The early history of the use of electrical energy in Canada is quite complex and lacks complete documentation. As is common in the introduction of any new technology, various aspects of the scientific phenomena are used to develop practical applications that have economic or social benefits to industry and the general public.

As these new inventions are being tested in the field, new discoveries constantly appear to alter the situation. Also, if the new technology becomes a rival for a firmly entrenched existing business, then an additional factor of competition affects the rate of acceptance and development of new equipment. In addition, another complication is that the new technology usually has a new terminology that is slowly introduced, gradually modified and may even become obsolete.

The first experiments with current electricity (as opposed to static electricity) were carried out with various kinds of batteries producing electricity chemically. The power was called continuous current (now called direct current - DC). DC has some very specific technical characteristics and in many ways is the simplest form of electrical energy.

When the first dynamos (generators) were built, creating electricity using mechanical energy, the current that was generated alternated forward and backward (now known as alternating current - AC). The early experimenters did not know how to use this AC current and had to adapt their dynamos to produce DC by adding a commutator.

With the new dynamos and batteries, scientists and engineers now had a reliable source of power with which to experiment. The obvious practical applications were communication (the telegraph) and lighting (the arc lamp), both of which required very simple apparatus. The arc lamps created light by causing a spark to jump from one electrode to another. Although the light was far brighter than any previous source of man-made illumination, arc lighting did have some disadvantages, such as having to use fairly high voltages to create the spark. The lights connected in series had to have a continuous level of current, which meant that it was difficult to turn individual lights on and off. Finally, the early lights had to be short-circuited to start, which means that the electrodes had to be touching and then drawn apart after the spark was created. The operation of the lights caused one electrode to erode and thus the lights would have to be adjusted manually nearly every day. These disadvantages meant that arc lamps were not very suitable for use indoors but were good for outdoor, street or area lighting.

Demonstration installations of arc lighting were set up in Europe and North America and small trial installations were made in Montréal and Toronto in 1878 and 1879. One of the earliest permanent arc lighting systems was designed and installed by J.J. Wright in Toronto in 1881: several stores including Timothy Eaton's were illuminated, but the lights were far more effective on the adjacent streets. Demonstrations of arc lights using steam-driven generators were set up by several companies, and eventually the Toronto Electric Light Co, an amalgamation of them, was granted the exclusive franchise to provide electric light in Toronto. In Ottawa arc lighting was installed in several mills and the Ottawa Electric Co later provided arc lighting using equipment consisting of 3 dynamos driven by a waterwheel.

By 1883 permanent arc lighting systems were in operation in the streets of Toronto, Montréal and Winnipeg, and by 1890 many other centres, including Ottawa, Hamilton, Pembroke, London, Victoria, Vancouver, Halifax, Saint John, St John's, Moncton and Sherbrooke, were also arc lit. During this experimental period, new types of arc lamps were developed, such as the Jablochkov Candle, the Brush, the Hochhausen-Vandepoele and the Thomson-Houston systems, which gave a more regular light.

In the meantime, several inventors were trying to develop a better kind of lamp that produced light for human eyes that was not so harsh indoors. Gaslight had been popular for years: various mantles that gave a bright incandescent flame had been produced, and a stick of lime could be inserted in the flame to increase its brilliance ("limelight"). Thomas Edison in the US and J.W. Swan in the UK were experimenting with electric incandescent lamps enclosed in glass globes. Demonstration installations of the Edison lighting systems were made in Montréal as early as 1879 and later in 1882, and in Toronto in 1883. They did not work very well and were removed. The first successful installation was completed at the Canada Cotton Co Mill at Cornwall, Ont, in the fall of 1882, and the Montréal Cotton Co Mills at Valleyfield, Qué (now Salaberry-de-Valleyfield), installed an Edison system in September 1883 (electric light was a godsend to the dusty textile and lumber mills, as it was much less of a fire hazard).

In 1886 a small plant producing incandescent light was installed in the Parliament Buildings in Ottawa and in January 1887 a station was completed in Victoria, BC, which was reputed to be the first public incandescent lighting station in Canada. Edison soon became the main promoter of DC incandescent electric light in the US and Canada. The light bulbs used generally had carbon filaments which had a short life and low efficiency. They would be improved in time with tungsten filaments, better wiring and control systems. Incandescent lamps were tried for street lighting in various areas, but the early bulbs were not bright enough to compete with gas or arc lamps. DC generators also had the advantage of being able to charge storage batteries.

All of these installations were designed to provide power for the immediate area only and could serve an area up to one-quarter-mile radius. Edison devised a 3-wire system of 220/110 volts that increased the distance to one-half mile, but beyond that the voltage losses as a result of the resistance in the wire were too great.

During this period, experimentation continued with AC current. Engineers discovered that the disadvantage of the power alternately increasing and decreasing with single-phase AC could be mitigated by altering the wiring in the generator which could produce 2- or 3-phase current that would deliver smoother power. They also adapted AC to arc and incandescent lighting and some AC motors were being developed that would rival the existing DC motors. One of the most important early inventions was the converter (now called transformer) which consisted of two coils of different sizes. Voltage in the first coil induced a higher or lower voltage (depending on the number of windings) in the second coil with a corresponding lower or higher amperage - the current remained constant. It was discovered that the higher the voltage, the lower the power losses. Thus if you could transform (or step up) the voltage from the generator from 2200 volts to 11 000 or 50 000 or more (now 750 000), the power losses were greatly reduced, which made possible the efficient long-distance transmission of power for the first time.

A vigorous competition ensued between proponents of DC (Edison) and AC (Westinghouse). DC advocates referred to AC as "killer" voltage among other things. In 1888 the first recorded permanent installation of a Westinghouse AC system in Canada was installed in Cornwall, Ont. By 1890 similar installations were constructed in other locations across Canada. It appears from the statistics that several companies added AC capability to their DC plants primarily to supply customers who wanted indoor lighting.

Another major user of electrical power appeared in the 1880s. Street cars using DC motors were quickly established with considerable success in urban areas. Street-car companies usually generated and distributed their own power. The first use of the power of Niagara Falls in Canada for electricity was in 1893 when a railway company (later the International Railway Co) installed two 1000 hp generators to operate its electric tramway as well as to supply power for distribution. This transmission was at generator voltage and not long distance.

The competition between advocates of AC and DC came to a climax during the massive development of Niagara Falls power in the US. The plan called for the generation and transmission of power for industry, including the new electro-chemical and electro-metallurgical industries, in the Buffalo, NY, area. Proponents of DC proposed to generate electrical power, convert it to mechanical power and transmit it by cables and pulleys, or compressed air, or hydraulically. AC advocates suggested using the new transformer (which would not work on DC) to step up the power from 2200 to 11 000 volts and then transmit the power by wire to Buffalo. The AC system of George Westinghouse was selected and in 1895 one of the world's most influential power developments was opened.

The concept of transmitting electrical power over long distances was enormously important to Canada, where numerous hydroelectric power sites in remote areas could be harnessed for industry. One of the earliest long-distance transmissions in Canada was from a power station on the Batiscan River 16 miles to Trois-Rivières in 1897. This line carried 11 000 volts. The power of nearby Shawinigan Falls was first harnessed for the pulp and paper industry and the new aluminum industry in 1901. By 1903 a power line from here carrying 50 000 volts reached Montréal and within a decade it carried 100 000 volts.

The whole electrical equipment industry developed almost as rapidly. The new power source required generators, alternators, motors, lights, meters, switches and, above all, good cheap copper wire, and all of it needed to be standardized to make the equipment universally interchangeable. Building codes had to be altered to ensure the safe installation and use of electrical equipment. Most of this technology was imported to Canada as the Westinghouse Co established a branch plant in Hamilton and General Electric (previously Edison Electric) in Peterborough. However, many Canadian companies manufactured some of their own equipment. The demand for copper wire stimulated Canadian mining. The mines and pulp and paper companies were also major consumers and developers of electrical power; the development of hydroelectric power and Canadian resources went hand in hand.