything we know about behavioural responses to taxation in general and capital taxes in particular.

Yet Finance Minister Chrystia Freeland’s prepositioning speech last weekend simply dismissed these economic costs and instead set out a series of strawman arguments about how if Parliament didn’t enact her tax hike, children would go hungry at school and teenage girls would get pregnant because they cannot afford birth control.