Budget offers $50B jolt to help Canada double its electricity grid

Budget offers $50B jolt to help Canada double its electricity grid Billions will be rolled out through existing tax measures Budget 2026 outlines the federal government's plan to spend more than $50 billion in "bold and ambitious measures" in the coming decades to expand Canada's electricity system. "The countries with abundant electricity will be the leaders of the 21st century," said Finance Minister François-Philippe Champagne in prepared remarks shared with the media. "We will connect provincial grids. We will build thousands of kilometres of transmission lines. We will develop the nuclear energy sector." Much of the proposed money is being invested in existing investment tax credits. To better connect provincial electricity grids, the government is expanding its clean electricity investment tax credit to help cover the cost of "the highest-voltage intraprovincial electricity lines in each province." That tax credit, along with another for clean technology, is being extended past 2034 to the end of 2040. Carney's 2nd budget earmarks billions for affordability and Canadian sovereignty Budget 2026: Liberal government doubles down on plan to build Canadian economy at home 7 takeaways from the Carney government's 2nd budget The budget states these measures are expected to cost $2.4 billion this decade and then $36.1 billion over fiscal years 2031-32 to 2041-42. The Carney government set an ambitious goal of doubling Canada's electricity grid by 2050. Producing and distributing more clean power is key to decarbonizing economies and achieving Canada's net-zero climate goal. Additional generation and distribution will be necessary as Canadians transition from gas-powered cars to electric ones and households rely less on fossil-fuel-based furnaces and install energy-efficient heat pumps which can heat and cool homes. Energy-hungry artificial intelligence infrastructure is also forecasted to need considerably more electricity. According to Ottawa's finalized electricity strategy, all told the federal government is spending $115 billion in electrification through 2041-42. Budget 2026 contains $52 billion in new commitments. Much of that money, though, is backdated well into the next decade — running the risk that a future federal government could end the spending measure. "We do want that long-term certainty, especially for utilities and major investors who have to make these decisions over decades," said Hadrian Mertins-Kirkwood, a senior researcher at the Canadian Centre for Policy Alternatives. "The problem is they don't scale up very quickly, which means we might not see the investment we need for a few more years.… Especially when it comes to climate change, every year counts." Printed copies of the 2026 federal budget. (David Thurton/ CBC) The feds foreshadowed their annual fiscal document would emphasize electricity with its cover being a photo of power lines. Announcements, such as up to $10 billion in financing for Labrador's Churchill Falls hydroelectricity generating upgrades and other measures, also offered a strong signal Ottawa intended to make considerable investments in electricity. The Carney government has been criticized for weakening federal electricity regulations that would allow for more natural gas generation. Ottawa now is promising new money to support renewable energy expansion. The government will offer $4 billion over 10 years starting in 2027-28 for the expansion of renewables and what it calls electricity infrastructure and other priority sector projects. The budget anticipates more Canadians will be driving zero-emission vehicles. The document states the government is supporting more than 55,000 additional EV chargers in areas that need it most. It proposes to spend $587 million over five years to renew the Zero-Emission Vehicle Infrastructure Program.