An Energy Superpower at What Cost? Why Analysis Must Be Part of the Equation

January 20, 2026 – What does it mean to be an “energy superpower,” and how will it economically benefit Canadians? A new report from the C.D. Howe Institute warns that recent megaproject power sector announcements touting Canada as such lack definition, cost-benefit analysis, and evidence that they will improve affordability, which continues to remain a top concern for many Canadians.

In “Beyond ‘Energy Superpower’: Market-Friendly Planning for Canada’s Power Sector,” A.J. Goulding finds that new nation-building proposals, such as building new generation or transmission for export, expose Canadians to significant financial risk when they are not supported by firm, long-term demand. He offers a high-level framework to help policymakers make better-informed decisions and ensure new investments achieve the highest return on scarce taxpayer dollars.

“Canada’s ageing power infrastructure does need significant investment,” said Goulding, President of London Economics International and Adjunct Professor at Columbia University. “But large public spending decisions should be grounded in clear objectives, robust economic analysis, and a demonstrated link to affordability and reliability for Canadian households and businesses.”

The report notes that the economic case for large-scale interprovincial transmission is becoming less certain. Electricity export demand from the United States is increasingly uncertain as US policy emphasizes domestic self-sufficiency, while Canadian provinces are already undertaking substantial investments to meet their own reliability needs, largely financed by ratepayers. Together, these developments raise important questions about whether additional federal and provincial subsidies for power-sector megaprojects represent the most effective use of limited public resources.

To mitigate the risk of misdirected investment, Goulding outlines a framework to help inform future decisions on public support for power-sector projects. He emphasizes that government intervention should be focused on clearly defined market failures, that stronger incentives are needed for effective interregional planning, and that new cross-border infrastructure should be supported by long-term contracts to limit financial risk. The framework also stresses the importance of carefully considering alternatives and opportunity costs, as well as subjecting proposed projects to transparent, timely, and independent economic review before they are fast-tracked or receive public financing.

“When I think of an energy superpower, I think of affordability and reliability,” said Goulding. “Achieving that kind of success depends on disciplined decision-making that ensures public dollars are spent where they deliver the greatest economic value and tangible benefits for Canadians.”

Read the Full Report

For more information, contact: A.J. Goulding, President, London Economics International and Adjunct Professor, Columbia University; Raquel Schneider, Communications Officer, C.D. Howe Institute, 647-805-3918, rschneider@cdhowe.org.

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

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