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Canada Economic Crossroads highlights bank earnings trends, interest rates, loan delinquencies, EV tariffs on Chinese imports, domestic manufacturing, Algoma Steel decarbonization, sustainability, and housing market risks shaping growth, investment, consumer prices, and climate policy.

Key Points

An overview of how bank earnings, EV tariffs, and Algoma Steel's transition shape Canada's economy.

✅ Higher rates lift margins but raise delinquencies and housing risks

✅ EV tariffs aid domestic makers but pressure consumer prices

✅ Algoma invests to decarbonize, boosting efficiency and compliance

In a complex economic landscape, recent developments have brought attention to several pivotal issues affecting Canada's business sector. The Globe and Mail’s latest report delves into three major topics: the latest bank earnings, the implications of new tariffs on Chinese electric vehicles (EVs), and Algoma Steel’s strategic maneuvers. These factors collectively paint a picture of the challenges and opportunities facing Canada's economy.

Bank Earnings Reflect Economic Uncertainty

The recent financial reports from major Canadian banks have revealed a mixed picture of the nation’s economic health. As the Globe and Mail reports, earnings results show robust performances in some areas while highlighting growing concerns in others. Banks have generally posted strong quarterly results, buoyed by higher interest rates which have improved their net interest margins. This uptick is largely attributed to the central bank's monetary policies aimed at combating inflation and stabilizing the economy.

However, the positive earnings are tempered by underlying economic uncertainties. Rising loan delinquencies and a slowing housing market are areas of concern. Increased interest rates, while beneficial for banks’ margins, have also led to higher borrowing costs for consumers and businesses. This dynamic has the potential to impact overall economic growth and consumer confidence.

Tariffs on Chinese EVs: A Strategic Shift

Another significant development is the imposition of new tariffs on Chinese electric vehicles. This move is part of a broader strategy to protect domestic automotive industries and address trade imbalances, aligning with public support for tariffs in key sectors. The tariffs are expected to increase the cost of Chinese EVs in Canada, which could have several implications for the market.

On one hand, the tariffs might provide a temporary boost to Canadian and North American manufacturers by reducing competition from lower-priced Chinese imports. This protectionist measure could encourage investments in local production and innovation, mirroring tariff threats boosting support for energy projects in other sectors. However, the increased cost of Chinese EVs may also lead to higher prices for consumers, potentially slowing the adoption of electric vehicles—a critical goal in Canada’s climate strategy.

The tariffs come at a time when the Canadian government is keen on accelerating the transition to electric mobility to meet its environmental targets, even as a critical crunch in electrical supply raises questions about grid readiness. Balancing the protection of domestic industries with the broader goal of reducing emissions will be a significant challenge moving forward.

Algoma Steel’s Strategic Evolution

In the steel industry, Algoma Steel has been making headlines with its strategic initiatives aimed at transforming its operations, in a broader shift toward clean grids and industrial decarbonization. The Globe and Mail highlights Algoma Steel's efforts to modernize its production processes and shift towards more sustainable practices. This includes significant investments in technology and infrastructure to enhance production efficiency and reduce environmental impact.

Algoma's focus on reducing carbon emissions aligns with broader industry trends towards sustainability. The company’s efforts are part of a larger push within the steel sector to address climate change and meet regulatory requirements. As one of Canada’s leading steel producers, Algoma’s actions could set a precedent for the industry, showcasing how traditional manufacturing sectors can adapt to evolving environmental standards.

Implications and Future Outlook

The interplay of these developments reflects a period of significant transition for Canada's economy, shaped in part by U.S. policy where Biden is seen as better for Canada's energy sector by some analysts. For banks, the challenge will be to navigate the balance between profitability and potential risks from a changing economic environment. The new tariffs on Chinese EVs represent a strategic shift with mixed implications for the automotive market, potentially influencing both domestic production and consumer prices. Meanwhile, Algoma Steel’s push towards sustainability could serve as a model for other industries seeking to align with environmental goals.

As these issues unfold, stakeholders across sectors will need to stay informed and adaptable. For policymakers, the challenge will be to support domestic industries while fostering innovation and sustainability, including the dilemma over electricity rates and innovation they must weigh. For businesses, the focus will be on navigating financial pressures and leveraging opportunities for growth. Consumers, in turn, will face the impact of these developments in their daily lives, from the cost of borrowing to the price of electric vehicles.

In summary, Canada’s current economic landscape is characterized by a blend of financial resilience, strategic adjustments, and evolving industry practices, amid policy volatility such as a tariff threat delaying Quebec's green energy bill earlier this year. As the country navigates these crossroads, the outcomes of these developments will play a crucial role in shaping the future economic environment.

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CER Interactive Electricity Bill Tool compares provincial electricity prices, fees, taxes, and usage. Explore household appliance costs, hydroelectric generation, and consumption trends across Canada with interactive calculators and a province-by-province breakdown.

Key Points

An online CER report with calculators comparing electricity prices, fees, and usage to explain household energy costs.

✅ Province-by-province bill, price, and consumption comparison

✅ Calculator for appliance and electronics energy costs

✅ Explains fees, taxes, regulation, and generation sources

Canadians have a new way to assess their electricity bill in a new, interactive online report released by the Canada Energy Regulator (CER).

The report titled What is in a residential electricity bill? features a province-to-province comparison of electricity bills, generation and consumption. It also explains electricity prices across the country, including how Calgary electricity prices have changed, allowing people to understand why costs vary depending on location, fees, regulation and taxes.  

Learn how fees and usage impacts your electricity bill in new online CER tool
Interactive tools allow people to calculate the cost of household appliances and electronic use for each province and territory, and to understand how Ontario rate increases may affect monthly bills. For example, an individual can use the tools to find out that leaving a TV on for 24-hours in Quebec costs $5.25 per month, while that same TV on for a whole day would cost $12.29 per month in Saskatchewan, $20.49 per month in the Northwest Territories, and $15.30 per month in Nova Scotia.

How Canadians use energy varies as much as how provinces and territories produce it, especially in regions like Nunavut where unique conditions influence costs. Millions of Canadians rely on electricity to power their household appliances, charge their electronics, and heat their homes. Provinces with abundant hydro-electric resources like Quebec, B.C., Manitoba, and Newfoundland and Labrador use electricity for home heating and tend to consume the most electricity.

By gathering data from various sources, this report is the first Canadian publication that features interactive tools to allow for a province-by-province comparison of electricity bills while highlighting different elements within an electricity bill, a helpful context as Canada faces a critical supply crunch in the years ahead.

The CER monitors energy markets and assesses Canadian energy requirements and trends, including clean electricity regulations developments that shape pricing. This report is part of a portfolio of publications on energy supply, demand and infrastructure that the CER publishes regularly as part of its ongoing market monitoring.

"No matter where you go in the country, Canadians want to know how much they pay for power and why, especially amid price spikes in Alberta this year," says lead author Colette Craig. "This innovative, interactive report really explains electricity bills to help everyone understand electricity pricing and consumption across Canada."

Quick Facts

• Quebec ranks first in electricity consumption per capita at 21.0 MW.h, followed by Saskatchewan at 20.0 MW.h, Newfoundland and Labrador at 19.3 MW.h.
• About 95% of Quebec's electricity is produced from hydroelectricity.
• Provinces that use electricity for home heating tend to consume the most electricity.
• Canada's largest consuming sector for electricity was industrial at 238 TW.h. The residential and commercial sectors consumed 168 TW.h and 126 TW.h, respectively.
• In 2018, Canada produced 647.7 terawatt hours (TW.h) of electricity. More than half of the electricity in Canada (61%) is generated from hydro sources. The remainder is produced from a variety of sources, such as fossil fuels (natural gas and petroleum), nuclear, wind, coal, biomass, solar.
• Canada is a net exporter of electricity. In 2019, net exports to the U.S. electricity market totaled 47.0 TW.h.
• The total value of Canada's electricity exports was $2.5 billion Canadian dollars and the value of imports was $0.6 billion Canadian dollars, resulting in 2019 net exports of $1.9 billion.
• All regions in Canada are reflected in this report but it does not include data that reflects the COVID-19 lockdown and its effects on residential electricity bills.
   

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Wildfire Resilient Power Grid Act proposes DOE grants for utility companies to fund wildfire mitigation, grid resilience upgrades, undergrounding power lines, fast-tripping protection, weather monitoring, and vegetation management, prioritizing rural electric cooperatives.

Key Points

A federal bill funding utility wildfire mitigation and grid hardening via DOE grants, prioritizing rural utilities.

✅ $1B DOE matching grants for grid upgrades and wildfire mitigation.

✅ Prioritizes rural utilities; supports undergrounding and hardening.

✅ Funds fast-tripping protection, weather stations, vegetation management.

U.S. Sens. Ron Wyden and Jeff Merkley today introduced new legislation, amid transmission barriers that persist, to incentivize utility companies to do more to reduce wildfire risks as aging power infrastructure ignite wildfires in Oregon and across the West.

Wyden and Merkley's Wildfire Resilient Power Grid Act of 2020 would ensure power companies do their part to reduce the risk of wildfires through power system upgrades, even as California utility spending crackdown seeks accountability, such as the undergrounding of power lines, fire safety equipment installation and proper vegetation management.

"First and foremost, this is a public safety issue. Fire after fire ignited this summer because the aging power grid could not withstand a major windstorm during the season's hottest and driest days," Wyden said. "Many utility companies are already working to improve the resiliency of their power grid, but the sheer costs of these investments must not come at the expense of equitable regulation for rural utility customers. Congress must do all that it can to stop the catastrophic wildfires decimating the West, and that means improving rural infrastructure. By partnering with utilities around the country, we can increase wildfire mitigation efforts at a modest cost -- a fire prevention investment that will pay dividends by saving lives, homes and businesses."

"When this year's unprecedented wildfire event hit, I drove hundreds of miles across our state to see the damage firsthand and to hear directly from impacted communities, so that I could go back to D.C. and work for the solutions they need," said Merkley. "What I saw was apocalyptic--and we have to do everything we can to reduce the risk of this happening again. That means we have to work with our power companies to get critical upgrades and safety investments into place as quickly as possible."

The Wildfire Resilient Power Grid Act of 2020:

* Establishes a $1 billion-per-year matching grant program for power companies through the Department of Energy, even as ACORE opposed DOE subsidy proposals, to reduce the risk of power lines and grid infrastructure causing wildfires.

* Gives special priority to smaller, rural electric companies to ensure mitigation efforts are targeted to forested rural areas.

* Promotes proven methods for reducing wildfire risks, including undergrounding of lines, installing fast-tripping protection systems, and constructing weather monitoring stations to respond to electrical system fire risks.

* Provides for hardening of overhead power lines and installation of fault location equipment where undergrounding of power lines is not a favorable option.

* Ensures fuels management activities of power companies are carried out in accordance with Federal, State, and local laws and regulations.

* Requires power companies to have "skin in the game" by making the program a 1-to-1 matching grant, with an exception for smaller utilities where the matching requirement is one third of the grant.

* Delivers accountability on the part of utilities and the Department of Energy by generating a report every two years on efforts conducted under the grant program.

Portland General Electric President and CEO Maria Pope: "We appreciate Senator Wyden's and Senator Merkley's leadership in proposing legislation to provide federal funding that will help protect Oregon from devastating wildfires. When passed, this will help make Oregon's electric system safer, faster, without increasing customer prices. That is especially important given the economy and hotter, drier summers and longer wildfire seasons that Oregon will continue to face."

Lane County Commission Chair Heather Butch: " In a matter of hours, the entire Lane County community of Blue River was reduced to ashes by the Holiday Farm Fire. Since the moment I first toured that devastation I've been committed to building it back better. I applaud Senators Wyden and Merkley for drafting the Wildfire Resilient Power Grid Act, as it could well provide the path towards meeting this important goal. Moreover, the resultant programs will better protect rural communities from the increasing dangers of wildfires through a number of preventative measures that would otherwise be difficult to implement."

Linn County Commissioner Roger Nyquist: "This legislation is a smart strategic investment for the future safety of our residents as well as the economic vitality of our community."

Marion County Commissioner Kevin Cameron: "After experiencing a traumatic evacuation during the Beachie Creek and Lion's Head wild fires, I understand the need to strengthen the utility Infrastructure. The improvements resulting from Senator Wyden and Merkley's bill will reduce disasters in the future, but improve everyday reliability for our citizens who live, work and protect the environment in potential wildfire areas."

Edison Electric Institute President Tom Kuhn: "EEI thanks Senator Wyden and Senator Merkley for their leadership in introducing the Wildfire Resilient Power Grid Act. This bill will help support and accelerate projects already planned and underway to enhance energy grid resiliency and mitigate the risk of wildfire damage to power lines. Electric companies across the country are committed to working with our government partners and other stakeholders on preparation and mitigation efforts that combat the wildfire threat and on the rapid deployment of technology solutions, including aggregated DERs at FERC, that address wildfire risks, while still maintaining the safe, reliable, and affordable energy we all need."

Oregon Rural Electric Cooperative Association Executive Director Ted Case: "Oregon's electric cooperatives support the Wildfire Resilient Power Grid Act and appreciate Senator Wyden's and Senator Merkley's leadership and innovative approach to wildfire mitigation, particularly for small, rural utilities. This legislation includes targeted assistance that will help us to continue to provide affordable, reliable and safe electricity to over 500,000 Oregonians."

Sustainable Northwest Director of Government Affairs & Program Strategy Dylan Kruse: "In recent years, the West has seen too many wildfires originate due to poorly maintained or damaged electric utility transmission and distribution infrastructure. This legislation plays an important role to ensure that power lines do not contribute to wildfire starts, while providing safe and reliable power to communities during wildfire events. Utilities must, even as Wyoming clean energy bill proposals emerge, live up to their legal requirements to maintain their infrastructure, but this bill provides welcome resources to expedite and prioritize risk reduction, while preventing cost increases for ratepayers."

Oregon Wild Wilderness Program Manager Erik Fernandez: "2020 taught Oregon the lesson that California learned in the Paradise Fire, and SCE wildfire lawsuits that followed underscore the stakes. Addressing the risk of unnaturally caused powerline fires is an increasingly important critical task. I appreciate Senator Ron Wyden's efforts to protect our homes and communities from powerline fires."

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Pennsylvania Electricity Market Deregulation has driven competitive pricing, leveraged low-cost natural gas, and spurred private investment, jobs, and efficient power plants, while nuclear subsidies threaten wholesale market signals and long-term consumer savings.

Key Points

Policy that opens generation to competition, leverages cheap gas, lowers rates, and resists subsidies for nuclear plants.

✅ Competitive wholesale pricing benefits consumers statewide

✅ Gas-driven plants add efficient, flexible capacity and jobs

✅ Nuclear subsidies distort market signals and raise costs

For decades, the government regulation of Pennsylvania's electricity markets dictated all aspects of power generation resources in the state, thus restricting market-driven prices for consumers and hindering new power plant development and investment.

Deregulation has enabled competitive markets to drive energy prices downward, as recent grid auction payouts fell 64% indicate, which has transformed Pennsylvania from a higher-electricity-cost state to one with prices below the national average.

Recently, the economic advantage of abundant low-cost natural gas has spurred an influx of billions of dollars of private capital investment and thousands of jobs to construct environmentally responsible natural gas power generation facilities throughout the commonwealth — including our three power generation facilities in operation and one presently under construction.

Calpine is an independent power provider with a national portfolio of 80 highly efficient power plants in operation or under construction with an electric generating capacity of approximately 26,000 megawatts. Collectively, these resources can provide sufficient power for more than 30 million residential homes. We are not a regulated utility receiving a guaranteed rate of return on investment. Rather, Calpine competes to sell wholesale power into the electric markets, and the economics of supply and demand are fundamental to the success of our business.

Pennsylvania's deregulated electricity market is working. Consumers are benefiting from low-cost natural gas, as broader evidence shows competition benefits consumers and the environment across markets, and companies such as Calpine are investing billions of dollars and creating thousands of jobs to build advanced, energy efficient, environmentally responsible and flexible power generating facilities.

There are presently seven electric generating projects under construction in the commonwealth, representing about a $7 billion capital investment that will produce about 7,000 megawatts of efficient electrical power, with additional facilities being planned.

Looking back 20 years following the enactment of the Pennsylvania Electricity Generation Customer Choice and Competition Act, Pennsylvania's regulators and policymakers must conclude that the results of a free and fair market-driven structure have delivered indisputable benefits to the consumer, even amid potential winter rate spikes for residents, and the Pennsylvania economy.

While consumers are now reaping the benefits of open and competitive electricity markets, we see challenges on the horizon that could threaten the foundation of those markets. Due to pressure from nuclear power generators, state policymakers throughout the nation have been increasing efforts to impact the generation mix in their respective states by offering ratepayer funded subsidies to existing nuclear generation resources or by considering a market structure overhaul in New England.

Subsidizing one power generation type over others is having a significant, negative impact on wholesale electric markets, competitive retails markets and ultimately the cost the consumer will have to pay, and can exacerbate disruptions in coal and nuclear industries that strain the economy and risk brownouts.

In Pennsylvania, these subsidies would follow nearly $9 billion already paid by ratepayers to help the commonwealth's nuclear industry transition from regulated to competitive energy markets.

The deregulation of Pennsylvania's electricity markets in the late 1990s allowed the nuclear industry to receive billions of dollars from ratepayers to recover "stranded costs" related to investments in the commonwealth's nuclear plants. These costs were negotiated amounts based on settlements with Pennsylvania's Public Utility Commission to allow the nuclear industry to prepare and transition to competitive electricity markets.

Enough is enough. Regulatory or governmental interference in well functioning markets does not lead to better outcomes. Pennsylvania's state Legislature should not pick winners and losers by enacting legislation that would create an uneven playing field that subsidizes nuclear generating resources in the commonwealth.

William Ferguson is regional vice president for Calpine Corp.

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New York faces soaring energy bills as utilities seek record rate hikes, aging grid infrastructure demands upgrades, and federal renewable policies shift. Consumers struggle with affordability, late payments, and rising costs of delivery and energy supply across the state.

Why is New York Facing Soaring Energy Bills?

New York faces soaring energy bills because utilities are raising rates to cover the costs of grid upgrades, inflation, and policy-driven changes in energy supply.

✅ Utilities seek double-digit rate hikes across the state

✅ Aging infrastructure and storm repairs increase delivery costs

✅ Federal policies and gas dependence push energy prices higher

New Yorkers are bracing for another wave of energy bill increases as utilities seek record-high rate hikes and policy changes ripple through the state’s power system. Electric bills in New York are the highest they’ve been in over a decade, and more than a million households are now at least two months behind on payments, a sign of pandemic energy insecurity that continues to strain budgets, owing utilities nearly $2 billion.

Record numbers of households have had their electricity or gas shut off this year — more than 61,000 in May alone — despite pandemic shut-off suspensions that had offered temporary relief, the highest the Public Utility Law Project (PULP) has ever recorded. “This August was the group’s busiest month ever,” said Laurie Wheelock, PULP’s executive director, citing a surge in calls to its hotline. “The top concern on people’s minds: rate hikes.”

Utilities across the state are pushing for significant price increases, citing aging infrastructure, the need for climate adaptation, and higher operating costs, as California regulators face calls for action amid rising bills. “We used to see single-digit rate hikes and now we see double-digit rate hikes,” said Jessica Azulay, executive director of the Alliance for a Green Economy. “That’s a new normal that is unacceptable.”

Several utilities have requested delivery rate increases of 25 percent or more, with some proposals as high as 39 percent. Upstate utilities NYSEG and RG&E are seeking to raise electric and gas bills by about $33 a month, although regulators are unlikely to approve the full amount.

The companies argue the hikes are needed “to pay for rebuilding an aging grid and expanding its capacity to meet residents’ and businesses’ service demands,” including storm repairs. They also claim the plan would create more than 1,000 jobs.

James Denn, a spokesperson for the Public Service Commission (PSC), said much of the cost pressure stems from “inflation, higher interest rates, supply chain disruptions, the global push to upgrade electrical infrastructure, and, most recently, the rising risk and uncertainty from tariffs,” trends reflected in U.S. electricity price data over the past two years.

While some have blamed New York’s clean-energy transition, a PSC report found that state climate policies account for only 5 to 9.5 percent of the average household’s electric bill, or approximately $10 to $12 per month. The bulk of the increases still come from traditional spending on infrastructure, storm resilience, and system expansion.

On the supply side, costs are rising too. President Donald Trump’s recent policies have threatened renewable-energy investment nationwide, even as states’ renewable ambitions carry significant costs, potentially adding to New York’s woes. His July “megabill” phases out a 30 percent federal tax credit for solar and wind unless projects begin construction by mid-2026. Industry experts warn that the changes could make renewables “more expensive to build” and “increase reliance on gas.”

“It just means more expensive power,” said Marguerite Wells of the Alliance for Clean Energy New York.

The state estimates Trump’s policy shifts could cost New York $60 billion in lost renewable investment. With fewer clean-energy projects moving forward, gas — which already supplies roughly half of the state’s electricity — will remain the dominant source, tying energy prices to volatile global markets and the kinds of price drivers seen in California in recent years.

Governor Kathy Hochul has called affordability “our greatest short-term challenge,” while consumer advocates are demanding reforms to reduce utility profits and overhaul “rate design,” and to strengthen protections such as the emergency disconnection moratorium that applies during declared emergencies.

“There is definitely a groundswell of concern,” Wheelock said. “We go to meetings and we’re getting questions about rate design, like, ‘What is the revenue decoupling mechanism?’ Never had that question before.”

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European Power Demand During Second Lockdowns remains resilient as winter heating offsets commercial losses; electricity consumption tracks seasonal norms, with weather sensitivity, industrial activity, natural gas shielding, and coal decline shaping dynamics under COVID-19 restrictions.

Key Points

It is expected to remain near seasonal norms, driven by heating, industry activity, and weather sensitive consumption.

✅ Winter heating offsets retail and hospitality closures

✅ Demand sensitivity rises with colder weather in France

✅ Gas generation shielded; coal likely to curtail first

European power demand is likely to hold up in the second round of national lockdown restrictions, with fluctuations most likely driven by changes in the weather.

Traders and analysts expect normal consumption this time around as home heating during the chilly season replaces commercial demand.

Last week electricity consumption in France, Germany and the U.K. was close to business-as-usual levels for the time of year, according to BloombergNEF data. By contrast, power demand had dropped 16% in the first seven days of the springtime lockdown, as reflected by the U.K.’s 10% daily decline reported then.

How power demand performs has significance outside the sector. It’s often seen as a proxy for economic growth and during lockdowns earlier this year, electricity use slumped along with GDP, and stunted hydro and nuclear output could further hobble recovery. For Western Europe, annual demand is expected to be 5% lower than the previous year, a bigger decline than after the global financial crisis in 2008, according to S&P Global Platts.

The Covid-19 limits are lighter than those from earlier in the year “with an explicit drive to preserve economic activity, particularly at the more energy-intensive industrial end of the spectrum,” said Glenn Rickson, head of European power analysis at S&P Global Platts.

Higher levels of working from home will offset some of the losses from shop and hospitality closures, “but also increase the temperature sensitivity of overall gas and power demand, as heat-driven demand records have shown in recent summers,” he said.

The latest wave of national lockdowns began in France, Germany, Spain, Italy and Britain, with Spain having seen April demand plummet earlier in the year, as coronavirus cases surged and officials struggled to keep the spread of the virus under control.

Much of the manufacturing industry remains working for now despite additional restrictions to contain the coronavirus. With the peak of the second wave yet to be reached, “it seems almost inevitable that the fourth quarter will prove economically challenging,” analysts at Alfa Energy said.

There will initially be significantly less of an impact on demand compared with this spring when global daily demand dipped about 15% and electricity consumption in Europe was down 30%, Johan Sigvardsson, power price analyst at Swedish utility Bixia AB said.

The prevalence of electric heating systems in France means that power demand is particularly sensitive to cold weather. A cold spell would significantly boost demand and drive record electricity prices in tight markets.

Similar to the last round of shutdowns, it’s use of coal that will probably be hit first if power demand sags, as transition-focused responses gather pace, leaving natural gas mostly shielded from fluctuations in the market.

“We expect that another drop in power demand would again impact coal-fired generation and shield gas power to some extent,” said Carlos Torres Diaz, an analyst at Rystad Energy.

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