REMOVING ENERGY CAPACITY CONSTRAINTS TO UNLOCK ECONOMIC GROWTH IN B.C. (2026)

Issue

Insufficient electricity and natural gas capacity in British Columbia is delaying housing construction, industrial expansion, and commercial development, particularly in high-growth regions such as the Okanagan. Businesses are facing longer project timelines, escalating costs, and uncertainty due to grid constraints and new energy allocation processes.  A lack of timely, coordinated, and balanced energy capacity is emerging as a structural constraint on economic growth, housing supply, and business competitiveness across British Columbia.

Background

British Columbia is experiencing sustained population growth, rapid electrification of transportation and buildings, and increasing industrial demand for power. According to BC Hydro’s 2023 Integrated Resource Plan, provincial electricity demand is projected to increase by approximately 15% by 2030 and up to 50% by 2040 due to electrification and economic development.[1]  This demand growth is not limited to a single region, but is being experienced across urban, rural, and resource-based communities throughout the province.

At the same time, FortisBC has identified capacity pressures in parts of its natural gas distribution system, particularly during winter peak demand periods, requiring interim measures such as trucking liquefied natural gas (LNG) to maintain reliability in some Interior communities.[2] While necessary in the short term, these measures increase costs and highlight infrastructure limitations.

In the Okanagan, rapid residential growth, tourism-related seasonal population surges, agricultural processing, technology expansion, and increasing digital infrastructure demands are placing unprecedented strain on substations, feeders, and transmission corridors. Several Interior communities rely heavily on single transmission corridors vulnerable to wildfire disruption – a risk underscored by recent wildfire seasons.[3]

Delays in energy connection approvals and the introduction of competitive energy allocation or “bidding” processes for large loads have created additional uncertainty for developers. Housing projects, industrial facilities, and commercial expansions cannot proceed without confirmed energy capacity.

When energy availability becomes uncertain:

• Construction timelines extend.
• Financing costs rise.
• Investment decisions are deferred or redirected.
• Housing supply is constrained, exacerbating affordability pressures.

The Canada Mortgage and Housing Corporation (CMHC) estimates that British Columbia will require hundreds of thousands of additional housing units by 2030 to restore affordability.[4] Energy infrastructure constraints directly undermine the province’s ability to meet these targets.

Meanwhile, Canada’s climate commitments require that new supply be low-carbon and aligned with emissions reduction goals. Electrification of transportation and buildings is central to achieving net-zero targets.[5] However, electrification without parallel investment in generation, storage, and transmission risks creating reliability challenges that weaken public and business confidence.

Economic Competitiveness and Investment Risk

Access to reliable, affordable energy is foundational to economic competitiveness. The Canadian Chamber of Commerce has repeatedly identified infrastructure capacity, including electricity transmission, as critical to enabling business growth and attracting investment.[6] Regions unable to guarantee timely grid connections risk losing capital to jurisdictions with greater infrastructure certainty.

Energy capacity constraints also raise complex considerations around cost allocation, infrastructure timing, and competing demands between residential, commercial, and industrial users. A balanced approach is required to ensure that solutions support broad economic benefit without creating unintended consequences for ratepayers or specific sectors.

Resilience and Climate Adaptation

Wildfire-related transmission outages and climate-driven peak demand events expose structural vulnerabilities. Distributed energy systems, including microgrids, battery storage, rooftop and community solar, geo-exchange, and hydrogen-ready infrastructure, can enhance resilience while reducing emissions.

Federal programs administered through Natural Resources Canada[7], Infrastructure Canada[8], and the Canada Infrastructure Bank[9] already support clean energy infrastructure. However, funding criteria do not consistently account for seasonal population surges or the urgent capacity constraints facing high-growth Interior regions.

Targeted federal–provincial coordination could:

• Eliminate electricity and natural gas capacity constraints on approved development projects.
• Accelerate new low-carbon supply additions aligned with projected demand.
• Reduce reliance on temporary fuel delivery solutions.
• Improve grid resilience in wildfire-exposed regions.

Removing energy as a bottleneck would unlock housing, enable industrial expansion, improve investor confidence, and strengthen long-term economic competitiveness across British Columbia.

The Chamber Recommends

That the Provincial and Federal Governments:

1. Work with utilities, regulators, and industry to ensure sufficient, timely, and coordinated energy capacity to support economic growth, housing development, and electrification objectives across British Columbia.
2. Prioritize long-term planning and investment in electricity generation, transmission, distribution, and complementary energy systems to address current and projected capacity constraints.
3. Ensure energy planning frameworks reflect regional differences in demand, growth patterns, and economic activity, while maintaining a consistent and equitable provincial approach.
4. Support a balanced and transparent approach to energy allocation and cost recovery that considers impacts on businesses, communities, and overall economic competitiveness.