ABSTRACT

In spite of current preoccupations with energy supply futures, the most serious energy problems in Canada are on the demand side. Whatever new energy resource options are exercised in Canada, the costs of development will necessitate revenues at the level of world prices. Canada's dilemma is that it has the world's most energy-intensive and energy-inefficient economy combined with a technologically weak manufacturing sector. Neither are viable in international terms without low-cost or "special status" energy supplies. But with energy thus subsidized, the incentives for frontier energy resource developments, for energy conservation, and for industrial revitalization largely disappear. Short-term economic imperatives conflict with long-term rational solutions: a classical political problem. Means must be found to invest any "windfall" revenues from conventional domestic reserves in the forms of economic restructuring given above. Creating national energy policies to achieve this is a critical determinant of Canada's future as a trading nation. These policies will not come about unless the public understands the real nature of the energy issue.