The Pearson Centre for Progressive Policy

Progressive Dialogue and Policy for a Better Canada

ENERGY: THE BIG PICTURE for the next decade

By

June 8, 2015

ENERGY: THE BIG PICTURE for the next decade

By

This Report includes:
– Welcome remarks by Hon. Mauril Belanger, MP
– Opening Remarks by Hon. Perrin Beatty
– Opening comments by Hon. Bob Chiarelli
– A summary of the discussion (Coming soon)

DRAFT NOTES FOR THE HON. MAURIL BELANGER, MP.

MAURIL: I am pleased to start today’s event and welcome you all to the discussion on “Energy: the Big Picture of the Next Decade”.
As you will know the Pearson Centre was formed in 2013 and addresses a range of public policy issues from a progressive perspective.
I had the pleasure of speaking at another Pearson Centre event to mark the 50th Anniversary of the Canadian Flag in February and am pleased to be associated with this event today.

Energy policy is of course a very important yet very complex policy field, whether we consider the provincial and federal roles, renewable and non-renewable sources of energy, new technologies, carbon and the environment, or geo-politics. So today’s discussion will be very useful in understanding some of these issues and how the Ontario and other governments can help.

I want to add a few words about the upcoming United National Conference on Climate Change scheduled for this fall in Paris. I was there recently on this file and I want to say that it is critically important that Canada be there as a full player with a solid plan on carbon reduction.

I want to take a moment to acknowledge the sponsors of this event that have made it possible.
The Gold sponsor is Bruce Power, and
The Silver sponsors are:
– The Canadian Electricity Association
– The Ontario Power Generation, and
– The Provincial Building Trades Council of Ontario
There are also several Table Sponsors who are listed in your program. So thank you to all of them.

I also want to introduce the Chairperson for today’s event. He needs little introduction, but I can say that the Honourable Perrin Beatty is:
– President of the Canadian Chamber of Commerce a leading business group in Canada
– He has been president of the Canadian Manufacturers Association, and
– Served as an MP and in several key cabinet portfolios between the years of 1979 and 1993.
Perrin….

OPENING REMARKS BY HON. PERRIN BEATTY, President of the Canadian Chamber of Commerce.
Speaking Notes for Opening Remarks and Panel Questions Perrin Beatty

Energy: The Big Picture
The Pearson Center for Progressive Policy
May 29, 2015
Ottawa, Ontario

Thank you Mauril Belanger, MP, Ottawa-Vanier).

Many of you may not know that Mauril just celebrated his 20th anniversary as a Member of Parliament. Congratulations.

Welcome everyone. Let me take a couple of minutes to introduce the program for today and then I’ll be back around 12:30 to introduce our speakers.

We’re tackling nothing less than the big picture for energy Ontario and Canada for the decade ahead.

The Canadian Chamber of Commerce has many files but only one real mission: the competitiveness of the Canadian economy.

When I tell you that energy is priority for the Canadian Chamber, it means that our network of 450 local and provincial Chambers and Board of Trade from every industry and in every province and territory have told us that this is key to their success.

Minister Chiarelli is holding the pen on one of the most exciting energy stories in Canada, with many exciting recent developments:
• The announcement about a cap and trade system,
• Developments around Hydro One,
• Questions about the role of nuclear and renewable in Ontario’s future electricity mix.

But there are themes with national importance running through Ontario’s energy story as well.
Community acceptance of energy projects, also referred to as social license, has emerged as one of the country’s greatest challenges.
A related issue is the relationship between industry, aboriginal communities and governments. Forging better partnership between First Nations and industry over the next few years will be crucial to Canada’s success.
In fact, the Canadian Chamber is launching a major project in this area, with the aim of coming up with recommendations to make sure that the process of consulting with aboriginal peoples works better.
Market access for energy has been a key preoccupation for the Canadian Chamber for a few years now. In 2013 we released a report that pointed out that being captive suppliers to the US has cost Canadian oil producers as much as $50 million per day relative to the theoretical price on world markets.
You might think this is an Alberta issue, but it matters deeply to my members in Ontario’s construction and manufacturing industries, who provide goods and services to the oil patch and pipelines like Line 9B and Energy East.
Sergio can tell you much better than I how market access to the US is an important issue for Canadian electricity producers as well.
Canada has gotten itself into an odd position when it comes to climate policy.
On the one hand, many Canadian provinces are climate leaders. On the other, Canada is developing a reputation as a laggard on climate action, which impacts on social license at home and market access abroad.
We’re getting all the pain of implementing carbon policy, with none of the reputational gain. A clear national Canadian strategy on climate is needed to make sure that Canada emerges as a recognized leader in this area.
• Social licence;
• Aboriginal relations;
• Market access; and
• Climate change
These are the key themes my network has identified for the energy industry. I’m really looking forward to seeing how Ontario’s big picture aligns with these issues.
The format for the discussion ahead is pretty innovative, and I’m quite excited to see how it works out.
We’ll be treated to a conversation where two members of the industry will ask Minister Chiarelli a series of questions on key aspects of energy policy. I think it will be a nice change from the typical speech-and-eat rhythm of these lunch events.

For those of you who want to tweet, the twitter handle is @PearsonCentre (At Pearson Centre)

Bon appetite. I’ll be back at 12:30pm

12:30: PERRIN BEATTY

It is now my pleasure to introduce our speakers for this afternoon.

Bob Chiarelli, is the Minister of Energy and MPP Ottawa West-Nepean and has had influential careers at both the municipal and provincial levels of government. During his municipal government years Bob served as Regional Chair of Ottawa-Carleton and Mayor of the City of Ottawa. Since then he has served as Minister of Infrastructure and Transportation and now, Energy.

Elizabeth McDonald, is President of the Canadian Energy Efficiency Association A global advocate for sustainable clean energy solutions, Ms. McDonald was formerly President of the Canadian Solar Industries Association. She was also president of the Canadian Film and Television Association – which is when I first met her when I was with the CBC.

Hon. Sergio Marchi, became President and CEO, Canadian Electricity Association in February of this year. He served as a city councillor in Toronto; as MP and Minister in three portfolios, namely, Environment; Citizenship and Immigration; and International Trade. Our time in the Parliament overlapped from 1984 to 1993. After he left the House of Commons Sergio served as Canadian Ambassador to the World Trade Organizations and the United National agencies in Geneva.

Sergio and Elizabeth will discuss a number of key issues with Minister Chiarelli after his opening remarks.

Opening comments
Hon. Bob Chiarelli, MPP
Minister of Energy, Ontario

Pearson Centre, Ottawa May 2015,

Thank you Andrew Cardozo and the Pearson Centre.

I’m honoured to have the opportunity to participate with the other two distinguished participants Elizabeth McDonald and Sergio Marchi, and all under the watchful eye of Perrin Beatty, an icon in Canadian politics and public policy.

As Minister of Energy in Ontario, sometimes I think there must be something wrong with me.

I actually find the job challenging and exciting, notwithstanding that when I was appointed I received 10 condolences for every congratulation.

I thought in my opening remarks I might just list a series of factoids that might seemingly be unconnected, but really are connected.

The electricity sector is like a Rubik’s cube. A change in any part of it impacts on most of the others.

Let me start with something most of you are probably aware of.

The sector is well into a technology evolution, if not revolution – much like how it redefined telecommunications.

There are many jurisdictions in North America where you will find a flat or reducing electricity demand, because of new science and technology – expanding economics and economic growth.

Therefore there is emerging concern for the financial viability of LDC’s or local electricity utilities in many jurisdictions.

On the other hand with an explosion of innovation, there is a better system with tremendous entrepreneurial upside, better environmental upside and better upside for cost containment by businesses of every size.

In the operating system in and around New Jersey, demand response – a type of conservation – using complex algorithms, electricity consumption has been permanently reduced by 10,000 megawatts. That’s 10,000 megawatts they no longer need to generate.

With Ontario’s conservation programs, Home Depot at their sites across Ontario have reduced energy consumption by more than 29 million kilowatt hours since 2012, enough electricity to power more than 3000 typical Ontario homes for a year. Tim Hortons and many others across Ontario are having similar success.

Here in Ontario to support expanding or new companies create jobs; we are using new software technologies to dispatch surplus power to these companies at a 50% discount for a period of 10 years, under a program called the Industrial Electricity Incentive.

Again, Ontario is one of only a handful of North American jurisdictions to have installed Smart Meters – 4.8 million of them – enabling time of use conservation – and an emerging technology sector creating new apps from extensive data collected.

The meters enable every utility to measure consumption digitally, avoiding the human meter readers of the past.

In Ontario over 300 large manufacturing entities save 25% on their power price by participating in a demand response program called the Industrial Conservation Initiative – this is enabled by software technology.

Over the last 8 years Ontario has invested 34 billion dollars rebuilding what was an unreliable polluting, undersupply deficit, into a system that is reliable, in surplus, and clean.

25% of our electricity generation that had been polluting, but inexpensive, was replaced with clean water power, renewables, and less polluting natural gas.
This was the largest emissions reduction program in the history of North America, cutting emissions equivalent to taking 7,000,000 cars off Ontario roads- and independently assessed to avoid $4 billion per year in health care and environmental costs.

In the world of climate change and carbon control Ontario is way ahead of the curve when it comes to the electricity sector. New science and technology has brought the price of wind and solar generation to grid price parity in some jurisdictions and rapidly approaching it in others. Renewables have become the generation of choice in many jurisdictions.

In fact an Ottawa-based start-up is commercializing a computer chip technology that completely eliminates the need for the inverter in solar systems, significantly reducing the cost.

Evolving electricity storage technology will soon be a major game changer.
Smart grid technologies are emerging at a rapid pace. Grid automation, data management, load Control and micro-grids.

Canada does not have a national energy plan or policy. The Premiers are making progress in the absence of the federal government.

Alberta’s electricity supply mix is 50% polluting coal generation with no reduction in site.

Again it should be noted that Ontario is now coal free.

Ontario and Quebec are cooperating on carbon reduction and are trading clean electricity. The federal government is virtually absent on carbon control and regulations.
In Ontario, a non- profit organization called “Eco- Schools” has created an extra-curricular program mentoring electricity and other conservation – now engaging school boards with over 800,000 students, participating across Ontario at the elementary and secondary level.

Over the last two years Ontario has attracted more direct investment than any other jurisdiction in North America.
Ontario’s electricity prices are lower than in 3 other provinces and lower than New York, Boston and Detroit. Manitoba and Quebec are low price jurisdictions by reason of their legacy hydroelectricity availability.

Ontario and Canada have a severe infrastructure deficit. Our government is broadening ownership and retaining a minimum of 40% ownership in Hydro One as a TSX company. This will allow an estimated 9 billion to be applied equally to debt and investment in infrastructure, without borrowing, tax increases, or cutting programs. This is part of a 10 year, 34 billion infrastructure program to sustain a competitive economy and quality of life.

And lastly, Ontario has established funding and policies that are enabling and facilitating First Nations and Metis communities to acquire significant equity ownership in a wide range of electricity infrastructure projects.

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