Unpacking Equity: The Transition of Indigenous Communities from Diesel to Renewable Energy Generation

Unpacking Equity is a collaboration between the Public Policy and Governance Review and the Gender, Diversity and Public Policy Initiative (GDPP) at the Munk School of Global Affairs and Public Policy. This series aims to explain equity-related policy issues and break down complicated topics involving equity, diversity and inclusion. Policy professionals can gain a better understanding of these complex issues in order to incorporate an equity lens into their practice. To learn more, please get in touch with the GDPP.

By Megan Mattes

If the world is to reach 2050 decarbonization targets and avert a climate disaster, renewable energy sources must contribute 70 to 85 percent of all electricity. Renewable energy projects have gradually increased in Canada, generating more jobs and less emissions. Wind, biomass and solar now account for 7% of electricity generated, while hydro accounts for 59% (though technically a renewable resource, large hydro projects have environmental and social consequences; small hydro projects are less problematic). However, as we transition to renewable energy sources, policy makers are tasked with the challenge of ensuring that the benefits of this transition are equitable and just. In order for the adoption of renewable energy in Canada to be equitable, the economic, social and health benefits must be shared by Indigenous communities.

Because many remote Indigenous communities are located a great distance away from existing electricity transmission infrastructure, the cost to expand the grid to deliver electricity is prohibitively high. These communities are thus unable to benefit from the overall lower-emission energy sources that feed Ontario’s grid – nuclear and hydro, primarily. 188 remote Indigenous communities in Canada instead rely upon diesel fuel which is flown, shipped or driven in through a provincial utilities service or an independent power authority. Reliance on diesel as a fuel source has a range of negative social and economic impacts: generators are loud and can disrupt residents; emissions from diesel can harm residents’ health; the necessity to fly, drive or ship fuel into communities increases the cost of energy; and fuel prices can fluctuate, leading to unpredictability of energy costs.

Hydro, biomass, wind and solar power are four renewable energy sources which are strong alternatives to diesel generators in remote communities. As of 2017, 12 of the 25 remote Indigenous communities in Ontario have at least one installed renewable energy source, though these sources account for only a tiny portion of communities’ total energy needs. Ontario’s 2009 Green Energy Act helped spur new renewable energy projects through the feed-in tariff and microFIT programs. The recent repeal of the Green Energy Act under Premier Ford has not only led to lower ability for communities to pursue new projects, but also to direct financial hardship for many Indigenous communities across the province. Though it’s unknown if any remote communities were impacted by the provincial government’s cancellation of 758 renewable energy contracts, Environmental Commissioner Dianne Saxe found in her recent report that First Nations had equity stakes in 8 of the 10 cancelled large renewable energy projects – these investments are now lost. Without financial aid facilitated under the Green Energy Act, it’s less likely remote communities will be able to afford to install renewable energy sources.

While the federal government does provide funding towards renewable energy projects in Indigenous communities, the $50 million allocated in the 2017 budget is described as woefully inadequate due to the high capital cost of projects; for example, a small hydroelectric project can cost $100 million – double the federal budget allocation for the entire country. A stronger commitment in the form of financial investment is required if the government is serious about transitioning remote communities off of diesel fuel.

A further problem is that 25% to 50% of remote Indigenous communities in Canada, diesel generation facilities run at full capacity and thus stifle community growth and improvement. According to University of Waterloo professor Jatin Nathwani, without increased power generation capacity, communities are unable to build new houses to accommodate growing populations, create new businesses, or upgrade aging public services such as schools, health centres and water and sewage treatment facilities. The reliance on existing diesel generators thus impacts nearly every facet of life: housing, health, education, and the local economy.

Once upon a time, transporting fuel over long distances was the only financially feasible way to power remote communities, but no longer; renewable energy sources are now viable in-community options, and remote communities deserve government investment in their power generation. The model for this investment is straightforward: government can act as a mentor and financial supporter of partnerships between Indigenous communities and energy companies to ensure project success.

Megan Mattes is a Master of Public Policy student at the University of Toronto’s Munk School of Global Affairs and Public Policy. She holds a Bachelor of Applied Science in Mechanical Engineering from the University of Toronto. Her interests include environmental policy, global development, and wealth inequality.