5 Commonalities in the Energy Policies of the US and Canada

A significant portion of Canada's prosperity and sense of well-being may be attributed to the country's success as a trading nation, particularly in terms of trade with the United States. In order to offer a significant background for debates regarding the development of a national clean energy plan for Canada, the features of the two economies and the trade flows that occur between them are essential. This significance is demonstrated by the Clean Energy Dialogue that was initiated by the United States of America and Canada. Choices made by the United States government on climate change and energy policy have the potential to have both economic and environmental repercussions for Canada. This is due to the high level of trade integration that exists between the two countries. It is possible for businesses in one country to gain a competitive edge as a result of differences in policies.

On the other hand, the United States of America and Canada have entirely different energy sources, emission profiles, projected rates of growth in emissions, and costs associated with decreasing emissions. Despite the fact that there are clear parts that complement one another, the process of developing a clean energy strategy for Canada that will incorporate economic, environmental, social, and regional issues implies that a policy approach that is distinctively Canadian and that is complementary but different could be the most effective way to achieve our requirements.

The Argument in Favor of Policy Cooperation and a More Efficient Integration

They are significant and long-term, and they are the drivers of change that cut across the energy sectors of Canada, the United States of America, and Mexico. These drivers of change give fuel to enhanced policy coordination and deeper integration of energy systems. The development and application of new technology, as well as the impact that this has on costs, supply, and proven resource bases; price volatility and shifting relative prices across commodities and markets; the growing energy demand of emerging market economies; and profound structural reforms in Mexico are some of the factors that are driving this trend.

These fundamental forces of change will continue to exert their influence on the energy systems of North America regardless of the specific oil price scenario that may occur. Investment and the rate at which new energy resources are developed will be impacted as a result of the abrupt drop in oil prices that began in 2014. This drop can be linked, at least in part, to the increasing supply of oil coming from the United States and Canada. However, the breadth, depth, and reach of the energy industry in the three nations, as well as the potential profits from enhanced collaboration, will not be dramatically diminished by the lower pricing of oil, at least not for the foreseeable future.

Canada had significant surpluses in its trade.

During the year 2008, Canada had significant trade surpluses with the United States in the areas of oil and gas extraction, manufacturing of petroleum and coal products, manufacture of paper goods, and manufacturing of wood products. Compared to the Joined together States' sends out to Canada, the differing qualities of Canada's trades to the Joined together States is significantly lower. As a result of essentially multiplying in esteem over the course of the past five a long time, the oil and gas industry has risen as the foremost critical source of Canadian sends out to the Joined together States.  The sector that deals in the production of automobiles comes a distant second. On the other hand, as recently as 2004, the opposite was true, with vehicle exports to the United States amounting to approximately $56 billion, while oil and gas exports were $52 billion.

The esteem of vehicle sends out has been persistently diminishing over the past few a long time, falling by about 35 percent to its display level of around $36 billion. This slant highlights the crucial significance of vitality commerce to the financial victory of Canada. Over the course of the final ten a long time, the esteem of Canadian vitality trades to the Joined together States has expanded essentially. These days, the yearly esteem of oil sends out is more noteworthy than $40 billion, whereas the yearly esteem of normal gas sends out is more noteworthy than $28 billion. As portrayed in figure 2, this development is for the most part inferable to an increment within the exportation of oil and characteristic gas, as well as an increment within the estimating of these commodities. The income created by the send out of control, on the other hand, has remained basically unaltered all through the same time period, falling some place between one billion and four billion dollars yearly. 

trade balance with the United States

As seen in figure 3, Canada's overall trade balance with the United States in energy commodities is positive for all fuels with the exception of coal. Despite the fact that Canada's overall trade balance with the rest of the world in the commodity of coal is positive, the country imports more coal from the United States than it exports. By a large margin, the most important trade surplus that Canada generates from its energy trade is derived from the export of petroleum products.

The composition of the energy sources that are used for the generation of electricity is one of the most significant differences between the energy systems of the United States and Canada. As can be seen in figure 4, hydroelectricity was the primary source of electricity generation in Canada in the year 2006. With China being the world's largest producer of hydroelectricity, Canada is the world's second largest producer. Canada is significantly less reliant on coal-fired power plants for its electrical supply than many other countries, including the United States of America, due to the quantity of hydropower in the country. Compared to Canada, the United States generates a substantially greater amount of power from coal. To generate power, the United States also makes greater use of natural gas.