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Federal regulations threaten Ontario’s ability to meet electricity demand

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4 minute read

From the Fraser Institute

By Kenneth P. Green

“Newer forms of supply, such as energy storage, are not ready to operate at the scale that would be needed to compensate; nor is there enough time or resources to build the necessary generation and transmission infrastructure to replace gas generation within an eight-year timeframe.”

A new report from Ontario’s Independent Electricity System Operator (IESO) suggests that electric vehicles and artificial intelligence facilities will drive a massive increase in demand for electricity in Ontario’s not-too-distant future.

The IESO estimates that overall electricity demand will grow by a projected 75 per cent by 2050, which is higher than the 60 per cent increase previously forecasted. The IESO attributes that growth in demand to a number of factors including industrial electric vehicle (EV) production and data centres (increasingly AI-driven). In fact, the IESO reportedly forecasts at least 16 new data centres will be in service by 2035, driving 13 per cent of the new electricity demand.

But where will all that electricity come from?

Under Canada’s current climate and energy policies, it won’t come from fossil fuels, which are to essentially regulated out of use by 2050 per the Trudeau government’s “net zero” greenhouse gas (GHG) plan and proposed Clean Electricity Regulations expected to be enacted by the end of this year. Assuming those frameworks remain in place in coming years, the increased demand for electricity must be met with low- or zero-GHG emitting forms of generation, which include wind power, solar power, hydropower, nuclear power and biomass power generation.

But Ontario already faces a stiff challenge in replacing existing fossil fuel electricity generation with renewables, even before all this new EV/AI-driven demand. In 2021, IESO released a study assessing the impacts of phasing out natural gas generation by 2030. It found that natural gas generation “provides a level of flexibility to respond to changing system needs that would be impossible to replace in the span of just eight years [the province’s current goal].”

The IESO also noted that natural gas power generation in Ontario provides almost three-quarters of the system’s ability to respond quickly to changes in demand. And that the proposed alternate energy technologies are not ready for widespread implementation: “Newer forms of supply, such as energy storage, are not ready to operate at the scale that would be needed to compensate; nor is there enough time or resources to build the necessary generation and transmission infrastructure to replace gas generation within an eight-year timeframe.”

In other words, meeting Ontario’s growing electricity demand by 2030 with low- and no-GHG emitting technologies—without raising electricity prices or destabilizing the grid—will be challenging to say the least.

In light of projected increased electricity demand from AI and EVs (not to mention newer technologies that AI might spawn), the Ontario government should demand relief from the Trudeau government’s forthcoming Clean Electricity Regulations. Without such relief, Ontario might not be able to meet future electricity demand, which would stifle not only the future EV market and the AI revolution, but all other electricity-consuming industries, costing Ontario a great deal of potential economic growth and the prosperity that accompanies it.

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Energy

Canada’s debate on energy levelled up in 2025

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From Resource Works

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Compared to last December, Canadians are paying far more attention.

Canada’s energy conversation has changed in a year, not by becoming gentler, but by becoming real. In late 2024, pipelines were still treated as symbols, and most people tuned out. By December 2025, Canadians are arguing about tolls, tariffs, tanker law, carbon pricing, and Indigenous equity in the same breath, because those details now ultimately decide what gets built and what stays in the binder. Prime Minister Mark Carney has gone from a green bureaucrat to an ostensible backer of another pipeline from Alberta to the West Coast.

From hypothetical to live instrument

The pivot began when the Trans Mountain expansion started operating in May 2024, tripling capacity from Alberta to the B.C. coast. The project’s C$34 billion price tag, and the question of who absorbs the overrun, forced a more adult debate than the old slogans ever allowed. With more barrels moving and new Asian cargoes becoming routine, the line stopped being hypothetical and became a live economic instrument, complete with uncomfortable arithmetic about costs, revenues, and taxpayer exposure.

The American election cycle then poured gasoline on the discussion. Talk in Washington about resurrecting Keystone XL, alongside President-elect Donald Trump’s threats of 25 percent tariffs, reminded Canadians how quickly market access can be turned into leverage.

In that context, Trans Mountain is being discussed not just as infrastructure, but as an emergency outlet if U.S. refiners start pricing in new levies.

The world keeps building

Against that backdrop, the world kept building. Global pipeline planning has not paused for Canadian anxieties, with more than 233,000 kilometres of large diameter oil and gas lines announced or advancing for 2024 to 2030. The claim that blocking Canadian projects keeps fossil fuels in the ground sounds thinner when other jurisdictions are plainly racing ahead.

The biggest shift, though, is domestic. Ottawa and Alberta signed a memorandum of understanding in late November 2025 that sketches conditions for a potential new oil pipeline to the West Coast, alongside a strengthened industrial carbon price and a Pathways Alliance carbon capture requirement. One Financial Post column argued the northwest coast fight may be a diversion, because cheaper capacity additions are on the table. Another argued the MOU is effectively a set of investment killers, because tanker ban changes, Indigenous co ownership, B.C. engagement, and CCUS preconditions create multiple points of failure.

This is where Margareta Dovgal deserves credit. Writing about the Commons vote where Conservatives tabled a motion echoing the Liberals’ own MOU language, she captured the new mood. Canadians are no longer impressed by politicians who talk like builders and vote like blockers. Symbolic yeses and procedural noes are now obvious, and voters are keeping score.

Skills for a new era

The same sharper attention is landing on carbon capture, once a technocratic sidebar. Under the MOU, a new bitumen corridor is tied to Pathways Alliance scale carbon management, and that linkage is already shaping labour planning. A Calgary based training initiative backed by federal funding aims to prepare more than 1,000 workers for carbon capture and storage roles, a sign that contested policy is producing concrete demand for skills.

British Columbia is no longer watching from the bleachers. It flared again at Carney’s December 18 virtual meeting, after Environment Minister Steven Guilbeault resigned from cabinet over it. Premier David Eby has attacked the Alberta Ottawa agreement as unacceptable, and Prime Minister Mark Carney has been forced into talks with premiers amid trade uncertainty. Polling suggests the public mood is shifting, too, with a slim majority of Canadians, and of British Columbians, saying they would support a new Alberta to West Coast pipeline even if the B.C. government opposed it, and similar support for lifting the tanker ban.

None of this guarantees a new line, or even an expanded one. But compared with last year’s tired trench warfare, the argument now has stakes, participants, and facts. Canadians have woken up to the reality that energy policy is not a culture war accessory. It is industrial policy, trade policy, and national unity policy, all at once.

Resource Works News

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Energy

New Poll Shows Ontarians See Oil & Gas as Key to Jobs, Economy, and Trade

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From Canada Action

By Cody Battershill 

A new Ontario-wide survey conducted by Nanos Research on behalf of Canada Action finds strong public consensus that Canadian oil and gas revenues are critical to jobs, economic growth, and trade – and that Canada should lean into its energy advantage at home and abroad.

“Our polling feedback shows that a majority of Ontarians recognize the vital, irreplaceable role oil and gas has to play in our national economy. Canadians are telling us they want to see more support for the oil and gas sector, which is foundational to our standard of living and economy at large,” said Canada Action spokesperson, Cody Battershill.

The online survey of 1,000 Ontarians shows that more than four in five (84 per cent) respondents believe oil and gas revenues are important for creating jobs for Canadians and building a stronger economy. Additionally, four-in-five (80 per cent) support Canada developing a strategy to become a preferred oil supplier to countries, while Ontarians are more than eight times as likely to support as to oppose Canada supplying oil and gas, provided it remains a major source of energy worldwide.

POLL - more than four in five (84 per cent) of Ontarians believe oil and gas revenues are important for creating jobs for Canadians

“Building new trade infrastructure, including pipelines to the coasts that would get our oil and gas resources to international markets, can help Canadians diversify our trading partners, maximize the value of our resources, and secure a strong and prosperous future for our families,” Battershill said.

Also, nearly four-in-five (79 per cent) of Ontarians say oil and gas revenues are important for keeping energy costs manageable for Canadians.

“Our poll is just one of many in Canada since the start of 2025 that show a majority of Canadians are supportive of oil and gas development. It’s time we get moving forward on these projects without delay and learn from the lessons of our past, where we saw multiple pipelines cancelled to the detriment of Canada’s long-term economic success.”

80 per cent of Ontarians support Canada developing a strategy to become a preferred oil supplier to the world

Additional findings include:

  • Four-in-five (80 per cent) of Ontarians support Canada supplying oil and gas, provided it remains a major source of energy worldwide.
  • Four-in five (80 per cent) of Ontarians believe oil and gas revenues are important when it comes to building stronger trading partnerships.
  • Nearly four-in-five (79 per cent) of Ontarians say oil and gas revenues are important for keeping energy costs manageable for Canadians.
  • Nearly four-in-five (78 per cent) of Ontarians support Canada stepping up to provide our key NATO allies with secure energy sources.
  • Nearly four-in-five (78 per cent) of Ontarians support Canada increasing oil and gas exports around the world, about six and a half times more likely than to oppose.
  • Nearly four-in-five (77 per cent) of Ontarians support Canada providing Asia and Europe with oil and gas so that they are less reliant on authoritarian suppliers.
  • Nearly three-in-four (74 per cent) of Ontarians support Canada increasing oil and gas exports around the world, five times more likely than to oppose.
  • Nearly three-in-four (74 per cent) of Ontarians say oil and gas revenues are important to reducing taxes for Canadians.
  • More than seven-in-ten (71 per cent) of Ontarians support building new energy infrastructure projects without reducing environmental protections and safety.
  • More than six-in-ten (63 per cent) of Canadians say they are important for paying for social programs, including health care, education, and other public services.
  • Respondents were nine times more likely to say the government approval process for energy infrastructure projects is too slow (46 per cent) rather than too fast (5 per cent).

80 per cent of Ontarians support Canada supplying oil and gas to the world as long as it continues to be a major source of energy79 per cent of Ontarians say oil and gas revenues are important for keeping energy costs manageable for Canadians78 per cent of Ontarians support Canada stepping up to provide our key NATO allies with secure energy sources78 per cent of Ontarians support increasing oil and gas exports around the world, 6x more than those who oppose this

About the survey

The survey was conducted by Nanos Research for Canada Action using a representative non-probability online panel of 1,000 Ontarians aged 18 and older between December 10 and 12, 2025.

While a margin of error cannot be calculated for non-probability samples, a probability sample of 1,000 respondents would have a margin of error of ±3.1 percentage points, 19 times out of 20.

SOURCE: Canada Action Coalition

Cody Battershill – [email protected]

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