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By: Tegan Hill and Elmira Aliakbari
Amid an ongoing trade war with the United States, which will increase prices for Canadian and American consumers alike, affordable energy is crucial to fuel our daily lives and power the economy. Unfortunately, energy prices have been rising for years, straining household budgets across Canada including in Alberta.
For perspective, from 2002 to 2023 (the latest year of available data) the price of energy (electricity, gasoline, etc.) grew by 105.5 per cent compared to 53.5 per cent for non-energy goods and services. This reflects a significantly higher increase in energy prices compared to other goods.
Why have energy prices increased?
While there are many factors, bad government policy has added fuel to the fire. The list includes the federal carbon tax, which remains in place for large industrial emitters. And Ottawa’s “Clean Electricity Regulations,” which mandate that by 2050, 100 per cent of Canada’s electricity must come from clean energy sources as wind, solar, hydro, etc. To meet this goal, Canada would need to build a massive amount of new infrastructure and technology, potentially driving electricity costs even higher.
Of course, Canadians pay the price for bad policy. Due in part to rising energy prices, in 2021 (the latest year of available data), 11.0 per cent of Canadians lived in “energy poverty”—that is, at least 10 per cent of their household total annual spending paid for energy-related goods such as electricity, natural gas, gasoline and other heating fuels. In Alberta, the number was 10.0 per cent. All told, that’s a lot people in energy poverty.
And energy poverty disproportionally affects lower-income households. For instance, in 2021 across Canada, 22.1 per cent of households earning $31,200 or less, and 20.7 per cent earning between $31,200.01 and $55,000, were in a state of energy poverty compared to only 1.6 per cent of households earning more than $124,000.
When the next federal government—whoever that may be—works with the provinces to develop energy policy, it should understand the significant level of energy poverty in Canada including Alberta, particularly among low-income households. Increasing energy prices further would likely increase the burden on families already experiencing energy poverty and those families at risk of falling into it.
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