Energy Poverty in Canada is an Issue that Affects Us All
Last month, the Canadian Urban Sustainability Practitioners (CUSP) published a report on energy poverty within Canada. CUSP is a network that connects municipalities from across Canada, so they can collectively bargain for resources to fund their sustainability projects and work to reduce their environmental impact. Despite being aware of the phenomenon of energy poverty and the challenge it poses to Canadian families, quite often policymakers lack the means to measure energy poverty accurately and are therefore unequipped to combat it. For this reason, CUSP sought to give lawmakers a tool to research this issue, so they can more effectively tackle the energy poverty rates.
The study’s findings show that energy poverty in Canada is divided around many social issues, including racial lines and the ‘urban vs. rural’ divide. With sustainable and ecological development becoming a hot-button political topic in recent years, and governments from all over the world scrambling to move towards renewable forms of energy, it is incumbent upon us to better understand the shortcomings of our current system and improve on them as we attempt to update our energy grid.
What is Energy Poverty?
At its core, energy poverty is an assessment of the financial burden that energy rates have on households. Families in energy poverty may struggle to keep their homes at a livable temperature during the winter or summer months. Or, they may struggle to keep the lights or appliances on and face frequent outages. Generally, it is contingent on a number of factors such as the cost of household energy relative to income, access to the energy grid or clean energy, frequency of utility disconnection or the general efficiency of the house. A household is said to be in energy poverty if 6% or more of its net income is spent on energy bills. For comparison, the median Canadian household pays less than 3% of its net income on energy. Utility bills can exacerbate the financial strain experienced by a struggling family, so the divisions on which energy poverty is distributed can reveal which families may be affected.
The Study’s Findings: Energy Poverty Per Province
According to the study, at least one in five Canadian households are affected by energy poverty. That means nearly 3 million homes have an undue burden on their utility bills. For these families, the lack of income means that adequate investments to make to lower energy consumption over time, such as improving home insulation or home appliances, is untenable. This ensures the cycle of poverty continues.
Referring to the graph, we can see that the highest percentage of households experiencing energy poverty is in Prince Edward Island, who’s energy poverty percentage approximately twice that Canada’s. However, accounting for nearly half of the Canadian total of energy poverty is Ontario, at over one million households in energy poverty.
As CUSP states, income inequality, climate crisis and the housing crisis are all inextricably linked with energy poverty. These issues cannot be overcome on an individual basis. Rather, alleviating one will make positive changes in the others. Hence, studies like this that shine a light on the scope of the problem can better equip us to tackle these crises.
Energy poverty is a problem in both rural and urban areas. While there are a greater number of households in urban centres experiencing energy poverty, this can be attributed to a greater number of households within cities, generally. However, due to a number of factors, such as having larger homes, and higher transmission charges, energy bills in rural areas tend to be more burdensome.
Please see below for a list of the provinces in Canada with the highest proportion of energy-poor families, according to CUSP:
- Prince Edward Island (23,640 households)
- Newfoundland and Labrador (83,245)
- Nova Scotia (147,085)
- New Brunswick (114,790)
- Northwest Territories (3,805)
- Yukon (3,450)
- Ontario (1,138,065)
- Saskatchewan (81,390)
- Canada (2,810,905)
- Quebec (630,185)
- Manitoba (74,435)
- Alberta (237,425)
- British Columbia (272,200)
- Nunavut (1,185)
Thus, a greater percentage of folks in rural Canada are in energy poverty. If we shift our focus to the United States then, according to the ACEEE, the median energy burden is 3.3% of income for all US households. However, for rural households, this number jumps to 4.4%. Though while it appears that Canadians are better off than their American counterparts, it is essential to note that extraordinarily rural and some Indigenous communities were omitted from census data to protect their privacy. In other words, these findings could be worse than we imagine.
CUSP also finds that energy poverty is comorbid along certain social lines as well, such as lower incomes and higher household occupancy in households of minorities and immigrants. These communities are also more likely to be found in metropolitan areas (which, as previously stated, have a greater number of the energy impoverished), meaning that energy poverty within Canada is also delineated on racial lines.
The Price You Pay for Energy in Canada
The availability of resources within your province greatly influences the rates you pay for energy. Energy bills in Canada vary from province to province; a phenomenon attributable to a combination of factors.
Per the Fraser Institute, cities that paid lower electricity prices tended to generate their electricity through coal-fired power plants or hydroelectricity. Hence, why provinces such as Ontario and Quebec have had consistently low residential electricity prices, as touted by Hydro-Québec.
On the other hand, being oil-rich, the prairies, such as Alberta and Saskatchewan, also tend to have lower natural gas rates. When taking into consideration the environmental debates raging today and the impact of governmental policy, this can have paradoxically negative effects. Ontario’s shift away from coal-fired plants to renewables resulted in increased electricity costs for residence, according to the Fraser Institute.
Going forward, if we want to make wiser decisions in our public policy while minimizing the brunt of energy costs on struggling families, it helps to know the extent of the problem and the potential side-effects of any countermeasure enacted.
In the meantime, it helps to take control where you can to diminish the impact that your energy bills may have on your home. Steps like learning how much your appliances cost on average can help you make better decisions on where you can cut your costs; or the electricity and natural gas rates of your province, so you can know if you need to switch retailers. Do your energy rates fluctuate based on market projections or are fixed at a stable rate? All these factors and more affect your utility bills. Fortunately, if any of this seems daunting, we at EnergyRates.ca have tools available for you to understand your utility bill and discover whether or not you’re paying the lowest possible rates for energy.