The energy minister’s new marching orders have different priorities than a year ago, and may reflect a new degree of realism in the face of financial constraints.
Introduction
On January 16, 2025, BC cabinet ministers received their “mandate letters” from the premier; public statements of his expectations of them and their ministries.
Mandate letters are more politics than policy, but they can provide some clues as to the government’s priorities, both in what they say and where they choose to stay silent.
Let’s take a look at some of the significant differences between the 2024 and 2025 mandate letters for the minister of energy.
So, how was 2024?
The 2024 mandate letter started by crowing about the ministry’s environmental successes since 2020, such as increased zero-emission vehicle adoption and the rollout of the provincial network of public charging stations for electric vehicles. In the 2025 letter, however, there is no victory lap. Why is that?
Well, the most recent figures, published last year, show our greenhouse gas (GHG) emissions are actually rising, and in fact we’re now producing the same GHG emissions we were in 2007. The legislated target of a 40 percent reduction by 2030 remains a fantasy.
In 2024, the minister was to “ensure the province is well positioned to electrify B.C.’s economy and industry”. Given BC Hydro’s electricity deficit and its need to rely on $1.4 billion of imported electricity last year, perhaps the government decided that it would be better not to dig too deeply into the recent past.
2024 vs. 2025 – the (political) climate is changing
Last year the government said one of its priorities was a “sustainable, clean” economy by “driving down [GHG] emissions.” In contrast, this year it has four “challenges” to tackle, starting with growing the economy and reducing costs for families. A strong economic flavour has emerged and references to sustainability and cleanliness have been dropped.
Combating climate change was also front and centre for the minister of energy personally in 2024, who had this as her first priority:
“Drive delivery of your ministry’s CleanBC Roadmap to 2030 policies and programs on time and on target to help ensure we meet our legislated GHG goals”
This year, however, the name “CleanBC” has been expunged like a former Soviet leader airbrushed from a politburo photo. Instead, the first priority for Minister Dix is to review all his ministry’s programs to ensure they “grow the economy, and help keep costs low for British Columbians.” The review could foreshadow anything from an expansion of the CleanBC program to its complete dismantling. My money is not on expansion.
The ministerial guidance acknowledges the current budget constraints, without saying what these are. Let me help. The provincial government deficit in 2024/25 is now expected to be a record $9.4 billion, and the credit rating agency S&P Global downgraded the province’s rating in April last year. The agency considers the outlook to be negative, something I can’t help but agree with, based on projected lower tax receipts and higher spending in the next two years. And that doesn’t consider US tariffs, which I’ll come to.
I look forward to seeing how expanding the CleanBC budget from $87 million in 2024/25 to $137 million in 2026/27 will grow the economy and help keep our costs low. What’s more likely is that it will continue to add to the provincial deficit, which will have real affordability consequences to British Columbians as our debt interest payments rise.
Reducing costs for families?
Energy costs were not a feature of last year’s priorities for the ministry. It’s still not clear what the government has in mind this year, suggesting only “access to home energy retrofits and innovative technology solutions.” Presumably this refers to saving money by being more energy efficient, which is fine in principle, but has its challenges.
Energy efficiency isn’t free. The BC Utilities Commission (BCUC) approved BC Hydro spending $110.1 million in 2024/25 on energy efficiency programs, an increase of 23 percent from two years prior. Fortis gas will spend $146.6 million in 2025, rising to $164.8 million in 2027. If you are the beneficiary of one of these programs you might save money – but everyone else picks up the tab. All customers pay for energy efficiency programs in rates, although the amount is not broken out transparently on the bill.
And there’s another thing. The utilities don’t collect these amounts immediately; the costs are deferred and collected over multiple years. As of March 31, 2024, BC Hydro reported $870 million in its deferral account for energy efficiency programs, Fortis gas reported a total of $123.9 million. Even if these utilities slowed down their spending on energy efficiency programs, the costs would continue to be included in rates for years to come.
There are many other reasons to worry about energy costs. BC Hydro’s operating costs are rising fast, and the new wind generation anticipated in 2028 will likely increase the utility’s cost of energy. Natural gas prices are projected to rise from recent record lows, and the BC carbon tax is scheduled to increase again this year, and every year until 2030.
The BCUC already acted last year to smooth out a potential BC Hydro electricity bill increase of 12.1 percent, bringing it down to 2.3 percent for each of the next five years. The large increase in BC Hydro’s costs as a result of the new Site C dam coming into service will not be apparent to customers for some time.
In contrast, the BCUC did nothing about a 17.5 percent bill increase for Fortis gas customers at the start of this year. The government could request that the BCUC consider smoothing gas rate increases out over multiple years, but that would run counter to the plan to increase prices to reduce demand for gas, and therefore GHG emissions.
It could be that the government is simply trying to set expectations, and perhaps ward off additional budget requests from BC Hydro and the like. If it did want to do something about energy costs, or at least slow their rise, it might consider funding its policy programs through taxation rather than energy prices. As I’ve argued before, this would be more equitable and transparent.
Conclusion
While this paints a rather bleak picture, it could get even worse. A trade war with the US could lead to reduced sales of BC’s electricity, leading to lower profits for BC Hydro’s trading subsidiary, Powerex, which are used to subsidize rates. Lower sales of oil and gas won’t help the BC economy either; the government is counting on royalties of $1.07 billion from natural gas sales in 2025/26, and employment in northern BC would also be at risk.
As I said in my new year’s predictions, the climate change agenda is likely to be more balanced with economic issues in 2025. That seems to be happening faster than I expected.