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The Energy Economy in Canada


The energy sector is an important part of Canada's economy in terms of investment, trade, income generation, and employment. The energy sector employs more than 280,000 Canadians and accounts for 6.8 per cent of GDP and 16 per cent of total investment in Canada. However, there are marked regional differences in energy production and consumption.



Canada has been a net exporter of most energy forms since 1969. In 1997, Canadian gross energy exports were valued at CDN $27.9 billion. The United States is by far Canada's largest customer (91 per cent of Canada's energy exports). Virtually all of Canada's exports of oil, natural gas and electricity, and 85 per cent of its uranium exports go the US. The importance of energy in Canada's trade balance is further emphasized when one considers exports of energy-intensive goods, equipment, systems, and expertise.


The Canadian Constitution divides the power to set energy policy between the provincial and federal governments. The provincial governments own the natural resources, and they are responsible for most aspects of regulation and energy sector development within their geographical boundaries. The federal government is responsible for harmonizing energy policy at the national level, promoting regional economic development, frontier lands, offshore development, interprovincial facilities, plus international and interprovincial trade. Both levels of governments are involved with energy research.


Canada's federal energy policy underwent a major reform during the mid-1980s, the result of which was a more market-oriented energy sector. Ownership restrictions in the upstream oil and gas industries were relaxed and oil exploration and fuel switching subsidies removed. The government's commitment to a market-based energy policy is evident by ratification of the North American Free Trade Agreement and the elimination of foreign ownership restrictions for production licences on frontier lands. Canadian energy policy is now becoming increasingly driven by GHG emission issues.



The domestic energy production sector enjoys a strong presence in all primary energy commodities. In addition, there are vigorous activities in the energy efficiency/emissions areas.


The following graph indicates past, present and future energy supply data for Canada, broken out by source:


Primary Energy Supply in Canada (PJ)