Canada's 2023 Budget: Effect on Independent Power Producers and Regulated Utilities

Canada's 2023 federal budget, which was released at the end of March, has reaffirmed Canada’s commitment to becoming a net-zero carbon emitter economy by 2050. Canada believes achieving this net-zero commitment will require electrifying various sources of energy, including home heating, transportation, and industrial processes. Meeting net zero will also involve creating new industries that will require access to clean electricity, such as clean hydrogen, in which electricity is used to operate electrolyzers that separate hydrogen from water; the resulting hydrogen can then be used as an energy source for industries that are difficult to electrify, such as long haul-transportation and other industrial uses.

To meet the increased electricity requirements, the budget acknowledges that Canada’s total installed electricity generation capacity needs to increase by 2.2 times to 3.4 times from existing levels by 2050. The 2023 budget has proposed various measures that will support the increased need for electricity, which we expect will affect both Canadian independent power producers and regulated utilities.