This article originally appeared in the Financial Post.
Canada has some of the most affordable natural gas in the world. Yet many First Nations and rural communities heat their homes with more expensive, higher-emitting fuels simply because they lack access to natural gas. There’s a real human cost to this. Chief Christine Longjohn of Sturgeon Lake First Nation calls it “heat poverty”: families having to choose between groceries and a warm home. In some communities, heating bills can approach $1,000 a month.
In 2021, Statistics Canada found 5.6 per cent of Canadian households were energy-poor, defined as spending 10 per cent or more of their income on energy. On reserve, that figure was 12.9 per cent, more than double the national rate.
Natural gas is among the cheapest ways to heat a home, with electricity costing between two and six times as much per gigajoule, according to 2022 data from the Canada Energy Regulator. But more than 300 First Nations reserves in the five provinces where data were available have no natural gas connection, some even when surrounded by gas infrastructure. In British Columbia alone, 60 per cent of on-reserve Indigenous communities lack access, compared with five per cent of other residents.
Provincial regulators generally require utilities to recover extension costs from the customers being connected, a reasonable principle. But it can strand remote projects that cover as much as 80 to 90 per cent of their own costs, leaving a shortfall communities can’t close on their own. In theory, that gap for on-reserve infrastructure is one the federal government could help fill. But a combination of issues, including policy preferences in Ottawa, has left communities in limbo.
Ottawa’s programs generally favour renewable energy, meaning community members can receive substantial support to replace an oil furnace with a heat pump but much less, maybe even none, to connect to natural gas that could provide cheaper, more reliable heat. One Saskatchewan First Nation was told it could receive a maximum of $5,200 per household for a natural gas hookup, whereas households switching from an oil furnace to a heat pump could get up to $10,000 upfront, plus access to a $40,000 interest-free loan. The federal government clearly isn’t averse to spending on home heating, but its preferred solutions aren’t always in the best interests of those receiving them.
Ottawa has helped expand Canada’s natural gas network before, with federal programs extending gas service to rural communities across the country from the 1980s through the 2010s. In Red Lake, Ontario, $2.7 million in federal support helped households cut heating costs by 50 to 70 per cent. Since 2018 Ontario’s expansion program has funded 34 projects in 59 communities, including several First Nations.
More projects are ready. The First Nations Power Authority is advancing a $39.2-million project to bring natural gas to five Saskatchewan First Nations. According to FNPA estimates, households would save an average of $1,568 a year, roughly $2.1 million annually across the five communities. The Canadian Gas Association has identified roughly $1.1 billion in similar projects nationally.
It’s important to note that the choice here isn’t necessarily between affordability and lower emissions. The Ontario Energy Board estimates that in a 210-customer community, natural gas would reduce emissions by an average of 29 tonnes by displacing higher-emitting fuels such as propane and wood.
To address these problems, Ottawa should make natural gas distribution explicitly eligible under existing programs. Funding should bridge the gap between what a community can repay and the cost of extending service, while also supporting appliance upgrades, energy audits and housing improvements. Indigenous energy access should also be incorporated into major-project initiatives, including the Indigenous Loan Guarantee.
Not every First Nation or northern community will want natural gas. But a community that does should not be denied that option because it doesn’t fit Ottawa’s fuel preferences. As one of us (Lonechild) has put it, “Natural gas is the new water.” Clean water on reserve is finally getting the attention it deserves. Affordable, reliable heat and energy should be next.
Guy Lonechild is president and CEO of the First Nations Power Authority. Shannon Joseph is chair of Energy for a Secure Future.
