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Energy Policy

Canada's energy policy is guided by a series of principles, agreements and accords. The main principles of our energy policy are:

  • A market orientation
    Markets are the most efficient means of determining supply, demand, prices and trade while ensuring an efficient, competitive and innovative energy system that is responsive to Canada's energy needs.
  • Respect for jurisdictional authority and the role of the provinces
    Provincial governments are the direct managers of most of Canada's resources and have responsibilities for resource management within their borders.
  • Where necessary, targeted intervention in the market process to achieve specific policy objectives through regulation or other means
    These policy objectives include issues of health and safety (e.g., pipeline regulation) and environmental sustainability.

Canada's energy policy has been framed by a number of agreements and accords, including the:

  • Western Accord: an agreement between the Governments of Canada, Alberta, Saskatchewan and British Columbia on oil and gas pricing and taxation
  • Agreement on Natural Gas Markets and Prices: an agreement with the same western provinces
  • Atlantic Accords: an agreement with Newfoundland and Labrador and with Nova Scotia, including the establishment of jointly managed Offshore Boards
  • Free Trade Agreement: an agreement with the United States followed by the North American Free Trade Agreement (NAFTA). NAFTA is a cornerstone of our energy policy with regard to trade. It emphasizes the importance of competitive market behaviour and encourages investment in Canadian energy markets.

Over time, numerous federal decisions have also contributed to our energy policy:

  • The creation of the National Energy Board: to promote in the public interest safety and security, environmental protection and efficient energy infrastructure and markets in the regulation of pipelines, transmission lines, energy development and trade.
  • The creation of the Canadian Nuclear Safety Commission: to regulate all aspects of the nuclear power industry in Canada.
  • The creation of Atomic Energy of Canada Limited: to foster the advancement of nuclear energy and nuclear technology.
  • Sustained funding of the Program on Energy Research and Development: to support the development of energy technologies.

Canada also has international responsibilities to deal with issues as they relate to energy. Since energy is a globally traded commodity, trade issues and the emissions associated with the production and use of energy are the subject of many international agreements. These agreements have a great influence on how we develop and carry out energy policy in Canada.

The elements that compose the federal energy policy will continue to evolve so that Canada can meet the challenges and benefit from the opportunities that arise in international and domestic energy markets. Federal energy policy is solid but not static. It must remain flexible to ensure an economically competitive and innovative energy sector that sustainably delivers a secure, reliable and safe supply of energy.

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