Kevin Thomas is chief executive officer of the Shareholder Association for Research & Education, which recently released the report “Power at Risk: The Investment Case for a Clean Competitive Canada.”
The adoption of a new federal electricity strategy is critical for our future growth, and here’s why: Canada’s next competitive advantage won’t be the amount of fossil fuels we can export; it will be the industry, investment and jobs we can attract by solidifying our clean electricity infrastructure.
The world is undergoing a clear structural shift from fossil fuels to clean electricity, driven by electrification of industry and transport, the explosive growth of data-intensive technologies, and investor preference – with more than twice as much investment going to clean energy than fossil fuel developments in the past year.
The industries of the future demand abundant, low-carbon and reliable power.
Canada has what it takes to attract that investment. But to do so, we need a new strategy that prioritizes clean electricity and transmission build-out across Canada, co-ordinated by a federal–provincial–territorial clean electricity table to tackle significant constraints on growth.
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Canada is entering the clean-energy transition with strong advantages. Our electricity sector is already roughly 85-per-cent non-emitting and our resource abundance is nearly unmatched with large uranium reserves and substantial deposits of lithium, nickel, cobalt and rare earth elements. We enjoy a reputation for economic and financial stability, and we hold preferential access to markets representing 66 per cent of global GDP.
These benefits are driving investment. Since 2021, Canada has attracted an estimated $60-billion to $70-billion in announced capital investment across key clean economy sectors, which should create at least 26,000 long-term direct jobs and tens of thousands more across supply chains.
But the edge Canada currently enjoys is under threat.
Grid constraints, interprovincial barriers, slow infrastructure build-out and intensifying global competition are eroding Canada’s clean electricity advantage and putting future investment at risk.
More than 12,000 companies – representing 40 per cent of global market capitalization – have now set emissions reduction targets, and more than three-quarters of those have set Scope 2 targets that specifically increase demand for clean electricity.
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Hyperscale data-centre operators and cloud providers have clean energy commitments across their global portfolios.
Canada’s aluminum and low-carbon steel producers already secure price and volume advantages in markets where buyers are under pressure to decarbonize.
Automakers, rail operators and construction companies are locking in low-carbon material supply commitments. EU battery regulations and tightened climate targets at the original equipment manufacturer (OEM) level are leading automakers to embed renewable-energy and emissions thresholds in contracts for aluminum, steel and battery materials.
In the mining sector, grid-connected, low-carbon power is now among the top five investment criteria, alongside ore quality and jurisdictional risk.
Global demand for reliable, clean power is expected to rise two to three times by 2050. Yet Canadian provinces are already scrambling to manage a massive influx of requests from energy-intensive sectors.
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Ontario is forecasting 75-per-cent demand growth by 2050. Since 2022, Quebec has received more than 250 industrial connection requests totalling roughly 43 GW – more than the utility’s entire installed capacity. And similar constraints are being felt in Manitoba, British Columbia, Alberta and Atlantic Canada.
Many of the projects on Canada’s nation-building projects list will need new generation and transmission that has not yet been secured or even planned.
Senior executives across finance, technology, heavy industry, mining and energy development tell us that predictable, cost-competitive clean electricity adds material asset value or enables market access. Industry leaders emphasize that clean electricity is no longer a marginal siting factor – in many cases it is central to capital allocation decisions.
This is a real-life example of “if you build it, they will come.”
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But grid constraints, permitting delays and interconnection uncertainty are already putting up to $220-billion in potential capital investment in large-scale Canadian projects at risk, alongside more than 80,000 direct jobs, in sectors like EVs and batteries, green steel, data centres and critical minerals – the very sectors Canada wants to grow for our future prosperity.
And loss of indirect employment is an even bigger risk. Critical mining projects, for example, create an average of 2.3 indirect jobs for every direct job.
In his Davos speech, Prime Minister Mark Carney spoke about the transformation of the global economy and some of the opportunities for our country. Taking advantage of those opportunities is not just about building trade relationships. It’s about building the infrastructure that can support that trade expansion and capital formation.
That starts with convening political, industry and investor leadership to support a new electricity strategy that accelerates clean generation, storage and transmission build-out across the country, and prioritizes grid projects and interprovincial ties at a pace consistent with industrial and electrification needs.
