Powering Canada’s Growth – Macroeconomic Methodology and Assumptions
The Open Insights initiative at the University of Victoria undertook the modelling for this report. The scenarios analyzed draw from the Canada Energy Regulator’s (CER) report released in March 2026, Canada’s Energy Future (CEF), and its underlying data sets. CEF explores how possible energy futures might unfold for Canadians over the long term. In addition to their own quantitative analysis, the CER consulted with industry, various government and non-governmental organizations, and academia in developing their report.
The CEF 2026 scenarios provided the energy story with variables including electricity demand, energy prices, and clean tech development rates. The Open Insights team ran MacroABM-CA, a macroeconomic agent-based model of Canada’s ten provinces, to assess the economic impacts, including overall growth, jobs, and sectoral changes. The data input into Open Insights modeling was drawn from the CEF’s Current Measures and Canada net-zero scenarios, populating their business-as-usual and electrified-economy scenarios, respectively. Open Insights made policy and project additions to these scenarios to ensure the current energy landscape — as of July 2026 — was reflected. The policy cutoff for CEF was November 2025, therefore important policies and projects such as the Canada-Alberta MOU and Churchill Falls deal were not reflected. However, to the extent feasible, changes since then have been incorporated into Open Insight’s scenarios. Enabling conditions of boosted labour and investment growth were also adjusted for the electrified-economy scenario, reflecting the federal government’s efforts to support workforce development and attract new capital investments to Canada.
The following information summarizes the key assumptions and modelling decisions made in this analysis. For additional details on assumptions, input data, source code and results from the modelling, please see the detailed modelling methodology document and the results visualization dashboard (currently includes national results; provincial results will be released soon).
Scenario comparison: business-as-usual vs. electrified-economy
Electricity Demand
Business as usual: Grows 50 per cent, reaching 973 TWh in 2050.
Electrified economy: Grows 102 per cent, reaching 1,316 TWh in 2050.
Generation capacity by technology
Business as usual
| Technology | Hydro | Solar | Wind | Nuclear | Gas | Battery storage |
|---|---|---|---|---|---|---|
| Generation Capacity in 2050 | 91 GW | 30 GW | 91 GW | 20 GW | 42 GW | 24 GW |
| Growth in Capacity | 1.08 X | 4.27 X | 4.79 X | 1.52 X | 1.30 X | 14.56 X |
Electrified economy: Wind is the primary driver of capacity growth between the two scenarios. Solar, nuclear, and battery storage also see greater growth in the electrified-economy scenario.
| Technology | Hydro | Solar | Wind | Nuclear | Gas | Battery Storage |
|---|---|---|---|---|---|---|
| Generation Capacity in 2050 | 91 GW | 32 GW | 167 GW | 25 GW | 42 GW | 30 GW |
| Growth in Capacity | 1.08 X | 4.34 X | 8.74 X | 1.93 X | 1.31 X | 17.89 X |
Electricity’s share of total energy use (electrification)
Business as usual: Minor electrification progress, growing from 18.2 per cent to 23.2 per cent.
Electrified economy: A near doubling of electrification from 18.2 per cent to 34.8 per cent as electricity is increasingly used to heat homes, propel vehicles, and power industrial processes.
Fossil fuel prices
Business as usual: Oil prices remain flat at $75USD/bbl, natural gas has steady slow growth increasing to $5.25 USD/MMbtu in 2050.
Electrified economy: Faster global energy transition leads to lower global oil and natural gas demand. Oil decreases to $65USD/bbl and natural gas prices remain flat at $4 USD/MMbtu.
Clean technology development
Business as usual: Consistent development of clean technology leads to innovation and decrease in costs for these technologies. As an example, the cost of solar electricity decreases 38 per cent and direct air capture by 33 per cent in 2050.
Electrified economy: Greater global energy transition action results in greater price declines. The cost of solar electricity and direct air capture both fall by 54 per cent in 2050.
Enabling conditions
For the electrified-economy scenario, two enabling conditions were required to realize the full potential economic gains:
- Growing the labour workforce, and
- accelerating firms’ ability to secure capital for new projects.
The assumed 0.25 per cent increase in the labour force growth rate results in a 0.75 per cent lower unemployment rate. Without these conditions, the model funnels investment and labour into doubling the electricity grid, and with inadequate funds or labour for other sectors and projects to grow alongside it, their growth potential is constrained.
Recognizing the federal government has prioritized and is taking steps to build the workforce and invite new capital investment to Canada, we consider the use of these enabling conditions as reasonable. For labour, the Energy and Electricity Workforce Alliance and Team Canada Strong will provide billions of dollars of investment to build the workforce required for the electrified-economy scenario. Similarly, changes to fiscal and tax policy, as well as the recent Canada Investment Summit, are intended to serve the goal of attracting significant new investment capital to Canada.
Policies modelled directly in MacroABM-CA
In addition to the numerous energy policies already embedded in the CEF scenarios used by Open Insights, the following policy adjustments were modeled in both the electrified-economy and business-as-usual scenarios, unless noted.
Investment tax credits (ITCs)
- The Clean Technology ITC decreases from 30 per cent to 15 per cent at the start of 2034 and is eliminated in 2035.
- The Clean Electricity ITC ends in 2035.
- The CCUS ITC decreases from 50 per cent to 25 per cent at the start of 2036 and is eliminated in 2041.
- Allow stacking the CCUS ITCs with the Alberta Carbon Capture Incentive Program.
Industrial carbon pricing
- Updated province-specific OBPS stringency, start years and reduction factors for all ten provinces.
- Tightening stops in 2030 under business as usual as legislated; electrified economy extends it to 2050.
- Quebec runs at the observed WCI settlement (~ $40/t in 2026, +5%/yr), not the federal $170 path.
Household rebates and firm grants
- Province and industry-specific grants:
- Ontario EV production package ($10.8B, 2023-2043) goes to motor-vehicle manufacturing in Ontario alone, and
- The Smart Renewables and Electrification Pathways ($4.5B, 2022-36) provide support to the electricity sectors in all ten provinces.
- Household rebates ($1.2B over five programs, led by Greener Homes Affordability) reach households in all ten provinces as deposits.
Quebec’s consumer carbon price
- Quebec’s consumer carbon price is modelled as legislated: the cap-and-trade system covers fuel distributors and so costs are passed onto consumer.
- This is captured both in the CEF scenarios and the MacroABM-CA (via the fuel prices and fuel usage provided from the CEF scenarios).
Policies excluded
- Lowered the CEF estimate of the aggregate cost of carbon from an effective $550/t under net-zero to the legislated $170/t.
- Excluded the Oil and Gas Emissions Cap as it is being cancelled.
- Industrial pricing revenue recycling is not modelled endogenously, but major climate / energy spending commitments — some of which are funded by industrial pricing revenue — are captured.
Major projects modelled directly in MacroABM-CA
Acknowledging new developments since the CER developed its CEF scenarios, the following projects — which have been prioritized by government — have been incorporated.
| Project | Where | How it enters the model | Scenario | Capex floor $bn |
|---|---|---|---|---|
| West coast pipeline (AB + BC legs) | AB / BC | Minimum capex on transport, 2028-34 | Both | 39.5 |
| PRGT pipeline | BC | Minimum capex on transport, 2026-29 | Both | 11.0 |
| BHP Jansen potash S1+S2 | SK | Minimum capex on mining, 2023-29 | Both | 14.0 |
| Battery cell plants (NextStar, PowerCo) | ON | Minimum capex + 30 per cent CTM credit | Both | 12.0 |
| Critical minerals (six projects) | BC/ON/QC/SK/NB | Minimum capex + 30 per cent CTM credit | Both | 9.5 |
| Steel decarbonization (Dofasco, Algoma) | ON | Minimum capex on primary metals | Both | 2.7 |
| Rio Tinto AP60 aluminum | QC | Minimum capex + 30 per cent CTM credit | Both | 1.4 |
| Pathways Alliance CCS | AB | Tax credits + industrial pricing credit generation | Electrified economy | – |
| Churchill Falls repricing | NL / QC | Two-sided income transfer | Both | – |
| Total capital floors | 90.1 |
Model limitations
Supply chains
The CEF does not include a supply chain narrative. Therefore, we allocated supply chain impacts based on historical input-output shares. If Canada can develop new clean technology supply chains and project corridors, then growth in manufacturing and trade could see greater growth than our modelling shows.
Data centres
The CEF estimates that data centres will add 3.5 GW to national electricity demand by 2050 for both scenarios. This estimate is significantly lower than other estimates and lower than the demand from data centres already being proposed. Data centre demand could push total electricity demand past the doubling in the electrified-economy scenario.
Export market
The model assumes no major expansion or contraction in Canada’s export markets. As productive capacity grows, imports and exports both increase and their effects largely offset one another. The projected economic gains come primarily from investment, jobs, rising household incomes and greater spending within Canada, not assuming that new markets will emerge. If the Government’s efforts to increase and diversify exports are successful, that would deliver incremental growth beyond that included in our results.
International demand
We do not exogenously set demand for commodities (apart from oil and gas to align with CEF scenarios), but the model does assume that excess production can be sold to the rest of the world.