Ontario’s Costly Nuclear Folly
The last time the nuclear industry got its way in the province, Ontario Hydro spent over two decades building 20 nuclear reactors. It was a mash-up of missed deadlines, cost overruns, and a troubling pattern of declining nuclear performance.
Even more troubling, the last generation of nuclear reactors forced Ontario Hydro to the edge of bankruptcy. And it saddled us with a mountain of nuclear debt that we are still paying off.
The Conservative government of Doug Ford is now repeating those costly mistakes in the largest expansion of the nuclear industry in Canada’s history. A nuclear blunder on steroids.
Part 1: Past Debt Due
In 1999, Ontario Hydro collapsed under the staggering weight of its nuclear debt. When the account books were opened, the reality hit home. At the time, Hydro’s assets were valued at $17.2-billion but its debt amounted to $38.1-billion. The government was faced with a stranded debt of $20.9-billion.
In response, the government of the day split Ontario Hydro into five separate organizations. Ontario Power Generation took over the generating facilities (hydro, coal, gas, nuclear) and Hydro One, later privatized, inherited the transmission grid. Neither of these organizations would survive if they had to carry the debt. The government was aware that any future hopes of privatizing the successors of Ontario Hydro would be scuttled if investors had to absorb the debt. The debt was transferred to Ontario families through special charges on electricity bills (until 2018), regular electricity bills, and the tax system. It was the world’s largest nuclear bailout, one we are still paying.
The Ontario Electrical Financial Corporation is one of the five Ontario Hydro successor entities. It was set up to manage and service the long-term debt of the former Ontario Hydro. According to its 2024 Annual Report, the total debt, twenty-five years later, is still $12.1-billion. In 2024, OEFC paid $626-million in interest charges alone, an amount that is recouped from taxpayers and ratepayers. In its financial statements the organization notes that its longest-term debt issue matures on December 2, 2050. In 2050, Ontario will still be paying the debt of the failed nuclear program of the 1970s and 80s.
Part 2: Repeating Past Mistakes
Ontario Power Generation (OPG) is owned by the government of Ontario. OPG is leading Ontario’s nuclear resurrection. It is aided and abetted by the IESO (Independent Electricity System Operator) another surviving offshoot of the collapse of Ontario Hydro. And it is directed by a series of government policy announcements and legislative initiatives. These directives put nuclear on the fast track while shouldering aside clean, cost-effective, and safe renewables.
It is an astonishing nuclear industry coup. Without putting up their own money, without bearing the financial risks, the nuclear industry has captured Ontario’s energy policy and turned crown agencies into nuclear cheerleaders.
Even a few years ago this would have seemed impossible. The nuclear industry was on the ropes. Catastrophic nuclear accidents at Three Mile Isle in the US, Chernobyl in Ukraine, and Fukushima in Japan had severely tarnished the nuclear safety image. All around the world, the cost overruns and lengthy build times of nuclear plants had chilled utility and government interest in more nuclear plants. In Europe, only one nuclear plant has been built and come on line since 2000.
In Ontario, the last nuclear reactor went into operation in 1993. Nuclear plants that had been forecast to operate for 40 years showed major signs of early ageing after about ten years. Most of the existing nuclear fleet was rapidly reaching its best before dates. Safety and operational issues plagued the industry. The four units at Pickering had been shutdown because of safety reasons. And shut down again. By 1993, Bruce A’s performance, as a result of ‘fretting’ pressure tubes, had drastically declined. In 1997, Ontario Hydro announced that it would temporarily shut down its oldest seven reactors. By that time, the escalating costs of the newest reactors at the Darlington site were already a cautionary tale. Originally billed in 1978 at $3.9-billion, the final cost in 1993 had more than tripled to $14.4-billion (1993 dollars).
The first generation of nuclear plants had clearly demonstrated the failure of the nuclear industry to deliver electricity on time and on budget. It also demonstrated that nuclear reactors couldn’t provide affordable electricity. In fact, Ontario Hydro’s last public cost comparison (1999) revealed the cost of nuclear energy to be more than six times the cost of hydro electricity. (7.72 c/kWh vs $1.09)
Part 3: The Nuclear Resurrection
It seems that all those ‘hard lessons’ learned have been willfully forgotten. The Ford government has now launched a multipoint nuclear power offensive. It has passed legislation to ensure that nuclear is Ontario’s energy priority. It has made commitments to build untested and costly small modular reactors (SMRs). It has decided to refurbish antiquated nuclear plants (Pickering) when there is no business case to do so. It has announced as the centrepiece of its energy policy the irrational goal of becoming a nuclear energy superpower. And it has opened the public purse to the appetite of the nuclear industry.
It is a power play with some revealing features.
3a. A Propaganda Push
In 2023, OPG launched a series of propaganda ads. The ads, in bus shelters and transit, print, and television, were designed to overcome public skepticism and convince us that a new generation of nuclear was safe, reliable, and clean. The company behind the pubic relations campaign made the following claim: “For years, popular culture has distorted perceptions about nuclear power with false narratives that served to stoke fear.” They go on: “The campaign is intended to recast nuclear power as a “true hero” of the province’s clean energy mix.”
Some of the ads focused on Gen Z and Tik Tok with the cartoon character “Pelly the uranium pellet.” Others were tailored to older generations who were well aware of the problems with the nuclear industry and there were ads which simply made outrageous claims. For example, the ad for Small Modular Reactors declared that “SMRs are clean and reliable.” Quite the claim since none have been built.
The ad campaign effectively echoed the industry’s talking points, talking points that have become the mantra of the Ford government. Nuclear energy is now described by Ontario’s energy minister as “clean,” “non-emitting,” “reliable,” and “fundamental to our future.”
3b. A revolving door between the government and the industry
Back in June 2024, former Energy Minister Todd Smith left the government, after spending billions on the nuclear industry and promising billions more. Upon his departure, Todd Smith landed a job as a VP of CANDU Energy Inc. CANDU Energy Inc was created when SNC-Lavalin purchased the commercial reactor division of Atomic Energy of Canada Limited from the federal government in 2011. In an effort to distance itself from its scandal ridden past, SNC-Lavalin has since changed its name to AtkinsRealis. The company is heavily involved in the refurbishment of Ontario nuclear plants and the plans for new builds.
3c. The technological hype of SMRs
Small Modular Reactors (SMRs) are not small and they are not that modular. And they are not that new. The designs, of which there are about 54, have been kicking around for a long time. It’s just that no one wanted to build them, and investors were loathe to put up their own money. The fate of SMRs changed when the nuclear industry convinced governments in Canada to develop what it called the “SMR Roadmap.” The “Roadmap,” largely produced by the industry, was all hype and little substance, but it was enough to convince the Ford government to join the parade.
The World Nuclear Industry Status Review is an annual independent assessment of the global nuclear industry. In its 2022 review, it concluded:
“Small modular (nuclear) reactors or SMRs continue to hog the headlines in many countries, even though all the evidence so far shows that they will likely face major economic challenges and not be competitive on the electricity market. Despite this evidence, nuclear advocates argue that these untested reactor designs are the solution to the nuclear industry’s woes.”
In the 2024 edition of the review, the analysts note: “The gap between hype about Small Modular Reactors (SMRs) and reality continues to grow. The nuclear industry and multiple governments are doubling down on their investments into SMRs, both in monetary and political terms.”
3d. Over-the-top visioning and ideological straw men
Stephen Lecce became the Minister of Energy in June 2024. Shortly afterwards, he travelled to the US where he made a pitch to western leaders and industry movers and shakers. He told them that Ontario is building a blueprint for a nuclear energy future.
A CP wire story put it this way: “Ontario is selling itself as the nuclear North Star to guide the direction of American power.”
Speaking to a largely American audience, he said it’s time to “rid our economies of any dependence on these foreign states that … do not share our democratic embrace,” (Oops).
The minister’s early charm offensive turned more aggressive back home when he criticized those who support renewable energy as” ideologues” who want to “romanticize certain resources.” As he told the National Post, “We are seeing forces on the left, the illiberal left, who cannot come to terms with the fact that in order to decarbonize we’re going to need nuclear.”
The commitment to nuclear was further baked into Ontario’s future when the Ford government released its energy vision in October 2024. The document ironically entitled “Ontario’s Affordable Energy Future” sets the stage for a massive build out of nuclear power.
It also makes it clear that Ontario has set its sights on becoming a nuclear energy superpower in the hopes of selling expensive nuclear electricity to the US and costly nuclear technology to the world.
Reflecting the grandiose aspirations of a would-be energy superpower the Minister declared that “this was Ontario’s moment.”
3e. The legislative lock-in
In December 2024, the government passed the misnamed “Affordable Energy Act” (Bill 214) The legislation has many troubling aspects. Various sections of the act restrict public consultation, further erode the independence of regulatory tribunals, and shifts more decision making to the government. But most alarming is how the government has used the Act to give preference and priority to nuclear power. Section 25.29 (2) of the Act refers to, “the prioritization of nuclear power generation to meet future increases in the demand for electricity …”
3f. The commitment to underwrite the costs of nuclear
The government is bankrolling the nuclear expansion with public money because investors don’t want their own money at risk. The costs of nuclear power have driven private investors away. Even with massive subsidies from governments, investors are reluctant to ante up.
A spokesperson for the government-owned Ontario Power Generation made the point very clear when commenting on small modular reactors.
Kim Lauritsen is a senior OPG vice-president. She told a Global Business conference audience that the crown corporation was willing to take the “first-mover risk.”
As she put it: “Because they (small modular reactors) take too long and the industry needs to see that these things can be built successfully, to give investors the confidence and really get the ball rolling for other jurisdictions.”
Because investors are nervous and because Ontario wants to show the way for other jurisdictions, the Ford government is prepared to saddle Ontario families and future generations with the exorbitant costs of nuclear power.
Part 4: The nuclear three-prong plug: Refurbishments, SMRs and New Large Scale Reactors
Refurbishments
The Ontario government is spending billions to refurbish old nuclear plants. Fourteen reactors are scheduled to be rejuvenated – 6 at Bruce, 4 at Darlington, and 4 at Pickering. The repair schedule for existing nuclear plants stretches out for decades. While these reactors are off line, the government plans to make up the electricity shortfall with more climate wrecking, fossil-gas generating plants.
The cost of the refurbishments will be in excess of $40-billion. That forty billion and the millions more in interest charges will find its way onto our electricity bills.
As our electricity bills go up, so does political pressure and when that pressure reaches a tipping point, the government steps in with subsidies to help reduce electricity bills. It is a repeated pattern in Ontario.
A recent report from the Government’s Financial Accountability Office (FAO) projected the cost of current electricity subsidies to be $118-billion over the next 20 years. These are not all nuclear electricity subsidies. But as we spend more on nuclear and nuclear increases the cost of electricity and governments are pressured to reduce the cost of electricity, there will be even more subsidies to shift the costs from our electricity bills to our taxes.
Small Modular Reactors (SMRs)
In addition to the massive refurbishment program the Ford government has announced a series of nuclear new builds.
There will be four new small modular reactors (SMRs) built at the Darlington nuclear location. Site preparation work is already underway on the first one. OPG has convinced the Canadian Nuclear Safety Commission to forego an environmental impact assessment, relying instead on an assessment that had been done years ago on the site for a different project.
The government has selected the GE-Hitachi BWRX-300 design. This is based on a design that has been kicking around for about 20 years and has had to be redesigned about ten times. It still has never been built. The engineering designs for Darlington have again been changed, making the small modular reactor less small and even less modular.
OPG has not released a cost estimate for the reactors. But there are some indications of the probable magnitude. In the US, the only SMR project that had been approved by the US federal government was NuScale in the mid-west. The project was cancelled because of escalating costs. Originally estimated at $3-billion (US), it was terminated in 2024 when the projected costs reached $9.3-billion (US).
The Tennessee Valley Authority, a large power utility in the US, has partnered with the OPG to promote the GE-Hitachi SMR. The TVA recently provided some estimates of the costs of building the SMR in the US. It indicated that the cost of the first reactor could be about $5.4-billion (US). It hoped the costs could be reduced to about $3.7-billion (US) if more were built. These costs do not include any interest charges, cost overruns, or missed deadlines.
If we assume the lower cost and convert to Canadian dollars, the price tag for the four SMRs at Darlington would be about $20-billion before things go wrong. In 2019, the company’s indicated the costs would have to be below $1-billion (US).
New Large Scale Nuclear Reactors
In July 2023, the Ontario government announced its support to expand the capacity of the Bruce nuclear power plant near Kincardine. The Bruce nuclear generating station is owned by OPG but operated by Bruce Power, a private consortium. Bruce Power is planning a major expansion of the site’s generating capacity. At present, six of the eight reactors are being refurbished. This new development, if it goes ahead, will add an additional 4800 MW, which would require building four or five new reactors. Admittedly, it is early days, and no costs have been provided.
Port Hope
In January 2025, the Ontario government announced that it was in the preliminary stages of a massive new nuclear plant that could be built at the OPG site in Wesleyville, near Port Hope. Officials have suggested the plant could have a capacity of 8,000 to 10,000 megawatts and be in operation by the 2040s. Achieving that generating capacity would require building eight or more nuclear reactors.
Part 5: Calculating the Costs
The government avoids any discussion of the costs associated with its nuclear expansion. When asked, it sidesteps the issue. So here again, we have to rely on some reasonable estimates.
A useful starting point for estimating the price tag in Ontario are the actual costs incurred in the construction of recently built nuclear reactors elsewhere.
Plant Vogtle in the United States
Plant Vogtle, Units 3 (2023) and 4 (2024) in Georgia, are the first new nuclear units built in the United States in the last three decades.
They are years late, and the costs have escalated dramatically. Construction which began in 2009 was slated to be finished in 2017. Instead, it took 15 years to build and was seven years behind schedule. The final costs are now calculated at about $38-billion ($53-billion CAD).
Flamanville in France
In December 2024, the1,600-MW Flamanville nuclear power plant began delivering electricity to the French and European grid. It is the first new unit in France since 1996.
Construction began in 2007. It was projected to come into service in 2012 at a cost of €3.4-billion. The French court of auditors has estimated that the cost of the nuclear power plant will increase to over €20-billion ($29-billion CAD) once financing costs and delays are taken into account.
Hinkley C, England
The UK flagship nuclear project, the Hinkley C plant in the south of England, has spiralled out of control. The plant has two reactors and a capacity of 3200 MW.
It was originally estimated at a cost of about £9-billion with a completion date of 2017. It is now estimated to cost £46-billion ($68-billion CAD) and will take until 2030 to come online.
The old story repeated: massive cost overruns, lengthy delays, and the world’s most expensive electricity. If these costs are any indication of the costs of Ontario’s nuclear program, then we are in a huge amount of trouble.
There is another way to estimate the costs of Ontario’s nuclear expansion, and that is to use benchmark figures for the capital costs of new nuclear construction.
Lazard is a financial advisory and asset management company that is considered an authoritative source on energy cost comparisons. Amongst those are the capital cost comparisons of various energy generating technologies. Lazard expresses the costs as a range from low to high for each generating technology. In 2024, it reported the capital cost of nuclear plants as a range from $8,475 to $13,925 (USD) per KW. The mid point of the range expressed in Canadian dollars is $15,680 per KW. Using this figure gives us a way to estimate of the cost of Ford’s new nuclear plants.
- A mid point cost estimate for Bruce C with 4800 MW is $75-billion.
- A mid point cost estimate of Port Hope at 10,000 MW is $156-billion.
Regardless of how astronomical those costs are, the estimates are likely on the low side. If the costs in Ontario track the actual costs at Vogtle in the US, at Hinkley C in England, and in Flamanville in France, then the costs for Bruce C and Port Hope would be even higher.
A Price Tag that Mortgages our Future
The Ford government is committed to spending an unbelievable amount of money on its nuclear gamble. Here is the tally:
- $40-billion for refurbishments at 14 nuclear reactors
- $20-billion for 4 SMRs at Darlington
- $75-billion for Bruce C
- $156-billion for Port Hope nuclear plant
That is a $290-billion nuclear gamble. If we add the $26-billion that is the official preliminary estimate for the deep geological repository of nuclear waste, then we are well beyond $300-billion.
$300-billion is a colossal amount of money. For most of us, it’s hard to get a sense of that amount of money. To demonstrate, consider the following;
- It could provide every dwelling in Ontario with a free $20,000 heat pump for about $110-billion. We could also provide a free $20,000 rooftop solar system for another $110-billion. These initiatives combined are less than the cost of nuclear expansion.
- It could replace half of the passenger vehicles in Ontario with a free electric vehicle for about $225-billion. Less than the price of nuclear.
- It could replace transit fares in Toronto for the next 300 years.
- It could provide every farm in Ontario with a free small 10 KW wind turbine for about $5-billion.
- It could replace all the school buses in Ontario with new electric ones at a cost of about $10-billion.
Very expensive nuclear plants produce very expensive electricity, and those costs are paid for through our taxes and our electricity bills. It is already the case that nuclear is one of the most expensive energy options available. The Ontario Clean Air Alliance, using data from the IESO and Lazard, has reported that the mid-point cost of new nuclear will be 24.4 cents per kw/hr compared to solar with storage at 10 cents per kw/hr.
The Ontario government plans to spend a colossal amount of money to support a nuclear industry whose reactors will, in all likelihood, be stranded assets well before the end of their useful life. Now and in the years ahead, we will be paying electricity bills that are unnecessarily high. And then our children and their children will be forced to pay off the next generation of stranded nuclear debt.
There is a global energy transition underway. The International Energy Agency, (IEA) in its recent World Energy Outlook 2024, reviews some of its dimensions, the momentum behind it, and the characteristics of clean energy technologies. It notes:
- Clean energy is entering the energy system at an unprecedented rate, including more than 560 gigawatts (GW) of new renewables capacity added in 2023.
- Investment flows to clean energy projects are approaching $2-trillion (US) each year, almost double the combined amount spent on new oil, gas, and coal supply.
- Renewable power generation capacity (is expected to) rise from 4,250 GW today to nearly 10,000 GW in 2030…short of the tripling target set at COP28 but more than enough, in aggregate, to cover the growth in global electricity demand.
In Ontario the Ford government is planning to build new nuclear plants over the next few decades in the hopes of becoming a nuclear energy superpower. It is clearly on the wrong energy pathway. •
