Beyond “Energy Superpower”: Market-Friendly Planning for Canada’s Power Sector

• Canada faces unprecedented power-sector investment needs through 2050, driven by ageing infrastructure, rapid load growth, and decarbonization goals. Governments increasingly frame large transmission and generation projects as “nation-building” or pathways to becoming an “energy superpower,” yet many recent announcements lack clear economic definitions, cost-benefit analyses, or evidence that they will improve affordability for ratepayers and taxpayers.
• Building generation or transmission for export – whether interprovincial or international – poses significant economic risks unless underpinned by firm, long-term contracts. Without contracted demand, such investments expose Canadians to revenue volatility and stranded-asset risk, particularly as US states and provinces prioritize self-sufficiency and state-backed procurement.
• Massive generation build-outs are already underway across nearly every province, largely financed by ratepayers. While some federal involvement may be justified to address true market failures – early-stage technologies, data gaps, or northern and Indigenous-led infrastructure, for example – broad federal subsidies risk crowding out private investment and misallocating scarce public resources.
• The paper proposes five principles to guide government support for power-sector investment: focus on demonstrable market failures; fund interregional planning and better data rather than construction; require long-term contracts for cross-border infrastructure; rigorously assess alternatives and opportunity costs; and subject proposed projects to transparent, timely, independent economic review before fast-tracking or public financing.

The author extends gratitude to Aleck Dadson, Tasnim Fariha, Parisa Mahboubi, Daniel Schwanen, Grant Sprague, and several anonymous referees for valuable comments and suggestions, and thanks Juan Carlos Segovia Garza and Joannes Ezeokana for their research assistance. The author retains responsibility for any errors and the views expressed.

Introduction

Projected needs for power sector investment in Canada through 2050 are massive. Replacing ageing infrastructure and meeting significant projected load growth while reducing emissions and retaining affordability will be an ongoing challenge for policymakers. Government-imposed policy targets and timelines further complicate matters. Given the magnitude of the task ahead, it is critical that decisionmakers focus on specific challenges such as improving productivity through economically efficient investments, instead of being distracted by amorphous concepts such as nation-building or becoming an “energy superpower.”

Government support needs to be viewed as a scarce resource to be allocated wisely. This paper offers a high-level framework to help federal and provincial policymakers make informed decisions when considering subsidies for infrastructure. First, it explores recent political statements that could distort electricity sector planning. Next, it reviews a selection of recent power sector megaproject announcements. This is followed by a discussion of the risk of misdirected investment. Finally, the paper proposes five principles¹1 Broader discussion of reliability, affordability, and low emission targets is out of the scope of this paper but can be considered during the economic review phase, if such objectives are clearly articulated and consistently applied. to consider when assessing potential taxpayer-funded support, ideally before a project is referred to the Major Projects Office (MPO).

These principles are:

• focusing on areas of market failure,
• increasing incentives for interregional planning,
• ensuring that new cross-border (whether interprovincial or international) supporting energy infrastructure is underpinned financially by long-term contracts,
• considering alternatives and opportunity costs, and
• requiring transparent, timely, independent economic review.

Recent Announcements Lack Supporting Economic Analysis

In October 2024, the Government of Ontario released Ontario’s Affordable Energy Future, which articulates plans for the province to become an “energy superpower.” The document suggests that future plans need “to build on [Ontario’s] competitive advantage and export clean energy and technology to the world,” with the goal of driving “revenue and jobs” to the province. However, since then the global political and economic environment has changed dramatically; far from contemplating increased power exports, Ontario at one point threatened to eliminate them in the face of the ongoing US tariff threat. Nonetheless, the June 2025 Energy for Generations document continues to use the term “superpower” and highlights potential for further exports to the US once relations stabilize.

Nationally, the focus has turned towards strengthening interprovincial transmission ties in the hope of stimulating electricity trade between the provinces. For example, at a rally on April 9th, Prime Minister Mark Carney announced his plan to secure Canadian energy and electricity sovereignty by working with provinces and territories to build out an east-west electricity grid (Liberal Party 2025). Subsequent announcements, such as the backgrounder issued to announce the second tranche of projects to be referred to the MPO, also echo Ontario’s “energy superpower” rhetoric.

Both the provincial and the federal pronouncements are lacking in definition. For example, what does it mean precisely to be an energy superpower, and how does that benefit customers and the local economy? The essential foundation for being a “superpower” is affordable and reliable power, where measures of affordability also consider the cost of the contribution from the taxpayer.²2 To be fair, while Chapter 9 of Ontario’s Integrated Energy Plan (Energy for Generations) is entitled “Ontario as a Global Energy Superpower,” language in the text is more restrained. For example, page 145 notes that “Ontario sees a strategic role for long-term agreements that include firm revenue guarantees, to drive value and protect ratepayers.” Page 147 notes that priorities include lower electricity bills and more jobs. However, it is not clear that a mechanism exists to ensure that new initiatives are grounded in analysis to test whether these priorities will be met. Building out the power system for export, whether to other provinces or to the US, has benefits to ratepayers only if there are significant economies of scale, and if sufficient long-term load exists in the destination market.

However, even absent trade tensions, it must be noted that US states themselves are also focused on self-sufficiency. While delays and cancellations of US offshore wind may provide near-term export opportunities for Canada, an increasing amount of generation and transmission in New York and New England is being built under state-sponsored contracts; New York also recently announced it is pursuing new-build nuclear.³3 Ontario and New York have signed a memorandum of understanding to cooperate on nuclear project development. Unless Canadian provincial exporters achieve contracts under similar state or provincially sponsored procurements (see Box 1 for an example), the risk of building for export to the US or neighbouring provinces is untenable due to the potential revenue volatility and associated risk.

Similarly, the concept of an east-west grid is ill-defined and may pose economic risks to Canadians if overbuilt. Currently, southbound transmission capacity is approximately three times larger than the capacity available between provinces; correspondingly, US markets are also larger than adjacent provincial markets. While a recent North American Electricity Reliability Corporation (NERC) study (2025) highlighted the potential for increased interprovincial transmission to alleviate shortages in some hours, it did not perform an economic cost-benefit analysis or a least-cost assessment of alternatives.

Leaving aside what was formerly referred to as the Atlantic Loop (a set of transmission improvements linking Quebec, New Brunswick, and Nova Scotia that was shelved in 2022),⁴5 According to the NERC study, Nova Scotia faced shortages in all the weather years studied. Expansion of transfer capability with New Brunswick would address these deficits. creation of a new east-west transmission grid is a solution in search of a problem.⁵6 Accelerating load growth across provinces means that there is less surplus energy to be exported, and new large-scale resources that would serve the needs of multiple provinces could take over a decade to develop. The challenges faced by Muskrat Falls are instructive; a combination of cost overruns, difficulties in building the associated transmission, and reliability concerns in neighbouring provinces has meant that the net economic benefits of the project are significantly smaller than expected. Partially, this represents a misunderstanding of the way electricity grids work; electrons from British Columbia would not travel directly from the Site C Dam to eastern load centres, the way that physical molecules do in a pipeline; line losses and transmission charges would in any event make such a transaction costly.

Even the US lacks an east-west grid.⁶7 The North American grid is divided into the Eastern and Western Interconnection and the Electricity Reliability Council of Texas, known as ERCOT. There are limited interconnections between them. The North American grid is divided into three largely distinct transmission grids with limited capability to exchange power between them. In geographically large jurisdictions, national integration is not always better; different solutions may well be appropriate for different parts of a country. Figure 1 provides an overview of current internal Canadian and cross-border interties. Existing provincial interties (except those between Quebec and Atlantic Canada) are seldom fully utilized;⁷8 Between 2022 and 2024, most east- and west-bound flows across western and central Canadian interties had average capacity factors below 40 percent, indicating that actual power transfers were well below rated capacities for much of the time. To avoid underrepresenting flows in either direction, intertie utilization was calculated as the sum of flows in a given direction divided by the product of the intertie’s capacity and the number of hours with flows in that direction. Using this metric, the same interties show utilization rates frequently below 60 percent, whereas interties between Quebec and Atlantic Canada (Quebec–New Brunswick and New Brunswick–Nova Scotia) exhibit significantly higher utilization, averaging around 90–100 percent in the dominant direction of flow (author calculations using data from AESO 2024; IESO 2024; Hydro-Québec 2024; Nova Scotia Power 2024). while this does not mean they do not have value – one would expect usage to be focused on peak needs – it does call into question the need for significantly more ties. The individual provinces have diminishing surpluses to share with one another; to be economical, transmission buildout would likely need to be accompanied by construction of additional generation capacity. Further detailed economic modelling of potential east-west transmission ties would be necessary to substantiate a business case, with particular focus on whether interconnections facilitate access to dispatchable, rather than intermittent, resources.⁸9 Several studies referenced to support interties date to before 2022. The North American Renewable Integration Study was issued by the US National Renewable Energy Laboratory in 2021; the Regional Electricity Cooperation and Strategic Infrastructure Initiative, as well as the Pan-Canadian Wind Integration Study, both funded by NRCanada, are even older. Arguably, a study focused on the economics of transmission build rather than the integration of a particular resource would produce different results, particularly if the focus is on affordability and dispatchability. Investments should move forward only when the economic case is clear and well-substantiated.

It is not evident that market failure exists in the case of east-west transmission. Generally, close to the full cost of electricity infrastructure is recovered through rates, though some provinces provide subsidies for policy-driven investments (Ontario’s recent shift of some renewable energy contract costs from the Global Adjustment to taxpayer funding, for example) or take lower than commercial returns in their provincially owned utilities to suppress rates. If transmission ties between provinces are mutually beneficial, mechanisms already exist to fund such ties through rate base, and provincial utilities and system operators are more capable than the Canadian federal government to assess need and allocate cost consistent with benefits.⁹10 As noted later in the paper, the Atlantic provinces and northern regions are an exception; given the small size of the rate base in these regions, federal support may be justified. Support need not be monetary; acceleration of project approvals, as is contemplated for major projects, is also a form of support. Even if one argued in favour of federal incentives to encourage regulators to recognize the value of so-called strategic¹⁰11 Unless carefully assessed, the word “strategic” can be code for simply ignoring economic analysis when it contradicts what a policymaker or investor wants to do. infrastructure and support private-sector investment, the federal government still would need to look before it leaps by adhering to the five principles outlined in this paper.

While open to mutually beneficial cooperation on projects like offshore wind, most provinces are focused on self-sufficiency; furthermore, new technologies that allow for distributed generation and greater access to demand response are closer to load and can substitute for interprovincial transmission.¹¹12 In markets with organized capacity mechanisms, aggregated demand response and distributed generation are formally recognized (accredited) as contributors to system reliability and capacity. Even if focusing on system optimization within a province causes utilities or system operators to be myopic regarding the benefits of interprovincial ties – a tendency that may be enhanced by the desire to support investments in their own provinces – the correct policy response in that case is to nudge provinces to do the economic assessment,¹²13 Recommendation 19 of the Canadian Electricity Advisory Council’s Final Report (May 2024, p.128) provides one potential avenue for achieving this. rather than to immediately assume substantial federal money is needed.

Significant Generation Investment Is Proposed

Enthusiastic plans for generation in most provinces may undercut the case for more interprovincial transmission. Ontario is planning additional investment in new generation at an unprecedented pace. LT2, the largest competitive energy procurement in Ontario’s history, is in the works and aims to secure 14,000 GWh of new-build electricity. Incremental need through 2050 is projected to be as much as 13.4 GW (Independent Electricity System Operator 2025). The province is making a substantial commitment to nuclear power (Government of Ontario 2024). The Small Modular Reactor (SMR) project at Darlington, led by Ontario Power Generation (OPG), which recently received a green light for construction of an initial unit, is projected to cost nearly CA$21 billion for 1,200 MW of new nuclear capacity (The Globe and Mail 2025). Bruce Power is undergoing a Federal Impact Assessment for up to 4,800 MW of new capacity, dubbed the Bruce C Project. OPG also began exploring building up to 10,000 MW of new nuclear generation at its Wesleyville site (Government of Ontario 2025).

Ontario’s potential expansion plans are upwards of 42 percent of its existing capacity of roughly 37,600 MW (Independent Electricity System Operator 2025). Ontario, alongside Québec (37,200 MW), is one of the two largest electricity systems in Canada (Hydro-Québec 2025). By comparison, Alberta’s system totals about 23,200 MW (Alberta Electric System Operator 2025), and British Columbia’s around 18,500 MW (BC Hydro 2025). Most other provinces and territories operate systems below 10,000 MW.¹³14 Provinces and territories with less than 10,000 MW of installed capacity: Saskatchewan (5,930 MW), Manitoba (6,100 MW), Nova Scotia (3,824 MW), New Brunswick (3,799 MW), Newfoundland & Labrador (8,058 MW), Yukon (152 MW), Northwest Territories (135 MW), and Nunavut (84 MW).

Significant development activity, as shown in the appendix, is also being proposed in other provinces and territories. The volume of power sector investments across Canada demonstrates that each jurisdiction is focusing on meeting its needs and is largely relying on ratepayers to do so. Although most large provinces are capable of planning for and financing their own needs, enthusiasm for large-scale projects can come at the cost of reducing optionality, increasing the risk should demand not materialize.

While there may be circumstances where federal participation unlocks broad social benefits, these circumstances are unique and likely limited to activities such as derisking new technologies. Adjacent provinces are already creating joint planning meetings, where doing so is mutually beneficial.¹⁴15 The recent memorandum of understanding between Quebec and Newfoundland is one example of revived interprovincial cooperation. However, in some cases, the desire for self-sufficiency by one province has been greater than its desire for cost-effective cooperation with another. Federal involvement is unlikely to be effective if the provinces themselves are unenthusiastic about coordination.

Risk of Misdirected Investment

Recent polling by Abacus Data (2025) finds Canadians continue to rank inflation, the cost of living, housing affordability, and healthcare as their top concerns.¹⁵16 In the latest wave of surveys conducted in September 2025, 61 percent cited affordability, 39 percent the economy, 38 percent the current US president and the administration, 33 percent healthcare, and 30 percent housing among their top concerns. These priorities have persisted even as inflation moderates, reflecting continued public anxiety about purchasing power and access to basic services. It is unclear how increasing interprovincial transmission ties or building generation for export addresses these concerns unless doing so is directly linked to affordability. Indeed, rapidly building generation and transmission¹⁶17 Significant investments in transmission in Alberta, for example, have contributed to rising wires charges (transmission and distribution costs) on customer bills. While pre-build of transmission is sometimes justified, it is not always the case that it leads to lower costs for consumers. before it is needed may contribute to inflation, particularly if crews and raw materials are diverted from higher-value projects. While the private sector can be heavily involved in generation and transmission, sparking private investment in healthcare is more difficult. When assessed from a returns perspective, investments in affordable housing, for example, may have a bigger multiplier effect than in the power sector.

Although some may argue that regulators and utilities should not plan based on polling concerns, only the most tone-deaf regulator or utility executive would ignore affordability concerns, for example. Public opinion is, over time, a binding constraint; provincial governments are particularly vulnerable to shifts in public opinion regarding the electricity sector. Governments still need to reflect the priorities of the governed; hence, the focus of this paper is on how the federal and provincial governments allocate scarce resources given those priorities.

Because governments need to make choices, it is worth asking: Is federal and provincial support for power sector investment the area where we can achieve the highest return on taxpayer dollars? Is funding being suitably directed towards areas where the government is uniquely positioned to fill a gap or manage a risk in a fashion that addresses the concerns of the public? Even taking into account that electricity is a key input to healthcare and housing, it is not necessarily the case that building interprovincial transmission will have any impact whatsoever on making those sectors more affordable.

How Do We Get This Right?

Thoughtful federal and provincial government support would consist of five elements:

1. Focus on areas of market failure.
2. Provide funding for inter-regional planning, the lack of which may be a form of market failure. It would also support the creation of better data sets for planning and standards setting for new technologies.
3. Ensure that no infrastructure for cross-border activities would be built without long-term contracts.¹⁷18 Federal support for initial conceptualization and assessment of long-term, large-scale projects can help to increase optionality and may be justified.
4. Ensure consideration of alternatives and opportunity costs.
5. Finally, arrange for a transparent, timely, independent review.

These elements are discussed further below.

Focus On Market Failure:

Market failure occurs when private actors, acting according to the incentives facing them, do not invest enough in a particular sector to produce a socially optimal outcome. This can be because of unpriced or underpriced attributes such as contributing to emissions reductions, or differences in risk profiles or desired payback periods, such as those experienced when investing in new nuclear technologies. In those cases, government intervention can often help bring forth the appropriate level of funding.

Determining when a market has failed can be challenging because, in some cases, the market is simply providing an answer that policymakers are unwilling to hear. For example, a lack of interregional transmission capacity may be due to the fact that such capacity is unlikely to be economically utilized, and cheaper alternatives are available. As Box 2 shows, even projects with substantial government backing may fail to progress in the face of adverse market conditions. While the failure of a project to proceed is not the same as the failure of an associated support program – arguably, if there are no failures, program administrators are being too conservative – significant time and effort can be wasted if the market response is overwhelmingly negative.

Government funding at all levels should augment, rather than crowd out, private sector funding. It should also focus on facilitating activities that otherwise would not occur. East-west transmission may not fall into this category, but energy development and transmission in the North and possibly Atlantic Canada may. True nation-building involves Indigenous Peoples and First Nations connecting in the way they want (if at all) to be connected; in the North, regardless of the province or territory, there are opportunities where nation-building and the desire to be an energy superpower converge, and private investment alone is likely to be insufficient. Other examples might include a national orphan wells program (Alberta is not the only province with orphaned, abandoned, but improperly plugged wells) and further support for carbon capture and storage across Canada.

Fund Interregional Planning, Build a Sound Data Foundation, and Encourage Standard Designs:

The Canadian federal government can catalyze potential interprovincial transmission capacity improvements without funding them.¹⁸19 The final report of the Canada Electricity Advisory Council takes a thoughtful approach to many of these issues. While 18 months have passed since the report was issued, and national priorities have evolved, many of the recommendations in the report remain sound. For example, while the federal government may lack the authority to order studies of interregional transmission that the US Federal Energy Regulatory Commission (“FERC”) has, it could nonetheless offer co-funding for studies of the optimum transfer capacity between provinces, contingent upon some degree of provincial matching. If the main challenge to interprovincial transmission is simply the geographically circumscribed planning area of provincial utilities and system operators, providing an incentive to broaden assessment horizons may have merit.

In addition to judicious, government-sponsored investments and grants, governments can contribute to economic growth through other activities. The 2025 NERC report notes the lack of transparent and standardized data across the Canadian power sector; information that historically has been readily and publicly available in the US is more difficult to assemble in Canada. Canada lacks institutions like the US Energy Information Administration (EIA) and the US national laboratories.¹⁹20 Canada has no equivalent to the EIA, or to the network of national labs such as the National Renewable Energy Laboratory, Oak Ridge, Brookhaven, Livermore, and so forth. Through EIA and other US government sources, information is available on almost every major power station in the US, to give but one example. EIA’s Annual Energy Outlook forecasts underpin a range of private sector initiatives, and are even used by Canadian regulators. EIA natural gas storage surveys influence gas markets. This list merely scratches the surface of the data currently available through EIA. While Canada has some laboratories doing some research on energy, they simply are not of the stature of the US energy research infrastructure. Recent US funding cuts in these areas may present opportunities for Canada. Investing in data availability and basic research pays dividends over time, especially given that the US appears to be retreating in these areas.

Governments can also assist in setting standards and encouraging complementary designs. Part of getting nuclear right in Canada will be to encourage all the provinces currently considering nuclear to coalesce on one or more designs (for both SMRs and large-scale nuclear projects) that will enable economies of scale in construction and, where cost effective to do so, include Canadian content.²⁰21 A recent report by Clean Prosperity entitled Nuclear Nation Building (September 2025) provides some useful recommendations in this regard. Note that while the interprovincial memorandum of understanding between Ontario, Alberta, New Brunswick, and Saskatchewan is a good start, there is no guarantee it will result in a standardized choice of SMR design, or of large-scale nuclear. The federal government can play a role in encouraging such standardization. Federal funding can be used to nudge provinces toward this goal. It is also important to recognize, however, that funding is in some ways the easy part. The greater challenge lies in reducing permitting and construction timelines while ensuring appropriate consultation periods and reasonable environmental protection – efforts that will likely yield greater long-term returns.

Do Not Build for Cross-border Consumption Without Contracts:

Sound planning principles require a high degree of confidence that sufficient load will exist to justify the construction of new generation infrastructure. While the ability to export may validate the viability of moderately increasing the size of planned generation stations, unless export load is backed by firm contracts, it should not be considered in generation planning. Many residential builders wait until 70 percent of units in a proposed development are sold before commencing construction (Pierre Carapetian Group 2023).²¹22 Canadian financial regulators require this threshold as a precondition for bank lending. Similarly, large industrial projects often require an anchor tenant. Unless export load (whether interprovincial or international) can play this role, it should be ignored when making long-term investment commitments in generation that are financed by ratepayers or taxpayers.

Provinces should consider taking a similar approach to new large loads within their jurisdictions. For example, Ontario could derisk its nuclear program by partnering with data centre customers. Indeed, a quick survey of press releases from the US illustrates the point that such contracts can actively spur nuclear power projects, including refurbishments of existing stations and deployment of new nuclear technologies (see Box 3).²²23 While data centre load growth estimates are significantly overstated, having data centre customers pay directly for new generation and other infrastructure shifts the risk of underutilization from ratepayers and taxpayers to the data centres themselves.

Consider Alternatives and Opportunity Costs:

Commitments to fund new infrastructure should not be made without a clear understanding of the relative costs and benefits of alternatives. NERC’s Canadian regional transfer capability study acknowledges this, noting that targeted demand response and storage could reduce the need for additional investment in interprovincial interties. Any investment in new transmission needs to be tested against non-wires alternatives (“NWAs”) for cost and performance; likewise, assuring optimal use of grid-enhancing technologies (“GETs”) is critical for effective transmission planning. Increases in interprovincial transmission capacity may also require coordinated increases in generation, but the generation itself could also substitute for interprovincial transmission. These alternatives need to be carefully evaluated before an investment is made. Enhancing demand response across Canada may be less attractive as a sound bite than constructing transmission, but if doing so is cheaper and achieves the same impact, it is a better way of building a nation.

Different investments that achieve the same level of generation can have very different impacts on the Canadian economy as a whole. Depending on the assumptions and ignoring first-of-a-kind issues, new nuclear can be competitive with solar plus storage,²³24 Lazard’s 2024 LCOE analyses report unsubsidized levelized costs for nuclear that, at the low-end, overlap with the high end of utility-scale solar paired with storage, depending on location, storage duration, and financing assumptions. The “Sensitivity to Fuel Prices” analyses indicate that new US nuclear has an unsubsidized levelized cost of about $139/MWh, with a plausible fuel-price-driven range of roughly $139–225/MWh, while utility-scale solar paired with storage spans roughly $60–210/MWh, so the low end of nuclear overlaps with the high end of solar-plus-storage under certain assumptions (Lazard 2024). In addition, the Columbia University School of International and Public Affairs (“SIPA”) Center on Global Energy Policy’s assessment of new nuclear cost studies shows that under favourable assumptions, some advanced nuclear designs achieve competitive/favourable LCOEs (Columbia University SIPA 2023). but takes longer to build. Nevertheless, the nuclear supply chain can potentially produce more Canadian jobs than solar plus storage installations. Although provinces may be able to fund nuclear generation projects themselves, through rate base and provincial support, building out the nuclear supply chain – including uranium processing and waste disposal – may require additional support.

It is also critical to account for opportunity costs. Canada’s resources, though not insignificant, are not inexhaustible. Selection of national interest projects from applications received during a solicitation window (including major projects facilitated by the MPO) should flow from an assessment of needs, understanding of least cost approaches, and an acknowledgement of what other activity is not being funded as a result of a particular financing decision, as shown in Figure 2. The decision-making process should start with objectives: What are we trying to achieve as a nation? Examples may include improving productivity, market diversification, and emissions reduction.²⁴25 Criteria in the proposed One Canadian Economy Act include strengthening Canada’s autonomy, resilience and security; providing economic or other benefits to Canada; having a high likelihood of successful execution; advancing the interests of Indigenous Peoples; and contributing to clean growth and to Canada’s objectives with respect to climate change (Government of Canada 2025). Next, a suite of alternative ways of meeting the objectives should be identified. This suite of alternatives should be further sorted to determine which areas represent a market failure. Appropriate Indigenous consultation and participation, cost sharing, and benefits spread across multiple provinces or territories should be gating criteria – in other words, national projects should not advance without all three.

Once alternatives that also justify government intervention have been highlighted, they should again be sorted to identify which produces the greatest outcome at the least cost. This involves understanding the unit costs and benefits of each project. These, in turn, can be used to create a least-cost portfolio of projects that are worthy of government support. Some may achieve multiple objectives; for example, high-speed rail improves transit, reduces highway congestion, reduces emissions, and helps address housing affordability by reducing commuting times from areas with lower housing prices. By valuing contributions to national objectives, the highest value portfolio of projects can be chosen for support.

All too often, when concepts like nation-building or economic growth are used to justify government support, the projects chosen seem to reflect whoever has spoken loudest and asked for the most; a structured process with a clear analytical framework will make better use of taxpayer dollars. Sound policies do not arise from “ad hoc-ism.”

Require Transparent, Timely Independent Review:

Nation-building and economic growth should not be used as a distraction from focusing on the underlying fundamentals of the Canadian and provincial economies. Ordering independent institutions to consider “economic growth” in their mandates,²⁵26 Ontario has proposed legislation making economic growth a “formal objective” for both its regulator and system operator. without definition or an understanding of the process to do so, is likely to expose those institutions to political pressure and to undermine efforts to maintain affordability and reliability. The amount of investment in the power sector required simply to meet organic growth and replace ageing infrastructure will itself contribute to economic growth. Rigorous, thoughtful analysis protects both ratepayers and taxpayers.

Governments (both federal and provincial) need to establish a structured process for identifying projects to support. This starts by creating a small independent body with a lean staff and an established support budget. It would issue periodic requests for proposals. The Project Support Review Body (which could be associated with a permitting ombudsperson) should have defined application review windows, clear application and scoring procedures, and timely response schedules.²⁶27 Timely response is critical to prevent this PSRB from becoming yet another bureaucratic hurdle. Timelines for response need to be set in advance, and the PSRB needs to be staffed appropriately to meet these timelines. The intent is to perform rapid, but thoughtful, project reviews; to do so, applications should have page limits, deficiency screening should be performed within a week of submission, and public comment periods should be kept short. It is important to note that no project is required to go before the PSRB; the process is voluntary and focuses only on those projects seeking federal support. The body itself would not be an additional layer of review for all projects, or substitute for other existing regulatory processes; it would only apply in the case of projects which are requesting federal monetary support in excess of what is available through other channels, or are seeking accelerated regulatory reviews. All applications would be public; reliance on confidential data should be minimized.

Even if the political environment necessitates proceeding without a regular application process, proponents should be required to demonstrate that their projects are consistent with the principles that would be followed, were a more formal approach utilized.

The federal government’s announcement of the MPO under the One Canadian Economy Act underscores both the opportunities and risks of this new approach. The MPO has been tasked with identifying and accelerating “nation-building” projects of national interest, working with provinces, Indigenous governments, and the private sector to streamline approvals and coordinate financing. The first tranche of projects – ranging from LNG Canada Phase 2 in Kitimat to Ontario’s Darlington New Nuclear Project and Québec’s Contrecœur Terminal – illustrates the scale and ambition of this initiative (Government of Canada 2025).²⁷28 Nonetheless, the MPO is a band-aid on a broken process; a more durable solution would be to reform permitting regimes entirely, eliminating duplicative reviews, imposing page limits, and shortening project review cycles. On November 13th, 2025, the Government of Canada announced a second tranche of nation-building projects referred to the MPO, including the North Coast Transmission Line in northwest British Columbia, the Ksi Lisims LNG project with its associated gas pipeline and transmission line, Nouveau Monde Graphite’s Matawinie Mine and integrated Bécancour battery-materials facilities in Québec, and Northcliff Resources’ Sisson Mine in New Brunswick, all framed as part of the broader One Canadian Economy Act nation-building strategy (Government of Canada 2025).

The establishment of the MPO makes the case for independent and transparent review even stronger. A body such as the Project Support Review Body should provide oversight before referral to the MPO, ensuring that criteria for selecting or fast-tracking projects are applied consistently and are publicly understood. Transparent evaluation would strengthen confidence that the benefits of speed and coordination do not come at the expense of discipline, affordability or accountability to taxpayers. Table 1 below lists the first two tranches of projects announced for referral to the MPO, alongside additional examples that may fall under future phases of the One Canadian Economy Act framework (Government of Canada 2025).

The MPO’s initial projects and other potential national-interest initiatives demonstrate the scale and complexity of Canada’s infrastructure agenda. Independent, transparent and structured review processes are essential to ensure that fast-tracked and high-priority projects alike are evaluated consistently, protect public resources, and maintain public confidence. Clear criteria and public accountability will allow Canada to pursue ambitious economic growth while keeping affordability, reliability and long-term value for taxpayers at the forefront.

Conclusion

While periods of national enthusiasm are good for sweeping away unnecessary constraints to development, this enthusiasm needs to be harnessed to avoid outcomes like Ontario’s Green Energy Act, which resulted in higher-than-necessary costs to procure zero-emitting resources.²⁸29 See, for example, the table of comparative prices by procurement method in the 2011 Annual Report of the Auditor General of Ontario, p. 103, Figure 8. A “build everything” approach will exacerbate, rather than reduce, Canada’s productivity gap with its OECD peers. Taking time to ensure that federal and provincial funding is targeting areas of true market failure; that modest but important investments in planning, data management and standards setting are not ignored; that contracts underly cross border investments; that alternatives and opportunity costs are considered; and that transparent, timely independent review is conducted will save Canada money in the long run and make Canada stronger and more prosperous.

Appendix: Selected Examples of Proposed Power Generation
Investments by Province and Territory

References

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Liberal Party of Canada. 2025. “Mark Carney’s Liberals to make Canada the world’s leading energy superpower.” Press release. April 9.

Champlain Hudson Power Express. n.d. “Champlain Hudson Power Express.” https://www.chpexpress.com.

_________. n.d. “Construction process.” https://chpexpress.com/construction-progress.

Chilibeck, J. 2024. “Public utility plans big, new natural gas plant to avoid blackouts.” The Penticton Herald. December 6. https://www.pentictonherald.ca/spare_news/article_9b38dae0-7430-5043-8f66-9723e9d66af1.html.

Coletto, D. 2025. “Abacus data poll: Carney's Liberals regain lead as economy woes grow.” Abacus Data. September 7. https://abacusdata.ca/abacus-data-poll-carneys-liberals-regain-lead-as-economy-woes-grow/.

Columbia University SIPA. 2023. “The uncertain costs of new nuclear reactors: What study estimates reveal about the potential for nuclear in a decarbonizing world.” December. https://www.energypolicy.columbia.edu/wp-content/uploads/2023/12/QCFNuclearCosts-CGEP_Report_112923.pdf.

Constellation Energy. 2024. “Constellation to launch Crane Clean Energy Center, restoring jobs and carbon-free power to the grid.” https://www.constellationenergy.com/newsroom/2024/Constellation-to-Launch-Crane-Clean-Energy-Center-Restoring-Jobs-and-Carbon-Free-Power-to-The-Grid.html.

_________. 2025. “Constellation, Meta sign 20-year deal for clean, reliable nuclear energy in Illinois.” June 3. https://www.constellationenergy.com/newsroom/2025/constellation-meta-sign-20-year-deal-for-clean-reliable-nuclear-energy-in-illinois.html.

Dwyer, D. 2025. “Palisades nuclear power plant returns to ‘operating status’ three years after shutdown.” Michigan Public. https://www.michiganpublic.org/environment-climate-change/2025-08-26/palisades-nuclear-power-plant-returns-to-operating-status-three-years-after-shutdown.

Equinix. 2025. “Equinix collaborates with leading alternative energy providers to power AI-ready data center growth.” August 14. https://investor.equinix.com/news-events/press-releases/detail/1079/equinix-collaborates-with-leading-alternative-energy.

Google. 2024. “New nuclear clean energy agreement with Kairos Power.” Press release. October 14. https://blog.google/outreach-initiatives/sustainability/google-kairos-power-nuclear-energy-agreement.

_________. 2025. “Our new agreement with NextEra Energy will bring Iowa’s only nuclear plant back to life.” October 27. https://blog.google/feed/infrastructureduane-arnold-nuclear-plant-iowa/.

Government of Canada. 2024. “The Erie Lake Connector: A project in the best interest of the public?” House of Commons.

_________. 2025. “Government of Canada introduces legislation to build One Canadian Economy.” Press release. Intergovernmental Affairs. June 6.

_________. 2024. “Ensuring access to affordable, reliable and clean electricity in New Brunswick.” Natural Resources Canada. December 8.

_________. 2025a. “Major Projects Office of Canada: Initial projects under consideration.” One Canadian Economy. September 12. https://www.canada.ca/en/one-canadian-economy/news/2025/09/major-projects-office-of-canada-initial-projects-under-consideration.html.

_________. 2025b. “Major Projects Office: Second tranche of projects under consideration.” November 14. https://www.canada.ca/en/one-canadian-economy/news/2025/11/major-projects-office-second-tranche-of-projects-under-consideration.html.

Government of Ontario. 2024. “Ontario’s affordable energy future: The pressing case for more power.”

_________. 2025. “Ontario exploring new nuclear energy generation in Port Hope.” Press release. January 15.

Government of the Northwest Territories. n.d. “Taltson hydro expansion.” Ministry of Infrastructure. https://www.inf.gov.nt.ca/en/projects/taltson-hydro-expansion.

Grant, Taryn. 2025. “N.S. strikes deals with six wind farms to meet energy needs of big consumers.” CBC News. January 27. https://www.cbc.ca/news/canada/nova-scotia/ns-deal-six-wind-farms-energy-needs-big-consumers-1.7442950.

Hydro-Québec. n.d. “Transmission system overview.” https://web.archive.org/web/20200604171653/http:/www.hydroquebec.com/transenergie/en/reseau-bref.html.

_________. 2023. Vers un Québec décarboné et prospère: Plan d'action 2035. November.

_________. 2024. “Jusqu'à 3 000 MW de capacité éolienne: Un grand partenariat entre la Première Nation des Pekuakamiulnuatsh, les Atikamekw de Wemotaci, la MRC du Domaine-du-Roy et Hydro-Québec.” July 3. https://www.hydroquebec.com/projets/chamouchouane.

_________. 2025. “Power generation.” https://www.hydroquebec.com/generation/.

Independent Electric System Operator. 2022. “Negotiations with Lake Erie LP to move to next phase.” Press release. March 31.

_________. 2022–2024. “Yearly intertie actual schedule and flow report.” https://reports-public.ieso.ca/public/IntertieScheduleFlowYear/.

_________. 2025a. “2025 annual planning outlook.”

_________. 2025b. “Draft LT2(e) RFP.”

_________. 2025c. “Reliability outlook: An adequacy assessment of Ontario’s electricity system. October 2025 - March 2027.” September 18. https://ieso.ca/-/media/Files/IESO/Document-Library/planning-forecasts/reliability-outlook/ReliabilityOutlook2025Sep.pdf.

Lazard. 2024. “Levelized cost of energy+.” https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf.

Manitoba Hydro. 2025. “Generation.” https://www.hydro.mb.ca/corporate/operations/generation/.

Manitoba Public Utilities Board. 2025. “Comments and recommendations on Manitoba Hydro’s preliminary estimate for a 500 MW dispatchable capacity resource.” March 28.

Maritime Electric. 2024. “On-island capacity for security of supply project.” December 18.

McClearn, Matthew. 2025. “Ontario’s Darlington SMR project to cost nearly $21-billion, significantly higher than expected.” The Globe and Mail. https://www.theglobeandmail.com/business/article-ontarios-darlington-smr-project-to-cost-nearly-21-billion/.

Meta. 2024. “Accelerating the next wave of nuclear to power AI innovation.” Press release. December 3. https://sustainability.atmeta.com/blog/2024/12/03/accelerating-the-next-wave-of-nuclear-to-power-ai-innovation/.

New Brunswick Power. 2025. “Generation.” https://www.nbpower.com/en/about-us/our-business/generation.

Newfoundland and Labrador Board of Commissioners of Public Utilities. 2025. “An order of the board: No. P.U. 17(2025).” April 25.

Newfoundland and Labrador Hydro. 2025. “Our generation assets.” https://nlhydro.com/about-us/our-electricity-system/our-generation-assets/.

New York State Energy Research and Development Authority. n.d. “Solicitation and award: Tier 4 2021 solicitation (closed).” https://www.nyserda.ny.gov/All-Programs/Large-Scale-Renewables/Tier-Four/Solicitation-and-Award.

North American Electric Reliability Corporation. 2025. “Interregional transfer capability study: Canadian analysis.” pp. xv, 61.

Northwest Territories Power Corporation. 2024. “Annual report 2023-24.” https://www.ntpc.com/sites/default/files/2024-10/NTPC%20-%20Annual%20Report%20-%202023-24_1.pdf.

Nova Scotia Power. 2022–2024. “Hourly net energy flows NS – NB interconnection.” https://www.nspower.ca/oasis/monthly-reports/hourly-net-energy-flows-ns-nb-interconnection.

_________. 2025. “Electricity.” https://www.nspower.ca/about-us/producing.

Nukik Corporation. 2025. “Nukik Corporation and Qulliq Energy Corporation sign memorandum of understanding to advance a clean energy future for Kivalliq Region.” September 24. https://nukik.ca/nukik-corporation-and-qulliq-energy-corporation-sign-memorandum-of-understanding-to-advance-a-clean-energy-future-for-kivalliq-region/.

Pierre Carapetian Group. 2023. “Condo construction timeline: From sales to occupancy.” https://pierrecarapetian.com/phases-of-pre-construction-condos-from-sales-to-occupancy/.

Proximo. 2022. “Proximo weekly: CHPE digs deep into project lenders’ pockets.” December 8. https://www.proximoinfra.com/articles/8224/proximo-weekly-chpe-digs-deep-into-project-lenders-pockets.

SaskPower. n.d. “Aspen power station.” https://www.saskpower.com/our-power-future/infrastructure-projects/construction-projects/planning-and-construction-projects/aspen-power-station.

_________. 2025. “System map.” March 31. https://www.saskpower.com/our-power-future/our-electricity/electrical-system/system-map.

Six Nations Development Corporation. 2022. “Lake Erie Connector Project suspended.” August 2. https://sndevcorp.ca/lake-erie-connector-project-suspended/.

Talen Energy Corporation. 2025. “Talen Energy expands nuclear energy relationship with Amazon.” June 11. https://ir.talenenergy.com/news-releases/news-release-details/talen-energy-expands-nuclear-energy-relationship-amazon.

Yukon Bureau of Statistics. 2024. “Yukon energy facts 2024.” https://yukon.ca/sites/default/files/2025-08/fin-yukon-energy-facts-2024.pdf.

Yukon Energy. 2025. A reliable and robust grid: Reinforcing our foundation.