Commentary by Stephen MacMackin, Chair of Atlantica Centre for Energy

New Brunswick’s 2024 Election is behind us. Premier-designate, Susan Holt, gained a strong majority government and will soon become the first female Premier in the history of the province.

But one of the most important and challenging files the New Brunswick government will face during the next four years was hardly discussed by any party during the campaign; providing affordable energy for businesses and industry.

We rely on energy every day to keep us warm and fed, to help us travel and communicate, and to help power our businesses. Energy is also the backbone of New Brunswick’s economy, and the energy sector supports over 37,000 Atlantic Canadians in high-skill, high-wage jobs.

By fueling our cars and paying for electricity, we face energy-related costs daily. And, for many businesses these costs are increasingly affecting the bottom line, especially those in energy-intensive industries like trucking and manufacturing, and those businesses competing to sell their products outside Canada.

Budgets are tight all around. Yet, NB Power’s residential and industrial customers are likely facing rate increases of up to 15.3 per cent in 2024 and another 9.8 per cent in 2025. In fact, between 2023 and 2027, the average rate for NB Power customers is scheduled to increase by 38 per cent. The amount would be higher for industrial customers, and doesn’t even include yearly variances, that were an additional 5.5 per cent increase in 2024 alone.

This is a serious and largely overlooked affordability problem. How can we expect our businesses and industries to compete if their electricity rates are increasing by this much, this fast? We can’t, and something must be done.

NB Power has incredible challenges ahead; decarbonizing its grid and phasing out coal by 2030, deciding the future of the Mactaquac Dam, building new generation to meet population growth and electrification, all while modernizing the utility’s infrastructure and services. It has a tremendous debt already, which complicates its ability to invest in and address these challenges.

Simply put, NB Power cannot subsidize its rate payers. Instead, rates will continue to increase over the next (likely) several years.

The new government has also committed to “deliver an energy plan that provides affordable, reliable, clean energy for New Brunswickers and New Brunswick businesses,” while moving to an electricity grid that is “100 percent non-emitting.”

However, developing an energy plan that delivers clean, reliable, and affordable energy requires at least some fossil fuels in the medium-to longer-term future. Nearly all net-zero modelling exercises agree that fossil fuels are part of the most cost-effective paths to net-zero electricity grids in the region.

So which priority of the energy plan must bend? Or will the transition to a “100 percent non-emitting” electricity grid take several decades? New Brunswick’s businesses and industry need clarity. Although commitments have been made to help households offset some electricity rate hikes and lower gasoline and diesel costs, no specifics have been provided to help businesses understand how their future energy costs will be affordable.

So, what then happens to the established businesses and industries struggling to compete as their energy costs, especially for electricity, rise dramatically over the next five years? Will they shrink, relocate, or close entirely? These are important questions to ask. Governments often work to attract new business and industry to New Brunswick, and it can feel like those already established here receive less attention.

We need governments to appreciate the critical role industry and business play in Atlantic Canada’s economy, especially for those already established in the region. Governments need to better recognize the close relationship between energy costs, business competitiveness, and economic growth.

We need action from governments to support established industry and business in the region by ensuring their operating costs are competitive in the future.

The incoming New Brunswick government does not have a public plan for this yet, but its not too late. Hopefully, energy affordability for businesses and industry will soon get the priority it deserves.