Editorials

Editorial

Authors:  and | July 2026 – Volume 14, Issue 2, 2026

THE PERIL AND PROMISE OF INTERESTING TIMES

Since publication of the last ERQ issue, there have been additional dramatic changes in the political and economic landscapes in the United States and around the world that are shaping events here at home in Canada. These are indeed “interesting” times but not without both peril and promise.

ACTIONS ABROAD

Recent tension in the Middle East has been escalating since the October 7, 2023, attack by Hamas on southern Israel, followed by the exchange of missiles by Israel and Iran in 2024, and the Twelve-day War in June 2025, in which the United States launched an air strike on Iranian nuclear sites[1]. On February 28, 2026, without consulting their allies or obtaining U.S. Congressional approval, the United States and Israel launched airstrikes on Iran. Without a clear rationale for initiating the war and a strategy for ending it, the potential for larger, drawn-out conflict remains on the table.

Of course, by the time this issue of ERQ is published there may be either a restoration of peace in the Middle East or an ongoing conflict that has escalated. If the latter, there is no shortage of potential geopolitical and economic consequences – including strong incentives for Iranian retribution and revenge, a global recession, agricultural crop production disruption, shortages of refined petroleum products (such as transportation and heating and power fuels and other products), a more aggressive transition to or from renewable energy resources and electric cars[2], and higher global market-based prices for energy, to name a few.

With this backdrop, the limitations of illiberal, far-right, authoritarian regimes came into full view with the ouster of Viktor Orbán as Prime Minister of Hungary. Orbán’s 16-year reign came to an end on April 12, 2026[3] when voters handed the centre-right Tisza opposition party a parliamentary majority. The ouster of Orbán, long considered Russian President Vladimir Putin’s closest European Union ally, means that Russia no longer has an ally that can thwart European Union assistance to Ukraine, which may signal a shift in the current power dynamic. Orbán was also a close ally of President Trump, who even dispatched his Vice President to rally support for Orbán in the closing days of the election.[4]

The war in Iran and Orbán’s electoral defeat may prove to be minor setbacks for President Trump, but at home in the United States, the cumulative adverse effects of the President’s policy agenda — chaos, lack of certainty and confidence, and higher prices — suggest that it is no longer on a steady path. Rising oil prices and the resulting negative impact on domestic inflation[5] may weaken support for the Republican party in the upcoming midterm elections.

On the judicial front, on February 20, 2026, the United States Supreme Court held that the International Emergency Economic Powers Act (“IEEPA”) did not give the President the power to unilaterally impose tariffs on imports from any country anywhere in the world, at any rate, and for any duration the President chose.[6] The case was a complex one, brought by 7 small businesses and 12 states, filed in two separate actions in two different federal district (trial) courts. President Trump claimed emergency powers to deal with two foreign threats: 1) drugs from Mexico, China, and Canada, and 2) large and persistent trade deficits. The IEEPA gives Presidents the power to deal with significant foreign threats, and it was these two threats that led to the President announcing a comprehensive, global portfolio of tariffs on April 2, 2025, a day that has become known as ‘Liberation Day’.

Ultimately the Court ruled in a 170-page, 6-3 decision that the President could not use the IEEPA to impose his sweeping tariffs. This decision is only the start, not the conclusion of the debate surrounding President Trump’s signature economic policy, and as such, President Trump immediately imposed a 10% tariff on most imports, although many Canadian exports to the U.S. are exempt.[7]

Finally, the Canada-US-Mexico Agreement (“CUSMA”) is scheduled to be reviewed in July 2026 giving parties the opportunity to negotiate modifications and vote on whether to renew the agreement for another 16 years. If CUSMA is not renewed, the present agreement will be subject to annual reviews until the expiry in 2036[8]. The July 2026 review is likely to occupy the Canadian federal government’s efforts and energies over the balance of the year.

THE RESPONSE AT HOME

As of April 13, 2026, Prime Minister Carney now commands a majority government in the House of Commons, with 174 seats, as a result of defections of five members of parliament from two of the four federal opposition parties and victories by the Liberal Party of Canada in three by-elections.[9] It is the first time in Canadian history that a federal government has switched from a minority to a majority between elections[10] and is perhaps a manifest recognition that the fundamental challenges faced by Canada are rooted in its tumultuous relationship with the Trump administration in the United States. The next federal election in the United States is in November 2028 – the key implication being that domestic consequences arising from international actions are likely to dominate the Canadian political agenda until the next Canadian federal election, which must occur prior to October 15, 2029[11].

As a result, for the foreseeable future there will likely be more political stability in Ottawa and, potentially, a more active legislative agenda. An example of which was the April 14th announcement by the Prime Minister of the temporary suspension of the federal fuel excise tax on gasoline and diesel from April 20, 2026 to September 7, 2026.[12] Provincial governments will now have to make some degree of peace with Prime Minister Carney being the Prime Minister and the Liberal Party of Canada possessing its first majority government since 2015. What this “peace” looks like and how durable it is, remains to be seen.

That said, there continue to be provincially led initiatives that challenge existing federal – provincial constitutional authorities and processes and yet others that advance cooperative federalism:

  • On March 24, 2026, Alberta, Ontario, Quebec and Saskatchewan wrote a letter to Prime Minister Carney calling for constitutional change “for a new collaborative approach to judicial appointments”.[13]
  • Since our last issue of ERQ, Nova Scotia and Alberta have both signed impact assessment cooperation agreements under the federal Impact Assessment Act (“IAA”), streamlining the approval process for projects that would have required environmental assessments and approvals from both the federal and provincial governments.[14] The Alberta – Canada agreement sets out the circumstances where Canada will rely on Alberta’s environmental assessment or regulatory processes to assess the effects of a project, including adverse effects within federal jurisdiction and reciprocal arrangements, with the integration of Alberta’s environmental assessment and regulatory process requirements into the federal assessment, if applicable and desired by Alberta, as per the Agreement[15].
  • Discussions with the Yukon, Saskatchewan, Quebec, and Newfoundland and Labrador continue; However, these provinces had several cooperation agreements with the Government of Canada under the Canadian Environmental Assessment Act, 1992.[16]
  • On April 14, Alberta announced that it was introducing legislation, the Expedited 120-Day Approvals Act (Bill 30) to streamline approvals for major project investments, defined as projects that are aligned with provincial priorities, have minimum capital investment of $250 million, and are of strategic economic importance.[17] If passed, such projects would have a 120-day approval timeline. The legislation creates the process, application requirements, and criteria for approvals to guide project proponents and regulators alike. However, to be considered for a qualified designation, project proponents will also be required to complete, or have substantially completed, the environmental impact assessment process and Indigenous consultation. The proposed legislation does not change Alberta’s duty to consult.[18]
  • On January 23, the Alberta Court of Appeal released its latest Reasons for Decision arising out of the fourth case management Advice and Directions meeting relating to the ongoing challenge of the federal Clean Electricity Regulations.[19]
  • Prospect of referendums on independence in Quebec[20] and Alberta, notwithstanding the decision of Alberta Court of King’s Bench on April 10, 2026, to prohibit the certification of petition results or make a referral to the Alberta Minister of Justice until the Court has ruled on the Applications by Athabasca Chipewyan First Nation and the Blackfoot Nations.[21]

If necessity is the mother of invention, then the March 3, 2026 report by legal scholars Paul Daly and Mark Mancini entitled “The Single Market Myth: How Ottawa and the provinces can finally dismantle Canada’s costly internal trade barriers”[22] is a must read for those in the energy, regulation, and law space who are looking for potential cooperative arrangements that could meet the challenge of Canada’s constitutional structure for the energy file. Herein lies the promise of “interesting times” – when Canada’s aspiration to be an “energy superpower” hangs in the balance.

THIS EDITION

We begin this issue with a comment from Matthias Hofmann in response to the article by Ahmad Faruqui on real-time electricity pricing, published in ERQ Volume 13, Issue 3[23]. In the comment entitled: “Recent developments on real-time pricing in Norway”, Matthias Hofmann, Master of Science and Senior Advisor at Statnett, provides empirical evidence on the potential and limitations of real-time pricing in practice in Norway, in the context of changing regulatory approaches to real-time pricing. Using the most recent data from Norway, Hofmann provides some insight into rate design, something that continues to challenge companies, consumers, and regulators alike in Canada.

Mohammed El Mendri, associate lawyer at PNL Advocacy and legal research counsel at the Canadian Gas Association, pens a “Report on the ERQ Energy Law Forum 2026” in which he provides a high-level summary of the Forum’s proceedings on May 4 and 5, 2026 in Montreal. El Mendri concludes with the thought that energy law is now evolving at the pace of the country’s political and economic news and invites readers to stay tuned for upcoming issues of Energy Regulation Quarterly for continued discussion of the issues raised at the ERQ Energy Law Forum.

In the article “The Proposed Co-operation Agreement on Environmental and Impact Assessment between Canada and Alberta”, Nigel Bankes, Emeritus Professor of Law at the University of Calgary, analyzes the draft co-operation agreement on “Environmental and Impact AssessmentC between Canada and Alberta. Bankes discusses a background paper of the Impact Assessment Agency of Canada (“IAAC”) that informs the various co-operation agreements already in place with other provinces, before critiquing the draft Canada/Alberta agreement. Bankes reviews the agreement in some detail before offering critical thoughts on what he sees as a federal abdication in the area of impact assessment.

Pierre-Olivier Pineau, Professor, Department of Decision Sciences at HEC Montréal, takes a detailed look at the energy industry in Quebec, in his article “The state of energy in Quebec”. Pineau assesses the portfolio of energy used in the province by type and purpose, describes the organization of the energy sector, and analyzes the challenges facing Quebec’s energy industry in the future.

In the article “Utility asset dispositions in an era of climate change: Who pays?”, former Chair of the Alberta Utilities Commission (“AUC”), Mark Kolesar examines what happens when utility assets that are not yet fully depreciated are no longer considered used and useful for the purpose of setting just and reasonable rates. He highlights the two ways in which utility assets are adversely affected by climate change: premature destruction due to climate-related events and because of the policy or legislative requirements of government(s) to address climate change. The question of “who pays” is an enduring one, and Kolesar describes how these “stranded assets” have been treated across various North American jurisdictions.

Alberta has replaced the previous default rate for small retail consumers with a new default rate: the Rate of Last Resort (“RoLR”). As discussed by Chloe Haley, an economics student at the University of Calgary, in the article “The implications of price stability under the Rate of Last Resort Regulation for low income consumers in Alberta”, the design of the RoLR may produce a number of unintended consequences. Haley conducts empirical analysis on the Rate of Last Resort and provides some insights into its design and impact on consumption patterns.

In “Case Commentary: West Whitby Landowners Group Inc. v Elexicon Energy Inc.”,[24] Reena Goyal, Energy Lawyer and Alice Xie, articling student, both of Blake, Cassels & Graydon LLP, and Roy Hrab, Senior Manager, Policy Research at Power Advisory LLC, discuss when an intervention of the Ontario Energy Board (“OEB”) in a cost sharing dispute constitutes a reviewable decision. The authors focus their comments on the Court’s analysis of the nature of the OEB letters and whether the OEB’s intervention amounted to a statutory power of decision. The authors also discuss the role of delegated decision-making at the OEB and highlight the need for clarity on what types of OEB staff communications are binding versus non-binding.

Matthew Ghikas, Partner and Niall Rand, Associate, both of Fasken Martineau DuMoulin LLP, in their article “BC Utilities Commission approves a significant investment in natural gas resiliency” discuss the October 27, 2025 Decision of the British Columbia Utilities Commission (“BCUC”) to grant a Certificate of Public Convenience and Necessity (“CPCN”) to FortisBC Energy Inc.’s Tilbury Liquefied Natural Gas Storage Expansion Project. The authors discuss the iterative regulatory process and evolved evidence needed to address the issue of natural gas system resiliency in the absence of industry wide resiliency standards in order to demonstrate need and that the project is in the public interest.

This issue concludes with an article by Adam White, founder and CEO of Powerconsumer Inc., “Caution before convergence: Reflections on the OEA’s Ontario DSO Roadmap – Institutional Roles, Regulatory Sequencing, and the Economics of DER Value”. In this comprehensive article, White describes the Ontario Energy Association’s Ontario DSO Roadmap and assesses whether the early commitment to a specific DSO market form is warranted, before outlining a capability-first path forward that preserves regulatory optionality while allowing practical DSO progress to continue.

 

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