Building Canada’s Electricity Infrastructure: The National Energy Corridor Agreement And Its Legal Boundaries

National Energy Corridor Agreement

On March 4, 2026, the Ontario Government announced a new interprovincial and territorial partnership, called the National Energy Corridor Agreement (the "Agreement"). The Agreement is intended to build and strengthen Canada's electricity systems by advancing new transmission infrastructure that enables reliable electricity trade and improves connectivity between provincial electricity grids.

According to the Ontario Government, the Agreement provides a framework for provinces and territories to collaborate to:

• Identify and advance new interprovincial and territorial transmission infrastructure, which includes interconnection projects with elevated speed;
• Expand electricity trade within Canada to help regions meet growing demand and maximize the use of clean, reliable power before exporting abroad;
• Advocate for federal support, including investment to accelerate transmission corridors and support an east-west and north-south electricity strategy; and
• Partner with Indigenous communities in energy development, to provide meaningful participation and shared economic benefits.

The Ontario Government states the Agreement will bring together the Provinces of Ontario, British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Yukon, Prince Edward Island, Nova Scotia and the Northwest Territories.

The Legal Effect

From a constitutional perspective, interprovincial electricity trade and interprovincial transmission infrastructure can engage both provincial and federal jurisdiction. Provinces generally regulate electricity generation, transmission and distribution within their borders, pursuant to their constitutional authority over the development, conservation and management of electricity¹ However, federal jurisdiction may be engaged where an electricity undertaking or regulatory scheme is interprovincial in nature, including where there is the construction and operation of international power lines, export activities, or trade reporting.²

The federal parliament has exclusive power over "the regulation of trade and commerce" under section 91(2) of the Constitution Act, 1867 (the "Act").³ As such, while the Agreement refers to strengthening interprovincial electricity systems, any binding regulation of such trade may need to occur through federal legislation or federal regulatory action, depending on existing or future statutory authority. Federal jurisdiction may also be engaged in respect of certain "works and undertakings" that connect provinces or extend beyond provincial boundaries, including lines of steamships, railways, canals, telegraphs, under section 92(10)(a) of the Act.⁴ In such circumstances, provincial control may be limited as they may not be able to approve or control interprovincial transmission lines that connect across provinces or are designated as interprovincial as these projects can engage federal jurisdiction under section 92(10)(a). Additionally, the Canadian Energy Regulator Act includes a federal designation and certificate mechanism under sections 261 and 262 for certain interprovincial power lines, where the Governor in Council may, by order, designate an interprovincial power line as one to be constructed and operated in accordance with a certificate.⁵ Thus, even if provinces collaborate under the Agreement, in practice, federal statutory authority may govern how interprovincial projects will be operated.

Taken together, these constitutional and statutory considerations highlight that the practical implementation of the Agreement's objectives will depend not only on policy alignment, but on the scope and exercise of federal and provincial jurisdiction.

Key Takeaways

The Agreement signals a coordinated, policy‑driven effort by participating provinces and territories to advance interprovincial electricity infrastructure and expand domestic electricity trade. With the Independent Electricity System Operator's report from April 2025 that Ontario's annual electricity demand is forecast to grow 75% by 2050, the Agreement furthers a broader policy objective of strengthening system reliability and enabling long‑term planning for new interprovincial transmission infrastructure.⁶

While the Agreement reflects a shared commitment to collaboration, its practical impact will depend on the extent to which federal constitutional and statutory authority is engaged to support interprovincial transmission projects. In particular, the federal government's jurisdiction over interprovincial works and undertakings, together with the designation and certification regime under the Canadian Energy Regulator Act, will play a central role in determining how, and how quickly, new transmission infrastructure can be approved and developed. As governments seek to strengthen Canada's electricity systems and support clean energy objectives, the Agreement highlights both the opportunities and legal boundaries associated with advancing interprovincial transmission in a federated regulatory landscape.

Footnotes

1. The Constitution Acts 1867 to 1982, Section 92(1)(c).

2. Canada Energy Regulator, Market Snapshot: Electricity Trade – who regulates what in Canada?

3. The Constitution Acts 1867 to 1982, Section 91(2).

4. The Constitution Acts 1867 to 1982, Section 91(10)(a).

5. Canadian Energy Regulator Act, Sections 261 and 262.

6. Independent Electricity System Operator, Planning and Forecasting, Annual Planning Outlook Report.

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