Good afternoon, and thank you, Mr. Chair and members of the committee, for inviting me to appear before you here today.
I'm here on behalf of the Canada West Foundation, where I'm a policy analyst specializing in energy and electricity issues. The Canada West Foundation is an independent, non-partisan public-policy think tank that focuses on policies that shape the west, and by extension, Canada. Our CEO, Martha Hall Findlay, also sends her regards.
We at the Canada West Foundation recognize that climate change is a real and significant threat to Canada and the rest of the world and that the cost of inaction is unacceptable. We also know the action we do take needs to be taken in the most cost-effective way possible. For this reason we are supportive of the essential component of the pan-Canadian framework in clean growth and climate change: a price on carbon, which is the most practical and cost-effective way to reduce greenhouse gas emissions.
We're also happy that the committee is undertaking the study on strategic electric interties. The Canada West Foundation recognizes that pricing carbon is not a catch-all solution to achieving Canada's greenhouse gas goals in the most cost-effective manner possible. Complementary measures need to be taken to harness cost-effective emission reductions in instances where a price on carbon is not appropriate or practical. As the committee has heard from witnesses during these hearings already, a more integrated grid to increase strategic electricity interties can be a strong tool in harnessing cost-effective emission reductions by helping to integrate and share Canada's vast clean-energy resources. Yet a carbon price does not mean interties will be built, so it's appropriate this committee is looking at it more closely.
With that said, I think it's important to point out that the idea of investing in a more integrated grid is not new here in Canada, especially in western Canada. There have been many discussions on this for at least the last 40 to 50 years, which is roughly how long Canada West Foundation has been around. There's long been a sense that this would be a good idea, but the question remains, why hasn't it happened yet? Provincial electricity grids are still relatively independent of each other.
There are numerous reasons for why this idea has never gone anywhere, but in talking to folks who have been in this industry much longer than I have, I've learned that over the decades the western provinces have looked at the idea only to reject it time and again. Many of the reasons are related to provincial fears of losing influence over their own electricity grids. At times it was rejected because some provinces feared cheap coal power from Alberta would flood into their markets and harm their own utilities. At other times Alberta rejected the idea because of fears that cheap hydro would put their coal power plants out of business.
Now, with a final twist of irony, we're talking about it again because we have to reduce emissions and phase out coal power plants. This highlights the fact that the climate change imperative has injected new life into the idea of an integrated grid. It is very evident that we need to make big changes to the way we produce and consume electricity to achieve our climate goals.
As Bryson Robertson, from the University of Victoria, and many other witnesses have already said, improving the connectivity of our provincial grids is the key to taking advantage of the diverse energy resources we have across this country, and potentially, a very valuable tool in meeting our climate goals in a cost-effective way. This is particularly true in western Canada, where some of the country's best wind and solar resources reside between some of its best hydro resources—and we include Manitoba as the west for the Canada West Foundation,
For this reason the Canada West Foundation believes an integrated western grid should be pursued in the west, but as the past has shown, the provinces will need to work closely together if an integrated grid is to become a reality. A sustained conversation needs to be held between the provinces to figure out how to share the benefits that an integrated grid can offer. Fears that an integrated grid may wreak havoc on a province's electricity market will need to be addressed, and the full costs and benefits of increasing the trade of electricity will need to be understood and communicated.
The federal government has an important role to play in this. First, it can help provide valuable information in evaluating the costs and benefits of an integrated grid. While a more integrated grid can offer many benefits as Canada works to achieve its climate goals, these benefits are not guaranteed. Transmission infrastructure is expensive, and it gets more expensive over longer distances. Any investment in strategic interties should be made only if the benefits will outweigh the costs of building that infrastructure.
Natural Resources Canada and others are already working to address this information gap. We look forward to seeing the results of the regional electricity co-operation and strategic infrastructure initiative established by NRCan, which is evaluating the costs and benefits of a subset of infrastructure projects, including improved interties between the western provinces.
The second role government can play is with funding. Where strategic interties do make sense, the federal government may have a role in financially supporting the project to the extent the interconnection will drive greenhouse gas reductions. Such projects would be good candidates for the newly created Canada infrastructure bank, which seeks to leverage private and institutional capital to fund green infrastructure. Early indications from conversations I and others at the Canada West Foundation have had suggests there's a good degree of interest from private investors in strategic interties.
In conclusion, in conjunction with a price on carbon, strategic electricity interties and a more integrated grid can be a powerful tool to help achieve Canada's climate goals. The idea is not new, but the climate change imperative makes it all the more important now and the federal government has a key role to play.
With that I conclude my opening remarks. I thank you very much and look forward to your questions.