Government reinforces support for Canada’s nuclear sector in Budget 2024

On 16 April, Deputy Prime Minister Chrystia Freeland tabled the 2024 Federal Budget, predominantly focused on addressing public concerns over housing and affordability. While there are few new commitments or announcements that impact the nuclear energy sector, the budget in many places reinforces the government’s clear support for nuclear by confirming a series of announced policies and financial commitments intended to support a rapid build out of nuclear over the coming decades.

The budget specifically calls out nuclear as “one of the key tools in helping the world reach net-zero emissions by 2050” and stresses the important role of homegrown Canadian nuclear technology, our robust supply chain, and medical isotopes.

The government also used the opportunity of the Federal Budget to highlight a range of recent support for the nuclear sector, including $3 billion in export financing to Romania to support the construction of new CANDU reactors, $50 million in support of new large nuclear at Bruce Power, and funding for SMR development and deployment through the Canada Infrastructure Bank and the Strategic Innovation Fund. The budget also notes that Canada is the first sovereign borrower to issue a green bond including nuclear, “demonstrating Canada’s commitment to being a global nuclear leader.”

On the issue of impact assessment, the budget includes provisions to reduce timelines for major projects including amendments to the impact assessment act. The budget sets a a target of five years or less to complete federal impact assessment and permitting processes for federally designated projects, and a target of two years or less for permitting of non-federally designated projects.

In particular, it sets a three-year target for nuclear project reviews, by working with the Canadian Nuclear Safety Commission and Impact Assessment Agency of Canada and consider how the process can be better streamlined and duplications reduced between the two agencies.

Further opportunities for improving the efficiency of the impact assessment process will be undertaken as part of the five-year review of the Impact Assessment Act’s designated project list, which will occur later this year, following coming into force of the amended Act.

The Budget also reiterated commitments related to the Investment Tax Credits and nuclear, also specifying that the implementation date will be 1 June 2024, and that the ITCs are available to taxable and non-taxable corporations, including corporations owned by municipalities or Indigenous communities, and pension investment corporations. Provided that a provincial and territorial government satisfies additional conditions, the tax credit would also be available to provincial and territorial Crown corporations investing in that province or territory.

The budget also details that the government will introduce legislation to authorize a new, wholly owned subsidiary of the Canada Development Investment Corporation to issue and administer loan guarantees in respect of the Indigenous Loan Guarantee Program. This Program will provide up to $5 billion in loan guarantees to unlock access to capital for Indigenous communities, creating economic opportunities and supporting their economic development priorities.

In support of North American cooperation on the clean energy transition, the budget extends for an additional year the Canada-U.S. Energy Transformation Task Force, which is bolstering critical mineral and nuclear energy supply chain integration. The budget notes that Canada will continue to engage with international partners with “a view to announcing concrete measures later this spring to bolster North American nuclear fuel supply chains”. A total of $3.8 billion is also announced for Canada’s Critical Minerals Strategy, to secure the country’s position as the world’s supplier of choice for critical minerals and the clean technologies they enable.

Other specific support for nuclear includes $3.1 billion over 11 years, starting in 2025-26, with $1.5 billion in remaining amortization, to Atomic Energy of Canada Limited (AECL) to support Canadian Nuclear Laboratories’ ongoing nuclear science research, environmental protection, and site remediation work.