A Survey of Canadian Energy Policy: 1974-1983

Abstract

Two levels of government are involved in determining Canadian energy policy: the federal government and the governments of the oil- and gas-producing provinces (which own the mineral rights). Of the latter, the province of Alberta is the most important, as it produces about 85% of Canada's oil and gas. During the past decade the federal government, as investigator of most energy policy changes, has played an increasingly active role in influencing energy prices, energy exports, and the distribution of energy rents through tax measures. The major Canadian energy policy initiatives of the last decade are described to demonstrate that they were set either to respond to external events or set to internally redistribute petro-rents. The survey covers the following Canadian energy policy programs: the self-sufficiency policies contained in the 1976 federal government energy document, the National Energy Program (NEP) of 1980, the federal-provincial stalemate that followed in the aftermath of the NEP, the energy agreements of 1981, and subsequent modifications. The economic consequences of most of these energy policies are documented using several different types of measures: the microeconomic effects on the demand for and supply of oil and natural gas (mostly as a reaction to changes in taxation andmore » pricing); the macroeconomic impact on aggregate output, prices, employment, investment, balance of payments, and the exchange rate; and the economic rent values to show distribution of net benefits among the provincial governments, the federal government, the oil and gas producers, and the consumers. It is important to examine the full range of economic responses to energy policies since the adjustments are so broadly based throughout the economy. The second section of the paper examines Canadian energy policies during the period from 1973 to 1980, and the next section does the same for the post-1980 period. 19 references.« less