Article published in the Future Economy on August 6, 2025 by Emily Smejkal, Research Fellow at the Cascade Instutute.
Canada is on the verge of a seismic shift—one that could define our economic and environmental legacy for generations. The global race toward electrification and net-zero emissions has created a high-stakes competition. Among baseload power technologies, geothermal electricity generation stands out as a transformative opportunity. Emerging geothermal technologies offer Canada a strategic path to build a globally competitive clean energy industry—one that can leverage our existing strengths and position us for long-term prosperity, if we take the necessary actions to stand the industry on its feet.
Geothermal can be a cornerstone of clean growth. By drilling deep and capturing the Earth’s heat, geothermal provides reliable, baseload, zero-emission power, complementing intermittent renewables like wind and solar. Globally, momentum is building. The International Energy Agency estimates a US$2.1 trillion geothermal investment opportunity. Tech giants like Google, Meta, and Microsoft are investing. The US Department of Energy’s Frontier Observatory for Research in Geothermal Energy (FORGE) initiative and Enhanced Geothermal Shot are setting ambitious targets and backing them with serious funding. If Canada does not move now, we risk becoming a technology taker instead of a technology maker.
Canada Has the Ingredients but Lacks the Recipe
Canada is currently stuck on the ground floor. We have the tools, the talent, and the terrain—but not a single pure-play geothermal power plant to show for it. Our regulatory frameworks are a patchwork, with only Alberta, British Columbia, and Nova Scotia having geothermal-specific legislation. Federal support has been sporadic, tucked into broader renewable energy programs and grants. There has been no national strategy, no unified vision, and no clear signal to investors or innovators that geothermal is a priority.
“Canada is uniquely positioned to lead. First, we already have a robust, homegrown subsurface supply chain. Our oil and gas infrastructure is not a relic, but a launchpad.”
But here is the good news: Canada is uniquely positioned to lead. First, we already have a robust, homegrown subsurface supply chain. Our oil and gas infrastructure is not a relic, but a launchpad. The same rigs and crews that drill for hydrocarbons can also drill for heat. Second, Canada’s geothermal potential spans the country. Yes, the West has the hottest gradients, but with emerging technologies, we can tap into heat across nearly every province and territory. Third, we have the talent. Canadians are already leading international geothermal projects. Our universities and public labs are conducting cutting-edge research, and our geothermal industry includes trailblazers like Eavor, DEEP, FutEra, and Indigenous-led initiatives like Tu Deh-Kah.
A Modern Industrial Policy for Geothermal Innovation
To break through, we need to think bigger. We need a bold, coordinated strategy that matches the scale of the opportunity. That starts with a modern industrial policy. One that sets a clear national goal, similar to the US “Earthshot” target of driving geothermal electricity costs below $45/MWh by 2035. We need a strategy that aligns R&D funding, tax incentives, permitting reform, and IP protections to accelerate innovation. Industrial policy is not about picking winners; it is about creating the conditions for industries to reinvent themselves.
“We also need financial tools that give early-stage projects a fighting chance—expanded tax credits, loan guarantees, and a Canadian Geothermal Investment Fund to co-finance projects.”
We also need regulatory reform and de-risked investment. A national geothermal regulatory template will harmonize permitting across the country and would enable rapid technology deployment. Cascade Institute’s new Groundwork report lays out guidelines that provinces can adopt and adapt immediately. We also need financial tools that give early-stage projects a fighting chance—expanded tax credits, loan guarantees, and a Canadian Geothermal Investment Fund to co-finance projects. These are not handouts—they are signals that Canada is serious about building a geothermal industry and driving down the cost of clean, baseload power.
Building Canada’s Innovation Engine
Policy frameworks alone are not enough, though. The Cascade Institute proposes the creation of the Geothermal Science and Technology Research Authority—GEOSTRA. Modelled after the Alberta Oil Sands Technology and Research Authority (AOSTRA) and FORGE, GEOSTRA would be a national sandbox for geothermal innovation. Its mission: to accelerate the development and commercialization of next-generation geothermal technologies through collaboration, experimentation, and shared learning.
“The goal is not just research, but commercialization—turning ideas into infrastructure and scaling solutions that can power Canada’s clean energy future.”
GEOSTRA would consist of four test sites across Canada’s diverse geologies—open-access platforms where industry, academia, and government can work together, share data, and de-risk new technologies. These sites would focus on reducing drilling costs, developing high-temperature tools, refining well completions, and optimizing heat extraction. The goal is not just research, but commercialization—turning ideas into infrastructure and scaling solutions that can power Canada’s clean energy future.
To make this vision a reality, every stakeholder has a role. The federal government must fund GEOSTRA, craft a national geothermal strategy, and expand incentives. Provinces must pass geothermal regulations and streamline permitting. Industry must invest in R&D and partner on test sites. Academia must lead applied research and train the next generation of energy workers. The finance sector must develop tailored geothermal investment vehicles. Indigenous communities must be empowered as full partners and leaders. And entrepreneurs must innovate in drilling, sensors, and heat extraction—leveraging the deep expertise we already have.
Seizing the Moment to Lead in Geothermal Energy
This is a defining moment for Canada. Leadership is not a matter of chance—it’s a matter of choice. We must choose to act boldly, to coordinate our efforts, and to invest in the future we want to build. GEOSTRA can be the catalyst. A modern industrial policy and harmonized regulations can be the framework. And geothermal can be the foundation for a clean, competitive Canadian energy economy.
Canada has the heat—now let’s harness it.