Bridging the Gap - Why Canada's Push for Interprovincial Energy Trade Matters to Industry

Canada stands on the brink of a fundamental transformation in energy infrastructure. As decarbonization accelerates and market dynamics evolve, the push for integrated electricity and natural gas networks across provinces is gaining momentum. For industrial and manufacturing clients, this evolution is more than a policy discussion, it’s a strategic opportunity.

The Case for a National Energy Corridor

Historically, Canadian provinces developed energy systems independently—Quebec with hydropower, Alberta with fossil fuels (now increasingly wind and solar), and Ontario with nuclear and natural gas. Energy trade has long flowed primarily north–south into U.S. markets. But a growing consensus among policymakers and industry leaders is driving a shift toward strengthening east–west interconnections.

The emerging vision—championed by national leaders including Mark Carney—calls for a "Canada First Energy Corridor." Rather than a single mega-project, this corridor would be a network of interoperable transmission and pipeline upgrades designed to better connect Alberta, Ontario, Quebec, and other provinces. The goal: enhance energy security, reduce emissions, and increase cost-efficiency through regional diversification (Mark Carney, 2025; Western Premiers' Meeting, 2025).

Infrastructure Momentum

Progress is already underway:

• B.C.-Yukon Grid Connect: On May 23, 2025, the Governments of Yukon and British Columbia signed an agreement to explore connecting their electrical grids. The proposed Yukon–B.C. Grid Connect would enable two-way electricity flow, support regional renewable energy development, and enhance energy security (Government of Yukon).
• Ontario–Quebec Seasonal Exchange: Since 2023, IESO and Hydro-Québec have operated a 600 MW capacity swap, allowing Ontario to import hydro during summer peaks and Quebec to draw from Ontario’s grid in winter (IESO Press Release, 2023).
• Quebec’s Transmission Capacity: With ~34,200 km of transmission lines and 17 interconnectors, Quebec can export nearly 8,000 MW and import over 6,000 MW—positioning it as a continental energy hub (Hydro-Québec Transmission Report).
• National Grid Expansion Forecast: Under Canada Energy Regulator’s Global Net-Zero Scenario, interprovincial transmission capacity is expected to grow by 27% (from 12,950 MW to 16,445 MW) by 2035, with interprovincial trade volumes rising 33% by 2040 (CER Outlook, 2024).

Meanwhile, Alberta is poised to play a pivotal role. With its fast-growing fleet of wind and solar installations, the province could become a major exporter of clean energy—if infrastructure links to neighboring regions are strengthened. This transition offers opportunities for Western Canada to contribute to a balanced, low-carbon national grid.

Why This Matters for Industry

For large energy users, especially those in manufacturing, the benefits of interprovincial integration are significant:

• Reliability & Resilience: Access to a wider, interconnected grid mitigates risk during outages or supply constraints. This is critical for process continuity and operational stability.
• Cost Efficiency: Enhanced trade fosters competition and reduces price volatility. For businesses exposed to hourly power markets, diversified supply helps smooth energy costs.
• Sustainable Operations: Companies can lower Scope 2 emissions by sourcing cleaner energy from neighboring provinces, supporting both ESG goals and regulatory compliance.
• Scalable Capacity: As operations grow or shift toward electrification, the expanded grid provides the capacity needed to support long-term development.

Looking Ahead

Federal and provincial governments are aligning around July 2025 as a milestone for reducing internal trade barriers—paving the way for new intertie infrastructure. As corridors open up, surplus wind from Alberta could help meet peak demand in Ontario, while Quebec’s hydro could support Prairie reliability.

A 2025 report by RBC Climate Action Institute highlights that increasing east-west energy trade could lower average industrial electricity prices by up to 8% while reducing system-wide emissions by over 10 million tonnes annually (RBC Climate Action Institute, 2025). Meanwhile, MLT Aikins notes that the legal and regulatory harmonization required for interprovincial transmission development is actively progressing through joint task forces involving federal, provincial, and Indigenous stakeholders (MLT Aikins, 2024).

North–south trade remains strong—Canada operates 37 cross-border connections with the U.S.—but new east–west infrastructure would increase internal self-sufficiency. As electrification policies and industrial demand grow, access to clean, shared generation will become increasingly valuable both economically and operationally.

Strategic Insight for Today’s Operators

Manufacturers and energy-intensive operations are right to ask: Where will our power come from in five years? How do we ensure stable costs and emissions progress?

The evolving grid offers early answers. This isn’t just a government initiative—it’s a foundational shift that will redefine how energy is sourced, priced, and used across Canada.

As these changes unfold, Canadian Energy Strategies continues to monitor infrastructure developments and regional energy dynamics. Whether through long-term procurement, behind-the-meter solutions, or flexible hedging strategies, we’re helping clients align with where the grid is going next.