Episode 137: PM Carney launches the National Electricity Strategy, with Julia Muggeridge and Michael Powell

[MUSIC] If we are short on power, it means that we can't build homes. It means that we can't attract businesses. It means that we can't grow the economy and there's a real cost of people. So we can't miss out on the opportunity and I think that's where focus and keeping moving is essential. [MUSIC] >> Francis here from Electricity Canada. Welcome to another episode of the Flux Capacitor, a podcast about the future of electricity. This is number 137, episode 137 of the Flux Capacitor. I've been chatting with the industry's business leaders, thought leaders, new market players and stakeholders. I've built this as an opportunity for you, the listener, to get a sense of the conversations that are taking place in the sector in hallways over coffee outside of parliamentary committees, in airport lounges and at industry events. Something different today, a conversation between two of my colleagues, following the release by the government of Canada of its much anticipated electricity strategy. Julia Muggoridge, electricity candidate's VP of corporate affairs, chants with Michael Powell, VP of government relations, about the strategy and what it may mean for the sector. The day before their conversation, I joined Prime Minister Karney at the news conference, launching the strategy titled, Powering Canada Strong, a national strategy for an electrified Canadian economy. Here is Michael and Julia's conversation recorded on May 15th, 2026. Hi, I'm Julia Muggoridge with electricity Canada. I'm the vice president of corporate affairs. I'm here with Michael Powell, vice president of government relations. So yesterday was a really big day for our sector. Prime Minister Karney announced a much anticipated national electricity strategy. You are at the announcement with Francis, how did it go? What was the long time coming? We've been anticipating the release of the strategy or a green paper or discussion document, the government's described it in different ways over the last six months. And we've actually been building our advocacy focus since really the end of last year around what we want to see in this strategy and what do we want to see reflected in our priorities. And we were pretty happy with what came out. There was a big focus on how do we build a great faster, there's a big focus on how to make sure that we do so in a way that's affordably reflecting that not everything and just be born by right pairs. We saw a focus on better connecting Canada's different electricity systems. And we saw a focus on making sure that we have the stuff and the people that actually built the system. You're getting ahead of yourself as a communications person. I want to talk about optics. Why was the Prime Minister making this announcement? This feels like something that should have been made by Mr. Hussin. Nope. This is absolutely a priority of the government. And the one thing we've seen is that the government's agenda is very much of the Prime Minister's agenda. And we're at a pretty unique space in the electricity sector where the senior most people in government, the Prime Minister, the Clerk of the Privy Council and Minister Hussin, are all also electricity people. And so I think it says something that the Prime Minister chose to use his big announcement for the day to focus on how we're going to build out the electricity system and tie that to the government's agenda and really Canada's economic agenda. So maybe also on optics and as you mentioned leadership on the electricity side, I saw a scattered throughout the report mention of hydrocobect. So it was clear that Michael Saviag, the Privy Council, was actively involved in that. Was he a few announcements yesterday? I didn't see him, but he's a pretty busy guy. I think the thing to remember is that for sure, Minister Saviag was at hydrocobect. He used to be a deputy minister of finance. And so we saw some of his work from that era of elected in the document as well, both in expanding the investment tax credits and some of the conversations around longer term financing. I mean, ultimately Canada's electricity system is built at its base on strong hydroelectricity in some of our provinces, one of which is Quebec. And there's a pretty ambitious agenda to build out the system in Quebec and better connect to other provinces as well. So I think it ties into a lot of what was being talked about in the strategy I have a play. So the document released yesterday felt like more of a promise of more things to come. And we've seen that many times during the last Prime Minister as well. Maybe let's talk about what this wasn't. So was this a strategy that was released yesterday or the promise of the future strategy? I think it's absolutely a strategy, but it doesn't have all the decals in it. Now what we see is the government saying where it sees its need for a federal role in the electricity system and where it is putting a fly in some priorities. And that is in how do you have some national coordination between this systems? How do you better connect provinces? And mostly how do you finance it? There is, I mean, the government talked about a $1 trillion investment. We said 2 trillion in our state of the industry. It really doesn't matter that a lot of zeroes. And so I think what we see from this is the federal government being very clear that it sees our role for the national government in helping coordinate, helping build, helping finance, recognizing that provinces have a leadership role in this. But that we all have to be in this together. There's a lot to come. There's a lot of details to happen. But that's okay. We know we're in the right direction. And so we'll be working in electricity candidate to make sure we fill in those details in a way that works with the system. Right. So filling in those details seems like the next four months of work. It absolutely is. So the report was 35 pages and then like four pages of questions. Who will these questions be brought to and how is it basically just going to be like a round table with all of Canada for the next four months? So already there's engagement happening between the federal and provincial governments on electricity issues. I know there's going to be a major focus on intertimes and electricity systems at the Energy and Minds Ministerial Meeting, which is Minister Hodgkin and his provincial counterparts, which is taking place in summer. And even today, the Prime Minister and Daniel Smith are having a meeting on D'Alberta, Canada and MoU, part of which does relate to electricity. But if that's not the thing everyone's talking about. And I think organizations like ours are going to play a role. We've been very engaged with National Resource Canada. We've been very engaged with PCO and PMO, major projects office with EEECCL C. And so it'll be on us in the next months to gather member feedback and input and then make sure that we as a sector of cohesive submission is moving. And like as an example, the big announcement for one of the big announcements for us was an update to the clean electricity regulations, which was a major focus of my team over the last three years. We get to band back together. And so we'll be working with Environment and Climate Change Canada to advocate that process, which could take the better part of the year. So we'll get back to some of the details maybe just to wrap up like the actual document and what yesterday was. Where does this lead to? Well, when can we expect a more full-sense strategy? I think we can see more details on some of the big pieces in the fall budget. What we've heard from the Prime Minister yesterday and what we've had in conversations is that there's not really a firm, although there isn't a firm sort of deadline for comment, the process of government feeds its way through the budget process, which even though we'll publicly see the actual budget delivered in November, the big ticket items will be wrapped up over the summer. So our work is cut out for us between now and like we're doing. Okay, so let's talk a little bit about the content. I know you've talked about it your ties. You've talked about the CPRs. Our team yesterday when we were, you know, excitedly reviewing the document and noted that transmission did feel like the big winner. I fell asleep thinking about transmission lines. So let's start by talking about intraprovincial transmission and what was the big winner there in this strategy. Well, I'd say that there's winners across the system, but from obvious near-term benefit, I think intraprovincial transmission. So transmission within provinces is a really big winner. One of the gaps in Canada's investment tax credit, which is how the federal government most directly supports electricity investments has been that there really hasn't been funding or tax support for wires within provinces. And that we've been asking for this for a long period of time. We've been underlining that, you know, it's all well and good to connect provinces together, but you have to color in the lines as well. And what we saw yesterday was an announcement that they're going to expand the ITCs to include some of that. And that reflects what we've done and reflects advice from the Electricity POS Your Council. There's details figured out. It won't be everything, but I think even having the big stuff in place is a win for affordability, and it's a win for getting projects built. I feel like it's something that we've been hearing about a lot. The Q&I were in Alberta last week. We were hearing about generation assets in Alberta that are stranded. So this promise of support for intrepid, provincial, and be very helpful. Right, on to Intertides. This has been something we've been talking about a lot at electricity, Canada, since Smart Cardi released just platform last April. And I feel like this was the first time you've seen real movement outside of the major projects office on Intertides and further discussion on that. I think well one in the last two years there's been a real change in Canada about the conversation of of Intertives. It used to be that they were you know nice to have but there wasn't your disease expanding them and I think since well since Mark County was elected there's been a sea change in that conversation. Yesterday was the clearest articulation of where the federal government sees its role and there was a whole chapter in the document there is a push to the major projects office to figure out how these things are finance. There was very clear calls for and some of the stuff that we've been advocating for years for regional planning for benefit allocation for funding but this is building on momentum that we've seen the provincial levels. Well this isn't the federal government going out on a limb and saying this is where we think the future is. It's a recognition that there's a provincial conversation that's happening as well that the document actually talks about the NYU that Ontario has signed with many of the other promises. So we're at a unique spot where the federal and provincial governments and our members more and more are aligned in the direction that we need to go and and that's a good spot to be in the scene or to us both. And we saw yesterday in the news that the Prime Minister made mention of the opportunity between Newfoundland and Quebec and that there's a real opportunity for the federal government to play a role in this like benefit identification between those two provinces which I think is a big one. That's a real big way. I think one of the challenges and this is a unique to Canada is that once you have an intertide built everyone kind of figures out that there's a lot of use to it but two different parties on either side can be hard to identify exactly where where that week could be. And we saw that in other places in Canada. I think it was one of the challenges early on in the event of new conversations and so now we're seeing it but smaller but still a poor intertide people there. I think anything the federal government can do to help facilitate these conversations in a way that connects resources with people is a good thing. There's real opportunities to expand the Prime Minister's evidence and the questions and answers to continue to expand power production and laboratory and Quebec is needs power. There's an obvious win-win there and so how can the feds help out at the federal process? I think of everything I read in the strategy yesterday. This was the word that stuck out the most we was willingness and that we need provinces that are willing to participate and to build more intertides. So it seems like the government is there and ready to support willing partners in front of our next. I think one of the interesting thing here is there's a lot of willingness in lots of places and I think there's probably some very near-term wins and the government wants to land oats. There's political imperative to that but there's a utility literally to that as well. And then how do you set up this future for that to be self-proving? I think you've done some work on enterprise for us Canada. The opportunity is to lock in some early successes and then build from that as we build a more integrated connected national system. We don't need to have it all begun all at once. It can be iterative and little pieces build bigger pieces and I think that's probably why there's a focus on what those near-term wins are now. So we're looking forward to seeing what comes from this. Let's move on to CEERS. So you've talked about this a little bit briefly reflecting on the sentiment from the media that we saw yesterday. We saw a lot of positive responses and I would say that the negative responses are what we anticipated and goes that are frustrated with the clean electricity regulations being reopened and reconsidered. Forfecht on that I know that this has been a major part of your work for the last couple of years. Yeah I think I mean fair enough that there'd be questions about a change that moves away from a policy from before and that's sort of the obvious tension point. I think the fact the matter is that the electricity regulations that were passed in the last government don't work in all parts of Canva. That they dictate system operation choices to jurisdictions. They are expensive and mostly they don't produce a lot of emissions reductions that you add a lot of costs and a lot of risk but not a lot of megatons that are produced. I think one of the really important things this strategy emphasizes is something that we've talked about for a long time is that the real opportunity for Canada's electricity system is to carbonize other parts of the economy. We've already done the heavy lifting and reducing emissions in the sector. We're down 50% since 2005 or we're below 50 or 60 megatons now. So the opportunity is for to leverage electricity generation which is cleaner than most other places in the world to to carbonize cars, to carbonize buildings, to carbonize industrial process to grow the economy. And then as we expand new generation in the future we'll see more renewables, more hydro, more interconnections, more nuclear, which will be non-evading. And so I think what we're really excited about is an opportunity to take advantage to revisit the CERs and then leverage the equipment that we already have built. They be at the gas plants that are existing as peakers, be there for base load that can support growth. Those are really important and in places like Saskatchewan, Alberta and even Ontario, that's essential to the system. One of the main messages that we offer to the government during our discussions with them on the clean electricity regulations was that there's there are going to be issues with affordability. So that seemed to be a prominent part of the national electricity strategy as well was this feedback from the Prime Minister that there are affordability challenges that are ahead of us. He's looking to ensure that the taxpayer and rate payer both part of this but from a financing perspective in general, what were your thoughts on how they addressed affordability in yesterday's announcement? Yeah, certainly from a CERs perspective, if it doesn't make sense to turn out power plants that you already have for working. I think as we look to the build out and the document talks a lot about this is that the scale of how we build things in the electricity space is greater than what we've seen before with how we build in the past. So traditional electricity relies on rate base on your bill which is advertised over time. But when you start looking at spending trillions of dollars on electricity equipment and electricity stuff while also refurbishing and you're folding what you have as we jump with the grid, that gets bigger than can be handled by the bill gets bigger than to be handled by the net genit with this generation next generation and this government and next government. And so I think there's a really interesting reflection on how do you balance that over time and cover this. And so there's clearly a role for the federal government and the tax base and that can sort of smooth the peanut butter over time and make sure that what you're seeing is on when you pay your bill you're paying you know what it's fair for what you use and that future generations you're paying for what they're going to use. And that's how we do a lot of infrastructure at Canada. Electricity is pretty unique. We haven't built roads that way. We haven't built highways that way. We haven't built ports that way. And so it's I think very important that we're starting to think about the electric system as national infrastructure as critical infrastructure and then funnig at the same way that we do healthcare and works and other transportation. My sense was that the government doesn't have a clear path forward on this but yesterday's announcement closed an invitation for new ideas and several of the questions within the back end of the report were about financing and how they can make this work. So this feels like a real opportunity. Yeah I think they probably have some ideas but I think that they're even that they're open to the question of thinking about it is a really good sign. And again this speaks to what we've been taught in going to electricity Canada for some time. And so we see that as a really big opportunity for push forward. So this announcement yesterday comes on the heels of an announcement last week on red tape reduction and another paper that's being prepared over the next several weeks shorter time frame. How do these two papers connect? I think the way they connect is that there is an urgency for movement in this government and it's really on them to deliver. I think we're here to do the work and our members are ready to build. But if you were to go back the last four or five governments the usual focus is on you know how do we get projects built how do we cut red team how do we make sure that you know people can we can attract investment and get businesses to make investment decisions. I think the test here with all this movement is to see it actually materialize. I think we can be pretty optimistic the major projects office which was to focus the work yesterday last week is in a lot in strategy yesterday as well. Really are showing that the government is willing to think differently and we'll see how that materialize. So thanks. I know that we're going to have a very busy couple of thoughts because the federal government indicated that they want to talk to provinces, indigenous leaders, energy stakeholders which I I put as a that category and unions. So next four weeks we have to submit to this red tape production paper we're going to be consulting with them and participating in their in their discussions. This is a really big opportunity for us. So maybe we should end on that like next next couple months. What does this look like for electricity? Canada, how can we participate? Why should we ask for from our members in order to be you know active and open with the government during this process? I mean what's very helpful is that there's a clear list of questions and areas of focus and they happen to align with a lot of the work that we've already been doing with our members and our various councils and committees. So in the next actually we've already got a start office identifying you know what information we'd already have that might be useful for the questions that we anticipated and where do we have caps and so we'll be working with our members to fill those in to build consensus position and I think I'll really provide detail and granularity company. This is not a time where we need to be high level. I think there's a desire for specificity and there's a desire for new on. and I think we heard a recognition that, you know, what works in Ontario or Nova Scotia or Alberta might be different. And so, you know, we can leverage that and provide a single voice for them. So, but I think this is good, but that's what we're here for. - So, right before we sat down, there were certain words that you wanted to get out, and one of them that you have instead is pace. So, let's just talk pace, and then we'll wrap it up there. - Well, we've been, we put out seven states of the industry, and all have said that we need to get moving to double-sized degree by 2050. And every megawatt, we don't know today is another we have to build tomorrow. We really great when we started turning around and writing the 2027 state of the industry, that we can say, actually, we are moving. And I think what we've seen is that it doesn't get easier as we go along the, it's harder to find equipment. People are going to be committed to other tasks. And we risk missing out, I think, if we are short on power, then the, it means that we can't build new homes, it means that we can't attract businesses, it means that we can't grow the economy. And that has a real cost on, and there's a real cost on people. So, we can't miss out on the opportunity, and I think that's where, you know, focus and keeping moving is essential. - Great, well thanks for your time today. Thank you, everyone. Go, perhaps, go. (gentle music) For those that have been with the podcast since the beginning and those that have joined along the way, thanks for listening. Please take the time to rate the podcast on whatever platform you use to listen. And let me know what you think of the Flux capacitor. You can find me on Instagram as the Brad Bradley, on LinkedIn and through our website at electricity.ca. The website for this pod is the Fluxcapacitor.ca, and it includes links for this episode on the show page. This being episode 137. And let's continue the electricity conversation on our Facebook page on Instagram and at electricity.ca. (gentle music) (gentle music)