Prime Minister Mark Carney’s government is quietly developing a national electricity strategy to be released early this year.

The “clean electricity strategy,” as it is referred to in some lobbying records, offers a political opportunity for Carney to rebuild support among climate advocates after dismantling much of the previous government’s emission reduction policies and regulations, while throwing political weight behind fossil fuel infrastructure including new LNG terminals and a new oil pipeline to the West Coast.

A spokesperson for Energy and Natural Resources Minister Tim Hodgson confirmed an electricity strategy was under development and would be launched this year, but stopped short of a more detailed timeline.

The goal is to “harness clean energy” and to drive greenhouse gas emissions down by decarbonizing transportation, buildings and heavy industry, while boosting economic growth and addressing affordability concerns, said Carolyn Svonkin, director of communications for Hodgson, in a statement.

The strategy “will be a critical part of the government’s climate strategy,” she said.

Hodgson’s department is officially leading the development of the strategy, but lobbying records from industry groups such as the Canadian Renewable Energy Association indicate Environment and Climate Change Canada and Finance Canada officials are also working on it.

The multi-department effort, combined with the political realities of pulling together diverse provinces and territories, means the Privy Council Office (led by former Hydro-Quebec executive Michael Sabia, who is widely seen as Carney’s fixer) is also heavily involved. In a statement, the PCO confirmed it was "actively involved," but stopped short of details.

After dismantling many of the climate policies put in place by the previous government, Prime Minister Mark Carney has quietly directed his government to craft a national electricity strategy.

The stakes are enormous. In 2024, the federal government said Canada’s clean energy sector could see $58 billion in annual investments, creating more than 600,000 jobs, by 2030. If Canada transitions to a net-zero economy, Canadians could reduce their energy costs by up to $15 billion.

Cleaning up the electricity grid, while doubling or even tripling the amount of electricity available according to best estimates, is a vital part of the country’s energy transition. The sector was responsible for seven per cent of Canada’s greenhouse gas emissions in 2023, the most recent figures available from the federal government. Without clean power for heavy industries, transportation and heating homes, pollution would only grow as Canada’s economy does and as electricity-hungry users such as data centres and EVs come online.

Clean power is also viewed by experts as essential for trade competitiveness, given key trading partners such as the European Union have put in place carbon tariffs to make the import of high-emitting goods more expensive.

Thanks to the coal phase-out in many provinces, the electricity sector in Canada has shed more greenhouse gas emissions than any other — but as provincial governments opt for new gas plants, or in some cases defend coal generation, that progress is under threat. That creates a need for the federal government to step in and push provinces and territories that have jurisdiction over their power grids to correct course, some experts say.

“It’s good to hear the federal government is thinking about putting pen to paper on a new strategy for electricity in Canada,” said Stephen Thomas, clean energy manager at the David Suzuki Foundation. But “we have pretty recent electricity strategies already in place” to draw from.

Months before former Prime Minister Justin Trudeau stepped down, his government published a national clean electricity strategy. In 2024, two other separate sets of recommendations were presented to Ottawa from the Canada Electricity Advisory Council and the First Nations Major Projects Coalition, recommending a strategic national electricity focus on building quickly, keeping rates low, protecting reliability and pursuing full Indigenous participation.

It is unclear how much Carney’s government will lift from the Trudeau plan or recent reports, but experts interviewed by Canada’s National Observer say there is plenty of room for improvement.

They say the federal government’s forthcoming strategy should focus on green power generation, new transmission lines to link provinces to one another and connect regions within provinces, keeping electricity rates low and making strategic choices with respect to supply chains.

Philippe Dunsky, president of Dunsky Energy + Climate Advisors and former chair of the Canada Electricity Advisory Council, said it’s “critical” that provinces and territories add more non-emitting energy to their grids, but that the specific type of energy — wind, solar, nuclear, hydro, etc. — should be left to local leaders to decide based on resources available and electricity demand projects, rather than prescribed by the federal government.

It’s also crucial that Canada build quickly, which means a serious reexamination of environmental permitting, he said. There is an opportunity to fast-track assessments for projects that would bring emissions down and boost carbon competitiveness that a strategy should address.

Currently there is “no distinction between the infrastructure we need to build to get our emissions down and be better stewards of the environment, and the stuff that could instead increase emissions,” he said. “It blows my mind that we make no distinction there.”

A major problem the strategy will have to tackle relates to the trade-offs between various goals. For instance, major investments in generation and transmission risk increasing costs for rate payers, which could impact household affordability and industrial competitiveness. There are also questions about how to build quickly with fractured supply chains and political pressure to support Canadian industries.

Canada has major steel and aluminum sectors that could be tapped to build new transmission lines, but lacks solar panel and wind turbine manufacturing capacity, which would slow the build-out of new generation if a strict buy-Canadian policy were put into the strategy.

Fernando Melo, senior director of federal policy and public affairs with the Canadian Renewables Energy Association, said it would be great if Canadian companies were manufacturing the supplies needed at scale, but there is overall a “dearth” of production. In a climate crisis demanding fast emissions reductions, that poses a strategic problem.

“Building a new factory or a new production line can take years, and millions and millions of dollars,” he said. If “you want that investment, you need to guarantee that there’s a market for it.”

Thomas said that while Canada may lag far behind China, Europe and even the United States with respect to some renewable energy manufacturing, a major reason why is because the country has gone through boom and bust cycles for electricity development. Committing to a massive grid build-out could create the demand that would attract companies to set up shop.

Since taking office, Carney has taken some steps to grow the country’s electricity system.

In September, he instructed the Major Projects Office to consider fast-tracking new investments at the Darlington nuclear plant in Ontario and draft a business case for a co-called Eastern Energy Partnership which could include the development of the Gull Island hydrodam in Labrador.