The premiers of Ontario and Quebec signed a joint agreement to work together to share electricity and to advance their climate change agendas after a combined meeting of their cabinets today.

The statement makes a direct reference to the pipeline projects planned to carry Alberta oil through Ontario and Quebec.

Climate change must be addressed in any plan to carry energy across the country, Ontario Premier Kathleen Wynne said at a news conference in Toronto after meeting with Quebec Premier Philippe Couillard.

“We believe that from the centre of the country we are giving Canadians the leadership that is much needed,” she said.

Quebec issued seven conditions for TransCanada Corp.'s $12-billion Energy East pipeline on Thursday, including a demand for a provincial environmental review.

The project would convert a natural gas pipeline to carry bitumen from Alberta east to ports in Quebec.

“I talked about our understanding that Alberta needs to move its resources across the country. We want to work with Alberta. We know that there are companies that are dependent in Ontario on Alberta industry,” Wynne said.

But the provinces that have to bear the brunt of environmental damage from pipeline spills or conflict over the project have to benefit in some way, she said.

“We have to safeguard the interests of the people in Ontario,” Wynne said.

“As we talk about a Canadian energy strategy, as we talk about pipelines or other energy initiatives, we need to put in place protections and principles that we can all agree on. That is the work that we have been doing,“ she added. 

Electricity deal

Ontario and Quebec also signed a joint agreement to expand electricity trade with each other. In 2015, Ontario will provide five megawatts of electricity to Quebec in winter, when demand in that province peaks.

In summer, Quebec will be prepared to offer five megawatts of electricity to Ontario as its demand peaks in hot weather.

Wynne and Couillard also asked the Liquor Control Board of Ontario (LCBO) and the Société des Alcools du Québec (SAQ) to look at ways to boost the sales of locally produced alcoholic products from each other`s provinces.

Their agreement to co-operate on climate change raised the issue of carbon taxes, which both provinces have supported.

"We've been supportive of cap-and-trade processes for many years, and we are continuing to have that discussion with Quebec," Wynne said.

For his part, Couillard said he sees opportunities to grow the economy as new technologies are developed to reduce greenhouse gases.

"Nobody talks about the cost of not fighting climate change," he said. "This cost is passed to citizens too, whether it's health care, coastal erosion or spectacular weather events. This is hugely expensive for our society."

Among the biggest concerns for both provinces over Energy East are protection against an oil spill from the 40-year-old pipeline and a guarantee that the natural gas supply will not become tight and push prices higher for consumers.

Ontario is expected soon to present its own list of criteria for approving the pipeline, says Keith Stewart, an Ontario- based climate campaigner with Greenpeace.

“Ontario and Quebec in particular have been saying that any kind of a national energy strategy has to include climate change and that is something the federal government just doesn't want to hear,” he said.

Much of the work of addressing climate change has fallen to the provinces, because of the absence of a national strategy.

Quebec laid out conditions

Quebec's Environment Minister David Heurtel waded into the volatile politics of pipelines with a letter to TransCanada made public yesterday that set seven conditions, including a look at the project by Quebec’s environmental review board.

Like B.C. Premier Christy Clark, who wants benefits for her province from the Northern Gateway pipeline, Heurtel also asked for an assurance the project will generate economic benefits for all of Quebec.

Calgary energy analyst Bill Gwozd says these kind of demands are not reasonable for a business project.

“You can take it to the extreme, and in Canada we are supposed to be this free trade country,” he told CBC. "Between provinces we don't have this situation where each province is supposed to benefit."

Quebec’s other conditions:

  • A thorough emergency plan, including a compensation fund in case of a spill.
  • Consultation with nearby communities on potential social impacts.
  • Respect for the highest technical standards, assuring public safety and environmental protection.
  • Involvement of First Nations to satisfy their concerns.
  • No impact on Quebec’s natural gas supply.

Natural gas utilities in Ontario and Quebec have asked the National Energy Board to demand a new review of gas needs from TransCanada.

They fear their customers will be vulnerable to winter shortages and price spikes because of the elimination of the natural gas pipeline.