National Electricity Strategy – Impacts on the Western Provinces

“The world is changing rapidly” and “[i]n a more dangerous and volatile world, Canada is choosing to build.”[1] These statements mark the start and end of the Prime Minister’s official press release announcing Ottawa’s National Electricity Strategy (the “Strategy”).[2] Citing disruptions to global trade, ongoing wars, the build-out of artificial intelligence, and the continuing development of climate change, Canada is focused on “supplying and controlling our own energy.”

Why a National Electricity Strategy?

Canada estimates that emerging demand will require – at least – the doubling of electric system infrastructure by 2050, which will cost over a trillion dollars.

In addition to the expected growth of electricity demand from a growing population, a rapid build-out will be needed for:

• industrial growth (e.g., critical minerals, battery manufacturing, and other rapidly emerging drivers such as AI data centres); and
• electrification of transportation, industry and buildings (e.g., electric vehicles (“EVs”) and heat pumps).

And it’s the anticipated growth of the modern industrial and data-driven economy that is a significant motivating factor for the development of the Strategy.

National Electricity Strategy – Impacts on the West

BC

The Strategy addresses the need to attract and retain investment in high-growth and electricity-intensive sectors, including liquid natural gas (“LNG”) export facilities, mining, and critical minerals. Specifically citing the Major Projects Office involvement with the North Coast Transmission Line (“NCTL”), Ottawa believes the NCTL will serve as the backbone for delivering low-cost clean electricity and enabling new industrial projects, including the Ksi Lisims LNG facility and critical minerals developments in the Golden Triangle. Perhaps not a coincidence, on the same day the Prime Minister announced the Strategy, Ottawa also announced an agreement with the BC government to support LNG Canada’s potential expansion of its export terminal in Kitimat.[3]

Alberta

The Alberta Electric System Operator announced that it would have to initially limit the connection of new data centres to 1,200 MW (of an initially requested ~16 GW), “… which represents the maximum additional large load capacity that the grid can serve without negatively impacting grid reliability.”[4] And thus, the Strategy builds on the Memorandum of Understanding agreed to last year between Canada and Alberta.[5] While much of the public discussion centred on the agreement for an additional west-coast oil pipeline, the agreement had Canada commit to immediately suspending the Clean Electricity Regulations in Alberta (pending a since-released carbon pricing agreement)[6] and Alberta committing to implementing a policy framework to incentivize large investments in data centre development, including incentives for Canadian sovereign computing by July 1, 2026. The Strategy adds to this previous call for the build-out of Alberta data centre capacity by recognizing the strategic role natural gas will have for future developments.

Finally, of recent note, is Alberta’s recent commitment in the May 15, 2026, Implementation Agreement with Canada to, “… implement changes as warranted to the Restructured Energy Market to ensure the stability of its electricity system while continuing to enable natural gas generation and investment in renewables…” [emphasis added].[7] This emphasis comes after allegations that Alberta’s electricity policies have devalued wind and solar power.[8]

Saskatchewan

Similar to Alberta, Saskatchewan is a province that primarily relies on hydrocarbons for its base generation.[9] So Saskatchewan welcomed the Strategy’s flexibility around the Clean Electricity Regulations; in response to the Strategy, Saskatchewan’s premier stated: "We are going to reduce our reliance on coal as we build out our nuclear capacity,"[10] This statement comes a month after SaskPower signed a memorandum of understanding with Ontario’s Bruce Power to inform Saskatchewan’s large reactor technology, in parallel with their existing small modular reactor project.[11]

Expanding on Saskatchewan’s role, the Strategy highlighted Northern Saskatchewan’s high-grade uranium reserves, noting that the uranium production can fuel Canada’s own nuclear fleet and that it exports about 90% of its uranium production, positioning Canada as a reliable trade partner.

Manitoba

The Strategy was light on its discussion of Manitoba, which is the likely result of the fact that the vast majority of Manitoba’s electricity comes from hydro.[12] Considering the reliability of hydro, Manitoba could play a central role in the Strategy’s implementation of regional integration and the reliability concerns associated with intermittent, renewable energy sources.

Ottawa’s role in the implementation of the Strategy

Building on the momentum from Bill C-5: One Canadian Economy,[13] Canada’s approach to implementing the Strategy is four-fold:

• Build the infrastructure needed to double Canada’s electricity generation;
• Connect Canada’s fragmented grids East-West-North through new and expanded transmission lines;
• Train, attract, and retain the talent needed to build the grid of the future; and
• Make more of the technologies and components powering our grid here at home.

Recognizing that jurisdiction over electricity rests primarily with the provinces and territories, the Strategy spends a substantial portion of the paper discussing how it will finance the build-out of Canada’s electricity sector, including:

• A $1.5 billion First and Last Mile Fund (formerly Critical Minerals Infrastructure Fund) to address key infrastructure gaps in energy and transportation that enable critical minerals production and getting key resources to global markets;
• Strategic financing via the Canada Infrastructure Bank (Clean Energy target of $20 billion);
• Indigenous Loan Guarantee Program (envelope doubled from $5 billion to $10 billion); and
• A $6 billion nationwide effort to recruit, train, and hire 80,000 to 100,000 new Red Seal trades workers in the next five years.

Outside of financing, the Canadian government emphasized how previously announced initiatives, such as the Major Projects Office and a discussion paper on Proposed Legislative, Regulatory, and Policy Reforms,[14] could benefit industry by:

• Ensuring that federal reviews and decision-making timelines take no more than one year once a project’s application is complete;
• Establishing a Crown Consultation Hub to coordinate a single Indigenous consultation process, per community, per project;
• Ensuring a single comprehensive federal decision is made on permits and approvals for major projects; and
• Creating federal economic zones through regional impact assessments, in consultation with Indigenous Peoples.

Intertie developments

One area left for further development and consultation on, is the mechanics – or payment – of increasing regional integration.

Building on this context, the Strategy, citing a 2025 study, highlighted that doubling the capacity of the BC-Alberta interconnection could yield $1.7 billion in net benefits by 2050, and a tripling of capacity between Manitoba and Saskatchewan could yield $2.3 billion in net benefits.[15] Canada noted several steps that it was taking to encourage the development of further intertie connections, including:

• Extending clean electricity income tax credits to certain major high-voltage intra-provincial transmissions projects;
• Financial support from Natural Resources Canada programs; and
• Priority support from the Canadian Infrastructure Bank.

While these steps are welcome, several critical areas for future intertie development remain open for discussion. The Prime Minister’s statement spoke of referring the development of a new comprehensive Transmission InterConnect Investment Strategy to the Major Projects Office, and separately, the Strategy spoke of developing a standard cost allocation mechanism to guide and arbitrate costs among project participants (e.g., drawing on models such as the European Union’s Projects of Common Interest frame). However, these discussions will ultimately boil down to how much of the burden of new transmission infrastructure and interties should be borne, over time, by local beneficiaries and provincial ratepayers, and how much should be socialized to the larger public, ultimately, Canadian taxpayers.