Abstract
This paper predicts the adjustments in energy sources in Canada entering a free trade agreement FTA with China in an applied specific factors model including agriculture, manufacturing, services, and nonrenewable energy sectors. FTA price change scenarios lead to adjustments in sector outputs and capital returns, wages for five skill groups, and the price of electricity. Electricity is tied to renewable energy and treated as a factor of production. Increases in outputs, capital returns, and wages gains are offset by declines in manufacturing and the operator-handler wage. The declining demand for electricity will favor the nonrenewable sector over renewable energy.
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