This opinion editorial was co-authored with Bruce Lourie (Ivey Foundation) and Moe Kabbara (The Transition Accelerator) and was published in the Toronto Star.
Premier Doug Ford knows a good deal for Ontarians when he sees one, as he did with the federal daycare and health-care deals. With the recently unveiled federal budget, Prime Minister Justin Trudeau has put another good deal on the table for provinces and territories that make credible commitments to achieving net zero.
Ford should take advantage of the whopping $50 billion of federal support for clean electricity over the next decade by doubling down on Ontario’s clean energy advantage. Ontario’s recently launched Clean Energy Credit Registry and Future Clean Electricity Fund, as well as the work of the Electrification and Energy Transition Panel are significant steps toward demonstrating the province’s net zero commitment.
Now with the potential to tap into federal funds, Ford can go even further and faster in accelerating the build out of an affordable, resilient, and clean electricity system that powers Ontario’s future economy.
The need to go further and faster has never been more important. In 2022, Ontario’s grid was 90 per cent non-polluting — which is a good news story until you realize that the year prior it was 94 per cent. Near-term electricity supply constraints have pushed the province to procure 1,500 megawatts of new emitting gas-fired power plants. Now that there is new federal support, investments should be made to reverse these recent trends in order to maintain Ontario’s clean energy advantage.
Fortunately, Ford understands the value of Ontario’s clean energy advantage with his recent budget noting that “clean energy has become an economic imperative as companies around the world want to invest in jurisdictions with affordable, reliable and clean energy.” And this advantage is already paying dividends for Ontario.
Take, for example, the hard-won victory of getting Volkswagen to build a “gigafactory” for battery cell manufacturing in St. Thomas. Volkswagen, it should be observed, has a corporate commitment to 100 per cent renewable electricity for all its North American plants by 2030.
And this type of corporate commitment isn’t unique to Volkswagen. Other companies that have recently announced investments in Ontario have similar goals and have taken note of Ontario’s clean energy advantage:
- Stellantis/LG, in announcing its $5 billion battery manufacturing Windsor plant, praised Canada’s “leadership in the generation of electricity from renewable sources.”
- Umicore’s plans for a manufacturing facility for cathode active battery materials was even more effusive, noting Ontario “offers critical advantages such as access to a highly skilled workforce, key infrastructure and renewable energy, which the new plant will be running on 100 per cent from start of production.”
- Magna, which recently unveiled plans to invest $471 million into six facilities in Ontario — including $265 million toward a new battery enclosure facility in Brampton — is committed to net zero operations by 2030 and wants to transition all operations to renewable power.
The Ontario government has responded to these investments with the Clean Energy Credit Registry to enable companies to fulfil their climate commitments by purchasing 100 per cent clean electricity. Proceeds from the program will fund new clean energy investments.
Yet this program must go even further by ensuring the purchased credits come from new clean electricity generation, rather than recycled credits from existing generation. Such an improvement would increase the confidence of companies, which are facing ever-greater shareholder scrutiny around whether their deeds match their words and demonstrate to the federal government that Ontario has a robust commitment to a net zero grid.
Now with the federal government’s new clean energy support, there is no reason for Ontario not to pursue the investments needed to fully decarbonize the grid and to attract more companies to the province.
By demonstrating the province’s commitment to clean energy, Ontario can leverage federal funds to help continue attracting companies committed to net zero, ensuring a competitive economy and good jobs for Ontarians.
Polaris Strategy + Insight 