Yukon, B.C. agree to work together on electrical grid connection

The governments of Yukon and B.C. have signed an agreement to work together toward connecting their electrical grids, something Yukon's premier is touting as a "nation-building" project.

"I think all Yukoners know this is a really good pathway for the future of the Yukon. It's going to make sure that we can build projects, mineral projects," said Yukon Premier Ranj Pillai.

"It's also going to be able to sustain our energy needs, when we just think about the growth of the Yukon."

The memorandum of understanding was signed Thursday as Canada's western premiers met in Yellowknife. It commits Yukon and B.C. to "collaboration through the exploration and planning phases" of the project, according to a joint news release.

A grid connection with B.C. has long been on the Yukon government's wish list. Last year, Premier Ranj Pillai called on Ottawa to pony up $60 million for the project, and in September, the federal government "conditionally approved" up to $40 million to study a 765-kilometre transmission line.

Yukon's grid — which is not currently connected to the rest of North America — is under increasing strain to meet the local demand for power as the territory's population keeps growing and the territory's own green energy strategy calls for electrifying large swaths of the economy.

Meantime, Yukon Energy — the territory's power corp. — has applied this month to hike electricity rates by 34 per cent over the next three years to help pay for $350 million in "essential" upgrades to the aging system.

Pillai said the agreement signed with B.C. on Thursday is to ensure that the $40-million in federal funding announced last year can be used.

"We have the resources that are required, but it's just to get that commitment with British Columbia to, as well, look at the potential of selling power to us, or to buy power from us in the future," Pillai said.

At a news conference Thursday, B.C. Premier David Eby pointed to how reliant the Yukon is on diesel as an example of how this deal will benefit both areas.

"Electricity from B.C. would create jobs in B.C. and opportunity in British Columbia, as well as in the Yukon. And I'm looking forward to work with Premier Pillai on that," he said.

The premier said his government is focusing on the project right now because of Prime Minister Mark Carney's interest in so-called nation-building projects.

"We're going to need Canada to come to the table with a huge investment on the major capital budget. We can't put this on the shoulders of Yukoners, it's too expensive to do. But it will lead to so much potential for our country," Pillai said.

"We think it's a nation-building project, and we think it's of national consequence."

Pillai said the grid connection will help spur new development and energy projects in the Yukon and northern B.C. He said when mining companies express interest in investing in the Yukon, they "always" ask about the territory's long-term energy strategy.

He also said First Nations' involvement in both B.C. and the Yukon is the "foundation" of the project.

"We're looking at other transmission lines that have been built across the country where there's been significant Indigenous ownership, and we want to use that model," Pillai said.

"We think that's appropriate, and we think that that's really economic reconciliation."