Is permitting still a major challenge for energy projects in Canada, and how does it compare to what you see internationally?
Permitting is always an issue, not just for energy projects but for infrastructure and construction in general. However, what makes it particularly challenging for energy projects is the long life span of these developments—20 to 50 years—while government policy and regulations often change on a four-year election cycle. This creates uncertainty because while you’re planning for decades, the regulatory environment, taxes, and financing rules can shift dramatically in a short time. In Canada, permitting can be a major hurdle for energy projects in some jurisdictions. In others, where the development and completion of energy projects are part of a provincial government’s political or policy agenda, permits and regulatory approvals can be issued surprisingly quickly.
How does McMillan support energy clients, especially in high-emission sectors like oil and gas, in transitioning toward more sustainable practices?
McMillan has played a key role in developing the legal and policy framework for the energy sector over the last 25 years. Before I joined, I was Ontario’s senior energy policy advisor helping create an electricity market by opening it up to competition, which laid the groundwork for many of today's sustainable energy projects. My colleague, Robin Junger, helped draft the Clean Energy Act in British Columbia, and as a firm, we’ve been involved in initiatives like designing the first standardized public procurement for renewable energy in the country.
Our firm often helps create the regulatory environment where these projects can thrive, and once that’s in place, we assist developers in navigating these markets. For example, we’ve worked on over 700 rooftop solar projects and helped design green bonds to finance sustainable infrastructure. Our goal is to ensure clients can operate within these frameworks while also meeting environmental targets.
Green bonds and sustainability-linked loans are often discussed, but can you clarify how they work and how McMillan assists clients in this area?
Although I wasn’t directly involved in our recent green bond project, I can say that green bonds are a powerful tool for financing environmentally-friendly projects. They provide governments and companies with a way to raise capital specifically for green energy and infrastructure projects. We helped the government issue $4 billion in green bonds, which will be used to support green initiatives across Canada. This helps clients secure the funding needed to develop sustainable projects.
For companies, we help structure these green loans or sustainability-linked bonds by ensuring they meet the performance criteria and regulations attached to these financing instruments. This includes helping them track and report their sustainability progress, ensuring transparency and accountability.
How does McMillan help energy companies in Canada comply with both national and international sustainability regulations?
Most of our work focuses on helping energy clients comply with Canadian regulations. That said, in certain areas, like hydrogen, the international aspect is critical. Much of the hydrogen being produced in Canada is intended for export to Europe, so we help clients understand and comply with European Union regulations. For domestic energy projects, the regulatory framework is primarily provincial, as we don’t have a single national electricity sector but rather 10 provincial grids.
What emerging trends in renewable energy and clean technology do you think will have the biggest impact on the energy sector in Canada?
We're seeing exciting developments across various technologies:
- Nuclear: The government is quietly refurbishing and expanding existing large nuclear plants, but the real buzz is around small modular reactors (SMRs). While it's too early to know if SMRs will become mainstream, they’re certainly making waves.
- Wind, Solar, and Hydro: Canada has abundant wind and solar resources, but many are located far from demand centers, making transmission costly. However, we’re seeing increased involvement from First Nations in energy development, which is a promising trend.
- Geothermal: There’s been a surge in geothermal projects, particularly for thermal energy in green buildings. Toronto, for example, is leading the way by mandating green buildings, and geothermal heating and cooling are becoming popular with real estate developers.
- Energy Storage: Grid-scale storage can be valuable for managing intermittent resources like wind and solar. It can also help store excess nuclear energy produced during low-demand periods. On-site storage is also gaining traction among industries that require reliable energy supply to avoid production disruptions and voltage fluctuations.
- Hydrogen: Most of the focus in Canada is on producing hydrogen for export to Europe. While I’m somewhat skeptical of how quickly energy transitions occur, hydrogen could be a significant part of the future energy mix, but we’ll need to see how it plays out over the long term.
Can Canada play a unique role in the global green transition?
Canada's primary exportable energy resources are oil, gas, and hydrogen. Wind, solar, and electricity are less easily exportable, but hydrogen offers a way to essentially export electricity by converting it into a transportable fuel. If the hydrogen market proves sustainable, Canada could become a key player in exporting green energy. Otherwise, Canada’s role may be more focused on bilateral trade with the U.S., where our north-south grid connections are stronger than east-west ones.
What are some of the risks in the energy storage sector, particularly in Ontario?
One of the biggest risks in Ontario is tied to the economic benefits of energy storage. Much of the financial viability for energy storage projects comes from a charge called the Global Adjustment Charge. This is a government policy that could change at any moment, which creates uncertainty for storage projects that are meant to last 20 to 25 years. If the policy changes, the savings that make these projects profitable could disappear, and that’s a huge risk for developers.
How can Canada position itself as a global leader in clean energy, and why is this important for the world’s green transition?
Canada has the potential to play a significant role in the global green transition, particularly through the export of hydrogen, which allows us to leverage our abundant wind, solar, and hydro resources. If we can scale up hydrogen production and export it to places like Europe, we could have a major impact.
Canada also continues to be a leader in the development and export of nuclear technologies. Our historical CANDU expertise has converted into leading edge SMR development. Once the technology is proven through projects currently being built in Canada, that Canadian expertise and technology can be used and replicated everywhere. However, if technologies like hydrogen and SMRs don't take off globally, Canada’s role might remain more regionally focused, primarily serving the U.S.
