This piece is part of our Forum of Federations Series on National Unity and Canadian Federalism.

By Satya Sen

November 2, 2026

Infrastructure is often treated as an economic necessity: the means by which goods move, businesses operate and households receive essential services.

In a federation, infrastructure serves a larger purpose.

It connects regional economies, creates shared interests and gives practical meaning to national unity. Roads, railways, ports and transmission lines do more than overcome geographical distances. They create economic interdependence, making cooperation valuable and giving citizens a tangible stake in the success of the federation.

For Atlantic Canada, this cooperative relationship is particularly important. The region’s economic prospects depend not only on the resources and capacities of its four provinces, but also on their ability to connect to one another and to the wider Canadian economy.

Membership in the federation provides access to a national market, federal financing, and institutions for sharing fiscal risks. Yet these advantages do not translate automatically into prosperity. They depend largely on whether governments can turn collective resources into infrastructure that delivers tangible benefits.

Electricity cooperation offers a powerful object lesson in how this can be achieved.

In July 2026, New Brunswick, Nova Scotia and Prince Edward Island agreed, with federal support, to examine closer cooperation in electricity planning and operations.

In September, the Atlantic Economic Panel’s report, Bolder Ambitions: Greater Prosperity for All, extended that discussion to all four Atlantic provinces, recommending an integrated regional electricity market coordinated by a regional independent system operator.

The question is not simply whether integration would improve efficiency, but whether shared infrastructure can strengthen both regional prosperity and the bonds that hold the federation together.

Federalism is often understood principally as a division of constitutional powers. Yet its success depends equally on the relationships that develop across those divisions.

Constitutional arrangements determine who makes decisions; infrastructure interdependence helps determine whether governments have compelling reasons to make them together.

A transmission line creates an interdependent relationship between two provincial economies. The producing province gains customers and revenue; the purchasing province gains access to supply. Each acquires an interest in the other’s economic performance.

This is one of the less appreciated benefits of belonging to a federation. Atlantic Canada’s provinces need not rely exclusively on their own fiscal resources or individual markets to pursue development and provide public services.

Federal financing can support investments with benefits that cross provincial boundaries, while equalization and federal health and social transfers help provinces sustain public services despite differences in fiscal capacity.

These arrangements do not eliminate regional disparities, but they reflect a national commitment to sharing risks and sustaining comparable public services.

Infrastructure gives that commitment a physical expression, connecting regional resources to wider markets and creating opportunities that individual provinces might struggle to realize alone.

The Atlantic region already demonstrates its interdependence. Newfoundland and Labrador’s hydroelectric resources contribute to Nova Scotia’s electricity supply through the Maritime Link. New Brunswick’s Point Lepreau nuclear station provides substantial low-emission generation. Nova Scotia has considerable potential to expand wind power, while Prince Edward Island imports approximately 85 per cent of its electricity from New Brunswick.

Provincial boundaries remain politically significant, but they do not inhibit the economic relationships connecting Atlantic Canadians.

Coordinated planning could improve the use of existing generating capacity, facilitate reserve sharing, coordinate maintenance and identify where new transmission or generation would deliver the greatest regional benefit.

Flexible hydroelectric generation can help balance variable wind output, while stronger connections can improve access to electricity when local supply is constrained. Energy efficiency and demand management can reduce the infrastructure required to meet peak consumption.

None of this guarantees lower electricity bills.

Transmission is expensive, hydroelectric availability depends on water conditions and contractual obligations, and provinces may face peak demand simultaneously. Regional integration can also create additional costs.

Its economic case must be demonstrated against credible alternatives, with clear rules governing investment, reliability and the allocation of costs.

However, its value extends beyond immediate financial savings. If integration improves energy security, expands shared economic opportunities and establishes lasting interprovincial cooperation, it also strengthens the federation.

These wider benefits justify public investment, provided costs remain proportionate to the benefits and are distributed fairly.

This is where the federal dimension becomes important. Infrastructure that offers benefits that extend across provincial boundaries can be difficult to finance when each government is accountable primarily to its own taxpayers and electricity consumers.

One province may bear the cost of a connection while its neighbour captures a substantial share of the benefits.

Federal financing can help overcome this problem, provided public support is tied to demonstrable benefits and rigorous project appraisal. Ottawa’s role is not to displace provincial responsibility, but to help governments undertake investments that serve a wider Canadian interest.

Atlantic Canada’s electricity transition will test whether governments can make federalism work for an interconnected economy.

For example, in July, the federal government committed $5.9 million for preliminary work on a proposed expansion of the Prince Edward Island–New Brunswick interconnection. The funding advances project development; it is not the full cost of construction.

Similarly, the federal commitment of $100 million to advance offshore wind development in Nova Scotia supports research, surveys and transmission modelling rather than guaranteeing that commercial projects will proceed. Their ultimate value will depend on whether they lead to viable projects that improve regional supply and economic performance.

Infrastructure becomes a source of national strength not through announcements alone, but when projects are completed, services are dependable and citizens can see the benefits.

The Maritime memorandum of understanding on regional electricity cooperation and system integration is therefore significant as an institutional experiment. It provides a process for examining coordinated planning and evaluating the establishment of a regional balancing authority and a Maritime independent electricity system operator.

It does not establish a unified market, and its scope is narrower than the Atlantic Economic Panel’s proposal. The challenge is to negotiate arrangements that endure beyond individual projects and changes of government, without requiring provinces to surrender either ownership of their utilities or control over energy policy.

The distribution of financial risk will be equally important. The panel’s proposed investment and sinking fund seeks to support more than $25 billion in infrastructure investment by 2035. Spreading payments over time does not eliminate costs.

Governments must establish who bears construction overruns, how export revenues are treated and what happens when projected demand or generation fails to materialize.

Newfoundland and Labrador’s Muskrat Falls hydroelectricity project offers a sobering lesson: the language of regional development or national interest cannot excuse inadequate scrutiny of costs, risks and alternatives. Infrastructure can bind a federation together, but badly conceived projects can deepen distrust.

Churchill Falls offers a related lesson. The longstanding dispute between Newfoundland and Labrador and Quebec arose in large part from the distribution of benefits under the 1969 hydroelectric contract.

The August 2026 agreement involving both provinces and the federal government seeks a new framework for cooperation, including improved economic returns, expanded generation and transmission development.

Its significance lies not merely in the prospect of additional electricity, but in the recognition that durable interdependence requires terms that participants regard as fair. A province that believes its resources are enriching others at its expense is unlikely to regard integration as solidarity.

This distinction between interdependence and unity is fundamental.

Interdependence describes a condition in which governments and economies rely on one another. Unity requires a political relationship in which that reliance is considered legitimate and mutually beneficial. Infrastructure can encourage the latter, but it cannot guarantee it.

Shared assets require institutions that make contributions, benefits and obligations visible and provide credible means of resolving disputes. Indigenous governments must participate meaningfully in decisions affecting their rights and territories; affected communities need a voice in local impacts; and consumers require accessible information about costs and reliability.

The broader lesson extends beyond electricity. Transportation, communications and energy networks connect Atlantic Canada to national markets, making the region’s resources more accessible to businesses and consumers elsewhere.

Atlantic Canada gains wider economic opportunities, while the rest of Canada benefits from the region’s ports, energy resources, businesses and communities.

The federation is not simply a mechanism through which resources flow between regions; it is a framework in which their capacities and markets can reinforce one another.

That reciprocity must be demonstrated rather than assumed. Atlantic Canadians have legitimate reasons to expect national infrastructure investment to reflect their economic needs and their contributions to the federation.

Federal support, in turn, must be justified by credible public benefits. The objective is not identical returns for every province, but arrangements in which costs and benefits are distributed transparently and fairly.

Atlantic Canada’s electricity transition will test whether governments can make federalism work for an interconnected economy. The proposed regional market remains to be negotiated, and its success will depend as much on governance and public confidence as on engineering.

Its value should be measured by reliable power, consumer value, competitive businesses and fair allocation of financial risks.

Infrastructure is the connective tissue of a federation. It links regional economies, creates mutual interests and makes the benefits of collective action tangible. But physical connections alone do not produce national unity. They must be accompanied by institutions that reconcile competing interests and distribute benefits and burdens fairly.

For electricity cooperation in Atlantic Cananda, the regional independent systems operator could play that role.

Canadian unity is strengthened when Atlantic Canadians can see that belonging to the Canadian federation expands their opportunities, just as the rest of the country benefits from the region’s prosperity.

Federalism works best not when provincial differences disappear, but when governments build the infrastructure and institutions that enable Canadians to prosper through one another’s success.

Satya Sen is the Executive Director of the Federation of Prince Edward Island Municipalities (FPEIM).