ELECTRICITY AFFORDABILITY AND EQUITY IN CANADA’S ENERGY TRANSITION

The report finds that while electrification will increase electricity use, total energy spending for Canadian households is expected to decline. However, the costs of expanding electricity infrastructure may fall regressively, disproportionately impacting lower-income households. The authors analyze rate-design changes and government funding mechanisms as tools to improve equity, concluding that means-tested fixed charges and progressive tax-based funding can insulate vulnerable populations from rising costs.

• Aligning Canada's electricity systems with net zero emissions will increase electricity use, but total energy spending (including electricity, natural gas, gasoline, and heating oil) is expected to decline due to the higher efficiency of electric vehicles and heat pumps.
• Electricity costs are currently borne regressively in Canada, with lower-income households spending a higher proportion of their income and total expenditure on electricity than higher-income households.
• Provinces currently reliant on fossil fuels for electricity generation—specifically Alberta, Saskatchewan, Ontario, and the Atlantic provinces—face the highest risk of increasing volumetric rates and electricity expenditures due to the greater scale of required system investments.
• Under a status quo funding approach, the transition to net zero is likely to increase electricity expenditures for lower-income households relatively more than for higher-income households, potentially exacerbating existing equity issues.
• Implementing a uniform fixed charge for transmission and distribution costs, while improving efficiency and price signals for electrification, is regressive and increases the financial burden on low-income ratepayers.
• Means-testing fixed charges based on the progressivity of the federal personal income tax system is the most effective rate-design policy for reducing total costs for lower-income households.
• Government funding of 50% of net zero system investments through progressive income taxes reduces the cost burden on lower-income households compared to the status quo, though it has a more limited effect on overall progressivity than means-tested rate designs.
• Federal funding of electricity system investments provides an additional layer of equity by shifting costs from high-emission provinces with high investment needs to lower-emission provinces.

APA

Dolter, B., & Winter, J. (n.d.). ELECTRICITY AFFORDABILITY AND EQUITY IN CANADA’S ENERGY TRANSITION. Canadian Climate Institute. https://climateinstitute.ca/wp-content/uploads/2022/09/Electricity-and-equity-canadas-energy-transition.pdf

Chicago

Dolter, Brett, and Jennifer Winter. ELECTRICITY AFFORDABILITY AND EQUITY IN CANADA’S ENERGY TRANSITION. Canadian Climate Institute, n.d. https://climateinstitute.ca/wp-content/uploads/2022/09/Electricity-and-equity-canadas-energy-transition.pdf.

Wikipedia

{{cite report |last1=Dolter |first1=Brett |last2=Winter |first2=Jennifer |title=ELECTRICITY AFFORDABILITY AND EQUITY IN CANADA’S ENERGY TRANSITION |publisher=Canadian Climate Institute |url=https://climateinstitute.ca/wp-content/uploads/2022/09/Electricity-and-equity-canadas-energy-transition.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dolterndelectricity, author = {Dolter, Brett and Winter, Jennifer}, title = {{ELECTRICITY AFFORDABILITY AND EQUITY IN CANADA’S ENERGY TRANSITION}}, institution = {Canadian Climate Institute}, url = {https://climateinstitute.ca/wp-content/uploads/2022/09/Electricity-and-equity-canadas-energy-transition.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }