Fall Economic Statement Reinforces Commitment to Canadian Nuclear Energy in uncertain times

This year’s Fall Economic Statement (FES) was released in an unprecedented and uncertain political environment. The Deputy Minister and Minister of Finance resigned the Government hours before the tabling of the FES. 

At the moment, it is not clear if the Government will survive a non-confidence vote. 

The Fall Economic Statement includes several key developments for Canada’s nuclear energy sector, aligning with key industry priorities. These developments build upon the government’s ongoing support for the nuclear sector. 
 
Key Developments:

• Enriched Uranium Backstop: The FES announces a notable $500 million backstop for enriched nuclear fuel purchases from allied countries. This initiative represents a strategic move to strengthen nuclear fuel supply chains, reduce dependence on Russian nuclear fuel, and support the production of high-assay low-enriched uranium (HALEU).
  
• Investment Tax Credit Enhancements: The FES proposes amending the small nuclear energy property eligibility criteria under the Clean Technology Investment Tax Credit, including removing the megawatt electric threshold and modularity requirement, and increasing the megawatt thermal threshold for all nuclear fission reactors at a nuclear facility to 1,400. These would apply as of March 28, 2023.
  
• Regulatory Streamlining: Amending the Physical Activities Regulations in the Impact Assessment Act to rely to a greater degree on federal lifecycle regulators, such as solely having the Canadian Nuclear Safety Commission’s process apply to certain brownfield nuclear projects, as opposed to also requiring a federal impact assessment.
  
• Provincial/Territorial Crown Corporation Eligibility: Budget 2024 proposed that a provincial or territorial government would need to satisfy certain conditions for any provincial or territorial Crown corporation to claim the Clean Electricity investment tax credit.

Investment Tax Credits: Building on Previous Commitments
The Fall Economic Statement continues to support the nuclear sector through a trio of investment tax credits:

• 15% Clean Electricity investment tax credit 
• 30% Clean Technology investment tax credit 
• 30% Clean Technology Manufacturing investment tax credit 

Major Financial Commitments: Expanding Nuclear Capabilities

The Fall Economic Statement also highlights a substantial financial commitment to nuclear energy: 

• $3 billion in export financing for two new CANDU reactors in Romania, showcasing Canada’s international nuclear technology leadership 
• $50 million supporting Bruce Power’s nuclear expansion 
• $970 million invested in small modular reactors (SMRs) at the Darlington site 
• $3.1 billion allocated to Atomic Energy of Canada Limited for critical research and environmental protection initiatives 

These investments, coupled with continued support for SMR development and deployment, underscore Canada’s ambition to be a global hub for nuclear research, development, and technology export. 
 
Regulatory Streamlining and Policy Innovation 

The government is implementing several key policy changes to support nuclear development. These include simplified Canadian Nuclear Safety Commission processes for brownfield nuclear projects, the introduction of a three-year target for nuclear project reviews, and an updated Green Bond Framework to include nuclear energy expenditures. 
 
The future of nuclear energy in Canada remains promising, with these year-over-year developments providing a clear and evolving roadmap for continued innovation and expansion. 

Next Steps: 

Given the political uncertainty, it is not clear if the FES will pass any vote of confidence and if the required legislative changes can be implemented before an early election is triggered and or if there is a leadership change with the current government. The CNA has been and continues to work with all parliamentarians to ensure that the nuclear industry’s priorities are understood and supported.  

The CNA will continue to monitor and work with all parliamentarians to support the Canadian nuclear industry.