441-02099 (Environment)

Access to reliable and affordable emissions-free electricity will be the backbone of Canada’s net-zero economy. Decarbonizing electricity production by 2035 will play a significant role in enabling the rest of the economy to meet emissions reduction goals by 2050. 

The Strategic Innovation Fund’s Net Zero Accelerator initiative is one tool through which the Government of Canada supports Canada’s net-zero goals. With up to $8 billion in funding to support large-scale investments in key industrial sectors across the country, the Net Zero Accelerator ensures that Canada:

• remains competitive in a net-zero economy
• reduces greenhouse gas (GHG) emissions

Significant investments have been made through the Strategic Innovation Fund’s Net Zero Accelerator to ensure the Government of Canada achieves affordable, secure, emissions-free electricity for everyone living in Canada by 2035.

These investments include:

Almost $95M to support the development of three innovative small modular reactor (SMR) designs. SMRs are being designed for a range of applications, with the potential to replace conventional coal and fossil fuel power generation and help remote sites move off diesel with a non-emitting source of energy. SMRs also have the potential to replace the use of fossil fuels in heavy industrial applications. The three SMR projects include:

• $27.2 million in support of Westinghouse Electric Canada so its next-generation SMR, the eVinci micro-reactor, can be successfully licensed in Canada. The eVinci™ microreactor is an emissions-free energy source and has the potential to provide a more accessible and transportable source of low-carbon energy.
• $47.5 million in support of Moltex Energy Inc. to develop a Stable Salt Reactor that will produce emissions-free energy through a proprietary process that recycles existing used nuclear fuel.
• $20 million investment that will help Terrestrial Energy complete a key pre-licensing milestone through the Canadian Nuclear Safety Commission to assess the acceptability of the Generation IV technology that the company is developing as part of its $68.9 million Integral Molten Salt Reactor project, which will provide affordable energy for utilities and industry. The Generation IV technology allows the molten salt reactor to generate electric power 50 per cent more efficiently than conventional nuclear power plants that use water cooled and moderated reactor technology.

Over $54 million to support General Fusion’s development of a fusion technology. Fusion is an emissions-free technology.

The Strategic Innovation Fund has also supported the development of clean technologies to better manage existing electricity supplies, enhance grid resilience and improve access to rural and remote communities.

• Over $35 million to research and develop smart grid technology to help better manage the electricity supply in Atlantic Canada through a partnership between Siemens Canada, New Brunswick Power and Nova Scotia Power. Under this project, Siemens will research and develop smart grid technology to help better manage the provinces’ electricity and help improve power delivery to underserved communities, better integrate renewable energy into the power grid and reduce future electricity costs for consumers.

The Government is leveraging Canada’s innovation toolkit, which includes a mix of direct and indirect supports with a proven track record of securing long-term benefits for Canadians. Through the Strategic Innovation Fund, the Government is providing direct, targeted, and patient capital to firms to develop and commercialize innovative clean energy solutions at scale. The program also collaborates with federal partners to ensure that highly innovative projects receive the support they need to advance Canada’s transition towards emissions-free electricity by 2035.

The Government of Canada thanks the petitioners for sharing their concerns about the environment and clean energy.

Budget 2023 directed the Canada Infrastructure Bank (CIB) to invest at least $10 billion through its Clean Power priority area, and at least $10 billion through its Green Infrastructure priority area. This was done to position the CIB as the Government of Canada’s primary financing tool for supporting clean electricity generation, transmission, and storage projects, including for major projects. The CIB's consistent approach to collaboration with provinces and private sector partners on key clean power projects provides opportunities for important coordination in this space between municipal and federal priorities across the country, facilitating more targeted and diverse programming. The CIB’s efforts in this priority sector offer opportunities for closing economic gaps in key electricity projects, attracting private capital and catalyzing major and municipal clean power projects in key regions.

The CIB is an impact investor focused on accelerating infrastructure investments to create benefits for Canadians. The CIB makes investments in five priority sectors: clean power, green infrastructure, public transit, trade and transportation and broadband. As of December 31, 2023, the CIB has made total investment commitments of $11.6 billion across 56 projects worth $31.7 billion.

The CIB is one tool in the toolbox of initiatives to invest in infrastructure, and works closely with Infrastructure Canada, Natural Resources Canada and other government departments. As of December 31, 2023, the CIB’s investment commitments in clean power totaled $2.9 billion across 10 projects, while attracting $2.3 billion in private and institutional capital. Seven clean power projects are in active construction. Recent examples of the CIB’s clean power investments include: the Bekevar Wind Farm in Saskatchewan, a $173 million investment commitment to build the province’s largest wind power project; the Darlington Small Modular Reactor (SMR) in Ontario, a $970 million investment commitment to develop and construct Canada’s first SMR and catalyze future projects in several other provinces; and, the Lulu Island District Energy project in British Columbia, a $175 million investment commitment to expand the current district energy system using zero-carbon sewer heat recovery technology. 

For more information on CIB projects that are investing in clean power, please visit: Clean Power | Canada Infrastructure Bank (CIB) (cib-bic.ca). 

Canada, along with other G7 countries, has committed to transitioning to a net-zero electricity grid as a foundational measure to help achieve a net-zero economy by 2050. A clean, reliable, and affordable electricity grid is key to building a strong, clean economy and a competitive advantage that makes Canada an attractive place for businesses from around the world to invest. The federal government is building on Canada’s advantages to deliver affordable power to Canadians, grow the economy and fight climate change.

The federal government has already taken steps in helping to transform the electricity sector with the 2018 publication of the amended regulations to phase out unabated coal-fired generation by 2030, along with complementary regulations to ensure the efficient performance of natural gas-fired electricity generating units.

In 2023, the Government of Canada released a vision paper named Powering Canada Forward: Building a Clean, Affordable, and Reliable Electricity System for Every Region of Canada, as the basis for the development of a Clean Electricity Strategy, to be released this year. This vision paper acknowledges the reality that Canadian provincial electricity operators will need to expand their grids substantially over the coming decades to meet increased demand from Canadians. In fact, the Canada Energy Regular forecasts that provinces and territories will need to more than double their current electricity production to meet residential, commercial, and industrial consumption requirements in 2050.  It is crucial that the coming expansion of the grid be clean to ensure that Canada meets its economy-wide net zero targets by 2050 and Canada avoids making costly investments in fossil-fuel generation that run the risk of becoming stranded in the future. The Government of Canada also notes that the deployment of lower-cost renewable electricity is now surging globally and in North America and this has the potential to save Canadians money.

The federal approach is also backed by over $40 billion in new funding from measures announced in the 2022 and 2023 Fall Economic Statement and Budget 2023 to support each province and territory’s efforts to achieve a net zero grid.

Additionally, the Canada Electricity Advisory Council was launched last year as an independent body of 19 experts to provide the Government of Canada with advice on actions needed to achieve its net-zero emissions goals as they pertain to electricity. The Electricity Council’s advice will be a key contributor to the federal strategy.

While provinces and territories are responsible for electricity generation and delivery infrastructure within their borders, the federal government has an important role to play through its ability to convene partners and coordinate efforts while also attracting new investments, developing effective regulations including to reduce emissions and ensure nuclear safety, and advancing targeted approaches—all the while ensuring its contributions are responsive to the unique circumstances and opportunities in every region of the country.

Finalizing the Clean Electricity Regulations (CER) later this year will support this commitment. As the demand for electricity increases over the coming decades, the CER will ensure that the expanded supply is clean, affordable, and reliable. The CER is being developed now as electricity projects can take years to develop, and predictable regulations help reduce risk by providing substantial lead time to electricity providers.

On February 16, 2024, the Government of Canada released an update on the consultations and the design options being considered for the final CER. These options address the feedback received during the previous six months of extensive consultations and aim to enhance the flexibility for provincial operators to continue to deliver reliable and affordable power while maintaining Canada’s ability to achieve its emissions reduction goal. Before finalizing the CER, the Government of Canada will continue to engage on these options under consideration with key interested parties, including provinces and utilities. 

The Department of Finance response to part 3 is as follows:

The Department of Finance would like to highlight that as an important pillar of Canada’s clean economy jobs plan, the government is focused on implementing five new major investment tax credits, to support clean electricity, clean hydrogen, clean technology adoption, clean technology manufacturing, and carbon capture, utilization, and storage. In particular, the Clean Technology Investment Tax Credit and Clean Electricity Investment Tax Credit aim to help accelerate investments needed to support Canada’s clean electricity sector.

In the 2022 Fall Economic Statement, the government announced a 30-percent Clean Technology Investment Tax Credit to help companies adopt clean technologies. The Clean Technology Investment Tax Credit would be available to eligible investments in certain electricity generation equipment, stationary electricity storage systems, low carbon heating equipment, and non-road zero-emission vehicles and related charging and refuelling infrastructure. Budget 2023 announced that investments in electricity or heat generation from geothermal energy would also be eligible for the tax credit. 

In Budget 2023, the government also proposed to introduce a 15-percent, refundable Clean Electricity Investment Tax Credit to accelerate the investments needed to expand the capacity of Canada’s clean electricity grid and ensure it delivers more sustainable, more secure, and more affordable electricity across Canada. The credit would be available to eligible investments in non-emitting electricity generation, abated natural gas-fired electricity generation, stationary electricity storage systems, and equipment for the transmission of electricity between provinces and territories.

The 2023 Fall Economic Statement also proposed to expand eligibility for the Clean Technology and Clean Electricity Investment Tax Credits to support the generation of electricity, heat, or both electricity and heat, from waste biomass. 

The Government of Canada is taking ambitious action to combat the climate crisis, including through targeted programs to accelerate the growth of clean energy production, such as the Smart Renewables and Electrification Pathways Program (SREPs), launched in 2021 and recapitalized with an additional $3.5 billion in funding, creating thousands of more jobs while providing clean, affordable, and reliable power to Canadian communities. Eligible projects for this program include established renewables (e.g. wind, solar, small hydro, biomass), emerging technologies, (e.g. geothermal, concentrated solar, energy storage, renewable heating), and grid modernization (e.g. distributed energy resources, electric vehicle integration, microgrid, transmission). As of November 27, 2023, SREPs has approved 71 deployment projects (e.g., wind, solar, storage), enabling the deployment of approximately 2,600 megawatts of new renewable energy capacity and displacing 3.5 megatonnes of CO2e per year. The majority of these projects are in jurisdictions which still generate electricity using fossil fuels, preventing the need for the construction of new gas plants as energy demand rises and coal-fired electricity generation units are decommissioned in line with Canada’s bold commitment to clean air and climate action, through the phase out of thermal coal power. SREPs has also approved 49 capacity building projects, and over half of both deployment and capacity building projects have Indigenous ownership.

One example in Ontario is SREPs’ recent $16.7 million investment to support Ontario’s Independent Electricity System Operator (IESO) to increase the number and diversity of clean energy resources that can participate in delivering electricity in Ontario, including energy storage projects, and distributed energy resources such as small scale solar and wind to Ontario’s grid.

Significant investments in renewable energy in Alberta include $32 million to support the Michichi Solar project and $31.7 million for the Kneehill Solar project. These projects are a partnership between Sawridge First Nation (a Cree people that are in the original signatory to Treaty No. 8) and Capstone Infrastructure Corporation. Each of these projects includes a 25 MW solar farm and grid modernization technologies to contribute clean energy to the Alberta electricity grid, while supporting an equitable transition to low-carbon economy, Indigenous ownership and encouraging market adoption of similar technologies. Combined these projects generate enough electricity to power more than 12,000 average Alberta homes. Michichi and Kneehill solar are reducing GHG emissions by approximately 43,000 tonnes of CO2e a year combined; the equivalent of approximately 13,000 gas-powered cars off the road.

The Government of Canada is also supporting Ontario to scale up clean power production in the face of rising demand through strategic investments in nuclear power generation. Through up to $50 million in funding, from the Electricity Predevelopment Program, for Bruce Power’s pre-development work on new conventional power in Southern Ontario, and over $970 million in financing from the Canada Infrastructure Bank (CIB) for the Darlington Small Modular Reactor, the Government of Canada is investing in Ontario’s job-creating supply chain while displacing the need for new gas generation on the grid and creating baseload power to compliment renewable energy generation.

Another key targeted program aimed at reducing fossil fuel use is the Clean Energy for Rural and Remote Communities (CERRC) program. Launched in 2018, CERRC has an overall funding commitment of $443 million until 2027 to reduce diesel use for heat and power in Indigenous, rural and remote communities. To date, the program has supported more than 140 projects nationally, including capacity building initiatives, large capital renewable energy projects, innovative technology demonstration projects, and bioheat projects. The program is helping create environmental, social and economic benefits to support healthier and more sustainable communities.

Through the Energy Innovation Program (EIP) the Government of Canada is advancing clean energy technologies that will help Canada meet its climate change targets, reducing emissions while supporting the transition to a low-carbon economy. By supporting innovative research, development and demonstration projects, and related scientific activities we are accelerating electrification and maximizing the benefits of renewable heat and power.

The Government of Canada is addressing key electricity infrastructure through the Smart Grid Program; up to $100 million has been invested for utility-led projects to reduce GHG emissions, better utilize existing electricity assets and foster innovation and clean jobs. The Smart Grid Program was renewed in Budget 2023, with a new Call for demonstration projects launched October 31, 2023. The Regulatory Innovation Capacity Building Focus Area of the current Smart Grids Call aims to support electric grid modernization and energy innovation by funding projects that promote regulatory experimentation, the adoption of flexible regulatory procedures, skills and knowledge development, and meaningful participation and engagement in the regulatory ecosystem.

In addition to strategic investments, Canada is seizing on its position as a global clean energy investment destination through a variety of Clean Economy Investment Tax Credits (ITCs). The ITCs are incentivizing investment in green manufacturing, renewable energy, carbon management technologies, and much more. The full value of the credits are linked to prevailing wages to ensure the creation of sustainable jobs for Canadian workers as Canada builds a net-zero future.

Further to these investments, the Government of Canada is working in partnership with provinces and territories to lift regulatory barriers to the growth of the green industries. Alongside the Governments of Nova Scotia and Newfoundland and Labrador, the Government of Canada introduced Bill C-49 to amend the Atlantic Accord Acts in order to unlock Canada’s enormous potential to generate renewable offshore wind-power by leveraging Canada’s existing offshore energy expertise. Bill C-49 will allow for the creation of thousands of sustainable jobs in Atlantic Canada, resulting in the generation of a significant clean energy surplus, which can power North American industries, and power the creation of a globally-oriented and decarbonized hydrogen sector.

To help accelerate investments that promote sustainable, affordable and reliable electricity systems, the Government of Canada also launched the Canada Electricity Advisory Council in May 2023. This independent body of 19 experts will provide the Government of Canada with advice – through the Minister of Energy and Natural Resources – focusing on several key areas for creating a net-zero emitting electricity system by 2035, and through it, a net-zero emitting economy by 2050. This includes studying and advising government on additional steps to enable the transition in an affordable manner for Canadians; how to enable the pace of investment and project development needed; how to support Indigenous communities taking part in- and benefiting from those investments; how to facilitate regional cooperation where beneficial; and how to accelerate innovation to ensure affordability, reliability, and value growth far into the future. The Council provided its interim advice to the Government in December 2023 and will provide its final advice in a report later in 2024, which will be a key contributor to the federal Clean Electricity Strategy.

In the years ahead, we will work with our provincial, territorial, and industry partners to bring forward new approaches and avenues ensuring Canada meets its short term and longer-term climate goals. Canada’s first Clean Electricity Strategy expected to be published in 2024, will lay out the integrated package of policies, tools and actions that the Government plans to use to support, facilitate and accelerate the electricity sector’s transition to net-zero while ensuring Canada’s clean energy future reflects and builds upon unique circumstances and opportunities emerging in different parts of the country.