Last week, the premiers of Atlantic Canada met with federal Environment Minister Katherine McKenna to discuss energy planning for the region’s future. Things discussed included the building of a “clean electricity future,” and a “national price on carbon,” which was described as “impending” in a news article covering the meeting.
Atlantic Canada is, indeed, a leader in expanding renewable energy. Nova Scotia, for example, has committed itself to producing 25 per cent of its electricity generation with renewables by 2020, and is, according to reports, on a path to meeting that goal. But there’s another area where Atlantic Canada is in a strong leading position vis a vis the rest of Canada. More households in Atlantic Canada experience energy poverty – a situation where more than 10 per cent of household expenditures are used to pay for energy.
In March of 2016, the Fraser Institute released a study examining what Canadian households pay for energy consumption, both in the home, and on the road. The study used data from Statistics Canada to estimate how many households, across Canada and provincially, reach that frequently used benchmark of energy expenditures, and found that on average, 7.9 per cent of Canadian households met or exceeded that benchmark of energy poverty in 2013. And that is only energy expenditures in the home. By itself, this is an amazing figure for a country that has, at times, aspired to be an “energy superpower.” But the situation becomes even more dreadful when we drill down to Atlantic Canada.
In Atlantic Canada (Newfoundland & Labrador, Prince Edward Island, Nova Scotia, and New Brunswick), a stunning 20.6 per cent of households were in energy poverty as of 2013, a figure which rose from 17.1 per cent in 2010. That’s a 20 per cent increase in only three years. And that’s only counting energy consumed in the home. If you also factor in the cost of gasoline (an important energy-consumption metric overlooked in most studies of energy poverty) the number reaches an eye-popping 38.5 per cent as of 2013.
Adding more and more expensive renewables will not help out Atlantic Canadians already burdened with high energy prices and expenditures. And a carbon tax will almost certainly exacerbate the issue. Perhaps unintentionally Margaret Miller, Nova Scotia Environment Minister, acknowledged that the province’s steps to develop more low-carbon energy has landed on the backs of consumers. Miller apparently called for credit for Nova Scotia’s steps already taken: “We have wind energy and now we have tidal energy,” said Miller. “We have a lot of things moving forward that we’re really happy with. Things that really, Nova Scotians have already been paying for through their electricity costs.”
The Nova Scotia government, however, doesn’t want to talk about the costs of moving further down the same path. An article in Natural Resources (an online magazine) quotes a Department of Energy Spokesperson as declaring: “Beyond the cost of the Maritime Link project, the Nova Scotia government is hesitant to estimate the overall cost of adopting greener energy technologies. Instead, a Nova Scotia Department of Energy spokesperson offered another viewpoint: overall costs in bringing renewables on board should be compared to the costs of not meeting the targets.” But this is specious, and presumes that the only way for the government to meet its targets is with renewable energy, as opposed to, for example, buying greenhouse gas emission credits on world markets, or making a transition from coal power generation to natural gas.
Canadians want clean energy, and Canada has committed itself to stiff greenhouse gas emission reduction targets. However, how those targets are met, and at what cost, are vitally important questions for the well-being of Canadian households. Almost 40 per cent of households in Atlantic Canada experience energy poverty.
As they move forward with their energy plans, the premiers in Atlantic Canada would do well to focus on opportunities to make energy more affordable for their citizens, rather than taking actions to make it more expensive.
Kenneth P. Green is senior director, Natural Resource Studies at the Fraser Institute.