By Paul Vieira
OTTAWA--Canadian Prime Minister Mark Carney said the country needs to double the capacity of its electricity grid by 2050, a project with a trillion-dollar price tag but necessary to ensure the country's sovereignty and prosperity.
In a shift from his predecessor, Justin Trudeau, Carney is signaling that the government is open to natural-gas production to meet future electricity needs. The Trudeau administration's clean-energy initiatives aimed to discourage, but not necessarily ban, the use of natural gas.
"We cannot pursue business as usual. We cannot simply rely on restrictions and prohibitions. We must do things differently," Carney said at a press conference in the capital.
The doubling of electricity capacity is required to meet demand, officials said, from sectors such as rare-earths mining, artificial-intelligence data centers and advanced manufacturing. Carney linked this effort to nation building, arguing the country cannot thrive and demonstrate resilience without the ability to produce and control its own power supply.
"We have to unlock Canada's full potential as an energy superpower," Carney said. "Get it wrong, and Canadians will pay higher utility bills. Be too timid, and Canadians will end up short of power--losing good jobs and growing reliant on foreign suppliers."
Canada used to be a net exporter of electricity to the U.S., but the tables have turned in the past two years, according to recent data. Canada became a net importer of U.S. electricity for the first time in March 2024, said Heather Exner-Pirot, director of energy and natural resources at the Macdonald-Laurier Institute, a conservative-leaning think tank.
"This seems unsustainable," Exner-Pirot said in a report published in March, "as American electricity demand and prices are growing even faster than those in Canada, primarily due to stronger data-center demand."
She added that Carney's ambition to rebuild the Canadian economy--with new and refurbished trade corridors, and the development of resource projects--can't be achieved without abundant and reliable power. "Electricity availability is likely to be a major bottleneck for economic growth and affordability in Canada and will inevitably become a bigger political issue in the years to come," Exner-Pirot said in her report.
Documents outlining the government's strategy said the proposed expansion of Canada's electricity capacity by 2050 is forecast to cost over 1 trillion Canadian dollars, or the equivalent of $730 billion.
Complicating Carney's strategy is the country's federal system. Under Canadian law, electricity generation is a provincial jurisdiction. Federal efforts under the former Trudeau administration to reduce greenhouse gas emissions via clean-energy regulations drew intense criticism from provincial governments, especially Alberta, arguing that Ottawa was intruding in their jurisdiction. Under that policy, officials aimed to increase electricity generation from low or non-emitting sources.
Carney's revised plan said that in many parts of the country, "natural gas provides baseload and operational flexibility that complements intermittent renewables like wind and solar." The document added that Canadian natural gas "has one of the lowest emissions intensities in the world. With the introduction of new technologies for methane abatement, we will be capable of further reducing emissions intensity."
More than half, or 60%, of Canada's power supply comes from hydroelectricity, according to the Canada Energy Regulator. The supply of hydroelectricity has come under strain due to droughts, and as a result Canadian utilities have invested hundreds of billions to diversify their supply.
For now, Canadian officials intend to begin consultations over the next four months with the provinces, indigenous groups, and electricity generators and utilities about how to double capacity.
Canada's Conservative Party criticized Carney's power strategy, saying it won't work unless the Liberal government repeals policies, such as industrial carbon taxes, that are dissuading investment.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
05-14-26 1250ET
