ACHIEVING SUSTAINABILITY OF THE ENERGY SECTOR IN CANADA

ECONOMICS DEPARTMENT WORKING PAPER No. 618
By
Annabelle Mourougane

Energy represents a major sustainable-development challenge for Canada. In the short term, labour
shortages and infrastructure bottlenecks are likely to hinder energy developments and need to be addressed.
In addition, provincial fiscal management could be improved by adopting prudent allocation and
withdrawal rules of revenues from non-renewable resources to and from a long-term fund. Eventually the
main challenge will be to curb greenhouse gas emissions (GHGs), despite the rapid expansion of high
emitting sectors. The effectiveness of environmental policies could be enhanced by better
federal-provincial coordination. Efforts should be concentrated on designing and implementing an
emissions-trading scheme compatible with corresponding systems abroad. Finally, effective and efficient
systems of regulation and taxation are essential to facilitate the timely realisation of energy supply plans.