Faster tax credits, flexible regulation could trigger $1.4T in non-emitting grid investment: Electricity Council

This article was published by The Energy Mix on June 11, 2024.

The federal government must fast-track and expand new clean electricity tax credits and streamline regulatory and approval processes to clear the way for C$1.4 trillion in capital investments in a non-emitting grid, the Canada Electricity Advisory Council says in its final report issued Monday.

The federally-appointed panel, chaired by Dunsky Energy + Climate President Philippe Dunsky, calls on Ottawa to “move with both greater urgency and greater flexibility,” the Globe and Mail reports, based on analysis showing grid decarbonization moving on different trajectories across the country.

The assessment indicates that Canada is about to embark on another great challenge: completing the decarbonization of its existing grids while vastly expanding electricity production and use.Canada is about to embark on another great challenge: completing the decarbonization of its existing grids while vastly expanding electricity production and use.

The report earned immediate praise from Energy and Natural Resources Minister Jonathan Wilkinson. “To be honest, I agree with them,” he told Radwanski. “In a country like Canada… one-size-fits-all is probably not the most appropriate way to proceed.”

The council calls for the federal government to dial back a requirement that provinces and territories publicly commit to a net-zero grid by 2035 before their utilities can qualify for the forthcoming tax credits. Instead, it says Ottawa should mandate provincial and territorial roadmaps “showing paths to net-zero emissions by 2050, with five-year benchmarks,” the Globe writes. It also wants the tax credits extended from 2034 to 2040 and broadened to include transmission projects as well as generation.

Wilkinson called the change in mandatory requirements “an interesting idea that the government will have to discuss internally,” but was less keen on extending the scope of the tax credits, the Globe says. With the sector losing patience with the time the federal government is taking to implement the tax credits, first announced in the 2023 federal budget, he said the priority is to get the credits in place at all.

The report says the Ottawa should also be prepared to step away from project reviews if provincial assessments meet the same standard, and to drop some environmental assessment requirements, all in the interest of speeding up project development. “We can throw all the money we want at it,” Dunsky said. “But if we still have a gummed-up system that adds three or four or five years unnecessarily to timelines for projects, then we’re just spinning our wheels.”

Read the rest of Adam Radwanski’s report here.