OTTAWA—The Canadian Climate Institute and global clean energy finance expert Michael Liebreich have published a joint Policy Brief proposing the federal government establish a new long-term help fund to ensure Canada can keep electricity rates affordable as it works toward doubling its electricity grid capacity over the decades ahead.
The proposed Powering Canada Forward Fund would address a fundamental barrier to achieving the speed and scale of electricity grid expansion outlined in the National Electricity Strategy: namely, keeping power bills remain affordable for rate payers during a surge of investment in electricity generation, transmission, and storage infrastructure across the country.
The Institute’s research has found that expanding the supply of clean, affordable, and abundant electricity across Canada is a crucial step toward attracting investment and boosting competitiveness as demand for electricity surges due to the electrification of transport and heating and new industries such as data centres. Doubling Canada’s electricity system is also a critical lever to improving domestic energy security, promoting affordability, and decarbonizing the economy.
But substantially increasing the rate of electrification of the economy requires significant anticipatory investment; if the cost of that investment is immediately levied against existing power users, it could drive up bills to levels that deter the very electrification that is required. The Powering Canada Forward Fund would help keep electricity rates affordable for users by distributing the costs of electricity investments over a longer period of time. Doing so would mean that new electricity infrastructure is paid down progressively as demand grows and helps cover the bill, keeping rates manageable for all users over time. The federally-supported fund would also remove demand growth risk from the provinces, and use the federal balance sheet to limit fiscal costs and keep electricity affordable over time.
The strategic importance of abundant and affordable clean electricity underpins Canada’s draft National Electricity Strategy as well as provincial efforts to scale up their electricity systems. Around the world too, countries are placing new emphasis on electrification, which is expected to be a major theme at the COP31 Climate Summit in Antalya, Türkiye and in the G20’s agenda for 2027.
While Canada has some existing finance mechanisms to support electricity system investment, such as the Canada Infrastructure Bank and Clean Electricity Investment Tax Credit, neither is designed to smooth the price impact of an investment surge. The proposed Powering Canada Forward Fund would complement those tools and bridge the financing gap in two important ways:
- Aligning costs and benefits for ratepayers over time. It would enable rapid deployment of capital up-front to expand and modernize electricity systems now, while deferring the cost of the expansion to a larger base of future ratepayers—those who will stand to benefit from the expanded electricity system once it’s built.
- Shifting risks from provinces and ratepayers to the federal government and taxpayers. Federally-underwritten funding would accelerate the grid expansion necessary to attract investment and power economic growth, while buffering provinces and ratepayers from the possibility that the growth of future electricity demand lags expectations.
Further details on important financial and operational design recommendations for the proposed Powering Canada Forward Fund are outlined in the Policy Brief, which forms part of the Institute’s official submission to the public consultation on the National Electricity Strategy and forthcoming federal budget.
QUOTES
“The Canadian government has been crystal clear about its ambitions to double the size of Canada’s electricity systems—but it doesn’t have the full set of financial tools to get the job done. The proposed Powering Canada Forward Fund can help transform today’s aging and underpowered grids to supply the abundant, reliable and affordable clean electricity that will supercharge Canada’s future economic growth.”
— Rick Smith, President, Canadian Climate Institute
“From the UK and Europe to the U.S. and China and Singapore, Canada’s global peers and trading partners are retooling their electricity systems and entire economies for rapidly growing power demand. Our proposal would accelerate Canada’s essential, once-in-a-generation investment in electrification with a mechanism that smooths out the price impacts of investing in the grid. It is a practical, equitable and strategic approach, which will help keep the country’s electricity systems one step ahead of demand growth while limiting price increases and providing enhanced energy security.
— Michael Liebreich, global energy finance expert and Chairman and CEO, Liebreich Associates
RESOURCES
- Policy Brief | Powering Canada Forward Fund
- Report | Power Play: How to supercharge Canada’s clean electricity advantage
CONTACTS
Claudine Brulé (Eastern Time)
Lead, Communications and External Affairs
Canadian Climate Institute
(226) 212-9883
Krystal Northey (Mountain Time)
Lead, Public Affairs
Canadian Climate Institute
(226) 212-9883
About the Canadian Climate Institute
The Canadian Climate Institute is Canada’s leading climate change policy research organization. The Institute produces rigorous analysis, economic modelling, and in-depth research focused on incentivizing clean economic growth and low-carbon competitiveness, reducing emissions and accelerating Canada’s net zero energy transition, and making our economy and infrastructure more resilient to a warming climate.
About Michael Liebreich
Michael Liebreich is a leading global expert on clean energy and transportation, smart infrastructure, technology, climate finance and sustainable development. He is chairman and CEO of Liebreich Associates and co-managing partner of EcoPragma Capital, chair of PragmaCharge and the founder of Bloomberg New Energy Finance.
