Clean energy transition must be key for next Ontario government: report

Reducing interprovincial barriers could open up new markets for Ontario's electricity that are insulated from ongoing trade uncertainty with the United States, the report said.

The next Ontario government should take the lead in encouraging urgent expansion of interprovincial electricity transmission while ensuring it advances a transition to a clean economy, a new report by the Pembina Institute said Wednesday.

Reducing interprovincial barriers could open up new markets for Ontario’s electricity that are insulated from ongoing trade uncertainty with the United States, the report said.

Ontario and the rest of Canada face a “new economic reality” highlighted by the threat of a prolonged trade dispute with the U.S., said the report published by the clean energy think tank. Yet, regardless of how those threats materialize, the report suggests a “major economic realignment” has started and Ontario must find a new path to ensure its economy is insulated against future shocks.

“The takeaway for Ontario is clear: developing a clean energy economy has the potential to make Ontarians’ lives more affordable and their homes and cities healthier and more comfortable, and to create new sectors and jobs,” the report said.

The report underlines some of the recent trends in Ontario’s electricity grid, electric vehicle manufacturing and purchasing, and building emissions before it offers a suite of recommendations on what reforms the next provincial government could pursue on a path to a lower-emissions economy.

There are some promising signs, the report said. Notably, the province initiated the largest ever battery storage procurement in Canada last year and recently approved a nearly $11 billion multi-year investment to help electricity consumers manage their use and costs.

But the report warned of possible pitfalls. While Ontario’s coal phaseout helped drop electricity emissions, the trajectory flipped in recent years.

The province’s grid went from 94 per cent emissions-free in 2020 to 87 per cent in 2024. That trend is set to continue due to forecasted growth in gas generation as the province refurbishes its nuclear generating stations, the report said.