OTTAWA, ON (July 13, 2026):
Canada’s electricity system is already one of the world’s most successful. Yet calls to replace its provincially based model with a more integrated national electricity market have gained momentum, driven by claims that greater interprovincial integration would improve reliability, affordability, and decarbonization.
In the federal government’s Powering Canada Strong strategy, a full restructuring of Canada’s energy market is presented as the solution – promising to strengthen economic competitiveness, increase interprovincial energy trade, and lower energy prices.
In The Integration Illusion: Seven decades of electricity trade data and the case against market restructuring in Canada, economist Edgardo Sepulveda dismantles the central assumptions behind Ottawa’s strategy. He argues that Canada can expand interprovincial electricity trade without forcing provinces to restructure their electricity systems.
The report argues that the strategy’s central premise – that Canada trades too little electricity East–West relative to North–South – is contradicted by nearly seven decades of trade data. In fact, interprovincial electricity trade has exceeded exports to the United States in most years since 1955.
Sepulveda argues that the success of provinces like Quebec, British Columbia, and Manitoba stems from vertically integrated public systems, which allow them to earn strong export revenues while maintaining low electricity rates at home.
He warns that restructuring those systems into a national market would erode those advantages by narrowing the price differences that currently make exports profitable.
“If the market were fully restructured, those earnings would likely shrink, because export prices would converge around a common market price, reducing province-by-province spreads,” explains Sepulveda.
Rather than restructuring provincial electricity systems, Sepulveda contends that Ottawa should focus on expanding transmission corridors while respecting provincial jurisdiction.
“By spending money to enhance the existing process rather than imposing its will … Ottawa can advance the increased trade and transmission that Powering Canada Strong seeks while leaving intact the very foundations of our successful electricity system, which rests on provincial grids,” writes Sepulveda.
To learn more, read the full paper here:
Edgardo Sepulveda is a Canadian economist with more than thirty years of experience.
For further information, media are invited to contact:
Skander Belouizdad
Senior Media Relations Officer
(613) 482-8327 x111
Skander.belouizdad@macdonaldlaurier.ca
