Canada: Legal Trends 2016: Renewable Energy


A recent Clean Energy Canada study concluded that investment in renewable energy in Canada increased at a dramatic rate of 88 per cent from 2013 to 2014, representing an aggregate investment of more than C$10.7-billion in 2014. This sharp increase catapulted Canada to sixth in the world for investments in new domestic clean-energy-generation projects. Nearly half of Canadian investments in renewable-energy sources occurred in Ontario.

Current indicators suggest this upward trend will continue in 2016. Canada offers significant advantages in terms of renewable energy investments, which likely are contributing to this increase. Canada's long coastlines and large landmass provide significant wind and solar resources. As a result, a large percentage of new investments continue to be in wind- and solar-power projects. A large domestic market also makes Canada the sixth-largest electricity consumer in the world. Further, the renewable-power industry provides significant opportunities for private-sector partnerships and deployment of collaborative research and development. The long-term trend of investment in renewable-energy sources will support growth in mergers and acquisitions in this area. The general trend toward corporate social responsibility will also likely spur increased investment in this sector.


Along with increases in investment, Canada has experienced significant growth in capacity. It now ranks fourth worldwide, with approximately 89 gigawatts of renewable-electricity capacity, sufficient power to fuel more than 35 million Canadian homes. In 2014, developers and facilities brought enough new wind-power capacity online to meet the needs of 500,000 Canadian homes.

The main capacity source continues to be Canada's hydropower facilities, which benefit from Canada's vast network of water sources. Industry observers expect this capacity growth to continue in 2016 with facilities upgrades, a number of new projects slated to become operational before 2020, and solar and wind capacity growth.


In October, Justin Trudeau's Liberal Party majority government was elected in Canada. Its platform is very supportive of renewable-energy sources and the prioritization of investments in alternative energy sources as compared to the previous government. In terms of government funding, the Trudeau government has committed to invest an additional C$100-million annually in organizations that support development of clean-technology companies in Canada and to issue "Green Bonds" to infrastructure projects such as electric-vehicle charging stations and transmission and storage networks. Further, the Liberal government has committed to shift federal subsidies away from fossil fuels and into renewables and to create a C$2-billion fund to support projects aimed at cutting carbon emissions. In terms of implementation, the government has also committed to becoming an "early adopter" of renewable energy by increasing its green technology use. Further, U.S. President Obama's recent rejection of the Keystone XL pipeline and the 2015 election of Rachel Notley's New Democratic Party (NDP) in Alberta (discussed below), signal increased emphasis on carbon reduction and renewable-energy policies at federal and international levels. Additionally, Trudeau's invitation to the Canadian premiers to attend the 2015 United Nations Climate Change Conference demonstrates a more unified approach among the provincial and federal governments in working toward climate change solutions on a global scale.


With the NDP's election in Alberta after more than four decades of the Progressive Conservative party holding power, the new government immediately increased the required rate of carbon emissions reductions, and doubled the costs for not achieving such reductions, under the Alberta Specified Gas Emitters Regulation. In a major shift in provincial energy policy, the new government subsequently released its Climate Leadership Plan (the Plan), further committing to transition Alberta toward a greater emphasis on renewables, particularly wind power, with a goal of increasing renewable sources to 30 per cent of Alberta's electricity production by 2030. The Plan also introduced additional carbon emissions taxation policies intended to encourage lower-carbon natural gas and zero-carbon renewables electricity generation, fostering a shift toward a more diversified energy generation mix. The Plan's key component is its broad application. Once fully implemented, it will cover approximately 78 to 90 per cent of provincial greenhouse gas emissions, including large and small emitters and consumers.

The introduction of a cap-and-trade system for carbon emissions, a centerpiece of both Quebec and Ontario's environmental policies, is not part of the Plan's "made in Alberta" approach. Meanwhile, Ontario continues to embrace renewable energy sources, adding approximately 1,810 MW of clean power in 2014. Some attributed this to the province's Green Energy Act, which has been partially responsible for a 50 per cent increase in renewables as a percentage of grid capacity since its introduction in 2009. British Columbia also continues to invest in renewable-energy sources, earmarking C$100-million for direct investment in clean technology and an additional C$200-million annually for traditional industries like forestry and mining to adopt clean technology. Further, Quebec's abundance of hydroelectric power means that Quebec has very low greenhouse-gas-emission levels and has been described as a potential renewable-energy superpower. Additionally, close to 3,000 MW of energy is currently being produced by Quebec's wind farms. Electricity production of wind farms in Quebec is expected to reach 3,710.7 MW in the near future.

These trends suggest that Canadian provinces are moving towards a more diversified energy grid by employing policy initiatives tailored to each province's environmental advantages.​​​​​​​​​

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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