New research finds electrifying Canada could add $3 trillion to the economy

New economic modelling finds that doubling Canada’s electricity supply and putting more clean power to work across the economy could add a cumulative $3 trillion to Canada’s economy by 2050, support 1.6 million additional jobs in 2050, and deliver $5 in economic benefits for every $1 invested in the power sector compared to business as usual.

The findings were published in Powering Canada’s Growth: the economic case for an electrified economy, a new report from New Economy Canada and the Canadian Chamber of Commerce, based on macroeconomic modelling by the Open Insights initiative — a consortium led by University of Victoria researchers. The analysis compares an electrified-economy scenario with a business-as-usual future based on current policies and measures.

“Amid discussions of what an electrified economy will cost, we now have a clearer picture of what it could return — trillions in additional economic activity and over a million jobs. This study shows what’s possible when Canada builds more electricity and puts it to work across the economy. It’s now up to all levels of government to come together and build on Canada’s electricity advantage to attract new investment and jobs. That’s how this opportunity can lead to greater prosperity for Canadian businesses, households and communities,” said Ian Bruce, president of New Economy Canada.

The modelling validates the economic direction of Powering Canada Strong — the proposed federal electricity strategy that aims to double Canada’s electricity supply and accelerate electrification — and demonstrates the significant gains in investment, employment and GDP that a coordinated push to build and use more electricity could deliver. 

It also shows that electricity investment can drive growth well beyond the power sector — but only if Canada expands its economic capacity to match.

The report identifies four priorities:

• Sustain political commitment and public investment: Keep electricity and electrification on the First Ministers’ economic agenda and establish a durable framework for long-term public investment.
• Mobilize capital at scale: Align investment tax credits, public-finance institutions and wider business-investment policies to attract capital and keep financing costs — and electricity rates — affordable.
• Build the workforce alongside the grid: Expand training, improve labour mobility and increase productivity so Canada has the workers needed to build the electricity system and support the resulting economic growth.
• Secure the supply chain: Modernize existing supply chains, develop Canadian capacity in critical electricity and clean technologies, and strengthen trade partnerships for products Canada cannot produce competitively.

The new investments announced following this month’s Canada Investment Summit are a strong start toward mobilizing the capital the country needs. At their June meeting, First Ministers also reinforced the importance of doubling Canada’s electricity grid and coordinating efforts on interprovincial transmission to support future economic development and growth.

Featured image: (Hydro One)