Canada’s next era of economic growth will be powered by electricity.

The federal government’s Powering Canada Strong national electricity strategy recognizes this opportunity. It provides an important roadmap for expanding Canada’s electricity system and ensuring Canadians have access to the affordable, reliable and increasingly clean power they’ll need in the decades ahead.

But we shouldn’t stop at building more electricity supply.

The greatest economic and environmental benefits come from using that electricity to power more of our economy and do it more efficiently while ensuring the investments we make create jobs, strengthen Canadian supply chains and grow domestic industries.

That’s why New Economy Canada recommends making Powering Canada Strong a true economic strategy by pairing electricity buildout with electrification, energy productivity and Canadian supply chain development.

Our recommendations can be summarized in three priorities:

Build more.

Canada needs to go beyond building for today’s demand and build an electricity system that’s ready for the more electrified economy of 2050.

That starts with coordinated federal, provincial and territorial planning, supported by long-term investment certainty. Governments need shared plans for generation, transmission and distribution while mobilizing private investment through modern financing tools, Clean Economy Investment Tax Credits, and striking the right balance between ratepayers and taxpayers paying for this growth.

Canada should also modernize the grid we already have. Smarter grids, leveraging digital technologies, distributed energy supply (e.g. rooftop solar) and batteries, demand response, and stronger energy efficiency can unlock additional flexibility and capacity from existing infrastructure, while helping keep electricity affordable for households and businesses.

Building with ambition also means building smart.

Make more.

Canada is about to make a generational investment in electricity infrastructure.

The question is whether that investment simply buys imported equipment—or whether it also builds Canadian industries.

Demand for transformers, transmission equipment, cables, batteries, electrical components and grid technologies is growing rapidly around the world. So is demand for the skilled workforce needed to build, operate and maintain those systems.

Canada has an opportunity to capture more of that economic value.

Strategic domestic procurement, coordinated purchasing across provinces and territories, and a national electricity and electrification supply chain strategy can help create the certainty manufacturers need to invest here. That means growing Canadian advanced manufacturing, strengthening domestic supply chains and creating skilled jobs that will support Canada’s competitiveness for decades to come.

The way we build Canada’s electricity system today will determine whether and to what extent we capture the industrial benefits of a more electrified domestic and global economy—or watch them flow and accrue elsewhere.

Use more.

Building more electricity is necessary. Using more electricity is where the greatest economic value is created.

Electricity is the tool. Electrification is the goal. Clean competitiveness is the prize.

The greatest economic and environmental benefits come from replacing higher-emitting fuels with clean electricity across transportation, buildings and industry. Electrification lowers operating costs, reduces exposure to volatile fossil fuel prices, improves business productivity and strengthens Canada’s energy security, while cutting pollution and making communities healthier.

That’s why we recommend making Electrify a formal implementation pillar within Powering Canada Strong, supported by a national electrification action plan and clear long-term targets.

Canada shouldn’t simply measure success by how much electricity it generates. It should also measure how effectively that electricity is being put to work throughout the economy.

A roadmap for Canada’s next generation of growth

Taken together, these priorities point toward three outcomes that should define Canada’s electricity strategy by 2050:

This “double-double-double” approach recognizes that building more electricity alone isn’t enough. Canada also needs to use that electricity more productively while ensuring the benefits of this historic investment strengthen Canadian businesses, workers and communities.

Powering Canada Strong has the potential to become much more than an electricity strategy. Done right, it can become the foundation of Canada’s next generation of economic growth.

Read on for New Economy Canada’s specific formal recommendations for Powering Canada Strong: A National Strategy for an Electrified Canadian Economy.

Recommendations to strengthen Powering Canada Strong

The federal strategy establishes a strong foundation built on four implementation pillars: Build, Connect, Train, and Make. New Economy Canada supports this framework but recommends strengthening the foundation with the addition of two complementary pillars: Electrify, and Modernize & Save.

Recommendation 1: Support Federal-Provincial-Territorial Cooperation and Regional Collaboration

a) Establish Powering Canada Strong as a shared federal-provincial priority and an all-of-government initiative, placing the strategy as a standing item on Frist Ministers agendas, and establishing a Privy Council Office secretariat for coordination across and between governments while delegating implementation responsibility to the federal, provincial and territorial energy Ministers.

b) Negotiate bilateral or regional electricity agreements with provinces and territories that establish shared expectations for 2035, 2040, and 2050 electricity demand, planned generation, transmission additions and priority corridors, electrification-enabling distribution upgrades, Indigenous partnerships, ratepayer affordability measures, and a corresponding federal support package (drawing on the most appropriate financial tools). These agreements would align federal investments with provincial plans that are appropriately scaled to meet future demand while respecting regional priorities and jurisdictional responsibilities.

c) Amend the Clean Electricity Regulations (CER) while retaining the focus on tracking towards net zero electricity sector emissions by 2050.

Recommendation 2: Mobilize Investment to Build Canada’s Electricity System

Develop a portfolio of federal financial tools that leverage the federal government’s fiscal capacity to make generational investments, while acknowledging that provinces have different markets, actors and needs.

a) Extend, expand and simplify Clean Economy Investment Tax Credits to 2040, ensuring they support transmission, generation, storage, efficiency, and grid modernization. Additional incentives could include a Canadian content “adder” that stacks on top, rewarding Canadian companies for purchasing from the domestic supply chain.

b) Adopt and implement a sustainable finance taxonomy for electricity to provide investors with the clarity, certainty, and confidence needed to invest capital into Canada’s clean electricity buildout.

c) Invest in intra- and interprovincial transmission through the Transmission InterConnect Strategy, utilizing the federal investment agency ecosystem to apply a coordinated strategic financing framework.

d) Support Indigenous communities and developers with necessary early-stage capital to enable planning, partnership or participation projects from the outset.

For further details, see New Economy Canada’s budget submission.

Recommendation 3: Secure Canada’s Electricity and Electrification Supply Chain

a) Develop a Canadian Electricity and Electrification Supply Chain Roadmap that:

• Assesses the security of Canada’s current electricity and electrification supply chain to understand current domestic capacity, international sources and suppliers, and potential security or bottleneck risks.
• Develops a rolled-up national assessment of electricity infrastructure and associated equipment needs.
• Identifies opportunities and priorities to secure Canada’s future electricity and electrification supply chain through targeted support for domestic production, trade agreements, and other multilateral initiatives or arrangements.
  

b) Develop a model Made-in-Canada procurement policy that prioritizes Canadian supply, where realistic, for provincial/territorial and/or utility adoption.

c) Coordinate procurement across provinces and territories through framework agreements modelled on the Canadian Collaborative Procurement Initiative (CCPI) that bundle demand for key electricity and electrification technologies, enabling larger, more predictable procurements to attract new manufacturing investment in the domestic supply chain.

Recommendation 4: Establish and Implement an Electrification Action Plan

Establish a 2035 (TBD) and a 2050 (doubling) electrification target.

a) Develop an electrification action plan to increase the use of electricity in transportation, industry, and buildings by:

• Developing sector-specific industrial electrification strategies, supported by targeted programs to drive innovation, commercialization and deployment of electrified industrial technologies.
• Re-capitalizing residential, commercial and institutional building retrofit programs, with a focus on electrification, affordability and emissions reductions.
• Advancing transportation electrification by delivering light-duty vehicle GHG regulations aligned with achieving 75% EV sales by 2035, alongside a dedicated Medium- and Heavy-Duty Vehicle (MHDV) electrification strategy supported by sustained purchase incentives and strategic investments in charging infrastructure for passenger vehicles, freight, transit and commercial fleets.

b) Encourage and support provincial integrated electricity and gas system planning to ensure transportation, building, and industrial electrification are reflected in long-term infrastructure decisions across both systems.

Recommendation 5: Deliver a Smarter Electricity System and More Efficient End-Use

Support a digital-first approach to grid modernization by encouraging and incentivizing utilities to adopt smart grid technologies, real-time grid intelligence, and digital system management to unlock capacity from existing infrastructure.

a) Accelerate deployment of storage, demand response and distributed energy resources by encouraging and supporting utility programs that improve system flexibility and enable greater customer participation.

b) Direct the Canada Infrastructure Bank to finance demand-side management projects to support utility portfolios that align with strategic electrification objectives.

c) Establish and finance a Home Energy Performance Fund to support the retrofit of at least one million homes, modelled after proven residential green bank programs in comparable jurisdictions such as Australia’s Household Energy Upgrades Fund, the U.S. National Energy Improvement Fund, and Michigan Saves.

d) Encourage and support utility integrated resource planning that values both supply- and demand-side resources.

e) Develop a suite of incentives to accelerate deep energy retrofits of large commercial and institutional buildings — one of the highest-impact demand reduction opportunities available, given that Canada’s building stock is among the least efficient in the G7 and commercial buildings account for a disproportionate share of peak electricity demand.