Electricity

The opportunity

Canada released its National Electricity Strategy in May 2026. Powering Canada Strong: A National Strategy for an Electrified Canadian Economy (the Strategy) sets out plans and reforms aimed at doubling Canada’s electricity supply by 2050 through new infrastructure, and accelerating economy-wide electrification to support competitiveness and decarbonization.

The Strategy, described by the federal government as “a nation-building exercise not seen for generations,” will help position Canada as an energy superpower. It is organized around four pillars: building and financing infrastructure; connecting grids east-west-north; attracting and training the necessary workforces; and expanding domestic manufacturing of grid components.

As part of an effort to address projected electricity demand and system costs—forecast to exceed $1 trillion by 2050—the government plans to support investment, amend the federal Clean Electricity Regulations, and advance regional integration and interties. Investors and sector participants should consider the Strategy’s initial proposed reforms and actions, and assess how they could affect future project development, financing, and regulatory approaches. Consultations on the Strategy began in the spring among the federal government and the provinces, territories, Indigenous Peoples, utilities, and unions.

Market entry and investment strategies

The National Electricity Strategy reaffirms Canada’s commitment to identifying investment barriers and attracting foreign direct investment to support electricity system growth.

Institutional investment. The Strategy highlights the important role of institutional investors such as pension funds in “filling a critical capital gap” and providing lower-cost capital for infrastructure buildouts.

MPO. The Major Projects Office (MPO) will serve to accelerate nation-building infrastructure. Established under the Building Canada Act, the MPO acts as a single point of contact for proponents, governments, and Indigenous Peoples. Four electricity projects—the Darlington New Nuclear Project, the North Coast Transmission Line, the Iqaluit Nukkiksautiit Hydro Project, and the Taltson Hydro Expansion Project—along with the Atlantic Energy Strategy and the Transmission InterConnect Investment Strategy, have been referred to the MPO so far. The MPO will also work with Crown corporations to ensure the right long-term funding mechanisms are in place to build out Canada’s transmission systems.

TIIS. Investors should closely monitor the Transmission InterConnect Investment Strategy (TIIS), an initiative to help identify high-priority transmission projects and financial solutions to move them forward. This could include intraprovincial transmissions and interties between provinces and territories. The Strategy also highlights working with provinces and territories to prioritize these projects, establishing mechanisms on long-term regional planning and dispute resolution, and developing a standard cost-allocation mechanism to guide and arbitrate costs among project participants.

NECA. The National Energy Corridor Agreement (NECA) signals nationwide alignment with the Strategy. Initiated by Ontario and signed by nine provinces and territories, NECA outlines how provinces and territories will collaborate to identify and advance new interprovincial transmission infrastructure (including new key interties), expand electricity trade within Canada, and partner with Indigenous communities in energy development. 

Financing and investor support

Canada’s federal government is offering tens of billions in funding support for electricity projects and proponents through tax credits and strategic investments, including the following:

• The Strategy proposes expanding the Clean Electricity Investment Tax Credits (ITCs) to support certain major high-voltage interprovincial transmission projects. Clean Technology ITCs and Carbon Capture, Utilization, and Storage ITCs are also available. These ITCs can improve project economics for energy generation, storage, and transmission development.
• Strategic investment financing is available for proponents via the Canada Infrastructure Bank (CIB), Canada Growth Fund (CGF), and Canada Indigenous Loan Guarantee Corporation (CILGC). Clean energy is a priority sector of CIB, with a $20-billion investment target. Since its inception in 2017, CIB has committed roughly $18 billion across 106 projects, representing $54.4 billion in total value. The $15 billion CGF is an independent investment fund, operating at arm’s length from the federal government. Funding for the CILGC’s Indigenous Loan Guarantee Program (ILGP) doubled from $5 billion to $10 billion in 2025.
• Canada’s first sovereign wealth fund, the $25-billion Canada Strong Fund, will support Canadian companies and invest alongside private capital in nation-building projects, including in electricity.

Key risks and how to manage them

The Strategy is not yet finalized. Its proposed reforms and actions from May 2026 have been subject to several months of consultations with the federal government. Proponents should follow the progress of the Strategy, next steps, and developments in the following areas:

Connecting transmission grids

Despite emerging federal, provincial, and territorial alignment on new transmission interties, building consensus among the different owners, operators, and regulators of transmission infrastructure in each province and territory may be a practical challenge. Canada’s grids are largely organized within provincial and territorial boundaries. Major intertie projects will require coordinated regulatory processes, cost allocation, and commercial arrangements across jurisdictions.

Varying ownership models

While many transmission assets are owned by provincial or territorial Crown utilities, Indigenous Nations and independent transmission companies are playing an increasingly significant role in the ownership and operation of new transmission infrastructure. Wataynikaneyap Power LP, for example, is a licensed transmission company majority-owned by a partnership of 24 First Nations, with Fortis Inc. and other private investors holding the balance. As a result, sophisticated negotiations and agreements will be required to connect transmission grids and meaningfully align the relevant parties’ rights, obligations, and incentives.

Amending the Clean Electricity Regulations

One way the government is seeking to provide regulatory certainty is through amendments to the Clean Electricity Regulations. Finalized in December 2024 under the Canadian Environmental Protection Act, 1999, the Regulations are intended to limit carbon dioxide pollution from fossil fuel-fired electricity generation starting in 2035 and move Canada’s electricity system toward net-zero emissions. While details of these amendments are limited, the government has signaled an approach that would allow electricity sector participants greater use and flexibility of carbon offsets, permit residual emissions to be offset elsewhere, and help avoid stranded assets by giving existing units greater flexibility to maintain reliability and avoid costly premature replacement.

In May 2025, Alberta announced plans to challenge the Regulations’ constitutionality in the Alberta Court of Appeal, leaving the Regulations’ viability uncertain. The May 15, 2026 Canada-Alberta Implementation Agreement holds the Regulations in abeyance in Alberta during the Alberta Court of Appeal reference and any later Supreme Court of Canada appeal. If the Regulations are upheld after all appeals are exhausted, Canada and Alberta will negotiate an equivalency agreement to stand down the Regulations in Alberta. If the Regulations are found unconstitutional after all appeals are exhausted, Canada will repeal them, and Alberta will maintain the carbon-pricing framework set out in the Implementation Agreement. Investors should continue to monitor the status of the reference and the implementation of any Alberta-specific equivalency framework.

Streamlining regulatory processes

Measures have been taken to streamline regulatory processes. The federal MPO was established to coordinate federal approvals, act as a single point of contact, and fast‑track projects deemed to be in the national interest. Provincially, British Columbia’s Infrastructure Projects Act, Ontario’s Protect Ontario by Unleashing Our Economy Act, and Québec’s proposed permitting reforms aim to expedite permitting pathways and reduce regulatory burdens.

Indigenous partnerships

The Strategy details the federal government’s approach to working in partnership with Indigenous communities in developing the North, financing electricity projects, and engaging in consultations. Indigenous partnerships in electricity projects are economically imperative to project success.

In Ontario, the Independent Electricity System Operator’s Long-Term 2 electricity generation procurement incorporated Indigenous participation into its competitive procurement design; all 14 successful projects in the energy stream included at least 50% Indigenous equity ownership, signaling a shift in requirements for new energy infrastructure in the province.

Additionally, the North Coast Transmission Line in British Columbia has been referred to the MPO and is being advanced with First Nations partnership opportunities; BC Hydro describes a co-ownership opportunity for First Nations to become 50/50 equity partners and receive long-term equity returns. Recent energy and capacity procurements in Manitoba and Saskatchewan are also incorporating Indigenous economic participation.

To support the financing of projects across the country, Indigenous infrastructure is a priority sector of CIB, with a $3 billion funding envelope. CILGC supports Indigenous groups in acquiring equity ownership in major projects, including electricity. CILGC announced a $700 million loan guarantee in June 2026 for Williams Treaties First Nations LP to take an ownership stake in the Darlington New Nuclear Project.

The National Electricity Strategy is accompanied by Canada’s Nuclear Energy Strategy, which was released in June 2026.

All dollar amounts in this primer are C$ unless indicated otherwise.