Accelerating Canada’s clean power advantage

Accelerating Canada’s clean power advantage

Countries around the world are racing to deploy low-cost clean electricity to meet the growing power demand in an environmentally responsible way. Progress has been impressive, with global investments in renewable energy now exceeding investments in conventional energy. Canada’s geography, abundance of natural resources, workforce, and forward-looking policy positions give us an edge in this historic transformation. More than 80% of Canada’s electricity already comes from renewable and non-emitting sources such as solar, hydro, nuclear, and wind power.

Building a net-zero electricity grid by 2050 is foundational to reducing greenhouse gas emissions to protect the environment and human health from the threat of climate change. It is also a massive economic opportunity. The Government’s economic agenda will draw on Canada’s advantages to attract investments and create economic success in every region of the country for decades to come. Adding new clean electricity infrastructure is an important part of reaching that goal—infrastructure like building out east-west electricity grids which would introduce new transmission connections between provinces and territories, next-generation nuclear power stations, and renewable energy projects.

Electricity is the backbone of Canada’s economy and is going to become even more important. By 2050, demand for electricity in Canada is expected to at least double, due to increasing demand from a growing population; the electrification of more of the economy (vehicles, home heating and cooling, manufacturing and industrial processes); and new drivers, like artificial intelligence and data centres. Ensuring that the coming grid expansion is clean is crucial to addressing climate change and enabling the Canadian economy to compete in the emerging low-carbon global economy.

The Government of Canada will help meet this demand by helping provinces and territories build out a net-zero emissions electricity grid by 2050. Simply put, expanding our grid needs to happen either way, and we must ensure that the coming expansion is clean.

The Clean Electricity Regulations are part of Canada’s clean electricity strategy, Powering Canada’s Future. The Clean Electricity Regulations protect the environment and human health from the threat of climate change by significantly limiting greenhouse gas emissions from the electricity sector.

By 2050, the Regulations will help ensure that emissions from Canada’s electricity grid have been reduced to net zero. This transition will begin in 2035, when the Regulations start to limit emissions of greenhouse gases from some electricity generation units that use fossil fuels.

To help build the grid of the future, the Government of Canada is making historic investments. This includes investment tax credits and funding programs totalling over $60 billion in potential support to provinces, territories, Indigenous organizations, and industry, and the budget 2025 commitment to introduce legislation to implement the Clean Electricity Investment Tax Credit, retroactive to April 2024.

The goal of a net-zero electricity grid by 2050 is shared by most provinces and territories. That timeline gives electricity producers sufficient time to plan and help make sure that the grid expansion ensures clean, affordable, and reliable power. The Government of Canada is working with provinces and territories so they can build new electricity generation and decarbonise their grids in ways that best suit their circumstances, including identifying and funding projects of national significance in the electricity sector.

Supporting flexibility through equivalency agreements

Equivalency agreements are a well-established mechanism under the Canadian Environmental Protection Act, 1999 (CEPA). These agreements recognise laws of provincial and territorial governments that achieve equivalent environmental effects. They have been successfully used for various federal regulations, including the federal coal-fired electricity regulations.

The Government of Canada is open to standing down the federal regulations in a given province or territory upon completion of an equivalency agreement.

As announced in Budget 2025, Canada intends to amend the Canadian Environmental Protection Act, 1999 to enable long-term equivalency agreements with provinces and territories reflecting the net zero by 2050 focus of the Clean Electricity Regulations, allowing these to be extended beyond the current limit of five years. This will help provide certainty for provinces and territories, utilities, and project developers as they plan their clean electricity investments and projects going forward.

Clean electricity projects are of national interest

The new Major Projects Office is identifying projects—including electricity projects—that are in Canada’s national interest and accelerating their development.

On September 11, 2025, the Government of Canada announced that an electricity project, the Darlington New Nuclear Project, is one of the first projects that has been referred to the Major Projects Office.

• This project would make Canada the first G7 country to have an operational grid-connected small modular reactor (SMR). This would accelerate the use of a key technology to support Canadian and global clean energy needs.
• The project would drive $500 million annually into Ontario’s nuclear supply chain, making it competitive in the growing global green energy market.
• Once complete, Darlington’s first of four planned SMR units will provide reliable, affordable, clean power to 300,000 homes. It will also sustain 3,700 jobs annually, including 18,000 during construction, over the next 65 years.
• The project has the potential to position Canada as a global leader in the deployment of SMR technology for use across the country and worldwide.
• On October 23, 2025, the Prime Minister announced a $2 billion investment from the Canada Growth Fund to support the construction and operation of the Darlington New Nuclear Project, alongside $1 billion from the Building Ontario Fund.

The Government of Canada has also acknowledged that the Wind West Atlantic Energy initiative—Canada’s first offshore wind development—has the potential to be transformative for the country. The proposed initiative would connect renewable, emissions-free energy from Atlantic Canada to Eastern Canada (Quebec and Ontario). This could meet rapidly growing demand due to population and economic growth.