2016 Outlook on Electricity Generation and Environment

2015 was a great year to be in Ottawa.

Between the drawn out Federal election campaign, the surprising strength of the Liberal win, initial post-election engagements like the COP21 international climate conference, and a few scandals to feed to rumor mill, the city buzzed with political chatter throughout the year.

If 2015 was a year for politicking, for grand pronouncements to be delivered down the road, 2016 is a year for legislative and regulatory change. The government is formed, COP21 has come and gone and even the scandals have lost their urgency. It is time to roll up the sleeves and get to work. Substance over style. Policy over politicking.

This post outlines six policy areas that frame my current 2016 outlook: environmental assessment, environmental stewardship, electricity-specific emissions regulations, decarbonization policy levers more broadly, indigenous relations and infrastructure investment.

Each is high on the Government’s agenda and falls (at least partially) under the purview of CEA’s Generation & Environment programs. These are not the only issues that we will be tracking and shaping this year, but they are the key files out of the gate.

If you have thoughts on any of these, I would love to hear from you. I can be reached via email at mccarthy@electricity.ca.

Canadian Environmental Assessment Act (CEAA)

During the 2015 election campaign, the Liberal party committed to making “environmental assessments credible again.”

The December 4th throne speech clarified the Government’s intent:

Public input will be sought and considered. Environmental impacts will be understood and minimized.  Decisions will be informed by scientific evidence. And Indigenous peoples will be more fully engaged in reviewing and monitoring major resource development projects.

CEAA is at the top of the Government’s legislative agenda. CEA will work with government officials and stakeholders (likely via a re-established Regulatory Advisory Committee) to help ensure that changes to CEAA protect the environment while allowing projects to proceed in a timely, predictable manner.

Stewardship Legislation

Further down the agenda but still very much present is a handful of environmental stewardship laws such as the Fisheries Act, the Navigable Waters Protection Act, the Species at Risk Act and the Migratory Birds Convention Act.

The Liberal campaign platform notes that:

Stephen Harper’s changes to the Fisheries Act, and his elimination of the Navigable Waters Protection Act, have weakened environmental protections. We will review these changes, restore lost protections, and incorporate more modern safeguards.

The Throne speech added that:

We will also do more to protect Canada’s endangered species. We will respond more quickly to the advice and requests of scientists, and will complete robust species-at-risk recovery plans.

CEA will monitor each of these Acts closely as the year progresses. We will ramp up Council and Committee activity in line with Government priorities.

Sector-Specific Greenhouse Gas Emissions Regulations

Coal fired electricity generation is the only industrial sector currently subject to federal emissions regulations, while Canada’s national greenhouse gas (“GHG”) emissions commitment promises the regulation of natural gas fired generation.

Will the Liberals continue the former Government’s sector-by-sector approach to emissions regulations? If yes, how will the existing coal-fired regulations and potential new natural gas regulations work within a national strategy focused on provincial targets and carbon pricing?

CEA will continue to work closely with Environment Canada and key government officials to develop solutions that protect the safety, reliability and cost effectiveness of Canada’s electricity system.

Broad Policy Levers for GHG Emissions Reductions

The Government is committed to meeting with provincial and territorial First Ministers by March 11th to determine how Canada can meet its GHG emission reduction targets.

Coordinated carbon pricing, electrification of transportation, and energy innovation are amongst the key elements that should be included in a national emissions reduction strategy.

CEA will provide input and policy ideas as the Federal-Provincial-Territorial discussions progress.

Indigenous Relations

On February 10th & 11th  the Assembly of First Nations will hold a First Nations Forum on Energy. The subtitle of the Forum is “setting priorities.” CEA hopes that a strong working relationship with the electricity sector will be at the top of the AFN’s agenda.

Electricity sector projects represent a significant opportunity for indigenous economic development. Furthermore, strong relationships with indigenous project partners, suppliers and communities are critical to industry’s ability to deploy capital.

The Government is committed to making Indigenous issues a policy focus in the coming year. CEA applauds this effort and supports policies, processes or forums that enable the indigenous -electricity sector relationship to thrive.

Green Infrastructure Investment

The Government is committed to investing $6 billion over the next four years in green infrastructure as a way to boost short-term economic activity and decarbonize the Canadian economy. Details remain sparse, but clean energy and climate resilient infrastructure projects are in scope for this spending.

In addition, a new Canada Infrastructure Bank (“CIB”) will issue Green Bonds to fund projects like electric vehicle charging stations and networks, transmission lines for renewable energy, building retrofits, and clean power storage. The CIB’s enabling legislation and regulations will determine how these bonds will be made available, and to whom.

CEA will work throughout 2016 to help ensure that the Government’s green infrastructure agenda aligns with the capital requirements of CEA member companies.


Devin McCarthy is Director, Generation and Environment, at the Canadian Electricity Association.