Government of Canada Plans New Strategy for Nuclear Energy

Two major investments accompany the announcement:

• $40 million for military microreactor feasibility (think remote Arctic bases), and
• $2.2 billion over ten years to modernize the existing Chalk River Laboratories, Canada’s longstanding national nuclear research labs.

That Chalk River modernization project will be run by Nuclear Laboratory Partners of Canada, an American consortium that took over managing Canada’s Nuclear Crown Corporation, Atomic Energy Canada Ltd (AECL) earlier this year. Canada already generates 13% of its electricity from nuclear power and is the world’s second-largest uranium producer. We played a pioneering role in developing medical isotopes – the technology used to detect and treat cancer. And we produce at least 50% of the medical isotopes used around the world. The government wants to leverage those strengths in a global nuclear market projected to grow by up to $200 billion per year by 2030.

This is important because nuclear research, uranium mining, and reactor design are some of the few success stories in Canada’s history with converting innovative research into tangible outcomes. The nuclear Crown corporation, Atomic Energy Canada Ltd. (AECL) has done a good job of commercializing research. AECL has also developed and retained control of the IP for the popular CANDU reactors which are used all over the world.

When it comes to resources, uranium mining is one of the examples where Canada has leveraged our status as “hewers and drawers” into fuelling research, creating a lucrative trade with the U.S. and allies, and supplying our own clean nuclear energy capacity.

Our biggest concern with ramping up a nuclear strategy is that the current management of Canada’s nuclear research is centred around an American consortium of companies that will be learning from and managing the expertise that Canada built. Previously, Canada Nuclear Labs (CNL), the main organization controlling nuclear research facilities in Canada, was operated by a Canadian consortium which meant there was at least a plausible pathway from public research to Canadian commercialization because the lead firm was Canadian.

We’ve already seen nuclear expertise leak to the consortium. The original bid to operate CNL included 4 firms — one was Canadian. But during the review process it was purchased by one of the foreign partners.

Right now, it’s still premature to make an assessment of the new National Nuclear Energy Strategy. But at Shield, we have developed a “Sovereignty Score” policy assessment, so we can say that the forthcoming nuclear strategy will need to do a few key things to be successful.

First, the AECL and any expanded capacity in Canada’s nuclear energy base will need to continue to have strong protections for IP and data related to research. CNL has shifted to a government-owned, contractor-operated (GOCO) model with a private contractor managing facility operations. This contract was recently transferred to a new consortium of U.S.-owned companies managing CNL as of 2025. The reliance on foreign contractors to manage this strategically important lab creates potential for some of the new value from research, operations and nuclear waste remediation work to be siphoned off to private U.S. companies if strong efforts are not made to protect those assets.

Second, the AECL must continue to own and control the facilities and research being developed through this new program. But it also must do so in a way that is productive and potentially profitable. We can’t expect that good work on CANDU, nuclear isotopes, and other research in the past will inherently lead to more innovations that can sustain an expanded AECL. Work on research partnerships, ownership and control, commercialization, and high safety standards will need to continue to ensure this plan is a success

Third, scaling uranium production and expanding exports should be approached with a lens on Canadian ownership and control. It may be the case that foreign direct investment (FDI) is required to scale and expand the industry, but that should not come at the expense of blindly accepting any FDI that is offered if it’s going to funnel the resulting value out of the country. Using FDI to drive this project will need to come with assurances that value remains in Canada.

Exporting more uranium may undermine Canada’s commitment to nuclear non-proliferation. At a time when multiple non-proliferation agreements are set to expire and global tensions are on the rise, Canada needs to make sure we continue to act in keeping with our values.

As the strategy comes together, the government needs to be deliberate about how it structures procurement and partnerships because if the terms aren’t designed with Canadian participation in mind, we could end up with nominally Canadian assets being operationally dependent on foreign firms — almost by default if the operational capacity exists entirely within a foreign management firm.

Even if the IP is Canadian controlled and the industry is domestically governed, the operational expertise being advanced and held by an independent firm might undermine capacity long term and create unwanted dependencies.

The CNL situation wasn’t necessarily a dramatic giveaway; it may have just been a badly designed process that left no viable Canadian option standing. But future operational partnerships and expansions of infrastructure must put sovereignty and Canadian options first, especially in this area where Canada has significant expertise. As the government launches into its full drafting of the strategy, it will need to be keeping sovereignty and Canadian values front and centre.