The Canadian energy regulatory framework continues to develop, increasingly characterized by unpredictability. The articles in this issue of Energy Regulation Quarterly include reviews of several significant recent and current developments at both the federal and provincial levels.

The issue at the core of many of these developments is of course climate change and the concomitant response of greenhouse gas emission pricing. The current Canadian scene on the subject may be best described as one of turmoil, with the federal government enacting legislation (Greenhouse Gas Pollution Pricing Act1) imposing a “carbon tax backstop” on emitters in provincial jurisdictions that have not implemented a pricing system by 2019, while at the same time, Ontario moved to cancel the province’s further participation in the California-Quebec-Ontario Cap and Trade system. Ontario has also announced a reference to challenge the constitutionality of the federal government’s initiative and that it will join Saskatchewan in its constitutional challenge.

In their comprehensive review of these developments in “Canadian Carbon Pricing: Where is it Going?”, Lisa DeMarco and Jonathan McGill describe the Ontario initiative as “carbon pricing whiplash”, in the midst of which legal issues abound.

The newly-elected Ontario government also announced the cancellation wind and solar contracts that had been at the forefront of the province’s efforts to transition towards a low carbon economy and directed the Independent Electricity System Operator to wind down the Feed-In Tariff (FIT) program that had been introduced in 2009. Gordon Kaiser discusses the development in “Ontario Cancels Wind and Solar Contracts.”

Meanwhile, the Parliament of Canada continues its consideration of Bill C-692 (An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts). As described in the last issue of ERQ, Bill C-69 is the most significant federal initiative in energy regulation since at least the 1980 National Energy Program”. The far-reaching changes proposed by Bill C-69 include impacts on timelines for reviewing federal projects. Jonathan Drance et al., in “Federal Energy Project Reviews: Timelines in Practice”, offer valuable empirical research that should inform the debate as Bill C-69 proceeds. The authors conclude that proponents are “likely to take only cold comfort from the ‘legislative timelines’ in Bill C-69.”

While much public attention is currently focused on pipelines, the implications of Bill C-69 for regulation of energy projects are far broader. In his article on “The role of the CNSC under the proposed Impact Assessment Act”, Andrew Dusevic describes how the responsibility of the Canadian Nuclear Safety Commission to perform environmental assessments would not only be eliminated, but the Commission would have no meaningful participation in the process, notwithstanding that it “is the only government agency with the requisite technical expertise to effectively evaluate the full scope of the nuclear activities.”

The consequences of policy and legislative initiatives directed at climate change can reach beyond their immediate goals. Implementation of the Alberta government’s 2015 Climate Leadership Plan, for example, had the potential to materially impact market dynamics in Alberta’s energy-only market. As discussed by Martin Ignasiak et al. in “The New Alberta Electricity Legislation”, this has led to the proposed shift under Bill 13, An Act to Secure Alberta’s Electricity Future3 to a capacity market.

Discussion of the challenges faced by energy policy-makers and regulators frequently focuses on processes for reviewing proposed new development projects, due to the public controversy that they often generate in today’s environment. However, dynamic developments within the energy industries, particularly developments resulting from technological innovation, also raise significant policy/regulatory issues. A recent report commissioned by the Canadian Gas Association and the Canadian Electricity Association on “Ratepayer Funded Innovation” discusses the case for utility-led and ratepayer-funded innovation. Adonis Yatchew comments on the report that the authors “have provided us with a valuable and cogent review of innovation models in electricity and natural gas industries”, focused on jurisdictions where ratepayers (or taxpayers) contribute to funding innovation initiatives.

As is apparent from the foregoing outline of the contents of this issue of ERQ, the interface between “policy” and “regulation” is frequently central to addressing “energy regulation” issues and the proper role of regulators. Stephen Bird discusses the challenge in his article “Addressing the Policy Regulatory Nexus in Canada’s Energy Decision-Making”. Dr. Bird’s article is the most recent of a series of articles to be published by ERQ emanating from the Positive Energy project at the University of Ottawa.

  1. Greenhouse Gas Pollution Pricing Act, being Part 5 of Bill C-74, Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, 1st Sess, 42nd Parl, 2018 (assented to 21 June 2018), SC 2018.
  2. Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts, 1st Sess, 42nd Parl, 2018.
  3. Bill 13, An Act to Secure Alberta’s Electricity Future, 4th Sess, 29th Leg, Alberta, 2018.

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