Canada’s electricity prices up 88 percent since 2000, and clients are feeling it
What the electricity price data shows
The Fraser Institute’s research draws on data spanning 1960 to 2016. Over that period, every 10 percent rise in energy prices corresponded to a reduction in economic growth of about 0.15 percentage points. The authors say Canada’s 88 percent electricity price increase since 2000 makes the cumulative GDP impact substantial.
“Throughout history, as more people gained access to abundant and affordable energy, economies grew, living standards improved and prosperity increased, yet in recent years in Canada and across other high-income countries, climate policies have inflated energy costs significantly which slows economic growth,” said Elmira Aliakbari, director of natural resource policy at the Fraser Institute.
The research also contends that directing resources toward emission-reduction efforts in wealthy countries produces limited climate benefit. Rather than pursuing emission cuts, the authors argue those resources could deliver greater benefit elsewhere. The report estimates such cuts might slow global temperature increases by just 0.1 degrees Celsius by 2100.
What do rising electricity prices mean for advisors and their clients?
Higher energy costs reduce disposable income. When clients pay more for electricity, they have less to save, invest, or direct toward their financial plans. Advisors working with middle-income households may already be fielding questions about tighter budgets.
This is where financial planning assumptions may need revisiting. Projected savings rates, retirement contribution levels, and household cash flow models that predate the sustained electricity price rise may no longer reflect clients’ actual capacity. For advisors working with households already under financial pressure, research shows that working with a planner strengthens financial resilience across every income bracket. This makes the case for proactive planning conversations now.
