Budget 2026: Masters of our Destiny

On November 5^th, the federal government introduced the 2026 federal budget, setting out its plan to strengthen Canada's economy and invest in the country's future. Current Affairs sat down with Mike Powell, Vice President of Government Relations at Electricity Canada, for his analysis of what the budget means for the electricity sector.

Hi Mike, thanks for joining us! We noticed the cover of budget 2026, Masters of our Destiny, featured transmission towers outside of Churchill Falls, so we had a hunch that this was going to be an electricity focused budget. What were your expectations going into lock up?

We knew we were going to see something pretty big for our sector when we saw the cover of the budget. One of the nice things about this government to date is that they are pretty good at tipping their hand about what they're going to do. And so, in the National Electricity Strategy, which came out in May, they listed a few things they were thinking about, including adding additional supports like the Investment Tax Credit regime for intra-provincial transmission. When we saw the cover we figured, ‘well here it is’. But what we actually saw in the budget, I think, was probably bigger than we would have expected.

Based on our conversations with the government over the summer, there was a lot of focus on the electricity sector from the Prime Minister, from NRCan and from Finance Canada. There was a lot of pieces going in and the opportunity for this to be an “electricity budget”. A lot of things went into this budget, but a substantial portion of new spending was to our sector. The pull quote from the press release our team put together speaks to it well, it really is the most transformative budget in a generation. It cements a clear federal role for helping build out the grid for the next 15 years.

Talk us through the advocacy wins and what they mean for our sector.

First of all, by extending the Clean Electricity and Clean Technology Investment Tax Credits to 2040 means that the vast majority of the build-out that we see bleeding into doubling the grid for 2050 will have some sort of clear federal support from the federal government. And if you were to go back five years, that didn't exist. Similarly, the Smart Renewables and Electrification Pathways Program (SREP) is topped up to another 4 billion dollars. We have a consistent funding stream that is tough to get.

Our job is to help create a policy environment where members can bank on investment and affordability to grow the grid over a long period of time and this budget helps deliver on that.

In the strategy, the first thing they talk about, is that they heard that affordability and rate impact matters, and they talk about how electricity can help reduce your costs overall through energy wallet. We are starting to see a picture where there is greater clarity how our sector can get the help that it needs to grow from the federal government.

When you looked at the budget, where were the moments you felt that it really connected to Electricity Canada’s advocacy work?

It was on the EFIEL (Excessive Interest and Financing Expenses Limitation) chapter. We've been working on that for four years. The government essentially changed rules to limit how much companies can expense or write off interest that they carry to avoid to limit taxes. We’ve been pushing for a utility exemption for a long time. In the budget, they announced what looks like an exemption for utility debt that even if it is held an associated entity which results in millions of dollars of savings for our members. That’s pretty close to what we asked for our in our letters.

Another win piece is interprovincial transmission. We've also been pushing for this for a long time. This is where the vast majority of build out for lines has to happen. And it's real today. The government went with an innovative solution for how they limit that, and we'll have to figure out what the exact implications are but, before last week there was no fixed federal programme that supported transmission build out in Canada. There was like bits and pieces here and there within provinces, and today there is. And that has a real material impact on growing the grid.

We have a budget, now we have to implement it. So, where do you think the challenges are going to lie with respect to actioning some of these items?

I think that in the next few weeks, we'll see a Budget Implementation Act, which will bring out the actual text of the legislation for most of these pieces. And so, there'll be some work in making sure that those are aligned in a way that makes sense. If you go a layer down, the actual policy implementation will be interesting and probably a challenge – the devil is in the details.

As an example, one of the commitments in the budget was to create a domestic content bonus for the ITCs, so, you can get 5 or 10% more if you use Canadian products. We don’t know what that looks like yet. The ITCs are still complicated to use. There's a lot of wage and labour provision tracking that makes it really complicated. And so that'll be an area where you know, we must keep focusing and there is still a gap in that for distribution focused funding.

What is next for the electricity sector?

I think we're in an exciting place. And I think that there's not a lot of trade associations that get to keep riding this wave because it hasn’t crested yet. The government is focused on electricity as a means of productivity and economic growth, it's focused on electricity as it's climate plan. I think that even with very smart people in government, there's a big responsibility for us as an industry association, to help translate our members' needs to where governments are at and vice versa, and to focus on, what we need to keep growing and how we can keep implementing.