Canada Should Better Integrate Electric Power Markets Among Provinces

Michael Giberson

Pierre-Olivier Pineau’s opinion piece in the Montreal Gazette makes a case for greater harmonization of electric power markets among Canadian provinces. He begins:

It is ironic that while a power grid must be in perfect balance to work, the electricity sector both within Quebec and among Canadian provinces is in complete imbalance.

In Quebec, for instance, government policy mandates that we build new wind-powered plants that produce electricity at a cost of more than 11 cents per kilowatt hour while Hydro-Québec is allowed to sign new contracts in which industrial consumers pay about 4 cents per kWh. Does this make sense?

Looking west and then east, the gap is even more staggering. Despite the current electricity surplus in Quebec, Ontario is pursuing solar energy, which sells at 80 cents per kWh. Meanwhile, New Brunswick still prefers to burn large amounts of coal and oil to produce the electricity it needs.

No other sector of the Canadian economy displays such large differentials.

He reports that improving coordination among separated provincial power markets would have significant economic and environmental benefits. There is, of course, a long history behind the current relative isolation and regulatory barriers to overcome.

The article builds on a study published earlier this year by L’idée fédérale/The Federal Idea, a Quebec think tank on federalism.