Executive Council
April 19, 2013

The following speaking notes were delivered by the Honourable Kathy Dunderdale, Premier of Newfoundland and Labrador, while leading discussions on a National Energy Strategy with the Premiers of Alberta and Manitoba, and Canadian Energy Ministers.

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It is a pleasure to be here this morning with my fellow Premiers as well as Energy Ministers and officials to discuss the development of a renewed Canadian Energy Strategy. I think we can all agree that the responsible development of our energy resources is a very significant component of our national economy. This was something that we acknowledged in 2007 with the Shared Vision for Energy in Canada, and something we have never lost sight of throughout our history. As provinces and territories, I am sure we all appreciate the importance of working together on an opportunity of this significance. 

From the outset of this process, Premiers, through the Council of the Federation, have noted that the 2007 Strategy continues to provide key priorities for provinces and territories. So much so, that seven of the 10 action areas identified for our renewed strategy are taken from the 2007 document.

Even the vision for a renewed strategy will likely build on the concepts identified in 2007, a further recognition of the continued relevance of that document. While much hard work went into achieving the completion of the 2007 strategy, there are always opportunities to move things forward, to embrace collaboration and cooperation, to work towards doing things right.

We all agree that 2007 is the starting point. It is the foundation upon which we will build a renewed strategy, but we all understand that there are always things that can be done better. There are things that can be made clearer, and opportunities to address the hard questions. As leaders, it is incumbent upon us to work collectively, to acknowledge hard work and to remind people when something just is not right.

While there are many elements to an updated energy strategy, each of which are represented by the 10 working groups, and each of which are important, our efforts will not be substantive unless we make real progress on energy transmission and transportation.

If provinces and territories are to continue to be global leaders that provide secure, sustainable and reliable supplies of energy, then we need to talk seriously about issues such as open cross-territorial access to transmission and transportation of energy resources. If we are going to build a strategy that actually achieves the outcomes we would like to see, then we need to make sure we do things right. That is my intention with this process and this strategy.

Canada is blessed with an abundance of energy resources, however for this nation to become an energy superpower it is essential that an effective framework for open unrestricted access to these resources for both inter-provincial and international trade is established.

Transmission and transportation systems must be the enabler of energy resource development because without assurances that the energy can be reliably delivered, projects cannot be financed and customers can’t be reached. All provinces and territories will benefit. Not just those with undeveloped energy resources, but also those that need competitive sources of energy, or want to diversify their energy mix to enhance energy security, or want to import greener and cleaner sources of energy. Further, all regions benefit from economic growth, investment opportunities, and stronger inter-provincial trade. Even if the ultimate goal is to transport energy across provincial borders to access international markets, all Canadians will benefit economically by enabling these opportunities.

We must be mindful, that despite the adoption of US FERC rules “on paper,” transmission access is still an impediment not an enabler for resource development in this country.  Fair, open and nondiscriminatory access to transmission is a key to Canada’s energy resource development future.

In Canada, the “low hanging fruit” of our clean energy resources has been developed. The best of the untapped hydro and wind resources are more remote. Non-discriminatory access to existing underutilized capacity and development of new transmission is needed to develop these resources.

In an era in which the effects of climate change are being felt and the need to reduce Green House Gas emissions is real; it is in the national interest for these resources to be harnessed. 

If it is in the national interest to enable development, we must ask ourselves, why does there always seem to be so many roadblocks?

Canada does not have a national electricity system. Its system is a patchwork of provincial systems under provincial regulatory jurisdictions. Open access policies have been adopted, not in compliance with Canada’s own regulatory requirements, but in response to the US Federal Energy Regulator’s requirements for participation in US competitive wholesale markets. The United States has made great strides towards facilitating electricity trade through open transmission access allowing efficient sharing of power supplies within and between regions. The continued absence of an effective inter-provincial electricity transmission system in Canada means we cannot always develop the best projects across the country for the benefit of all Canadians and we cannot benefit from improved integration of our electrical systems. This puts our country at a competitive disadvantage. 

It didn’t have to be this way. In fact, in 1997, all Energy Ministers directed their officials to conclude an Energy Chapter of the Agreement on Internal Trade that would create an obligation to provide open access cross-territory transmission service to all market participants, on a non-discriminatory and comparable basis. Consensus was reached in 1998 on the electricity provisions of the Chapter, with a single article with three short paragraphs capturing the principle. However, after another 12 years of negotiations, the Energy Chapter was never concluded, in large part because the commitment to cross-territory transmission access waned, exemptions were proposed and the Protocol of Amendment put forward, rather than liberalizing trade, would have memorialized trade-restrictive practices in the area of cross-territory electricity transmission.

Take our own Muskrat Falls development as a shining example of what can happen through shared cooperation. The development provides a completely different energy picture in Atlantic Canada. It will assist in building a modern and efficient regional grid system that is built upon clean, renewable sources of energy. This is a region-building project which will strengthen the Atlantic and Canadian energy marketplace through the development of a stable, reliable and environmentally responsible renewable energy source. Newfoundland and Labrador and Nova Scotia are working together to develop the Maritime Link, which will bring clean, renewable electricity from the Muskrat Falls development to Nova Scotia and to the other Maritime provinces and beyond.

In this current context, it is only by virtue of a strong alignment of commercial interests and provincial policy that developments such as Muskrat Falls and the Maritime Link can succeed – in this case the willing partner was Emera, a private sector company, and our jurisdictions are adjacent.

We also cannot ignore our federal partners in this. With the commitment for the loan guarantee, we have laid the groundwork for a regional project that will provide energy security in our region, while also reducing diesel and coal generation.

Once we have completed Muskrat Falls, we can turn our attention to Gull Island, with 2,250 MW of hydroelectric power waiting to be developed. This project, like many projects throughout the country, will offer another shining opportunity to support economic development, while supporting the goal of meeting Canada’s energy security needs. Gull Island, for example, could provide a clean supply option to diversify Ontario’s supply mix as it faces decisions on the aging of its nuclear fleet and meeting new demand, or displacing GHG emitting thermal generation in the Maritimes and the northeast region.

It is essential, as a result of this strategy to establish rules and practices which ensure non-discriminatory open access to transmission service across provinces. This should be tied to a timely, effective and impartial system for resolving disputes with respect to the acquisition and provision of transmission service. 

An effective non-discriminatory cross-territory transmission access regulatory framework will enable development of clean generation resources and transmission infrastructure, and optimize utilization of any existing infrastructure that is currently underutilized. 

The benefits to be realized from sound investment in this country’s energy infrastructure and a truly open access system for energy trade can be significant and long-term, and will shape Canada’s economic and environmental future. This is a matter of national interest. 

Ensuring security and stability is a fundamental principle of any energy strategy. Whether it is transporting oil and gas around the country, or transmitting electricity, it is crucial for all Canadians that access to energy be secure and stable. Energy is an essential part of our lives and will be a significant part of the future for all provinces and territories. 

With good planning, and strong leadership, we will position our jurisdictions to ensure our energy resources meet the needs of our people, and the energy demands of the global market. Given the importance of energy security and of transportation and transmission, I think we can all agree that a key focus of a new strategy must ensure a secure supply of energy for all Canadians by recognizing the need for open, non-discriminatory cross-territory transportation and transmission of energy resources. Without a meaningful sense approach to important issues how can we truly advance our economic agendas.

As provinces and territories look to meet the needs of the global economy, the demand for and access to, all energy sources in North America and beyond is accelerating. Collectively, we as provinces and territories need to be ready to meet that demand. Without question Canada has an unmatched array of energy resources. Our coming together today, demonstrates our desire to work together to renew the Council of the Federation energy strategy.

Let’s take the discussion of a west-east pipeline from Alberta to New Brunswick, or any pipeline for that matter. The fundamental component of a pipeline is transporting oil or natural gas across jurisdictions. Promoting a system of open transportation across borders, in this case through six provinces, is a strong endorsement of that principle. What better way can we support the development of energy in this country than heralding opportunities for open transportation and transmission. That said, we understand that it is not always an easy conversation to have, but one that is necessary.  

While much is being done, energy developments are still being hampered by inadequate regional, national and international electricity transmission and transportation infrastructure. As provinces and territories, we need to ensure that we make the investments necessary to guarantee our own energy futures, but also so that we are able to access the US and other international markets. Regionally and nationally, this will only be accomplished if we work together.

While the provinces and territories have an enormous warehouse of developed and undeveloped energy assets, there are within Canada regional disparities related to energy access, reliability and price. For example, some regions need urgent action to support resource developments in remote areas, while neighbouring regions export surplus energy and have significant undeveloped electricity resources. This situation can be improved for the benefit of all Canadians by enhancing the transmission of electricity, and the transportation of crude oil and natural gas. These investments will also expand opportunities for exports.

A Canadian Energy Strategy will help ensure that new energy developments are supported by strong regional, national and international infrastructure. I am sure we all want Canada to be seen as leader in sustainable and secure energy production, supply and transportation including East-West and Northern energy transmission and transportation.

Fundamentally, the Council of the Federation Canadian Energy Strategy is about encouraging strong economic outcomes and having access to secure energy for all Canadians. We all want to make sure our energy needs can be supplied in a reasonable and secure manner, while tapping into other opportunities if they exist. This is not about one being strong; this is about everyone being strong. As members of the Council of the Federation, and as a strategy of that federation, we need to address practical issues, including transmission and transportation of energy resources, in a manner that is clear and does not require interpretation.

As the Premier of Newfoundland and Labrador I look forward to an open and honest discussion that pushes our renewed strategy as far as Canada deserves.

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2013 04 19             3:40 p.m.