About half of Canadians could see an increase of $1,000 a year under the highest rate scenario, the study found.
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Canada has committed to net-zero greenhouse gas emissions by 2050, and for many Canadians that will mean savings on their energy bills – but not all.
A new report by Electrifying Canada’s Transition Accelerator that looks at the reach of a net-zero future finds that many homes will come out ahead when the country is fully electrified, but a “large proportion” will be paying more.
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The analysis included the cost of purchasing and operating heating and cooling equipment for the home and personal transportation under three electricity rate scenarios: low, medium and high, all of which are higher than today.
Even under the high-rate scenario, average households could save about $150 a year, the report says, because energy-efficient technologies like heat pumps and electric cars will reduce rising electricity rates.
At the low rate, the average family can save more than $1,000 a year.
The Atlantic states, where most homes now run on oil and gas and energy costs are the highest, stand to see the biggest savings. The average family in Nova Scotia could see their energy bills reduced by 24 per cent or about $2,400 a year, the report said.
“In these regions, the transition to an electric future will greatly improve energy accessibility,” he said.
Some districts will need some help.
Households in Alberta and Saskatchewan, where natural gas is used mostly for heating and where projected electricity prices are among the highest, are likely to see their energy costs rise.
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Low-income families without cars are also at risk of higher electricity bills because they will miss out on savings on transportation. Families with cars will save money as EVs drop in price, and pay less for fuel and storage. The report expects electric vehicles to reach the same price as gas-powered vehicles by 2050 or earlier.
“Although the majority of households will experience savings in the energy fund under the full range of electricity rate conditions, the majority of households will see an increase in energy fund costs compared to today,” the report said.
“For these households, energy availability concerns will increase without mitigation assistance or other policy interventions.”
The report estimates that under low to medium electricity rates, 23 percent and 33 percent of households will experience higher electricity costs, respectively.
The average annual increase in their costs will be between $764 and $861.
In the high-end scenario, that share of households rises to 48 percent, with an annual increase of more than $1,000.
The report emphasizes that while the transition to electricity is good news for many Canadians, support for those who will face rising costs is critical to ensuring its success.
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Governments have the tools to make this transition accessible to all Canadians and provincial and federal governments must work together, the report says.
“Geographic differences in the energy wallet underscore the need for coordinated efforts to provide affordable electricity across the country.”
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The Canadian consumer is back. Retail sales rose for the fourth month in a row in October, data suggested Friday, the longest increase since early 2022.
With September’s growth, third-quarter retail sales rose 0.9 percent — the biggest difference from the first half of the year, which saw the biggest reduction since 2009 without the pandemic, Bloomberg said.
Low interest rates are fueling retail prices that should get another boost after the federal government announced last week a GST/HST tax holiday from mid-December to mid-February.
“This holiday shopping season may have more sparkle than expected,” said Maria Solovieva, an economist with Toronto Dominion Bank in a note.
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Today’s Posthaste is written by Pamela Heaven, with additional reporting from staff at the Financial Post, The Canadian Press and Bloomberg.
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