Canada’s New Nuclear Strategy
On April 29, 2026, at the Canadian Nuclear Association Conference (CNAC) in Ottawa, Minister of Energy and Natural Resources Tim Hodgson announced that Natural Resources Canada (NRCAN) will develop a new Nuclear Energy Strategy that will be presented by the end of the year. The announcement that followed was substantial: a $40 million Department of National Defence commitment to assess a Canadian-controlled microreactor for remote Arctic military facilities, and $2.2 billion over ten years for Atomic Energy of Canada Limited’s (AECL) Chalk River research facility. Prime Minister Mark Carney previously referred the ongoing construction of four GE Vernova Hitachi BWRX-300 small modular reactors (SMRs) at Ontario Power Generation’s (OPG) Darlington Nuclear Generating Station in Bowmanville, Ontario to his new Major Projects Office (MPO). The Darlington New Nuclear Project’s four SMRs each delivering 300 megawatts of electricity, will together power 1.2 million households and make Canada the first G7 country to operate an SMR. The policy aims to expand Canada’s technical capabilities and industrial capacity of the Canadian nuclear energy industry which already contributes $22 billion annually to the Canadian economy and provides 15% of Canadians’ electricity.
Hodgson opened his remarks with a line that deserves more scrutiny than it usually gets: “Canada is at a pivotal moment. We are facing disruption in our markets, trade, security, technology and climate.” The investment strategy is not only being primarily justified as a mechanism to reduce emissions of Canada’s electricity output, but equally as one to improve Canada’s energy security.
The Paradox of the Energy Exporter
That framing raises an obvious question: why would one of the world’s largest energy exporters suddenly prioritize energy security? Matthew Fuhrmann, one of the top publishing scholars on nuclear politics, demonstrated in his 2012 article “Splitting Atoms” that countries dependent on energy imports are significantly more likely to build nuclear power plants. Canada is the opposite: a net energy exporter every year since at least 1971. In 2024, 48.2% of Canada’s domestic energy production was exported, ranking it fourth globally in export volume. As of 2023, Canada is:
- Third in proven crude oil reserves (10.3% global share) and fourth in production,
- Fourth in proven natural gas reserves and fifth in production,
- Second-largest proven uranium reserves, accounting for roughly 13% of global uranium production. About 90% of Canadian uranium is available for export.
Since 2000, Canadian energy exports have steadily increased by 76%, widening the energy trade surplus. On paper, Canada has no energy security problem.
However, though Canada is a net exporter of energy, energy security as a concept is not necessarily only measured by a country’s energy trade balance – even if it was a useful and defensible generalization for Fuhrmann. Approximately 90% of Canadian energy exports in 2025, valued at $163 billion were to the United States. The composition of Canadian exports within US imports include 63.4% of crude oil, 99.9% of natural gas and 81.3% of electricity. Additionally, Canada exports a significant fraction of its mined uranium to the United States. In 2024, one third of US uranium imports were from Canada fueling American reactors which rely almost entirely on imported fuel. Canada and the United States’ energy markets are structurally embedded through infrastructure such that they are interdependent. There is a sprawling network of cross-border pipelines which carry both oil and natural gas products, and traditional freight transportation completes a supply chain that delivers fuel to end-consumers across both countries, and abroad.
Since US President Donald Trump overturned the global trade status quo on “Liberation Day,” a trade war was endured with Canada. The Canada-US-Mexico Agreement (CUSMA/USMCA) is due for renegotiation in July, and $1.3 trillion in trade hangs in the balance – unfortunately, there has only been one bilateral discussion between Canadian and American representatives thus far, while Mexico has successfully held and scheduled multiple discussions with the Americans. Prime Minister Carney has made diversifying Canada’s trading relationships a central priority, seeking to reduce the country’s strategic dependence on the United States. At the same time, conflict involving Iran, the United States, and Israel temporarily disrupted traffic through the the Strait of Hormuz, removing roughly one-fifth of global oil and natural gas supply from international markets. These disruptions coincided with a major shift in North American energy exports. Canadian crude began moving to East Asia through the expanded Trans Mountain Pipeline, while U.S. Gulf Coast exports also increasingly targeted Asian markets rather than Europe. Canada and the United States now appear both economically interdependent and increasingly competitive in global energy markets – hardly a secure position.
Why Nuclear, and Why Now
The International Energy Agency’s World Energy Outlook 2025 projects that electricity demand is expected to grow by at least ~40% by 2035 amid digitalization, industrial growth, and AI data centre construction. It also reports that over 40 countries have stated policies to expand nuclear energy by 2050, annual investment in nuclear technology reached $70 billion USD in 2024 – a 50% increase from 2020, and there are currently 70 gigawatts of electricity generation capacity under-construction. According to Cameco, the largest firm in the Canadian nuclear fuel market, the average price per pound of uranium oxides on long-term supply contracts has risen by 165% in the last five years. They also argue that geopolitical disruptions and years of underinvestment have disrupted nuclear fuel supply chains, shifting risk onto utilities operating reactors. Increasingly operators are locking into long-term contracts on fuel supply and reactor construction to secure reliable baseload power, support emissions reduction, and improve Canada’s long-term energy independence.
Canada’s Nuclear Legacy and Industrial Advantage
Canada also has unusual standing to compete in this moment as a historical nuclear innovator. During the Second World War, Canada contributed to the Manhattan Project through the Montreal Laboratory and its successor Chalk River, supplying and processing uranium and playing an important role in plutonium research and production. In 1945, Canada built the ZEEP experimental reactor at Chalk River, and on 5 September 1945 it achieved a sustained nuclear reaction, becoming the first nuclear reactor built and operated outside the United States. ZEEP was eventually developed into the Canadian Deuterium Uranium (CANDU) pressurized heavy-water reactor (PHWR), a reactor design that became Canada’s signature contribution to civilian nuclear energy.
Today, there are 19 operating CANDU reactors in Canada, specifically in Ontario and New Brunswick, supplying 15% of our electricity and nine CANDU reactors operating abroad in South Korea, India, Argentina, China, and Romania. The CANDU fleet’s operation is being extended: in February, the Ontario government announced the complete refurbishment of Darlington Nuclear Generating Station’s four 850-megawatt (mw) CANDU reactors ahead of schedule and $150 million under budget. Likely to feature prominently in the forthcoming strategy, is the federal governments over $300 million loan to AtkinsRéalis (formerly SNC-Lavalin) to assist in the development of a new CANDU reactor design called the Monark. Even though the Monark is reportedly not going to live up to the promise of 1000 mw of electricity generation, its revised capacity is still an improved 925 mw from the previous 850 mw CANDU design. However, it’s capacity is significantly behind competitors like the American Westinghouse AP1000 offers 1,100 mw, and the Electricité de France’s European Pressurized Reactor offers 1,600 mw. Even though Westinghouse is an American firm, it is 100% Canadian owned by Canadian firms Cameco and Brookfield. Cameco argues in its sales pitch for the AP1000 to Canadians, that at current growth rates, electricity demand will be up 50% by 2050, necessitating both expansion of CANDU and added AP1000 capacity – Cameco has a significant stake in the CANDU fuel market, so it is in their best interest to promote both.
The Enrichment Question
Unlike most commercial reactor designs, CANDU reactors use stable uranium isotopes, fabricated into fuel rods, as nuclear fuel with heavy water as a moderator allowing them to operate without enriched uranium. U238 is the naturally occurring, stable uranium isotope, but the unstable fissile isotope of uranium is U235 (because it enables the fission reaction that is triggered in atomic and thermonuclear weapons). Other light-water reactors (LWRs), boiling water reactors (BWRs) and gas-cooled reactors (ARs) use uranium fuel that is transformed to contain anywhere from 3-5% U235 (rather than <1% in naturally occurring uranium) through a technically complicated and expensive process called enrichment. Some new SMR designs use high-assay low-enriched uranium (HALEU) fuel, with almost 20% U235. One of CANDU’s principal advantages was that it eliminated the need for enrichment infrastructure. Countries could operate the reactor using natural uranium, avoiding the most technically demanding and politically sensitive stage of the nuclear fuel cycle. Enrichment facilities are expensive to build and maintain, and because the same technology can be used to produce weapons-grade material, they have long occupied the centre of international non-proliferation efforts.
Fuhrmann, in a later article co-authored with Benjamin Tkach titled “Almost Nuclear: Introducing the Nuclear Latency Dataset, “recorded the scale and operational history of nuclear enrichment facilities, including Chalk River, to measure countries’ latent ability to weaponize their nuclear technology. Other scholars such as Stephen Herzog, Mehta and Whitlark, and Smith and Spaniel have continued to improve upon that initial attempt at measurement, but all acknowledge the weight of enrichment as the most significant latent capability due to its technical complexity and dual use nature.
The BWRX-300 reactors already being built at Darlington and any new AP1000 reactors potentially built will require enriched fuel. Canada does not currently have enrichment capacity. That means that even as Canada positions itself as an SMR technology leader and a major uranium producer, the most strategically sensitive step in its own fuel cycle remains outside its control.
Chalk River is beginning to close part of this gap. In April 2026, Canadian Nuclear Laboratories and Chicago-based Clean Core Thorium Energy announced an agreement to manufacture demonstration ANEEL fuel bundles. The patented fuel combines thorium with enriched uranium for use in existing CANDU and other pressurized heavy-water reactors without major hardware modifications. ANEEL promises higher burnup, reduced spent fuel volumes, and improved proliferation resistance. Although it still depends on imported enriched uranium, the project strengthens Canada’s domestic expertise in advanced fuel development.
Tritium, Fusion, and the Dual-Use Frontier
Chalk River’s most ambitious project offers both energy innovation and strategic capability. Construction is underway at the site on UNITY-2, the world’s first fully integrated, commercially relevant fusion fuel cycle demonstration facility, developed by a joint venture between CNL and Kyoto Fusioneering called Fusion Fuel Cycles Inc. The facility is designed to solve one of fusion energy’s hardest unsolved problems: tritium availability. Existing fusion demonstration reactors burn through their tritium inventory quickly and cannot sustain reactions beyond minutes; a commercial fusion reactor rated at 1,000 megawatts would require approximately 50–60 kilograms of tritium per year, against a global civilian supply estimated at roughly 30 kilograms and falling. UNITY-2 will demonstrate a continuous tritium breeding and recycling loop: extracting, purifying, and returning tritium within the fuel cycle in real time. Commissioning is expected in late 2026.
Tritium is also a key component in thermonuclear weapons, which gives Canadian leadership in tritium handling technology with significance that extends beyond energy. Chalk River’s existing tritium infrastructure already gives the CNL site the largest civilian tritium inventory in the world. UNITY-2 will deepen that expertise considerably, and the question of who controls and has access to that capability matters as much as the question of who controls enrichment.
Who Controls Chalk River?
In September 2025, an American-owned consortium formally assumed operational management of Canadian Nuclear Laboratories, including Chalk River itself. The consortium is led by BWX Technologies Inc., a large American specialty manufacturer of nuclear equipment and fuel for energy and military uses, alongside its Canadian subsidiary which has been active in the Canadian nuclear energy industry for 60 years. The contract worth approximately $1.2 billion annually and described as the federal government’s largest runs for six years with extensions possible up to fourteen. Canada is simultaneously declaring nuclear energy a matter of national sovereignty and funding the expansion of a facility it does not operationally control.
It provoked immediate political controversy. Conservative MPs accused the AECL of handing American interests authority over Canadian nuclear secrets and medical isotope production. AECL’s president defended the model, noting it was designed in 2015 specifically to access American expertise in nuclear waste management and lab operations. But that explanation was formulated in a different geopolitical era, when the Canada-US relationship was not a live source of strategic anxiety.
There is, however, another reason that building interdependence with trusted US-government contractors might be the right strategic engagement. Nicholas Miller’s research on non-proliferation sanctions demonstrates that the United States has historically used economic and security interdependence as the primary lever for pressuring allies to curtail sensitive nuclear activities such as enrichment, reprocessing, and heavy-water reactor programs. South Korea and Taiwan both abandoned nuclear weapons programs in the 1970s precisely because their dependence on American military protection and trade made the cost of defying Washington prohibitive. The logic is straightforward: the more a country needs the United States, the more vulnerable it is to American leverage over its nuclear program.
American defence contractors with a $1.2 billion annual stake in Chalk River’s continued operation and expansion creates institutional interests inside the American national security establishment that are aligned with Canada’s nuclear research program, not opposed to it. A US government inclined to coerce Ottawa to abandon enrichment research or tritium handling would be working against the commercial and strategic interests of its own trusted military contractors. Jeff Colgan and Miller’s later article on how dominant states manage nuclear technology sharing within their allied hierarchies suggests that Washington consistently tolerates and even encourages civilian nuclear programs among states it considers reliable partners, reserving coercion for those operating outside its orbit. An American consortium running Chalk River makes Canada’s program more legible and less opaque to Washington, while building both Canadian and American technical expertise.
Sovereignty, Interdependence, and the Future of Canadian Nuclear Policy
The nuclear strategy due by the end of 2026 will need to reckon with the enrichment question. Altman and Miller’s analysis of non-proliferation red lines suggests that enrichment is the one node in the fuel cycle where American pressure has been most consistent. An American-managed Chalk River may serve as a useful strategic buffer. It reduces the likelihood that Canada will face the type of coercive non-proliferation pressure previously applied to allies pursuing sensitive fuel-cycle technologies. By giving influential American stakeholders, a direct interest in Canada’s nuclear program, it aligns commercial and strategic incentives across the border. Whether that calculus holds as Canada moves toward enrichment capability remains to be seen.
