WaterPower Canada welcomes new hydropower and green hydrogen measures in Canada’s 2021 Federal Budget

Measures outlined in the 2021 Federal Budget will grow demand for hydropower generation, pumped storage hydro, and green hydrogen, while bolstering the industry’s domestic equipment manufacturing and supply chain.

Ottawa, Ontario, April 20, 2021 – The Federal Government’s 2021 budget, “A Recovery Plan for Jobs, Growth, and Resilience,” tabled in the House of Commons yesterday by the Honourable Chrystia Freeland, Deputy Prime Minister, and Minister of Finance, positions Canada toward a “green recovery to create jobs, build a clean economy, and fight and protect against climate change.” It establishes “fighting climate change, including reaching net-zero” as a cornerstone of this government’s economic plan, placing Canada on a pathway to “reduce emissions by about 36 per cent below 2005 levels by 2030”.

Highlights from the Budget that pertain to hydropower and green hydrogen (hydrogen produced from water by electrolysis):

  1. Investments to support: feasibility and planning of hydroelectricity and grid interconnection projects in Canada’s North such as the Atlin Hydro Expansion Project in Yukon ($40.4 million); and to build capacity for project development in First Nations, Inuit, and Métis communities through the Strategic Partnerships Initiative ($36 million).
  2. Investments to support decarbonization projects and accelerate Canada’s industrial transformation including green hydrogen production and utilization through the Strategic Innovation Fund’s Net Zero Accelerator ($5 billion), and a Clean Fuels Fund ($1.5 billion).
  3. The addition of equipment used in pumped hydroelectric energy storage and for hydrogen production by electrolysis of water to Class 43.1 and 43.2 of the Accelerated Capital Cost Allowance (ACCA), enabling the accelerated depreciation of their capital cost.
  4. A 50% reduction of general corporate and small business income tax rates for businesses that manufacture zero-emission technologies in Canada including equipment used in hydroelectric facilities and for the production of green hydrogen.



“Investments made by industry in the refurbishment of existing hydropower assets, development of new storage and transmission capacity, and in pilot projects that demonstrate the viability of hydrogen production through electrolysis, will result in tens of billions of dollars in capital investment and the creation of tens of thousands of new jobs. Canada’s 2021 Federal Budget builds upon our Strengthened Climate Plan and introduces several new important measures that improve the conditions needed for these investments to proceed, while maximizing their long-term value to Canada.”

– Patrick Bateman, Interim President, WaterPower Canada


More Information:

  • According to the “Hydrogen Strategy for Canada” released in January 2021, Canada’s position as the sixth-largest global producer of electricity in the world, and with one of the lowest carbon intensity grids due to our vast hydroelectricity, allow for unique competitive and comparative advantages that position the country to become a world-leading producer, user, and exporter of clean hydrogen, as well as hydrogen technologies and services.
  • Recently announced hydropowered hydrogen production projects include: a 90 MW electrolyser developed by Hydro-Québec that will supply green hydrogen and oxygen to the Recyclage Carbone Varennes (RCV) in Quebec to convert non-recyclable waste into biofuels; and a 20 MW electrolyser in the Outaouais region of Quebec developed in partnership by Evolugen (the Canadian operating business of Brookfield Renewable), and Gazifère Inc. (an Enbridge company) to inject into Gazifère’s natural gas distribution network.
  • Existing hydropower provides 60 per cent of Canada’s electricity generation and can also serve as the country’s “green battery”, providing long-duration energy storage and other ancillary services required to assure grid reliability and resilience, and to integrate variable renewable energy sources such as wind and solar.


Additional Background:




About WaterPower Canada (WPC)

Founded in 1998, WaterPower Canada (WPC) is the national, not-for-profit trade association dedicated to representing the waterpower industry. Its many members span the breadth of the sector and include hydropower producers, manufacturers, developers, engineering firms and other organizations. WaterPower Canada members represent more than 95% of the waterpower installed capacity in Canada, advocating for the responsible development and use of waterpower to meet our present and future electricity needs in a sustainable manner.

Follow us on Twitter and LinkedIn. Subscribe to our newsletter. Become a member. Learn more at waterpowercanada.ca. 


For more information, please contact:

Anastasia Smolentseva, Manager, Communications and Public Relations

WaterPower Canada



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