Market Snapshot: Electricity Trade — who regulates what in Canada?

Release date: 2025-01-22

Electricity trade between Canada and the United States (U.S.) involves exchanges of electricity across an international border using transmission lines. There is a mix of provincial and federal oversight for electricity trade regulation in Canada, which includes the infrastructure itself and trade activities.

The CER and International Power Lines

The CER currently regulates 86 international power lines. These are generally only a few kilometres long, starting at the substation nearest the international border and ending at the international border. For example, more than half (45 of 86) of operating international power lines are less than four kilometres long.^Footnote 6 Figure 1 shows some of these international power lines connecting almost all provinces to the U.S. transmission network, even though they only make up a small portion of the total transmission system in North America. Of the total international power lines regulated by the CER, the diamonds along Canada’s southern border indicate high and extra high voltage international power lines.

Figure 1: International Power Lines and the Canada-U.S. Grid

International power lines facilitate trade by connecting provincial transmission grids to various export markets in the U.S. To export electricity, Canada needs international power lines that are safe and reliable. The CER has two main responsibilities: issuing authorizations for the construction and operations of international power lines; and overseeing the electricity system safety and reliability. Regarding authorizations, depending on the circumstances, the CER’s electricity mandate either includes limited regulation related to the construction and operation of international power lines, or the complete regulation of the construction, operation, and abandonment of these international power lines, as described below.^Footnote 7

The CER (through its Commission) can issue three types of authorizations for an international power line:

1. A permit with transfer to a designated provincial authority upon issuance for oversight (default authorization)
2. A certificate with transfer to a designated provincial authority for oversight upon issuance
3. A certificate where the CER maintains oversight upon issuance instead of a designated provincial authority^Footnote 8

Whether a permit or a certificate is issued, there are project-specific conditions that are attached.

These authorizations reflect the relationship between provincial and federal jurisdictions in the oversight of electricity transmission.

1. Permit with transfer to designated provincial authority

Provincial crown corporations—representative of most entities applying for international power line authorizations from the CER—usually apply under the permit process. This process considers limited information because the oversight is largely the responsibility of the designated provincial authority in the province in which the international power line will be constructed and operate. After the Commission issues a permit, the provincial regulatory agency, designated by the province, takes over from the CER’s oversight.^Footnote 9 The majority of CER authorizations fall within this category.

2. Certificate with transfer to a designated provincial authority

In rare cases, when an applicant applies for an international power line permit, the Commission, with the approval of the Minister, assesses the application under a certificate process for a more detailed assessment. If approved, oversight will still be transferred to the designated provincial authority.

3. Certificate with the CER maintaining oversight

Lastly, an applicant for a proposed international power line can elect a certificate process. This election means that if a certificate is issued, the international power line will be subject to CER oversight rather than provincial oversight. Usually, applicants other than provincial crown corporations make this election.

North-South Transmission Lines

International power lines help provide grid reliability by linking provincial and U.S. grids. Large capacity electricity transmission infrastructure has been built predominantly north to south, between Canada and the U.S., not east to west between provinces and territories (Figure 1).

Generally, provinces that produce large amounts of hydroelectricity have the highest voltage international power lines to support more trade. Of the 86 international power lines, ten are over 345 kV and connected to large wholesale U.S. export markets. Meanwhile, some lower-voltage lines deliver small amounts of electricity to accommodate people and businesses not far across the Canada/U.S. border. These international power lines are used for border accommodations to connect U.S. customers directly across the border to the Canadian power grid when they lack connectivity with the U.S. grid.

Electricity Delivery to Consumers and Export Markets

Figure 2 illustrates the infrastructure that moves electricity between provincial power generators and customers in Canada and exports to the U.S. Electricity is produced at power generating stations. Electricity is delivered by provincially regulated transmission lines from generation sources to provincially regulated distribution lines for domestic use; or to CER regulated international power lines for export. Substations link power lines using a series of transformers and other equipment to “step up” or “step down” voltages and form power line connections where needed.

Residential and business customers receive electricity from local distribution lines. The connections between Canada’s grid and the U.S. allow exchanges of electricity with the larger continental grid through export and import activities. If more electricity is needed than what was generated domestically, power distributors or their trading divisions, can import electricity from the U.S. into the local distribution network. Provinces tend to import electricity if it is cheaper than generating it, if there is a generating shortfall, or if demand is higher than anticipated. Conversely, Canadian power producers may choose to sell excess electricity to our U.S. neighbours.

Figure 2: Electricity Infrastructure for Distribution and Trade

Source and Description

Source: Canada Energy Regulator

Description: This infographic shows the components of the electricity production and delivery system. The delivery system provides electricity for domestic consumers and international trade. Electricity is produced provincially at power generation stations. These are connected to transmission lines which are connected to an electricity substation. At the other side of the substation is a transmission line. A second substation is shown connecting this transmission line to a distribution line and an international power line. The distribution line brings electricity to domestic customers like residential and commercial users. The international power line goes to the Canada/U.S. international border.

Historically, the leading hydropower producing provinces have had the highest levels of international electricity trade and the most robust north-south infrastructure. Since hydroelectric power generation depends on water levels, the quantity available for export to U.S. markets depends on precipitation levels and domestic demand. If there are generation shortfalls, electricity can be imported from U.S. sources.

Provincial and Territorial Infrastructure Regulation

Electricity grids fall under provincial or territorial jurisdiction in Canada, except for those lines that are international power lines under the CER Act (Figure 1). Interprovincial transmission lines are currently regulated by their respective provinces. Generally, provincial or territorial entities manage generation sources, power distribution, load forecasting, and electricity access and reliability. Overseeing grid reliability includes working cooperatively with organizations overseeing reliability across multiple jurisdictions.^Footnote 10

For more information on electricity generation sources, transmission, and consumption sectors across Canada visit the CER’s Provincial and Territorial Energy Profiles. Some provinces like Alberta and Ontario are structured to allow competition in the electricity sectors. However, most provinces and territories have vertically integrated crown corporations that manage or oversee the electricity generation, transmission, distribution, and trading (sales and marketing) activities.

Date modified:

2025-01-20