The Toronto Star
July 30, 2014
Martin Regg Cohn
Ontario energy isolationism tops Quebec separatism: Cohn
Quebec is awash with cheap power. Ontario is burdened by rising electricity prices. Time to talk.
Quebec is awash with cheap power as yet more hydro dams come on stream. Ontario is burdened by rising electricity prices and an aging fleet of nuclear reactors.
Time to talk?
Kathleen Wynne and her Quebec counterpart, Philippe Couillard, will connect by telephone in mid-August ahead of a premiers’ summit in P.E.I. later that month. Electricity and a national energy strategy are on the agenda.
Conceptually, co-operation seems a good fit. Politically, however, it’s a high-wire balancing act fraught with interprovincial tensions.
Ontario has historically sought energy self-sufficiency, anchored in nuclear power. Quebec has sold its electricity to the highest bidder south of the border.
For decades, it seemed as if Quebec was practicing electricity separatism, while Ontario indulged in energy isolationism.
Now, energy conservationists in both provinces are lobbying their governments with a sense of urgency. They hope to dissuade Ontario from committing to the costly refurbishment of its nuclear reactors when cheaper hydroelectricity can be bought from Quebec.
In a joint report, the Ontario Clean Air Alliance and Quebec’s Équiterre argued that a long-term interprovincial deal is there to be had if both sides can find the political will to overcome entrenched interests at home.
The nuclear lobby is determined to protect tens of thousands of jobs tied to the design, sale and deployment of reactors. Publicly owned OPG (Ontario Power Generation), a descendant of the old Ontario Hydro, is also dependent on nuclear power for its future.
It’s not just jobs, but an industrial mindset.
Historically, Ontario’s industrial strategy was premised on cheap nuclear power to attract foreign manufacturers and resource producers. If electricity was part of the province’s comparative advantage, how could it possibly rely on its traditional competitor in Quebec to keep rates low?
But the three legs of Ontario’s economic stool have shifted over the decades.
The nuclear industry is bogged down — beset by rising costs for radioactive waste, plagued by unpredictable refurbishment costs after a history of budget overruns, and frustrated by an inability to sell new CANDU reactors at home or abroad.
Manufacturing has been declining for decades — not just in Ontario, but even faster in Quebec — as production shifts overseas to lower labour and production costs. And resource extraction has been rationalized amid globalization.
Against that backdrop, the old assumption of an Ontario-Quebec industrial rivalry seems dated, given the global economic forces arrayed against them both. The perennial separatist impulses that deterred Queen’s Park from tying its destiny to a Parti Québécois government also seem diminished.
Ontario’s power industry counters that conservationists are comparing Quebec apples to Leamington tomatoes, because short-term electricity exports are no substitute for the long-term baseload power that nuclear provides day and night. Assumptions by the Clean Air Alliance that Ontario could lock in Quebec power at 5.6 cents a kWh are dismissed as unrealistic, given that the going rate for long-term contracts are nearly double that in New England.
The capacity of transmission lines might be another pipe dream. Rightly or wrongly, the system wasn’t designed to maximize energy interdependence with durable connections across the North American grid. The province would have to invest heavily in new transmission capacity to boost electricity imports dramatically.
But more high tension lines linking our two provinces at a time of declining political tensions could bind us together and boost our bottom line.
In 2012, hydro imports accounted for a mere 1.7 per cent of Ontario’s electricity consumption, which defies common sense. If the price is right for Americans, why not for Ontarians? The National Energy Board bars Quebec from charging other provinces more than the Americans pay.
Our needs are complementary: Quebec’s peak consumption comes in the winter heating season, while Ontario demand is highest in the summer. Hydro Quebec’s dams have the ability to store some of Ontario’s surplus power for later use, freeing up exports that could be sold back to Ontario when needed.
When it comes to energy, nothing is as simple as it seems. The engineering is complex, the politics complicated. Conservationists like to target emissions-free nuclear power as the bogeyman, but Ontario could also use Quebec imports to reduce its reliance on gas-fired power plants that generate greenhouse gases.
Either way, Wynne should be more energetic in pursuing electricity co-operation when she talks to her Quebec counterpart by phone. If they can’t find common ground, they’ll have some explaining to do at their annual nation-building summit with the other premiers in late August.