Private capital investment opportunities: mobilizing capital for Canada’s energy supercycle

 
This article examines Canada’s recent reforms, identifies where private capital is deploying, highlights emerging opportunities (including MPO‑referred projects and growing procurement pipelines), and outlines the partnership structures investors will need to navigate to meet this crucial moment in Canda’s energy sector.

The energy investment opportunity

The investment opportunity is significant. McKinsey & Company’s September 2025 report, The Infrastructure Moment, estimates that $106T in cumulative global infrastructure investment will be needed through 2040 to meet emerging and updated infrastructure demands¹. Energy and power infrastructure represent the second-largest share, requiring approximately $23T, driven by clean generation expansion, grid modernization, and electrification². In Canada, more than $500B in major energy projects were planned or under construction nationwide in 2024, underscoring the scale of capital required and the critical role of private investment in meeting Canada’s energy infrastructure needs³.

For governments, these projections reinforce the need to crowd in long‑duration private capital to meet Canada’s objectives around energy security, electrification, and escalating AI‑driven power demand. But capital is mobile and selective. Capital will flow to jurisdictions offering the most attractive and efficient frameworks. To compete, Canada must enhance its investment environment and streamline regulatory processes to draw private capital at the scale required.

Strengthening Canada’s energy investment environment

Private capital investors place a premium on critical policy signals. Investors look for regulatory certainty; streamlined permitting; investment tax credits and incentives; and clear alignment across federal, provincial, and Indigenous decision-makers. Canada must demonstrate it is open to long-term, large-scale private capital for its energy projects.

Reflecting this need, governments across Canada have begun taking meaningful steps to strengthen the investment environment. For example, the federal Defence Industrial Strategy offers a “clear, long-term demand signal to Canadian industry” for defence and dual‑use capabilities and infrastructure, helping firms align capital, technology, and talent with priority areas⁴. As discussed in our analysis on the Strategy, clear strategic signals of this kind outline the scale of public investment and priority areas, reduce risk, and improve investment decision‑making.

Measures have also been taken to streamline regulatory processes. The Building Canada Act created the Major Projects Office (MPO) to coordinate federal approvals, act as a single point of contact, and fast‑track projects deemed in the national interest⁵. Provinces are following suit: British Columbia’s Infrastructure Projects Act, Ontario’s Protect Ontario by Unleashing Our Economy Act, as well as a law introduced by the Québec government in December 2025, all aim to expedite permitting pathways and reduce regulatory burdens⁶.

In addition to the MPO, the federal government’s Canada Infrastructure Bank (CIB) also provides a policy-driven tool to attract private capital, acting as a public funding backstop for critical energy infrastructure projects. Through strategic private investor partnerships, the CIB provides financing for projects, taking on strategic risks and closing investment gaps with projects. Since the CIB’s inception in 2017, the Crown corporation has committed roughly $18B over 106 projects, representing $54.4B in total value⁷.

Federal-provincial agreements, such as the Memorandum of Understanding between Alberta and the federal government, further signal to investors government alignment and commitment to major projects and resource development. Federal-provincial cooperation agreements on impact assessments also help to minimize regulatory duplication between different levels of government, clarifying the roles and responsibilities of different governments, including when and under what circumstances each government will lead a project’s assessment. Final or draft cooperation agreements are currently in place with more than half of Canada’s provinces, including most recently with Alberta⁸.

Interprovincial arrangements likewise underscore a shared intention to expand resource trade and strengthen provincial interties. On March 4, Ontario announced the National Energy Corridor Agreement, a new interprovincial and territorial partnership agreement to advance transmission infrastructure across Canada. The agreement commits provincial and territorial governments to collaborate on identifying and advancing new interprovincial transmission infrastructure, expanding electricity trade, advocating for federal support, and partnering with Indigenous communities in energy development⁹. The agreement signals to investors that provinces are presenting a coordinated approach to developing critical energy infrastructure.

Canada must continue to reduce permitting timelines, de-risk projects, and provide critical policy support for large energy and natural resources projects to attract global capital. While recent steps are positive, the risk of inaction is significant. As stated above, private capital is mobile, and investors will deploy funds to jurisdictions that move faster and offer more predictable frameworks.

The opportunities in Canada

As Canada’s federal and provincial governments continue advancing key reforms and policy measures, investors should take note of the major projects that have already been referred to the MPO for consideration. Currently, 15 projects have been referred to the MPO for consideration. These projects represent an important first wave of nation-building opportunities and range from all-season roads in the Arctic to mining expansions for critical minerals¹⁰.  Reviewing the full slate gives investors a clearer sense of where Canada is concentrating early efforts as these policy priorities begin to take shape.

The MPO continues to focus on large-scale energy and resource projects, including trade and transportation projects that move energy and resources to new markets. Most recently, the Prime Minister’s Office referred a series of Arctic and Northern energy and infrastructure projects to the MPO for consideration. The Taltson Hydro Expansion, the Mackenzie Valley Highway, Grays Bay Road and Port, and the Arctic Economic and Security Corridor represent a suite of strategic trade and transportation projects intended to “connect, build and transform Canada’s Arctic and Northern region”¹¹. These projects are discussed further in our corresponding quarterly article on resource development in Canada’s North.

Where is private capital deploying in Canada?

Beyond the projects referred to the MPO, several core areas across Canada’s energy and natural resources landscape continue to offer meaningful opportunities for private capital, driven by accelerating electrification, rising energy demand, and a growing pipeline of government-led procurements.

1. LNG export terminals and trade enablement

Key assets include pipelines, LNG terminals, storage, and export facilities. Canada continues to lag US LNG export capacity with only one operating terminal¹². The US has opened eight LNG export terminals since 2016 and is on track for four more by 2028¹³. The sector received positive momentum in September 2025 when the Carney government placed LNG Canada Phase 2 on the initial list of projects to be considered for fast‑tracking under the MPO.

Investment opportunities also extend to trade‑enabling infrastructure. Budget 2025 introduced the $5B Trade Diversification Corridors Fund to support transportation assets, such as roads, rail, airports, and ports, that unlock new markets and strengthen energy corridors¹⁴.

2. Power generation, transmission grids, and utilities

Nuclear energy continues to gain momentum as a source of long‑term, low‑carbon baseload generation. Investment opportunities include small modular reactor development, new-build facilities, and refurbishments. These opportunities extend beyond construction financing to long‑term fuel supply arrangements and servicing requirements for reactor fleets¹⁵.

Grid expansion and modernization also present significant investment potential. New transmission infrastructure is needed to relieve congestion, reduce curtailment, and support widespread electrification¹⁶. With more than 70% of global transmission lines now over 25 years old, modernization offers a compelling return profile, and in 2024 alone, approximately $390B was invested globally to strengthen grids^17,18. In Ontario, several large-scale procurements are underway to meet growing demand. In January, the government approved the Independent Electricity System Operator’s (IESO) recommendation for a new underwater transmission facility delivering up to 900 MW into downtown Toronto—the “Toronto Third Line”—and the IESO is developing the procurement framework to select the transmitter¹⁹. Later that month, Ontario designated the Greenstone Transmission Line as a priority project and confirmed Hydro One as the developer for the 230‑km line from Nipigon Bay to the Ring of Fire²⁰. Investors should consider how and at what stage to participate in these priority transmission projects.

Opportunities may also emerge in the utility sector. Ontario has launched the Panel for Utility Leadership and Service Excellence (PULSE), a strategic advisory group tasked with recommending investment frameworks, operational best practices, and regulatory reforms to address aging electricity distribution infrastructure. Its mandate includes “reviewing ownership, governance and investment models that balance municipal interests, financial sustainability and system efficiency”. With an estimated $103–$120B in distribution‑system investment required over the next two decades, investors should monitor PULSE’s recommendations and the evolving conditions of Ontario’s utility sector²¹.

3. Renewables and battery storage

Renewables continue to be an attractive investment opportunity. Wind and solar remain among the lowest‑cost greenfield generation options and are projected to supply 65–80% of global electricity by 2050²². Grid‑scale storage is further expanding opportunities by enhancing the reliability of variable resources and enabling system balancing as battery costs continue to decline²³.

Renewable‑energy procurements continue across Canada. The Canadian Renewable Energy Association forecasts that, by 2035, Canada will deploy 30–51 GW of new wind capacity, 17–26 GW of new solar capacity, and 12–16 GW of new energy storage²⁴. Procurements such as the IESO’s LT2 and forthcoming LLT processes, BC Hydro’s Call for Power, and Manitoba’s Wind Energy Procurement create significant entry points for private capital—offering investors the opportunity to participate directly in contracted renewable and storage projects and to help drive Canada’s broader electrification goals²⁵.

4. Natural gas and carbon capture utilization and storage (CCUS)

Canada’s natural gas sector continues to help support energy reliability within provinces, emphasizing its incorporation through an all-of-the-above (i.e., “resource-agnostic”) approach to meet energy needs²⁶. According to one forecast by the Canada Energy Regulator, Canadian natural gas production is anticipated to grow through to 2025 in all of its scenarios (with LNG export levels being an important driver of production)²⁷. Further, CCUS projects are becoming economic, and being paired with natural gas allows for a more flexible energy solution²⁸. Confidence in such projects is strengthened by the enactment of bespoke legislation. For instance, Ontario’s Geologic Carbon Storage Act, 2025 came into force as of January 1, 2026, which enables the development of commercial-scale carbon storage projects in the province²⁹.

Structuring relationships with government and stakeholders

As investors evaluate these emerging opportunities across Canada’s energy and natural resources sectors, an equally important consideration is how they structure their relationships with governments and key stakeholders throughout project development. Depending on the scale or type of project, this might include a partnership with the CIB or the MPO. Additionally, Indigenous equity participation is increasingly either required or strongly incentivized in major energy procurements. For example, many of the IESO’s recent and upcoming energy and capacity procurements incorporate Indigenous economic participation as part of the rated criteria³⁰. Manitoba, BC, and Saskatchewan also have incorporated Indigenous economic partnership into their energy procurements³¹. Investors should expect such partnership structures to be a central feature of project development.

Turning opportunity into investment

Canada’s energy supercycle is gathering real momentum. While continued policy clarity and regulatory efficiency remain essential, we are beginning to see the reforms, permitting improvements, and coordinated government action needed to unlock large‑scale investment. The early pipeline of MPO‑referred major projects demonstrates that governments are moving from vision to execution and that investment opportunities are emerging. For investors, this is a pivotal moment: those who move early, understand the evolving procurement and permitting landscape, and align with government and Indigenous priorities will be well positioned to shape and benefit from Canada’s next wave of energy and infrastructure growth.