Canada’s $456B Megaprojects List: Building The Past Or Electrifying The Future? – CleanTechnica

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Canada is preparing to spend potentially half a trillion dollars on major infrastructure projects that will shape the economy and society for decades. The list spans ports, high speed rail, hydroelectricity, nuclear, mining, oil and gas, carbon capture, offshore wind, and transmission. On paper it looks like a bold nation building program. In practice it is a mirror of Canada’s existing contradictions. There is too much money chasing yesterday’s trade, too little directed at the backbone required for electrification, and far too much trust being placed in public cost estimates that have proven unreliable time and time again.

Canada is not planning to write all of the checks for these projects. Many will be led and financed by private firms, provinces, and Indigenous partners. What the federal government is doing is creating a Major Projects Office and a single federal approval track intended to cut review timelines to two years and provide one set of conditions in place of multiple departmental permits. The list of 32 projects that has circulated is not a final roster but an early set of candidates under consideration for this accelerated process.

Reference class forecasting is a method of estimating project outcomes by comparing them to the actual results of similar projects rather than relying only on fresh forecasts from proponents. It was formalized by Bent Flyvbjerg after decades of evidence that megaprojects almost always cost more and take longer than planned. In this analysis I am applying reference class forecasting to Canada’s major projects list, using it as a corrective lens to adjust the official numbers to what history tells us is more likely.

The numbers tell the story. RCF puts the slate at $456 billion (all values in Canadian dollars). Where there are public estimates, RCF puts them at an average of a third higher. Every category shows systematic underestimation, but the gap is most pronounced in hydro and nuclear at 50% and 54% variance respectively. Transportation comes in at 33% higher, oil and gas at 30%, mining at 25%. The lesson is clear. Canada is about to repeat the pattern of announcing attractive projects at attractive prices and then finding out they are neither cheap nor quick to deliver.

Look first at transportation. Roughly $6 billion is for road twinning. That is a small part of the total and while it reflects car-centric habits, it does not dominate the portfolio. The bulk is ports and high speed rail. Ports are important infrastructure, but the question is what they are built to move. If the intent is to handle more coal, oil, and LNG shipments then they are bets on declining global markets. If they are designed for containerized value added trade, critical minerals processed into batteries, and offshore wind components, then they serve the future. At present, a full third of the port projects are explicitly for oil and gas expansion. Another third is for bulk timber and minerals exports, once again not higher value, more processed goods made from Canada’s natural resources such as manufactured mass timber, batteries or highly refined critical minerals. Canada has to choose. A port is a long lived asset and building for yesterday’s commodities locks in wasted capital.

High speed rail is different. It is one of the few transportation projects that aligns naturally with the electrification agenda. Electrified rail reduces short haul aviation demand, connects population centers, and allows for denser and more efficient urban growth. The cost is large. The RCF estimate is $174 billion compared to $120 billion in public announcements, well over a third of the total project portfolio. Canada should expect the higher figure because rail megaprojects globally have averaged 40% to 60% overruns. The real choice is not whether it is expensive. It is whether Canada wants a spine of electrified mobility that integrates major regions. If it does, it should accept the higher cost estimate as the starting point and plan accordingly.

The most glaring contradiction lies in oil and gas. Five projects together represent about $114 billion in RCF costs, about a quarter of the portfolio. These are pipelines, LNG terminals, offshore oil production, and a massive carbon capture hub. They are not bridges to the future. They are extensions of an industry that is in structural decline. Europe and Asia are accelerating electrification and moving away from fossil imports. New oil pipelines and LNG export facilities built in the late 2020s and early 2030s will face shrinking markets. The only argument for spending this money is if pipelines are used as an excuse to pull parallel high voltage direct current lines. If that happens, at least the right of way leaves a useful asset. If it does not, then the investment becomes a stranded cost borne by Canadians.

Hydro and nuclear are often paired as clean firm power, but they are not equal partners in a renewables heavy grid. Hydro is dispatchable. Reservoirs and turbines can ramp up and down quickly to balance variable wind and solar. Nuclear is inflexible. Reactors are economically and often technically constrained to run at steady output and adjusting them for daily load swings is inefficient and costly. That makes nuclear a poor fit for a grid dominated by wind and solar. Hydro is the right complement and nuclear is the wrong one. Canada has abundant hydro potential, especially in Labrador, Quebec, Manitoba, and British Columbia. Investing in flexible hydro expansion makes sense. Pouring $32 billion into new nuclear, with the highest cost overrun profile and poor grid flexibility, does not.

It gets worse, of course. The likely $32 million is for small modular reactors at the Bruce Nuclear power plant. They are first of a kind technology whose premise doesn’t stand up to scrutiny. What the SMR program does is keep the township of Kincardine, population 12,000 and in a strongly Conservative-voting rural area, alive by keeping the 4,000 jobs at the nuclear plant alive. Like the extension of the existing CANDU reactors through to 2064, in theory making them an average of an unprecedented and deeply unlikely 82.5 years old at retirement, it’s more vote pandering politics than sound energy policy. The federal government should stay well away from it.

The transmission category is the most underfunded. The RCF estimate is $5 billion. That is a rounding error compared to the total. Yet transmission is the arterial system of electrification. Without new long distance interties, offshore wind, hydro expansions, and solar farms cannot deliver their output to the urban and industrial centers where demand is growing. Without robust transmission, electrification of transport and heating stalls. Canada’s grid needs tens of billions in new transmission capacity. Leaving it at $5 billion is the single biggest misallocation in the entire slate of projects.

Mining and resources account for $21 billion. Critical minerals are a necessary input to batteries, electric vehicles, and wind turbines. The risk is that Canada continues its long habit of exporting raw materials rather than capturing value through refining and manufacturing. If mines are tied to domestic processing and manufacturing, they strengthen Canada’s role in the global clean economy. If they are only about shipping bulk ore through new ports, then they are another missed opportunity.

The thirty two projects on Canada’s major projects slate are not new ideas. On average they have been in development for fifteen to twenty years, with some of the largest and most expensive dating back decades. Gull Island hydro has been studied since the 1970s, the ALTO high speed rail corridor has been revisited since that same period, and Roberts Bank Terminal 2 has been under formal review for more than a decade. The Ring of Fire mining district has been a political talking point since the mid-2000s and Churchill’s port has cycled through periods of closure and reopening for thirty years. Even Bay du Nord offshore oil was discovered a decade ago and has been mired in delays. Only a handful of projects, such as the Pathways carbon capture hub, Nova Scotia offshore wind, and new critical minerals mines, are less than five years old. The picture is of a portfolio heavily weighted toward long gestation ideas that have struggled to reach delivery, not a fresh set of initiatives aligned with the next economy.

There are some glaring misses from the major projects list. Carney’s housing pledge, which requires 250,000 more houses built annually, has zero presence. That might be a timing and lighting issue. The national energy corridor is missing, with just a single oil and gas pipeline across northern Alberta and BC. While the ports are in urban areas, there is no other major urban development project on the list. Why aren’t more subways in Canada’s most crowded and dynamic cities, Vancouver and Toronto, showing up? Why isn’t freight rail electrification there? Where is large-scale grid storage, especially closed loop, off river pumped hydro? Basically, this is a collection of projects that were already rumbling along, not a strategic nation building program. Does that make it a terrible list? Not necessarily, but it should be viewed through that lens. These are projects that major stakeholders have been working on, often for years.

The iron law of megaprojects is that they are over budget and over time almost without exception. Canada is showing the same pattern. Reference class forecasting reveals a third more capital is required than public estimates. Hydro and nuclear are even worse. If governments plan on the public numbers, they will face fiscal shocks, delays, and projects that limp forward as half built or underused. If they plan on the RCF numbers, they have a chance of delivering the intended outcomes.

Canada’s choice is stark. It can direct nearly half a trillion dollars toward yesterday’s commodities and inadequate transmission, or it can reshape its infrastructure to support electrification and value added trade. Ports should be built for clean exports and containerized goods, not fossil bulk. High speed rail should be pursued with realistic budgets, and weighed against autonomous electric cars and electrified aviation. Hydro should be expanded as the flexible partner to wind and solar, while nuclear should be left aside. Transmission should be scaled up by an order of magnitude. Mining should feed domestic supply chains, not just overseas buyers. The money will be spent. The only question is whether it builds the past or the future.