Good morning, Chair and members of the committee. Thank you for inviting me here today.
My name is Cherith Sinasac, and I'm the director of government affairs at Electro-Federation Canada. We're commonly known as EFC.
EFC represents over 230 member companies across Canada's electrical and automation industry. Our members design, manufacture and deploy technologies that power Canada's industries, buildings and transportation systems. Our sector plays a critical role in advancing electrification and energy security. We are delighted to be here today to discuss Canada's electrification, energy self-sufficiency and domestic energy security.
Canada's electricity system is entering a period of significant structural transformation. Electricity demand is increasing rapidly due to electrification across sectors, economic growth and new large energy loads such as AI data centres. At the same time, the system is becoming more complex with increased integration of distributed energy resources and variable generation such as wind and solar. This means that Canada must simultaneously expand, upgrade and modernize our electricity system.
Electrification is central to achieving Canada's climate and economic objectives. To support this transition, EFC has worked with Dunsky Energy and commissioned a national assessment of key grid technologies expected to shape Canada's electricity transition. A central finding is that the technologies required to support electrification already exist and are commercially available. The primary challenge is not innovation, but rather the deployment barriers such as supply chain and cost pressures, utility regulatory rate-setting frameworks, codes and standards and interoperability challenges.
Supply chain and cost pressures are the dominant system-wide challenge and the top barrier to grid expansion and modernization, particularly for grid hardware. Cost inflation since 2020 has been driven by material shortages, lack of capacity and high demand. Canada's electricity infrastructure depends on increasingly complex global supply chains, with significant reliance on imported critical grid equipment and component parts. This exposes Canada to potential geopolitical risks, supply chain shocks and cost volatility. These deployment barriers also have the potential to impact Canada's energy security and domestic self-sufficiency. To address these challenges, the report identified several near-term priorities.
First, we need to strengthen domestic supply chains for critical grid technologies by expanding existing investment tax credits to include key grid equipment and to target investment where Canada can build capacity. This measure aligns with pillar four of the national electricity strategy.
Second, the report has found that there is a need to modernize utility regulatory frameworks. Current frameworks often favour traditional capital-intensive infrastructure and do not fully enable digital solutions or demand-side measures, or what we call non-wire alternatives. These are solutions that enable utilities to extract more value from the existing grid assets.
In addition to supply-side investments, demand-side measures are also critical.
Energy efficiency, load shifting and customer-side flexibility are among the most cost-effective ways to manage peak demand, improve system reliability and defer costs of costly infrastructure investment. These measures complement grid expansion.
In closing, Canada has a clear opportunity. The technologies needed to support electrification and strengthen energy security are available today. The priority now is to remove the barriers to deployment. By bolstering supply chains, modernizing regulations and standards and providing policy certainty, Canada can accelerate grid development, improve system reliance and support long-term economic growth and energy security. EFC and our members are standing ready to support the government in this work.
Thank you. I look forward to your questions.