Small Reactors, Huge Costs: Are Canada’s SMR Ambitions Affordable?

Written By: Courtney Duffy 

Edited By: Elin Kangarani  

Junior Division

In 1942, amidst the raging Second World War, Canadian Minister of Munitions and Supply C. D. Howe helped launch his nation into the nuclear age with three words: “Okay, let’s go.” (Natural Resources Canada, 2026, para. 2). 

In subsequent decades, the development of the Canada Deuterium Uranium (CANDU) reactor system – a heavy water natural uranium reactor system – solidified Canada’s potential as a global leader in nuclear energy. Today, Canadian CANDU technology fuels 26 reactors in six countries, while nuclear power accounts for approximately 13% of Canada’s electricity (Natural Resources Canada, 2026). Moreover, 2026 presents crucial opportunities for further advancing the nation’s nuclear energy strategy. 

Central to such opportunities is the Darlington New Nuclear Project (DNNP) in Ontario, where construction of North America’s first grid-scale operational small modular reactor (SMR) is underway. The Darlington project views SMRs as a “flexible, scalable nuclear solution” to address Ontario’s rising electricity demand and related climate change pressures (Ontario Power Generation, Questions & Answers section, para. 1, n.d.). 

However, below this promise of a clean, carbon-free energy source lies an undeniable financial cost, evident in the DNNP’s estimated $20.9 billion CAD budget for four SMR units. 

Small Modular Reactors and the Clean Energy Transition 

As the first part of the name implies, SMRs are only a fraction of the size of traditional nuclear plants and deliver a lesser power output — up to 300 MW(e), approximately a third of the conventional capacity (Liou, 2023). Secondly, “modular” comes into play with the reactors’ portability: the components can be manufactured and shipped to the site. By contrast, large nuclear reactors must be custom-designed and fully constructed on site. SMRs thus have less steep up-front costs than traditional reactors: they reduce both initial capital investment and construction length for the nuclear plant owner. 

Like their larger counterparts, SMRs release energy through nuclear fission, splitting large radioactive uranium atoms into smaller parts. Nuclear energy has long been promoted as an environmentally friendly alternative to fossil-fuel-based energy sources because its greenhouse gas emissions are minimal (even when accounting for uranium mining, plant construction, and operation). Globally, nuclear power provides roughly 9% of electricity and 25% of low-carbon electricity (Shifotoka, 2026). With their flexibility and scale, SMRs offer a way to maximize nuclear power’s potential in the clean energy transition, especially as electricity demand continues to skyrocket worldwide with expanding data centres. 

The Darlington New Nuclear Project 

The Darlington New Nuclear Project is pioneering the deployment of SMR technology across Canada and beyond. With Canada’s long history in the nuclear industry, the nation is indeed well positioned to lead the adoption of this technology. Ontario Power Generation (OPG), the Crown corporation behind the Darlington New Nuclear Project, declares SMRs to be “the future of nuclear power generation” in Canada (Ontario Power Generation, 2026). 

The DNNP, at OPG’s nuclear site in Bowmanville, Ontario, encompasses “the site preparation, construction and operation of up to 4 new nuclear reactors” to be connected to the province’s power grid (Canadian Nuclear Safety Commission, 2026). In April 2025, the Canadian Nuclear Safety Commission granted OPG a license to construct the first reactor at its site. That unit is now under construction – a GE Vernova Hitachi BWRX-300 reactor with a power capacity of 300 MW(e). Upon its expected completion in 2030, the first unit is projected to supply electricity to power 300,000 homes; all four SMR units together are projected to power 1.2 million homes, with a total energy output of 1,200 megawatts (Canadian Nuclear Safety Commission, 2026). 

Therefore, not only is the DNNP advancing Canadian nuclear leadership, but it is also contributing to Canada’s clean electricity goals through this vast forthcoming supply of low-emission electricity. 

$20.9 Billion: The DNNP’s Financial Costs

The DNNP’s first SMR unit is estimated to cost $7.7 billion – $6.1 billion to build the first reactor and $1.6 billion for common infrastructure. With per-unit costs decreasing, the total project budget amounts to $20.9 billion (Major Projects Office, 2026).

The Canada Growth Fund, an arms-length public investment vehicle, has invested $2 billion, while the Building Ontario Fund has invested $1 billion. To justify such investment, both groups promise massive employment creation: during the construction phase, the units are expected to create 18,000 jobs annually, while operations will support 2,500 jobs annually. Additionally, they anticipate the DNNP will add roughly $38.5 billion to the national GDP over 65 years (Syed, 2026). 

However, because the government is not directly financing the project, the financial burden will ultimately be borne by Ontario’s taxpayers over time through higher electricity bills. Currently, OPG has requested that the Ontario Energy Board double the cost of nuclear power for ratepayers to recover high construction costs (Syed, 2026). 

That said, in considering a possible alternative – the construction of 5,600 to 8,900 megawatts of wind and solar generators – the Independent Electricity System Operator (IESO) deemed the DNNP’s SMR units to be the lower-risk option. The estimated average power cost for all four reactors is 14.9 cents per kilowatt-hour, compared with 13.5-18.4 cents per kilowatt-hour for the alternative (McClearn, 2025).  

SMRs in Canada’s Future Energy System

The Darlington New Nuclear Project illustrates the tradeoff between SMRs’ environmental benefits and their substantial economic costs. Given this tradeoff, where do SMRs fit in Canada’s future energy system? 

First, it is crucial to note that the historic decline of nuclear power in countries such as the United States and France was driven by economic factors: “high costs, overruns, and delays” were key catalysts of this decline (McClearn, 2025). In light of this, it is evident that the DNNP’s final construction costs will play a major role in determining the future of SMRs in Canada (and beyond, as corporations across multiple nations closely monitor the project’s progress to assess their own proposed projects). Additionally, the DNNP is not expected to be completed until into the 2030s, a slow construction timeline when pitted against the urgency of lowering emissions. 

Yet the DNNP’s high costs do not completely negate its potential long-term importance. In Canada’s ongoing clean energy transition amid rising electricity demand, SMRs offer a reliable, widely deployable, low-carbon energy source.

Taken together, Darlington’s importance lies not solely in its success or failure in developing SMRs, but in the project’s final affordability. Whether the project sticks to its budget and timeline, and, most importantly, whether costs remain affordable for taxpayers, will help determine whether Canada should regard SMRs as a viable solution for lowering emissions or as an economically unsustainable one.

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Reference

Natural Resources Canada. (2026, June 22). Nuclear Energy Strategy for Canada (NRC Publication M134-81/2026E-PDF). https://natural-resources.canada.ca/energy-sources/nuclear-energy-uranium/nuclear-energy-strategy-canada 

Natural Resources Canada. (2026, September 15). The Canadian nuclear energy technology [Fact Sheet]. https://natural-resources.canada.ca/energy-sources/nuclear-energy-uranium/canadian-nuclear-energy-technology 

Canadian Nuclear Safety Commission (2026, August 25). Darlington New Nuclear Project[Fact Sheet]. https://www.cnsc-ccsn.gc.ca/eng/reactors/new-reactor-power-plant-projects/new-reactor-power-plant-facilities/darlington-new-nuclear-project/ 

Canada Energy Regulator. (2025, August 20). Market snapshot: Canada’s role in small modular reactor (SMR) technology. https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2025/market-snapshot-canadas-role-in-small-modular-reactor-smr-technology.html 

International Atomic Energy Agency. (2026). Country nuclear power profiles: Canada [Fact Sheet]. https://cnpp.iaea.org/public/countries/CA/profile/preview 

Liou, J. (2023, September 13). What are small modular reactors (SMRs)?[Fact Sheet]. International Atomic Energy Agency. https://www.iaea.org/newscenter/news/what-are-small-modular-reactors-smrs 

McClearn, M. (2025, May 8). Ontario’s Darlington SMR project to cost nearly $21-billion, significantly higher than expected. World Nuclear Industry Status Report. https://www.worldnuclearreport.org/Ontario-s-Darlington-SMR-project-to-cost-nearly-21-billion-significantly-higher 

Major Projects Office. (2026, July 8). Darlington New Nuclear Project [Fact Sheet]. Government of Canada. https://www.canada.ca/en/privy-council/major-projects-office/projects/national/darlington.html 

Ontario Power Generation. (n.d.). Small modular reactors | Darlington SMR – OPG. https://www.opg.com/projects-services/projects/nuclear/smr/darlington-smr/ 

Shifotoka, M. (2026, January). Five reasons the Clean Energy Transition Needs Nuclear Power. International Atomic Energy Agency. https://www.iaea.org/newscenter/news/five-reasons-the-clean-energy-transition-needs-nuclear-power 

Syed, F. (2026, February 19). Small modular reactors, big dreams: Ontario’s nuclear pitch. The Narwhal. https://thenarwhal.ca/ontario-darlington-nuclear-smr-explainer/#how-much-will-it-cost-ontario-taxpayers-to-build-the-first-smr