Molly Ayala
Electricity prices vary across Canada, with provinces that have limited access to cheap energy sources or rely on imported fuels tending to have higher costs. Québec has the cheapest electricity prices in Canada at $0.078/kWh, while the Northwest Territories has the most expensive at $0.41/kWh. Provinces with abundant hydroelectric resources, such as Quebec, Manitoba, and British Columbia, tend to have lower electricity rates, while provinces like Ontario, Alberta, and Nova Scotia tend to have higher rates due to their reliance on a diverse energy mix, including natural gas, coal, and renewables. Alberta's carbon pricing policy, known as the TIER system, can also impact energy rates in the province by adding a cost to carbon emissions from certain industries.
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What You'll Learn
Quebec: cheapest electricity due to hydroelectric resources
Quebec has the cheapest electricity prices in Canada, at 7.8 Canadian cents per kilowatt-hour. This is largely due to the province's abundance of hydroelectric resources, which have been exploited for over a century to generate power. Hydro-Québec, a Canadian Crown corporation public utility, manages the generation, transmission, and distribution of electricity in Quebec, as well as the export of power to portions of the Northeast United States. With 63 hydroelectric power stations, Hydro-Québec has a combined output capacity of 37,370 megawatts.
Quebec has Canada's highest per capita electricity consumption, at 22.9 megawatt-hours (MWh) in 2020, which was 57% more than the national average. This high consumption is due to the presence of industries such as aluminum smelters that rely on large amounts of low-cost electricity, as well as most residents using electricity for space heating. The Quebec government uses these low electricity rates to attract new businesses and consolidate existing jobs. Large industrial users pay lower rates than domestic and commercial customers due to lower distribution costs.
The development of hydroelectric resources has had environmental and social impacts. On the one hand, it has contributed to a reduction in Quebec's greenhouse gas emissions per capita, which were the lowest in Canada at 9.1 tonnes CO2e in 2022. However, the construction of new reservoirs and facilities has affected the natural environment, increased mercury levels in water bodies, and disrupted the society and culture of Aboriginal people living near the facilities.
Despite these impacts, the widespread use of hydroelectricity has kept electricity prices low in Quebec, making it the most cost-effective province in Canada for electricity.
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Ontario: one of the highest electricity rates
Ontario often ranks as one of the provinces with the highest electricity rates in Canada. This is due to its diverse energy mix, which includes nuclear, renewable energy sources, natural gas, coal, wind, biomass, and petroleum. While environmentally friendly, nuclear and renewable energy sources can be more expensive to produce and manage compared to traditional fossil fuels.
Ontario's electricity market is also competitive, with broad participation from privately-owned utilities. This market dynamic can influence pricing. Additionally, Ontario's phase-out of coal-fired generation has significantly reduced its GHG emissions from electricity. Between 2000 and 2022, Ontario's GHG emissions from electricity declined from 43.0 MT CO2e to 3.8 MT, contributing to a greener energy mix.
In contrast, provinces with the lowest electricity rates in Canada, such as Quebec, Manitoba, and British Columbia, predominantly rely on abundant hydroelectric resources. Quebec, in particular, boasts some of North America's lowest electricity rates due to its extensive hydroelectric infrastructure operated by Hydro-Québec. Manitoba benefits from significant hydroelectric power generation, and British Columbia also relies on hydroelectric power, albeit with slightly higher rates than Quebec and Manitoba.
It's worth noting that within provinces, electricity rates can vary, and additional fees may apply. For example, Alberta's carbon pricing policy, known as the TIER system, can impact energy rates by adding a cost to carbon emissions from certain industries, which may be passed on to consumers. As a result, provinces with diverse energy mixes, like Ontario, that are more affected by market fluctuations, tend to have higher electricity rates.
To summarize, Ontario's high electricity rates are influenced by its diverse energy mix, competitive market, and commitment to environmentally friendly energy sources. In contrast, provinces with abundant hydroelectric resources tend to have lower electricity rates.
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Manitoba: low electricity rates due to hydroelectric power
End-users in Canada face varying electricity costs, with a national monthly average of 19.2 Canadian cents per kilowatt-hour. The province of Quebec has the cheapest electricity prices in the country, at 7.8 Canadian cents per kilowatt-hour, while the Northwest Territories has the most expensive electricity prices at 41 Canadian cents per kilowatt-hour.
Manitoba, a province in Canada, generates almost all of its electricity through 16 hydroelectric generating stations with a total generating capacity of about 6,100 megawatts (MW). The Manitoba Hydro-Electric Board, operating as Manitoba Hydro, is the electric power and natural gas utility in the province. Since most of the electrical energy is produced by hydroelectric power, the utility has low electricity rates. In fact, the rates have remained largely stable over the years.
The first hydroelectric plant in Manitoba was established north of Brandon and operated from 1901 to 1924. The plant was powered by a 261-foot (80-meter) earth-fill dam built by private investors across the Minnedosa River (now known as the Little Saskatchewan River). The dam washed out in 1948, but the remains are still visible. In 1949, the province established the Manitoba Hydro Electric Board (MHEB), which was tasked with bringing electric power to rural parts of Manitoba.
Winnipeg Hydro, a former electricity provider for the city of Winnipeg, Manitoba, was acquired by Manitoba Hydro in 2002. Winnipeg Hydro's rates were among the lowest in North America, and after its acquisition, Manitoba Hydro continued to offer low electricity rates to its customers. Manitoba Hydro also sells its surplus power to the United States, Saskatchewan, and Ontario, with revenue from these exports contributing significantly to its total electric revenue.
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British Columbia: affordable rates due to hydroelectric power
British Columbia has been working to maintain affordable electricity rates for its residents and businesses. The provincial government and BC Hydro have implemented measures to keep costs down, with a focus on utilizing hydroelectric power.
BC Hydro, the primary electricity provider in the province, has committed to keeping rates stable and affordable. They have applied for a rate increase below the inflation rate for the sixth consecutive year, demonstrating their dedication to minimizing electricity costs for their customers. This is especially important as many people face unsustainable rising costs across the country. The low rates offered by BC Hydro support the transition from fossil fuels to clean electricity, helping to reduce climate emissions and air pollution.
The Comprehensive Review of BC Hydro Phase 1, completed in 2019, identified cost-saving measures, efficiencies, and new revenue streams to maintain low electricity rates. Additionally, BC Hydro is investing $36 billion through its 10-year capital plan to enhance electrical infrastructure and ensure power delivery to new homes, businesses, and industries. This includes the Site C hydroelectric project, which will power 500,000 homes and increase the electricity supply by 8%.
British Columbia's reliance on hydroelectric power is a significant factor in keeping electricity rates low. Hydroelectric power is a widely used energy source in Canada, particularly in the province of Quebec, which boasts the cheapest electricity prices in the country. The use of hydraulic turbines driven by flowing water to generate electricity is an efficient and cost-effective method that contributes to the affordable rates enjoyed by British Columbians.
While British Columbia has relatively affordable electricity rates, it's worth noting that other factors come into play. The design of electricity rates can impact the total average monthly bill, with low fixed monthly fees and tiered or time-of-use rates being more favourable for consumers. British Columbia's rates are designed to encourage the switch to clean electricity and support the province's growing economy.
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Northwest Territories: most expensive electricity
The Northwest Territories (NWT) has some of the highest electricity rates in Canada. As of 2023, the average cost of electricity in the NWT is $0.41 per kilowatt-hour (kWh), which is significantly higher than the Canadian average of $0.192 per kWh. To put this into context, a monthly consumption of 1,000 kWh in the NWT would cost $410, whereas the same usage in Quebec, the province with the cheapest electricity prices, would cost just $78.
The high cost of electricity in the NWT is due in part to the territory's remote location. The NWT's electricity generation is largely reliant on hydropower and petroleum, with some diesel and natural gas-fired generators also in use. The low population density and remote communities in northern Canada limit the viability of lower-cost energy infrastructure like natural gas pipelines and hydroelectric facilities. As a result, the region relies heavily on relatively expensive and carbon-intensive energy sources.
The town of Inuvik, NWT, for example, fuels one of its gas-fired power plants with liquefied natural gas (LNG) that is trucked in from British Columbia. The NWT also has over 20 megawatts of installed wood-pellet biomass capacity, and growth in this area is expected. Additionally, Yukon Energy's Whitehorse LNG facility, completed in 2015, provides a cleaner alternative to the diesel generators used to back up the territory's hydro facilities.
While the NWT has the highest electricity rates in Canada, other northern provinces and territories also tend to have higher electricity prices due to similar challenges with implementing lower-cost energy infrastructure. For instance, Nunavut has the second-highest electricity rates in Canada, with an average cost of $0.354 per kWh, and Yukon households pay $0.187 per kWh, which is above the Canadian average.
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Frequently asked questions
The Northwest Territories has the most expensive electricity prices at $0.41 per kilowatt-hour (kWh). This is due to its remote location and reliance on hydropower and petroleum for electricity generation.
Quebec has the cheapest electricity prices in Canada, at $0.078 per kWh. This is due to its extensive hydroelectric infrastructure, which provides a stable and low-cost energy supply.
Ontario often has some of the highest electricity rates in Canada, typically around 10.30 cents per kWh. This is due to its reliance on nuclear and renewable energy sources, which are more costly to produce and manage than traditional fossil fuels.
