Canada’s ‘nation-building’ nuclear project relies on US suppliers

By Abdul Matin Sarfraz / Canada’s National Observer / Local Journalism Initiative

Canada’s first major “nation-building” investment is going toward a small modular reactor project that depends heavily on US suppliers for key technology and components.

Prime Minister Mark Carney announced Thursday that the federal government will invest $2 billion in Ontario’s Darlington New Nuclear Project — a plan that has stirred controversy since the eruption of a trade war with the US.

During a joint announcement with Ontario Premier Doug Ford in Bowmanville, Carney described the project as a generational investment aimed at extending Canada’s leadership in clean energy while ensuring long-term prosperity for Ontario workers and communities.

“This investment will strengthen Ontario’s power grid and represents the kind of nation-building projects that defines Canada’s new economic approach,” Carney said. “This is a generational investment that will build lasting security, prosperity, and opportunities.”

In the weeks after US President Donald Trump imposed tariffs on Canadian steel and critical minerals, demand grew for Ontario to cancel its contract with US-based GE Hitachi, the company supplying the small modular reactors (SMRs) and enriched uranium for the $21-billion project. Both Carney and Ford have promoted “buy Canadian” policies to shield domestic industry from US tariff threats. Yet, despite the project’s reliance on American suppliers, both leaders defended the investment as essential to meeting Ontario’s soaring energy needs.

The $3-billion partnership includes $1 billion from Ontario’s Building Ontario Fund. Ontario Power Generation will remain the majority owner and operator, with the federal and provincial governments holding minority stakes.

Through the Canada Infrastructure Bank, Ottawa had earlier committed $970 million to the project.

Canada’s first major “nation-building” investment is going toward a small modular reactor project that depends heavily on US suppliers for key technology and components.

Carney said the project marks the start of a broader plan to fast-track large infrastructure and clean energy projects through Ottawa’s new major projects office as proof that “Canada can build big things again.”

Construction on the first reactor began in May, with completion expected in 2030. Once online, the four reactors will supply about 1,200 megawatts of electricity — enough to power 1.2 million homes. The province says the project will create 18,000 jobs during construction, sustain 3,700 permanent positions and inject $500 million annually into the economy.

It also says 80 per cent of the project’s spending will go to Ontario companies.

The Ford government signed contracts in 2021 with US-based GE Hitachi to supply the reactors and enriched uranium for the $21-billion project. It is unclear how much of that money will go to GE Hitachi and other American suppliers.

Ford says the investment is a “down payment on Ontario’s nuclear energy future” that will help protect the province from global uncertainty, navigate tariffs and secure reliable clean energy for a growing population.

“We’re protecting Ontario by supporting good-paying, long-term jobs for Ontario workers and building the energy infrastructure — including both SMRs and new, large-scale nuclear — needed to make Ontario an energy superpower,” Ford said.

The Ford government is projecting a major shift toward nuclear power to meet rising electricity demand and support Ontario’s transition to net-zero emissions by mid-century. Ontario’s long-term Energy for Generations plan also shows an increased reliance on fossil fuels over the next decade, with emissions expected to rise before declining after 2030.

The province says nuclear power will play a growing role in meeting electricity demand, which is expected to rise 75 per cent by 2050. Nuclear power already supplies more than half of Ontario’s power and the province predicts that share could exceed 70 per cent by mid-century.

The government argues nuclear is more land-efficient than renewables and essential to meeting net-zero goals. The province says Ontario would need to build up to 8,900 megawatts of wind and solar, paired with battery storage, to replace the output of four SMRs — an alternative it claims would carry major risks, including large land requirements and the need for significant transmission infrastructure.

Critics question cost, reliance on US suppliers

Growing skepticism over the cost of small modular reactors and similar large-scale nuclear projects echoes global concerns.

In the US, two reactors in South Carolina were scrapped after $12.5 billion (CAD) was spent, leading to Westinghouse Nuclear’s bankruptcy. Georgia’s Vogtle plant was completed at $48 billion, more than twice its original estimate, making it one of the most expensive infrastructure projects in US history. In the UK and Europe, new nuclear projects are also facing delays, cost overruns and cancellations.

Earlier this year, Ontario barred American firms from bidding on electricity contracts and urged utilities to prioritize domestic suppliers. The province also says nuclear projects are complex and costly, and it plans to explore new ownership models and equity partnerships to attract private capital and help finance the expansion. Critics say the Darlington project moves in the opposite direction, increasing Ontario’s dependence on foreign technology at a time of growing trade tension.

“Subsidizing the building of new US nuclear reactors in Ontario will jeopardize our national security and waste taxpayer dollars,” said Jack Gibbons, chair of the Ontario Clean Air Alliance. “We have much more secure, quicker and lower-cost options to meet our future electricity needs. Instead of wasting money on high-cost and slow-to-deploy new US nuclear reactors, we should be investing in energy efficiency, wind, water, solar power and battery storage.”

A recent Ontario poll found that 80 per cent of residents want the Ford government to cancel its contract with the American firm in favour of Canadian renewable alternatives.

Energy experts and environmental advocates have long warned that the province’s nuclear-heavy strategy could raise costs and slow the transition to clean energy. Studies show electricity from new nuclear facilities could cost more than three times as much as solar and up to 3.6 times more than onshore wind.

Ottawa ‘buying the idea’ of innovation

Peter Graefe, associate professor of political science at McMaster University, said the federal government likely sees the investment as a way to make Canada a “first mover” in small modular reactor development. Even though the technology is American, he said Canada could still gain economic benefits in construction, operation and expertise if the technology succeeds and is exported to other markets.

Governments are counting on the public not to look too closely at where the technology comes from but to focus on the fact that construction is happening on Canadian soil, Graefe said.

“People might not like that too much [US suppliers for the project], but they’ll probably pay more attention to the fact that something is actually being built here,” he said. “It’s hard to mobilize a strong public reaction around the idea that governments are betraying a promise to buy Canadian, especially when there isn’t an obvious Canadian alternative.” In fact, a modular nuclear reactor hasn’t yet been built anywhere in the world to offer any alternative, he added.

Graefe said Ottawa’s $2-billion contribution does not make or break the project since Ontario had already committed to financing it through Ontario Power Generation’s debt. “Essentially, what the federal government is doing is reducing OPG’s debt by $2 billion,” he said. “What Ottawa is really buying is the idea that Canada will be seen as being at the forefront of new technology.”

Graefe says this is part of a much longer-term pattern where Canada decides to rely on adopting and adapting American technology rather than becoming technological innovators on their own.

In a statement, Ontario Green Party Leader Mike Schreiner said the investment undermines energy independence and locks Ontario into reliance on American suppliers. “At a time when we should be focussed on energy independence, these SMRs will rely heavily on US technology and US-enriched uranium,” Schreiner said.

He said the province should invest in “made-in-Ontario wind, solar and energy storage” that can lower bills, reduce emissions and create local jobs. “Now is the time for innovation and bold action,” he said. “The world is moving forward. Ontario can’t afford to be left behind.”

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