Manitoba Hydro needs new markets for its electric power to help finance its current and future operations, and northern Ontario would benefit from low-cost power to develop its mining resources. There is potential for mutual benefit if these two provinces worked to meet each other's needs.
Northwestern Ontario is undergoing significant growth in mining exploration and development. The area is rich in deposits of chromium, palladium, nickel, gold and other base metals. Much of it is located in a mineral-rich area known as the Ring of Fire, which is located northeast of Thunder Bay. It has been conservatively estimated this development could have an economic impact of up to $120 billion. The economic potential, the impact of the Ring of Fire on Ontario's economy could be similar to the impact the Alberta economy has experienced due to the oil sands.
However, the mining development is far from Hydro One's main electrical system and there are no transmission lines to that area. In addition, the cost of power throughout the province's northwest is so high, it is said the cost is a disincentive for mining developments which utilize large amounts of electricity.
Manitoba Hydro has large generating plants on the Nelson River near Hudson Bay and is planning to develop more. Historically, Manitoba Hydro has used export sales to the United States to help finance new hydro developments on the Nelson River but these exports have been substantially reduced due to the availability of low-cost natural gas in the United States.
In just the past few years, the North American marketplace for energy consumption and energy development has changed dramatically. On the supply side, the rapid development of the oil and gas deposits of the Bakkens in North Dakota are not only fuelling the goal of U.S. self-sufficiency in energy 2017, but it is eroding potential U.S. customers for energy suppliers such as Manitoba Hydro.
The sales to the U.S. could be replaced by sales to northern Ontario by building a transmission line directly from the generating plants on the Nelson River to the Ring of Fire mining developments. This could provide reliable, low-cost power. The distance is about 600 kilometres.
The electrical system associated with the mining development need not be directly connected to the Hydro One electrical system, but if it was then the connection could form part of a trans-Canada electrical grid. In addition, the link could be used to supply northern Ontario with low-cost power, unbundling northern Ontario from high-cost eastern power.
The power generated already in northwestern Ontario is cheaper to produce than power in eastern Ontario. The fact that Manitoba Hydro power will help keep the cost of power to Hydro One down, it seems only reasonable that the people of northwestern Ontario and the region's industries should receive the benefit of the lower cost.
In other words, northwestern Ontario should not be economically compromised due to the high cost of power in southern Ontario.
In addition, to the obvious benefits to both Ontario and Manitoba, this type of project helps with nation-building and could qualify for federal financial assistance under the Building Canada Plan 2013.
As minister of state (transport), I have conducted public forums in northwestern Ontario, seeking input to develop Canada's next infrastructure programs. One of the chief complaints I heard, from Thunder Bay to Kenora and points in between, is the high cost of electric power. The high cost of power discourages development. Those in the pulp and paper industry pointed to the cost of power as one of the reasons why the industry collapsed in this part of Canada.
Such a scheme is technically feasible and could easily provide up to 1,000 megawatts of power, which is enough to meet the demands of the mining development with the extra to spare at other industries and local communities.
First Nations in the region could benefit from the provision of green energy, reducing their dependency on diesel generation. It would provide low-cost reliable power, and generate long-term jobs directly and indirectly. Cheap reliable power leads to economic growth.
There is a potential of an additional 5,000 megawatts of generation available to develop on the Nelson River system.
Manitoba is in a prime position to take advantage of the opportunities available for power export east and west. There is the potential for federal assistance with this type of transmission. It has the potential to develop the backbone of a national electrical grid.
The rail lines brought Canada together in the 19th century, highways and pipelines brought Canada together in the 20th century, and a natural electrical grid will keep Canada together in the 21st century. Manitoba is the key(stone) province.
Steven Fletcher is the MP for Charleswood-St. James-Assiniboia-Headingley and helped develop the new Building Canada Fund.