2.1 General characteristics

2.1.1 The energy system at a glance

The Canadian energy system, which main energy flows are illustrated in Figure 2.1, displays several characteristics that make it stand out from other countries. The abundance of domestic resources allowing Canada to be a major energy exporter explains not only the size and composition of its energy sector (presented in this Chapter) but also how and where energy is used across the country (the topic of Chapter 3).

However, presenting the energy system at the national scale hides the fact that production and use of energy vary greatly across provinces. If similarities across provinces can be observed mainly on the consumption side in sectors like transport or commercial and residential buildings, it is the opposite for the industrial sector, whose importance in energy consumption varies greatly on a provincial basis (Section 3.2), a difference attributable mostly to energy production activities.

Figure 2.1 – Supply, transformation and consumption of energy in Canada #

2.1.2 Domestic resources

Canada disposes of an almost unique access to domestic energy resources, including fossil fuels, uranium mining and non-emitting electricity production. As Table 2.1 shows, Canada is in an enviable position with regard to crude oil (3rd in world reserves, 4th producer in the world), natural gas (4th producer in the world), uranium (3rd in world reserves) and hydroelectric power (3rd in the world in terms of electricity generated). When all energy sources are included, Canada is the planet’s 6th largest energy producer and one of its main net exporters (NRCAN 2021). This position is supported by 282,000 direct jobs and generates more than 7.2% the country’s GDP.

Table 2.1 – Energy in Canada: world ranking for reserves/capacity, production and exports (2019) #

2.1.3 A largely decarbonized electricity production

In 2019, four-fifths (79.9%) of Canada’s electricity derived from non-emitting sources, mainly hydroelectricity (59.4%), nuclear (15.1%) and wind (5.1%). This puts Canada in 6th position internationally for the share of renewables in its electricity generation. This position is even more remarkable as four of the five countries with a larger share are much smaller in terms of population and territory (Norway, New Zealand, Austria, and Denmark). Brazil, which uses a share of hydroelectricity similar to Canada’s, is the sole exception.

2.1.4 Low interprovincial trade

Canada’s federal system of government places jurisdiction for energy matters largely in the hands of the provinces. Historically, this has contributed to provincial clustering in energy matters, both in policy making and in the organization of energy systems. Most trade occurs North-South (between provinces and American states) rather than interprovincially, mainly for electricity, but also for oil and gas, even though in recent years the central provinces of Ontario and Quebec have shifted their main oil supply from overseas to Canadian and, to a lesser degree, American production.