Canada: 2016 A Pivotal Year In Canadian Renewables: Evolving Carbon Policies And The Renewable Energy Sector


In recent months, climate change and the transition to low carbon energy solutions have been at the forefront of Canada's policy agenda — both provincially and federally. These priorities are likely remain unchanged in the coming year. Prime Minister Justin Trudeau, along with several provincial premiers, recently descended on Paris for the 2015 United Nations Climate Change Conference, which culminated in a landmark global agreement to combat climate change and limit global warming. In his speech to the Paris delegation, the Prime Minister stated that climate change is a top priority for Canada's government and that the country "will take on a new leadership role internationally".

Most Canadian provinces have echoed — or, in some cases, pre-empted- the Prime Minister's sentiments. In Alberta, Premier Rachel Notley recently rolled out the province's comprehensive Climate Change Leadership Plan, a revolutionary new agenda for the oil and gas resource-dependent province. Next door, the Government of Saskatchewan and SaskPower committed to double the percentage of renewable energy generation capacity in the province by 2030.

Not to be outdone, Ontario revealed its own Climate Change Strategy last month. While critics were quick to point out that Ontario's 37-page framework was light on specifics, few appeared to doubt the importance of this policy mandate and the necessity of transitioning the province towards a sustainable low-carbon economy.

Ontario has also signalled an intention to increase intergovernmental collaboration in this area after recently signing a memorandum of understanding (MOU) on Co-operation in the Area of Climate Change with Québec and Manitoba. This MOU is intended to "create new and competitive economic opportunities [in the three provinces] in areas such as renewable energy, energy efficiency and clean technologies that promote a transition to a more resilient low-carbon economy."

And despite some critique from Provincial Auditor, the Ontario government has remained steadfast in its commitment to renewables. As Premier Kathleen Wynne recently noted, "there's a cost associated with getting out of coal, of putting more renewables in place, and we've got other jurisdictions looking to Ontario as a model for how to do that."

A Key Role for the Renewable Energy Sector in Ontario's Low-Carbon Future

The province is still keeping its cards close to its chest regarding specific short-term climate commitments. Those details will come later this year, when Ontario releases its five-year climate change action plan. For now, the province has only revealed broad strokes, including a long-term goal to cut greenhouse gas emissions by 80 per cent (below 1990 levels) by 2050. To reach such a lofty goal, Ontario has identified a number of climate-conscious policy priorities, including:

  1. promoting the uptake of zero emission and plug-in hybrid vehicles;
  2. supporting the use of natural gas and low-carbon fuels in goods movement;
  3. supporting the uptake of net zero energy buildings (i.e., buildings that produce at least as much energy as they consume each year); and
  4. creating new energy retrofit incentives targeted to industrial, commercial and consumer applications.

What Ontario's Climate Change Strategy Means for the Province's Renewable Energy Sector

Given that the Wynne government is empowered by a majority mandate that will continue into 2018, these policy priorities should remain securely in place for at least the next two years. Moreover, Ontario's renewable energy sector is well-positioned to assume a leadership role in helping shape these priorities and in helping the government achieve its emission-reduction targets.

The province will be looking to leverage all opportunities to combat climate change and achieve its ambitious emission-reduction targets as it fills in the blanks on its five-year climate change action plan. At this early stage, it will be critical for the renewable energy sector to maintain a strong, unified voice and to continue to work closely with the province in the year ahead to help turn Ontario's Climate Change Strategy into action. As Ontario has already squeezed most of the carbon out of its electricity sector, the Province will need to focus on squeezing carbon efficiencies out of the transportation sector and the built infrastructure sector. This means that where renewables meet transportation (rail, EV's, storage) and where renewables meet build environs (net zero buildings, bpv) should become key areas of focus for the industry. 

All in all, we expect 2016 to be a pivotal year in the Canadian renewable energy sector. As the nature of the opportunity in Alberta and Saskatchewan evolves, as Ontario renewables sector manufacturing firms continue working to penetrate international markets, as the role which Canada's federal climate change policies will actually play in creating opportunities for the sector is clarified, and as the technological revolution occurring in energy storage, grid and 'grid-edge' technologies continues, Canada's renewable energy sector will see continued growth — but growth accompanied by rapid and sweeping change.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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