From our homes to our businesses to our workplaces, electricity powers our lives. As more Canadians shift to electric vehicles, more homeowners adopt electric heat pumps, and more industries green their operations, an abundant supply of electricity will be required. Building a clean, affordable, and reliable electricity system is not only at the foundation of Canada's efforts to tackle climate change, it is critical to Canada's ability to reach net-zero emissions by 2050.
As outlined in Powering Canada Forward: Building a Clean, Affordable, and Reliable Electricity System for Every Region of Canada, published earlier this week, the government recognizes the pace and scale required to transform Canada's electricity sector and to seize the economic and job-creating opportunities that come with it.
Today, the Honourable Steven Guilbeault, Minister of Environment and Climate Change, in collaboration with the Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources, announced draft Clean Electricity Regulations. The draft regulations are designed to help Canada achieve a net-zero electricity grid by 2035, in close collaboration with provinces, territories, Indigenous partners, industry, and others.
Canada starts from a position of strength. Our electricity grid is already one of the cleanest in the world, with more than 84 percent of electricity generated from non-emitting sources like hydro, nuclear, and wind. The draft regulations will ensure we decarbonize the remainder of our grid, while meeting the needs of increasing demand for electricity. As drafted, they would cut over 340 megatonnes of greenhouse gas pollution between 2024 and 2050.
Just as the United States and G7 partners are doing, setting new rules for cleaner power will stimulate investments in renewable energy like wind and solar, smart grid and energy storage systems, and emerging technologies, such as small modular reactors and carbon capture and storage. Canada is already seeing the benefits. Volkswagen committed earlier this year to build one of the largest battery factories in the world because of Canada's ability to supply clean and affordable electricity. This plant alone will create 3,000 jobs.
More than $40 billion in new tax credits and other major federal investments will help drive even more economic opportunities through the construction of new power sources and retrofitting of existing plants. The federal government is working with provinces and territories to rollout this funding in a way that supports affordable clean electricity across Canada. If provinces and territories take full advantage of these tools, federal funding is expected to offset more than half the cost of the new investments needed under the draft regulations.
Maintaining household affordability is at the heart of the draft regulations. Electricity is cheaper than home heating oil and gas prices, and as Canadians make the switch, they will save on energy costs. By 2050, as Canadians use more clean electricity, they are expected to spend about 12 percent less on energy. The Government is also helping households with home retrofit programs, zero-emission vehicle purchase incentives, and more, to help Canadians save on their energy bills.
The draft regulations are achievable. They offer provinces and territories flexibility and a technology-neutral approach to decide which technological solutions work best for them, so that Canadians can count on affordable, reliable electricity. The federal government will continue to engage with provinces, territories, Indigenous organizations, utilities, industry, and experts in the spirit of getting this right. A 75-day consultation period will help inform the final regulations, which are expected in 2024.
