Ottawa Proposes $52B to Double Electricity Capacity
The federal budget extends clean electricity tax credits to 2040 and broadens them to cover transmission projects.
Updated on Nov. 5, 2026 in Utilities
Live Poll
Should electricity infrastructure costs be paid through tax bills rather than power bills?
The Liberal federal government has proposed $52 billion in new spending to double Canada's electricity capacity by 2050. The budget also extends clean electricity and cleantech tax credits from 2034 to 2040 and broadens them to cover transmission projects.
Why it matters
Electricity infrastructure is very expensive, and funding it through consumers' power bills has proven unpopular. The federal plan instead places a larger share of infrastructure costs on tax bills, while government consultations flagged unsustainable rate increases as adding to cost-of-living pressures and hurting business competitiveness.
The budget proposes $52 billion in new electricity spending and $6 billion over six years starting in 2028 for new energy generation technologies. Federal backing of $10 billion for Labrador hydro and wind projects is included, though the budget does not address how the 28,000-worker shortfall will be closed beyond the apprenticeships program.
The players
Government of Canada
The federal government led by the Liberal Party, which proposed the electricity spending and tax credit expansion in its budget.
Hydro-Québec
Quebec's provincially owned electric utility, which requested changes to the federal tax credits.
The details
The budget proposes extending clean electricity and cleantech tax credits from 2034 to 2040 and broadening them to transmission projects. It also allocates $518.5 million over five years for nuclear energy research and supply chains, and offers a domestic content bonus of up to 10 percentage points for the cleantech investment credit.
Timeline
September: Team Canada Strong apprenticeships program announced
2028: Six-year, $6 billion energy generation technology support begins
2034: Original expiry of clean electricity and cleantech tax credits
2040: Proposed extended expiry of clean electricity and cleantech tax credits
Roadmap
The budget extends the clean electricity and cleantech tax credits from 2034 to 2040 and broadens them to transmission projects, shifting Canada's electricity buildout toward federal tax-funded support. This moves the country further from consumer-bill-funded infrastructure and toward a model where large-scale generation and grid expansion are underwritten by the treasury.
Electricity bills across Canada are still expected to rise, possibly by a lot, though the budget projects these increases will be more than offset by lower costs for gasoline, natural gas and propane. Households and businesses will see the effect through their power bills and tax bills, depending on how the costs are divided.
The takeaway
Doubling electricity capacity by 2050 will require both large public investment and a workforce that does not yet exist at the needed scale, making the apprenticeship program and tax-credit design central to whether the plan succeeds. Readers should watch how the costs are split between tax and power bills as the plan is implemented.
What happens next
The 2028 start of the $6 billion energy generation support and the 2034 expiry date for the existing tax credits will determine whether the 2040 extension takes effect as proposed.
Further reading
For more on how the sector is structured, see Utilities coverage across the country.
Live Poll
Should electricity infrastructure costs be paid through tax bills rather than power bills?
