How Much Does Electricity Cost for Industries in Canada?

Electricity is an essential service for most businesses in Canada, but the price of electricity varies widely across the country. In this blog post, we will compare the average industrial electricity prices in each province and territory, based on a monthly consumption of 100,000 kWh. We will also discuss some factors that affect the electricity rates, such as the type and availability of electricity sources, the demand and supply of electricity, the transmission and distribution costs, the taxes and fees, and the rate design. Finally, we will provide some tips on how to save money on your electricity bill.

Average Industrial Electricity Prices by Province and Territory

According to Statista, the average industrial cost of electricity in Canada was 0.13 CAD. Dollar per kWh, as of June 2023. This includes all components of the electricity bill such as the cost of power, distribution and taxes. However, this average does not reflect the diversity of electricity prices across the country. The table below shows the average total cost of electricity by province and territory, based on a monthly consumption of 100,000 kWh.

Province/Territory                           Cost in Canadian cents per kWh

Alberta                                                                14.08

British Columbia                                                 7.42

Manitoba                                                             5.43

New Brunswick                                                  10.69

Newfoundland & Labrador                                9.02

Nova Scotia                                                        11.58

Northwest Territories                                        28.11

Nunavut                                                              35.40

Ontario                                                                10.30

Prince Edward Island                                         11.42

Quebec                                                                5.33

Saskatchewan                                                    11.15

Yukon Territory                                                   14.02

Canada Average                                                 10.30

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As you can see, the electricity prices range from 5.33 Canadian cents per kWh in Quebec to 35.40 cents per kWh in Nunavut. Quebec has the cheapest electricity prices for businesses in all of Canada, thanks to its abundant hydroelectric resources. Nunavut has the most expensive electricity prices, due to its remote location and reliance on diesel fuel for electricity generation.

Factors Affecting Electricity Prices

There are many factors that influence the electricity prices in each province and territory, such as:

• The type and availability of electricity generation sources, such as hydro, nuclear, coal, natural gas, wind, solar, etc.
• The demand and supply of electricity, which can vary by season, time of day, weather, etc.
• The transmission and distribution costs, which depend on the distance and infrastructure required to deliver electricity from the generators to the consumers.
• The taxes and fees, which can include federal, provincial, and municipal taxes, as well as environmental levies, carbon taxes, debt retirement charges, etc.
• The rate design, which determines how the electricity costs are calculated and charged to the consumers. Some provinces use tiered rates, which increase or decrease as a function of electricity usage. Some use flat rates, which charge the same price per kWh regardless of usage. Some use time-of-use rates, which vary by the time of day and the day of the week.

Transmission and Distribution Costs

One of the factors that affects the electricity prices is the delivery or transmission charge. This is the cost of delivering the electricity from the generating stations to your business through high-voltage and low-voltage power lines. The delivery charge includes the cost of building, maintaining, and operating the electricity infrastructure, as well as the cost of losses that occur during transmission and distribution. The delivery charge varies by province and territory, depending on the distance and complexity of the electricity network, the demand and supply of electricity, and the regulatory framework. According to Direct Energy, the delivery charge makes up approximately 33% of a customer’s total electricity bill on average. However, this percentage can be higher or lower depending on the location and the usage of electricity. For example, according to the Ontario Energy Board, the delivery charge for a typical industrial customer in Toronto is about 30% of the total bill, while the delivery charge for a typical industrial customer in Thunder Bay is about 20% of the total bill.

Tips on How to Save Money on Your Electricity Bill

Depending on where you operate and how you use electricity, you may be able to reduce your electricity bill by following some of these tips:

• Take advantage of energy-saving programs and incentives, such as rebates, discounts, loans, grants, etc. that may be offered by your electricity provider, government, or other organizations. These can help you pay for energy-efficient upgrades, renewable energy systems, etc.
• Use power conditioning devices specifically close to facilities with poor power factors.
• Use smart thermostats and power strips, which can help you control and monitor your heating, cooling, and electronics usage.

Conclusion

Electricity prices for businesses in Canada vary significantly by province and territory, depending on the type and availability of electricity sources, the demand and supply of electricity, the transmission and distribution costs, the taxes and fees, and the rate design. By comparing the average industrial electricity prices and understanding the factors that affect them, you can make informed decisions about your electricity consumption and find ways to save money on your electricity bill.

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