Canada's 2026 Budget Allocates Billions to Nuclear and Forestry Sectors

Canada’s 2026 federal budget includes significant funding for the nuclear and forestry sectors, according to government documents and industry representatives.

Nuclear Energy Investment

The federal government has committed more than $6.5 billion to nuclear power, aiming to make the technology the “cornerstone” of its clean electricity strategy. This is part of $8 billion in capital spending on “electricity-related” projects over the next five years. The government's wider national electricity strategy envisions $60 billion in support through 2035 across nuclear, wind, solar, storage, and transmission.

Specific nuclear allocations mentioned in the budget include:

• $2.2 billion over 10 years for the Canadian Nuclear Laboratories at Chalk River, Ont.
• $970 million in Canada Infrastructure Bank financing for a grid-scale small modular reactor (SMR) at Darlington, Ont.
• Up to $3 billion in equity from the Canada Growth Fund and Building Ontario Fund for the construction of two new CANDU reactors in Romania.
• $74 million for a reactor being developed near Estevan, Saskatchewan by SaskPower.
• $50 million for refurbishment work at Bruce Power’s Darlington nuclear complex.
• $40 million for unspecified “microreactors.”

Energy-market observers have raised questions regarding these commitments. The Ontario Clean Air Alliance estimated the levellized cost of energy for nuclear power could reach $226 per megawatt-hour (MWh) by 2030, compared to $43/MWh for renewables such as wind and solar. Climate and energy policy analyst Hadrian Mertins-Kirkwood stated, “There’s not a strong economic case,” noting that wind farms can be built in three-to-five years, whereas SMRs or refurbishing plants can take 15 years or more.

Forestry Sector Support

The federal government announced $6.5 billion over six years, starting in 2027-28, to support the forestry sector, which faces combined tariffs and duties of approximately 35 per cent. This funding is intended to improve productivity and competitiveness.

The allocation includes:

• $4 billion for a new “forestry sector accelerator” to invest in large facilities and transform existing ones into biorefineries, biofuel facilities, and other projects.
• $2 billion to modernize facilities and equipment.
• $500 million to improve the fibre supply through forest management, stewardship, and technology deployment.

Kim Haakstad, president and CEO of the BC Council of Forest Industries, said it is unclear how much of this money will flow to British Columbia, which has been struggling with mill closures. Haakstad stated that while the funding “recognizes forestry’s importance to Canada’s economy,” it “cannot resolve the strain on our competitiveness.” Ravi Parmar, the outgoing B.C. forests minister, called the announcement a “good start.”

Why it matters

The budget highlights a policy direction that prioritizes nuclear power as a primary component of Canada's electricity strategy, even as analysts debate the speed and cost-effectiveness of nuclear versus renewable alternatives. Simultaneously, the government is attempting to stabilize the forestry sector through significant capital injections to offset international trade pressures.

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Sources

• nationalobserver.com: Canada's budget fuels new nuclear power with billions but bypasses faster renewables | Canada's National Observer: Climate News
• thestar.com: From forestry to food banks, what's in Budget 2026 for British Columbia?
• ctvnews.ca: Budget 2026 Canada: $6.5B for forest sector, hard hit in B.C.

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.