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Law \ Legal

Renewable Energy 2023 – Renewables


1. Overview of the Renewable Energy Sector

1.1 What is the basis of renewable energy policy and
regulation in your jurisdiction and is there a statutory definition
of ‘renewable energy’, ‘clean energy’ or equivalent

Renewable energy law and policy varies across Canada because
jurisdiction over many aspects of renewable energy belongs with
Canada’s provinces and territories under Canada’s
constitutional law. The federal government has authority over
certain aspects of renewable energy law and policy, particularly
with respect to undertakings that occur on federally regulated
lands or that involve interprovincial or international transmission
of energy.

Because renewable energy law is primarily legislated at the
provincial level, there is no universal definition across Canada
for “renewable energy” or “clean energy”.
However, renewable energy is commonly understood to include energy
produced from sources such as hydro, wind, solar, geothermal,
biomass, biogas, green hydrogen and ocean or tidal. British
Columbia, for example, specifies these types of energy sources.
Other provinces, such as Alberta and Ontario, have defined
renewable energy more generally as an energy source that occurs
naturally or that can be replenished naturally, and include
particularly identified sources of renewable energy such as those
listed above.

1.2 Describe the main participants in the renewable
energy sector and the roles which they each perform.

Currently, renewable energy is predominantly used to generate
electricity, though markets are developing for renewable natural
gas, waste heat recovery and biofuels.

With respect to electricity generation, transmission and
distribution from renewable energy sources, the markets in most
provinces are vertically integrated and the key participants

  • Independent power producers who build and operate renewable
    energy projects and supply power to electricity utilities.

  • Crown corporations, which operate as bundled service utility
    providers and are owned by provincial governments. In British
    Columbia, Manitoba, New Brunswick, Newfoundland, Quebec and
    Saskatchewan, Crown corporations are the principal participants. In
    Ontario, there is a mix of Crown corporations, municipal utilities
    and private corporations, whereas Alberta is entirely privatised,
    with the exception of the Alberta Electric System Operator.

  • Provincial regulatory bodies, economic, environmental, safety
    and otherwise, which regulate the production, supply, transmission
    and distribution of energy.

  • Provincial governments, which enact legislation and set public
    policy applicable to the renewable energy sector. In jurisdictions
    where Crown corporations dominate the electricity markets, the
    governments use their ownership interests in Crown corporations to
    advance provincial energy objectives.

  • Federal government, which regulates the interprovincial
    transmission of electricity through the Canada Energy Regulator and
    establishes environmental assessment laws and policies for
    renewable project approval that touches on federal powers under
    Canada’s constitutional law.

With respect to emerging, smaller-scale renewable energy
projects, local governments such as municipalities and regional
districts play a significant direct role alongside the private
sector, such as the production of renewable natural gas from
municipal landfills or the capture and use of waste heat from
municipal sewer systems. Provincial governments and the federal
government are indirectly involved in this sector, generally by
enacting favourable tax regimes and providing grant funding for
municipal and private sector projects.

1.3 Describe the government’s role in the ownership
and development of renewable energy and any policy commitments
towards renewable energy, including applicable renewable energy

The government’s role in ownership and development of
renewable energy projects is addressed in question 1.2. With
respect to targets, the Canadian Net-Zero Emissions
Accountability Act
legislates the federal government’s
commitment to achieve net-zero greenhouse gas (GHG) emissions by
2050. Canada has also committed to requiring net-zero electricity
by 2035 through a Clean Energy Standard, expanding renewable energy
development, and connecting regions to clean power. The 2022
federal budget committed more than $15 billion to climate-related
stimulus initiatives, including cutting tax rates for businesses
that manufacture zero-emission technologies (including equipment
and technology for renewable energy projects), issuing a $5 billion
green bond, and proposing an $8 billion investment for the Net Zero
Accelerator initiative to support projects that reduce GHG
emissions in key industrial sectors.

At the provincial level, government support for renewable energy
varies greatly, with some provinces, such as British Columbia,
aligning themselves closely with federal initiatives, and other
provinces repealing and cancelling programmes introduced by
previous governments meant to reduce GHG emissions and drive
investment in renewable energy.

The level of support also varies greatly at the local government
level. Several cities, including the City of Vancouver in British
Columbia, have declared a climate emergency and enacted by-laws
requiring all new building developments in the city to use
renewable energy for heating.

2. Renewable Energy Market

2.1 Describe the market for renewable energy in your
jurisdiction. What are the main types of renewable energy deployed
and what are the trends in terms of technology preference and size
of facility?

The predominant renewable energy deployed in Canada is
hydroelectricity. Hydroelectricity makes up 60% of all electricity
production in Canada. The opportunities to develop different kinds
of renewable energy differ depending on the geography, climate and
existing infrastructure of each province. Some provinces are more
appropriately suited for certain kinds of renewable energy. For
example, significant portions of the energy market in provinces
like British Columbia, Manitoba and Quebec come from hydroelectric
projects. Other provinces, like Alberta, Nova Scotia and Ontario,
are attractive for wind power projects and there is a developing
solar power market in Alberta, Ontario and Saskatchewan. One
industry expected to grow in Canada is hydrogen.

2.2 What role does the energy transition have in the
level of commitment to, and investment in, renewables? What are the
main drivers for change?

Federal laws require a minimum national standard for carbon
pollution pricing across all provinces and territories, creating
the incentive for change to renewables. Shareholder and investor
attitudes are a significant driver for change, and significant
climate change events in Canada – including extreme
temperatures, wildfires and flooding – have also put a focus
on the energy transition.

Each province has different opportunities for investment in
renewable energy projects, depending on the existing energy
resource mix in the province, and therefore different strategies to
achieve substantial reduction in GHG emissions. In Alberta and
Saskatchewan, the energy transition is focused on replacing coal
and natural gas with renewables for electricity generation;
whereas, in British Columbia the focus is on promoting electric
vehicles to reduce gasoline and diesel consumption and
transitioning to renewables for heating buildings.

2.3 What role, if any, has civil society played in the
promotion of renewable energy?

Over the last 10 years, climate change, energy policy and
environmental regulation have been key election issues for federal
government and for many provincial governments. Many provinces
provide opportunities for the public to engage with the project
approval processes for energy projects and include sustainability
and climate change as factors to be considered in project

2.4 What is the legal and regulatory framework for the
generation, transmission and distribution of renewable

Typically, provincial electricity regulators issue approvals for
facilities or expansions and control the terms and conditions of
service between a regulated utility and end-users through long-term
resource plan filings, rate cases and tariff filings. In provinces
with competitive market sectors, independent bodies monitor rates
and provision of services.

Depending on the size and type of the renewable energy project,
it is likely that an environmental assessment will be required for
new, modified or expanded facilities, as well as a variety of
permits, licences and authorisations addressing environmental, land
use, safety and other regulated aspects of the project. Regulators
must also assess whether the Aboriginal and treaty rights of
Indigenous groups have been respected throughout the particular
decision-making process, as these rights are protected under
Canada’s Constitution.

2.5 What are the main challenges that limit investment
in, and development of, renewable energy projects?

The main challenge for new renewable energy projects in Canada
is the low-demand growth for more energy, in part because there is
a strong focus in Canada on energy efficiency to reduce the demand
for energy. An additional factor is reluctance by some provincial
governments to shut down existing fossil fuel projects, which would
create more opportunities for renewable energy projects but could
strand historical investments and increase costs to consumers.

The cost of building new renewable energy projects relative to
the demand for new energy (Canada is a net exporter of electricity)
is an obstacle because new renewable projects will tend to displace
existing projects, potentially increasing cost to the consumer for
renewable energy. For example, Ontario cancelled its Feed-In Tariff
programmes in 2018, resulting in the cancellation of hundreds of
renewable energy contracts in pursuit of its policy goal of
reducing the cost for consumers. The prevalence of hydroelectricity
in Canada has also had a limiting effect on opportunities for the
development of other renewable energy sources, as there is little
environmental benefit to displacing one form of renewable energy
with another.

An additional factor is regulatory uncertainty, which can create
delay and increased cost, presenting a challenge to investment in
renewable energy projects. Regulatory uncertainty is attributable
both to evolving legislation and policy governing renewable energy,
and in the difficulty in applying laws and policies that were
drafted before many emerging technologies in this sector were

2.6 How are large utility-scale renewable power projects
typically tendered?

The tendering process for large utility-scale renewable power
projects differs from province to province. In provinces with a
government-owned corporation holding significant control over the
supply, transmission and distribution of electricity, those
corporations will issue competitive procurement programmes to award
power purchase agreements or public-private partnerships for
independent power producers.

2.7 To what extent is your jurisdiction’s energy
demand met through domestic renewable power

Renewable energy resources contribute approximately 19% of
Canada’s total primary energy supply and approximately 65% of
electricity generated in Canada is sourced from renewable energy.
Clean fuels such as hydrogen, renewable natural gas, biofuels and
synthetic fuels currently make up a small percentage of
Canada’s total energy supply, but are expected to increase
significantly in order for Canada to meet its climate change

3. Sale of Renewable Energy and Financial Incentives

3.1 What is the legal and regulatory framework for the
sale of utility-scale renewable power?

Please see question 2.4.

3.2 Are there financial or regulatory incentives
available to promote investment in/sale of utility-scale renewable

In jurisdictions where Crown corporations dominate the
electricity markets, governments use their ownership interests in
Crown corporations to advance provincial energy objectives,
including setting minimum requirements of renewable energy
generation leading to competitive procurement programmes if there
is demand for additional energy resources. Government grants and
tax incentives also promote investment in large renewable power
projects. Please also see the answer to question 1.3.

3.3 What are the main sources of financing for the
development of utility-scale renewable power projects?

Many utility-scale renewable power projects are owned and funded
by the government. Independent power producers fund the development
of projects through private investment, financing (including
project financing), debt, government grants and tax credits.

3.4 What is the legal and regulatory framework
applicable to distributed/C&I renewable energy?

In some provinces, the regulatory framework for Distributed
Energy Resources (DERs) is undergoing review and amendment, as
current regulations were designed for the historic model of
centralised energy delivery. Some provinces have developed
regulatory frameworks to integrate DERs. For example, in British
Columbia, a net metering programme is in place that permits excess
energy from small-scale renewable energy sources to be sold to the
provincial Crown corporation.

For C&I renewable energy, depending on the source of energy
and specifics of the project, regulatory approvals addressing
environmental, land use, and safety issues may be required, or
existing authorisations may require amendment.

3.5 Are there financial or regulatory incentives
available to promote investment in distributed/C&I renewable
energy facilities?

Generally, there is a higher level of private investment in
C&I facilities compared to DERs; however, there are federal and
provincial programmes to incentivise distributed renewable energy.
As outlined in question 1.3, the 2022 federal budget has committed
significant funding to technology innovation that will be of
interest to developers of C&I renewable energy facilities.
There are also provincial funding programmes that provide
opportunities for C&I projects. For example, the 2021 CleanBC
Industry Fund invested $70 million in 25 emission-reduction
projects, including projects involving fuel switching from oil and
gas to renewable energy sources and waste heat recovery

3.6 What are the main sources of financing for the
development of distributed/C&I renewable energy

Balance sheet financing, government funding and tax incentives,
as well as private investment, are the main sources of

3.7 What is the legal and regulatory framework
applicable to the development of green hydrogen

There is no comprehensive regulatory framework for the
development of green hydrogen projects in Canada. Regulatory
frameworks for hydrogen, where developed or developing, are not
consistent, and gaps in the existing frameworks that apply to other
energy projects will need to be addressed to provide the regulatory
certainty needed to enable investment in and adoption of hydrogen.
There are some regulations at the federal and provincial level that
encourage the use of hydrogen technologies, including low-carbon
fuel regulations, carbon pricing, vehicle emissions regulations,
zero-emission vehicle mandates, and renewable gas mandates in
natural gas networks. The federal government, as well as the
provincial governments of British Columbia, Alberta and Ontario,
have released hydrogen strategies that outline each
government’s vision.

3.8 Are there financial or regulatory incentives
available to promote investment in green hydrogen

Federal and provincial hydrogen strategies include the promotion
of industry and government investment in hydrogen projects,
primarily by de-risking investments through funding programmes and
long-term policies. In the federal budget tabled in April 2022, the
government announced a new refundable investment tax credit for
business that incur eligible costs relating to carbon capture,
utilisation and sequestration (enabling production of low-carbon
hydrogen), and a new Clean Technology investment tax credit of up
to 30%, focused on net-zero technologies, battery storage solutions
and clean hydrogen. The federal government has also entered into
relationships with foreign governments to promote cooperation in
the field of hydrogen energy, including Germany and the

The federal government and several provinces have promulgated
clean fuel or low-carbon fuel regulations and zero-emission vehicle
requirements intended to incentivise the development and adoption
of clean fuels, including hydrogen. Canada and certain provinces
have also created credit markets associated with these regulations,
which could provide a new funding mechanism for the
commercialisation of new fuel-production methods or the development
of clean energy technology (including hydrogen). Legislation
recently passed in British Columbia will require some utilities to
use a portion of their revenues from the sale of low-carbon fuel
credits for programmes dedicated to increased use of low-carbon

3.9 What are the main sources of financing for the
development of green hydrogen projects in your

Please see question 3.6.

3.10 What is the legal and regulatory framework that
applies for clean energy certificates/environmental attributes from
renewable energy projects?

Renewable Energy Certificates (RECs) are tradeable commodities
that are generated by electricity entities. Entities generate one
REC for every megawatt hour of renewable electricity created, which
can then be sold separately from the electricity that they are
associated with. This can provide additional income to energy
producers as an incentive to increase the production of renewable
electricity. RECs have been used as a mechanism by which
governments and other entities with mandated or self-imposed
renewable energy targets can meet those targets.

RECs are not formally regulated in Canada and instead have been
incorporated into the machinery of Canadian electricity markets by
recognition from the federal government, corporations, and
statutory regimes.

3.11 Are there financial or regulatory incentives or
mechanisms in place to promote the purchase of renewable energy by
the private sector?

Please see question 1.3.

4. Consents and Permits

4.1 What are the primary consents and permits required
to construct, commission and operate utility-scale renewable energy

Please see question 2.4.

4.2 What are the primary consents and permits required
to construct, commission and operate distributed/C&I renewable
energy facilities?

Please see question 3.4.

4.3 What are the requirements for renewable energy
facilities to be connected to and access the transmission

Most of the provincial electricity grids in Canada have North
American industry-standard interconnection requirements focused on
meeting standards for safe and reliable interconnected operations.
However, connection to the transmission grid does not necessarily
entitle the project to sell its energy to a buyer. As the majority
of provinces have bundled utility providers, connection of energy
facilities to the transmission grid is typically for the purpose of
selling the facility’s energy to the utility provider pursuant
to a long-term contract. In addition, some provincial market
structures (like in Ontario and Alberta) have power pools where
connected generating facilities bid their energy into a pool market
structure competing with other market participants.

4.4 What are the requirements for renewable energy
facilities to be connected to and access the distribution

Please see question 4.3.

4.5 Are microgrids able to operate? If so, what is the
legislative basis and are there any financial or regulatory
incentives available to promote investment in

Microgrids are particularly important to the energy transition
in small, remote communities in Canada. Microgrids are governed
primarily through provincial legislation, with certain regulatory
laws applying if a microgrid is considered a “utility”,
and requirements shifting depending on the size of the microgrid.
Microgrids must also comply with all general environmental and
health and safety laws. The federal Smart Grid Program includes
funding for microgrids using renewable energy.

4.6 Are there health, safety and environment
laws/regulations which should be considered in relation to specific
types of renewable energy or which may limit the deployment of
specific types of renewable energy?

There are no significant health, safety and environment laws
specific to renewable energy, though renewable energy projects are
governed by the laws of general application for health, safety and
the environment.

5. Storage

5.1 What is the legal and regulatory framework which
applies to energy storage and specifically the storage of renewable

The legal framework surrounding the storage of renewable energy
in Canada varies by province, with many jurisdictions in the
process of developing a framework specific to energy storage. For
example, the Alberta Electric System Operator has an Energy Storage
Roadmap outlining its plans to facilitate integration of energy
storage into its regulatory framework and its grid and market

Ontario has been a leading jurisdiction in Canada and has
regulatory requirements specific to energy storage, including the
requirement to obtain an electricity storage licence subject to
some exemptions. Energy storage licensees in Ontario must comply
with laws of general application, including Market Rules. The
Market Rules for the Ontario electricity market are made by the
Independent Electricity System Operator and their purpose is to
establish a competitive, reliable and efficient market for the sale
and purchase of electricity and ancillary services in Ontario.

In British Columbia, the Crown corporation BC Hydro is planning
to install utility-scale battery storage systems as part of the
ongoing build out of the province’s integrated electric system.
These will be subject to laws of general application. Please see
question 4.6.

5.2 Are there any financial or regulatory incentives
available to promote the storage of renewable energy?

There are a number of financial incentives available from both
federal and provincial programmes to promote the storage of
renewable energy.

Federal incentives include the Smart Renewables and
Electrification Pathways Program, which provides $922 million over
four years for smart renewable energy and electrical grid
modernisation projects, including energy storage projects.
Additionally, the federal Smart Grid Program aims to provide
financial support up to $5 million for modernising electricity
grids and storage facilities to make it easier to integrate
renewable energy sources. At the provincial and territorial level,
for example, Ontario and Yukon have programmes to provide relevant
applicants with funding for projects that cover clean storage
initiatives. Additionally, the Canada Infrastructure Bank, a
federal Crown corporation, announced that it would invest up to
$170 million in the Oneida Energy Storage project in Ontario, which
is expected to be the largest battery storage project in

6. Foreign Investment and International Obligations

6.1 Are there any special requirements or limitations on
foreign investors investing in renewable energy

There are no foreign ownership restrictions specific to
renewable energy projects in Canada. However, foreign investors
acquiring control of a Canadian business or starting a new business
in Canada are subject to the Investment Canada Act.
Investments that exceed certain value thresholds or that engage
Canada’s national security are subject to approval of the
Minister of Innovation, Science and Economic Development (ISEDC);
all other investments, unless of a prescribed cultural business,
require only notification. For 2022, direct investments made by
nationals of: (i) certain specified free trade countries, will be
reviewed if the enterprise value exceeds $1.711 billion; and (ii)
World Trade Organization (WTO) member countries will be reviewed if
the enterprise value exceeds $1.141 billion, or $454 million in
book value for state-owned enterprises. The threshold for review of
non-WTO investments is $5 million in book value for direct
investment and $50 million for indirect investment. The federal
government retains the discretion to review all foreign investments
that may engage national security. In evaluating a foreign
investment proposal that is subject to review, the Minister
considers the net benefit of the investment and assesses the risks
it poses to national security.

Foreign investors falling below the financial thresholds and
where the investment does not engage national security are subject
to the same regulations as domestic investors. Some provincial
energy regulatory regimes require approval from the provincial
regulator before the controlling interest of an energy utility can
be transferred and, on occasion, the nationality of the proposed
owner has been a regulatory issue.

6.2 Are there any currency exchange restrictions or
restrictions on the transfer of funds derived from investment in
renewable energy projects?

Funds can be repatriated from Canada to other countries through
the payment of dividends, the return of capital, the redemption of
shares, the repayment or making of loans, and payments for the
provision of goods or services. General banking laws and the
federal Proceeds of Crime (Money Laundering) and Terrorist
Financing Act
will apply to the transfer of funds.

Payments of dividends and interest to foreign investors can
bring Canadian tax implications, subject to tax treaties with a
foreign resident’s home jurisdiction and other factors.
Similarly, energy projects operated as joint ventures or a
partnership between Canadian and foreign entities can also have
Canadian tax implications, subject to tax treaties with a foreign
resident’s home jurisdiction and other factors.

6.3 Are there any employment limitations or requirements
which may impact on foreign investment in renewable energy

As a condition of approving a foreign investment, ISEDC may
issue required undertakings that relate to employment, including
the appointment of Canadians as independent directors on the board
of directors or the employment of Canadians in senior management

Companies seeking to employ foreign nationals may need to apply
for a Labour Market Impact Assessment (LMIA) to demonstrate a need
for the foreign national and that their employment will not
negatively impact the Canadian labour market. Once the application
is approved, the worker may apply for a work permit. Alternatively,
the foreign national may be eligible for an LMIA exemption and
apply for a work permit directly.

Business people can come to Canada for temporary business or
investment purposes without a work permit if they qualify under the
Canada-United States-Mexico Agreement (CUSMA), the General
Agreement on Trade in Services, or another international agreement.
If eligible business visitors intend to stay longer than six
months, they may require a work permit.

6.4 Are there any limitations or requirements related to
equipment and materials which may impact on foreign investment in
renewable energy projects?

Materials for Canadian infrastructure projects are commonly
procured using requests for proposals. In the private sector, a
competitive bidding process is not required but, if used, may
trigger certain obligations to the bidding parties under Canadian
common law.

The import of materials and equipment required for renewable
energy projects may be subject to domestic controls, anti-dumping
undertakings, permits, or other restrictions. The Canada Border
Services Agency requires certain goods to be clearly marked with
their country of origin. Anyone dealing with products listed as
controlled goods must register with the Controlled Goods Program.
Additionally, goods considered dangerous, such as new chemical and
polymer substances, ozone-depleting substances and nuclear
equipment, are subject to additional regulations. The Special
Import Measures Act
sets out subsidised goods from certain
countries that are subject to additional duties and fees on import
to prevent dumping. Steel imports are subject to special tariffs
and regulations.

7. Competition and Antitrust

7.1 Which governmental authority or regulator is
responsible for the regulation of competition and antitrust in the
renewable energy sector?

The Competition Bureau (Bureau) is the federal agency that
administers and enforces Canada’s competition laws across all
sectors of the economy, including renewable energy. The Bureau
cooperates with provincial energy regulators, such as the Ontario
Energy Board, which monitor competition and pricing for energy

7.2 What power or authority does the relevant
governmental authority or regulator have to prohibit or take action
in relation to anti-competitive practices?

The Bureau is empowered to investigate and regulate
anti-competitive practices such as abuse of dominant position,
price fixing, bid rigging and false and misleading representations
amongst other matters.

Companies who plan to undergo a merger are required to give
notice of the proposed transaction to the Bureau if the
target’s assets in Canada or revenues from sales in or from
Canada generated from those assets exceed a certain threshold, and
if the combined Canadian assets or revenues of the parties or their
respective affiliates in, from or into Canada exceed a certain
threshold. For 2022, those thresholds are $93 million and $400
million, respectively. The “target size” threshold is
adjusted annually based on GDP. The proposed transaction cannot be
completed until 30 days after notice has been provided, or 30 days
after any additional information requested by the Bureau within
this period has been delivered. If a proposed merger is challenged,
the Competition Tribunal may order that all or part of a merger is
not to proceed, or impose restrictions on actions that can be
undertaken by the merged entity.

In the renewable energy sector, it is common for energy projects
to be structured as joint ventures. If the joint venture is not
incorporated, the companies involved may not be required to provide
notice of a merger to the Bureau. However, the transaction can
still be subject to review under the merger provisions and as a
potentially anti-competitive agreement.

7.3 What are the key criteria applied by the relevant
governmental authority or regulator to determine whether a practice
is anti-competitive?

The purpose of the Competition Act is to maintain and
encourage competition in Canada in order to promote the efficiency
and adaptability of the Canadian economy, to expand opportunities
for Canadian participation in world markets while recognising the
role of foreign competition in Canada, to ensure that small and
medium-sized enterprises have an equitable opportunity to
participate in the Canadian economy and to provide consumers with
competitive prices and product choices. The Competition
identifies certain anti-competitive practices as offences;
most notably, conspiring with competitors by price fixing,
restricting output or allocating markets. It also provides that
certain anti-competitive activities may be addressed by order of
the Competition Tribunal, including cessation of certain activities
or practices if such practices or activities prevent or lessen or
are likely to prevent or lessen competition in any relevant

With respect to mergers, the Bureau will oppose a merger if it
determines that it is likely to prevent or lessen competition
substantially. In assessing whether a merger or agreement
substantially reduces competition, the Bureau considers factors
such as whether foreign competitors will provide effective
competition, whether a party to the arrangement has failed or is
likely to fail, the extent to which substitutes for products
supplied by the parties are available, the barriers to entry in the
market, international and interprovincial trade barriers (such as
tariffs), the level of regulatory control over the entity, whether
effective competition would remain in the market, the likelihood
that the arrangement will remove an effective competitor, and the
nature of change and innovation in the market.

The provinces with competitive power pool market structures have
rules that participants must follow to ensure the fair and
competitive operation of the market. Agencies monitor participant
activity in these markets, and participants that do not follow the
rules may be prosecuted. Substantial fines have been imposed.

8. Dispute Resolution

8.1 Provide a short summary of the dispute resolution
framework (statutory or contractual) that typically applies in the
renewable energy sector, including procedures applying in the
context of disputes between any applicable government
authority/regulator and the private sector.

Dispute resolution mechanisms depend on the market structure in
each province. In provinces with vertically integrated utility
providers, provincial energy regulators govern certain disputes
between utility providers and their customers; however, the courts
govern contractual disputes between renewable energy suppliers and
the utilities. For example, the British Columbia Utilities
Commission, the Alberta Energy Regulator and the Ontario Utilities
Board have exclusive jurisdiction over all matters falling under
their statutory authorities and such disputes must be heard before
the relevant agency. These disputes do not typically include
contractual disputes between private parties, which are within the
jurisdiction of the courts.

In addition to its jurisdiction to determine disputes within its
mandate, the Canada Energy Regulator is also required to provide
alternative dispute resolution processes for the resolution of a
dispute directly related to a matter regulated by the
Competition Act, provided that all parties to the dispute

Many renewable energy contracts, including those between
renewable energy suppliers and utilities, include a term that the
preferred form of dispute resolution is arbitration. Even when not
contractually required, many disputing parties will choose
arbitration, as it allows parties to select arbitrators that may
have specialised knowledge, proceedings are generally confidential,
arbitration may cost less and conclude more quickly than
litigation, and it allows parties flexibility of time and

8.2 Are alternative dispute resolution or tiered dispute
resolution clauses common in the renewable energy

Alternative dispute resolution clauses, in particular
arbitration clauses, are common in renewable energy contracts.
Tiered dispute resolution clauses are also common and often require
negotiation between the parties before referring a dispute to
mediation or arbitration.

8.3 What interim or emergency relief can the courts

Canadian courts have jurisdiction to grant pre-trial
injunctions, which include interim and interlocutory injunctions,
if there is a serious issue to be tried, irreparable harm if the
injunction is not granted, and if the balance on convenience
favours injunctive relief. Interim injunctions protect rights on a
short-term basis until an interlocutory injunction can be heard,
while interlocutory injunctions are sought to protect rights until
the final disposition of the proceeding.

8.4 Is your jurisdiction a party to and has it ratified
the New York Convention on the Recognition and Enforcement of
Foreign Arbitral Awards and/or the Convention on the Settlement of
Investment Disputes between States and Nationals of Other States
and/or any significant regional treaty for the recognition and
enforcement of judgments and/or arbitral awards?

Canada has acceded to the New York Convention on the Recognition
and Enforcement of Foreign Arbitral Awards. However, the
application of the New York Convention is limited to only those
differences arising out of commercial legal relationships. Each of
the provinces has enacted legislation mirroring this approach,
except in Quebec where the law has not provided for such a

Canada is a signatory to and has ratified the Convention on the
Settlement of Investment Disputes between States and Nationals of
Other States.

8.5 Are there any specific difficulties (whether as a
matter of law or practice) in litigating, or seeking to enforce
judgments or awards, against government authorities or the

CUSMA, the trade deal replacing the North American Free Trade
Agreement (NAFTA), eliminated the mechanism to commence
investor-state arbitration proceedings, thus American and Mexican
investors in renewable energy in Canada are unlikely to have access
to a dispute mechanism against Canada. Enforcing judgments or
awards against government authorities does not present any specific
difficulties in Canada.

8.6 Are there examples where foreign investors in the
renewable energy sector have successfully obtained domestic
judgments or arbitral awards seated in your jurisdiction against
government authorities or the state?

AbitibiBowater Inc., an American company, filed a claim against
Canada under NAFTA, claiming that Canada, amongst other things,
expropriated its hydroelectric facilities. AbitibiBowater Inc.
sought $500 million in damages and the parties settled for an award
of $130 million in damages in 2010.

There is currently a pending claim against Canada brought by
Koch Industries and Koch Supply & Trading LP, American
companies, alleging violations of NAFTA with respect to alleged
losses as a result of Ontario’s change in policy in its carbon
cap-and-trade programme. As noted above, CUSMA does not include
such a mechanism to commence investor-state arbitration proceedings
through Canada, though there are transitional provisions that
permit claims relating to investments made prior to CUSMA for a
limited period of time.

9. Updates and Recent Developments

9.1 Please provide a summary of any recent cases, new
legislation and regulations, policy announcements, trends and
developments in renewables in your jurisdiction.

There have been significant legislative developments in Canada
in the last several years with respect to renewable energy,
including the passing of the Canadian Net-Zero Emissions
Accountability Act
, which legislates Canada’s
international commitments for emissions reductions and the
Greenhouse Gas Pollution Pricing Act, which sets minimum
national standards for GHG pricing. The federal government has also
released regulations in 2022 establishing a GHG offset programme
and Clean Fuel Standards, some of which were delayed as a result of
challenges created by the COVID-19 global pandemic.

In 2021, the Greenhouse Gas Pollution Pricing Act
survived a constitutional challenge at Canada’s highest court
by three provincial governments, which alleged the legislation was
outside the scope of the federal government’s jurisdiction.

Some provinces have also challenged the constitutional validity
of the federal Impact Assessment Act, which is recent
federal legislation that reformed the environmental assessment
process for specified energy projects by, amongst other things,
including a requirement to consider sustainability factors as part
of any environmental assessment. The Alberta Court of Appeal found
that the legislation was unconstitutional in May 2022, and the
matter is now before the Supreme Court of Canada.

There have also been significant developments with respect to
the rights of Indigenous peoples in Canada. In 2019, the provincial
government of British Columbia passed the Declaration on the
Rights of Indigenous Peoples Act
, which seeks to align the
province’s laws with the rights and principles set out in the
United Nations Declaration on the Rights of Indigenous Peoples
(UNDRIP). UNDRIP states that governments must consult and cooperate
with Indigenous peoples to obtain their “free, prior, and
informed consent” in regard to projects, including energy
projects that may affect Indigenous interests. The new legislation
does not make UNDRIP law in British Columbia but rather mandates a
process to ensure that provincial laws are consistent with UNDRIP,
with an emphasis on further reconciliation, accommodation and
Indigenous self-determination.

The federal government passed UNDRIP legislation in June 2021
that is quite similar to British Columbia’s statute. The
federal statute does not import UNDRIP into domestic law, rather it
affirms that UNDRIP applies to Canadian law. The federal statute
requires the responsible Minister to develop an action plan in
consultation with Indigenous peoples to achieve the objectives of

Both the federal and British Columbia governments have said that
their respective statutes do not create a veto power for Indigenous
nations; however, it remains unclear how the courts will interpret
this aspect of the UNDRIP legislation.

Originally published by International Comparative Legal

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.


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