The need for a national grid
By David Orchard

This summer's blackout in Ontario has left Canadians wondering how a nation so abundantly endowed with inexpensive electricity could be reduced to importing expensive power from the U.S. and asking its citizens to stay home from work to avoid another outage.

Ontario industry incurred huge losses due to an electricity shortage while both of its two neighbouring provinces, Manitoba and Quebec, have surpluses which they export. Why are our power-exporting provinces connected to U.S. electricity grids but not linked to each other through a Canadian grid?

In the aftermath of the blackout, some, perhaps without much knowledge of history, are advocating further privatization of Ontario's power. It is worth looking at why our power utilities became publicly owned in the first place.

In the early 1900s, the water rights and power plants of Niagara Falls had been privatized and were in U.S. hands. Because the private utility companies were exporting more than 60 per cent of their power to the U.S. market and had failed to adequately supply Ontario residents and industry, the founder of Ontario Hydro, Sir Adam Beck, reversed the privatization and Ontario's power grid was unified under public ownership. Under his slogan "Power at Cost," the hard-driving industrialist built Ontario Hydro into the world's largest publicly owned power authority, providing low-cost power to Ontarians and laying a cornerstone of the public-enterprise tradition in Canada.

Have we forgotten this lesson? In the early 1960s, the cabinet of Prime Minister John Diefenbaker grappled with the lack of a national electricity line and concluded that a coast-to-coast power grid "would make possible substantial economies." Merrill and June Menzies, the husband-and-wife team of economists advising Diefenbaker, supported the argument that it would "build a more unified Canada, allow a better utilization of our other resources and make for a more even distribution of our prosperity." Diefenbaker convened a 1962 federal-provincial conference on the topic and compared a national energy grid to implementation of transcontinental railways, a nationwide aviation system and trans-Canada radio and TV networks, saying all were "links helping bind the country together."

Provincial resistance and a reversal of national policy in favour of exports by the subsequent Pearson administration, however, killed the national-grid proposal, and today we are seeing the results. Ontario followed the nuclear path. Quebec refused to allow Newfoundland to transmit power from Churchill Falls through its territory, while B.C. and Manitoba have linked their power systems to U.S. utilities.

Several exporting provinces are now linked more closely to U.S. grids than to each other, and none more so than Ontario, which has linked itself so tightly to the U.S. that a malfunction in that country can knock out Ontario's entire grid. Provincial surpluses are going to continental rather than national use, as Ontario found out so abruptly last month. We still have no national energy grid in Canada.

As Karl Froschauer points out in his groundbreaking book, White Gold - Hydroelectric Power in Canada, although less than 10 per cent of Canada's electricity is exported, a disproportionate emphasis is being placed on exports to the detriment of Canada's own needs. (In 1990, for example, less than five per cent of Canada's electrical production was exported.) Disregarding this reality, some provincial utilities are voluntarily placing themselves under U.S. regulatory law, splitting into separate generating and distributing units to conform with the rules of the U.S. Federal Energy Regulation Commission (FERC).

A failure of leadership has led to a situation where we are exporting power and handing the regulation of our provincial utilities over to foreign bodies before assuring that Canadian needs are met.

A Conservative finance minister, Sir Henry Drayton, dramatically warned in the1920s that "power exported is power lost." Liberal Prime Minister McKenzie King insisted that "power... shall be utilized within the Dominion to stimulate Canadian industry and develop the natural resources." Such warnings remain unheeded and assurances unfulfilled eight decades later.

This summer's blackout of Canada's most industrialized province, with the paralysis of both our largest city and the nation's capital, points to the urgency of creating a national energy link to ensure that Canadians and their industries - from Newfoundland through southern Ontario to Victoria - have a secure, affordable supply of energy. A summer power outage is one thing, costly and uncomfortable as it may be; one in winter is a matter of life and death.

Repeated and reputable studies have shown a national transmission line would deliver clear benefits: increased security of supply, so no part of Canada would have to worry about blackouts due to a power shortage; a substantial drop in pollution, since power from dirty plants could be replaced with cleaner, existing hydro power; a reduced requirement for new power plants; and a more efficient use of existing power due to staggered peak-load periods across the five Canadian time-zones. Reliable observers maintain that the savings in reduced capacity alone could cover the cost of a coast-to-coast line.

A less tangible, but no less real, benefit would be a sense of increased security, a drawing-together of the nation of which Diefenbaker spoke so eloquently four decades ago.

David Orchard is the author of The Fight for Canada - Four Centuries of Resistance to American Expansionism. He was a recent contender for the leadership of the federal Progressive Conservative Party and farms at Borden, Sask. Visit his web site at www.davidorchard.com or call him at (306) 652-7095.