I am a Professor in the Department of Economics and the School of Public Policy, University of Calgary. My research interests are energy and environmental policy development in Canada, and my research is currently focused on emissions pricing policies.
Partial upgrading of bitumen (PUB) improves the quality (increases the value) of crude oil from b... more Partial upgrading of bitumen (PUB) improves the quality (increases the value) of crude oil from bituminous sands to the level where pipeline specifications are met without—or with reduced use of—costly diluent. By reducing the cost of transportation to downstream refineries, PUB can serve as a solution to market access challenges and takeaway capacity constraints for oil sand producers. However, despite significant government and private investments, proponents in the Canadian province of Alberta still face challenges in commercializing the technology. We used a capacity investment model to explore the expected effects of different policy support types on a firm’s decision to invest in a partial upgrading facility integrated with an existing oil sands extraction facility. We evaluated 10 potential policy interventions and their expected effects on investments in partial upgrading. We focused our analysis of these policy interventions on the revenues and costs of firms, risk sharing,...
In January 2019, the Canadian province of Alberta enacted limits on crude oil and bitumen product... more In January 2019, the Canadian province of Alberta enacted limits on crude oil and bitumen production. These production controls, a policy referred to as curtailment, represent a shift for a government that historically avoided market intervention. The policy was designed to shrink a growing and prolonged price differential between the Western Canadian Select price of oil, the key benchmark for Alberta’s heavy oil production, and the West Texas Intermediate benchmark. The curtailment created artificial scarcity, shrinking the price differential from more than $40 USD per barrel in November 2018 to less than $15 USD per barrel in February 2019. In the process, this policy transferred market surplus from refiners, mainly those in the US Midwest, to producers in Alberta. We review this large-scale market intervention and calculate the magnitude of the economic transfer. We find the curtailment increased producer surplus by $659M CAD per month and reduced consumer surplus by $763M per mo...
A multi-modal corridor accommodates multiple modes of energy and transportation infrastructure wi... more A multi-modal corridor accommodates multiple modes of energy and transportation infrastructure within the same right-of-way. The existing literature on corridor routing in raster space often focuses on one mode with no consideration of the width. This is not a realistic assumption, especially if multiple modes are to co-exist within the same wide right-of-way. Moreover, newer routing methods that consider corridor width cannot take into account multi-modality and the arrangement of modes within a corridor. We developed two multi-modal wide-corridor routing methods using raster data. In the first method, the cost rasters of all modes are weighted and aggregated into a single composite on which a wide LCP is found. This wide LCP is then divided among the modes based on the desired arrangement. The second method uses a directed transformed graph in which the weight of each edge is calculated using different layers of cost data based on the edge direction, the desired widths and arrange...
Firm-level idiosyncratic policy distortions misallocate resources between firms, lowering aggrega... more Firm-level idiosyncratic policy distortions misallocate resources between firms, lowering aggregate productivity. Many environmental policies create such distortions; in particular, output-based intensity standards (which limit firms’ energy use or emissions per unit of output) are easier for high-productivity firms to achieve. We investigate the productivity effect of intensity standards using a tractable general-equilibrium model featuring multiple sectors and firm-level heterogeneity. Qualitatively, we demonstrate standards are always inferior to uniform taxes, as they misallocate both dirty and clean inputs across firms and sectors, which lowers productivity. Quantitatively, we calibrate the model to US data and show these productivity losses can be large. JEL Classification: Q4, Q5, H2, E6
The drive by Canadian governments, at the provincial and federal level, to lower greenhouse gas e... more The drive by Canadian governments, at the provincial and federal level, to lower greenhouse gas emissions has resulted in a hodgepodge of different policy approaches. Some governments have opted for energy taxes, others for regulated limits on total emissions or emission intensity. Unfortunately, not all policy solutions are created equal; some are more effective than others in lowering total emissions and, worse still, may exact a heavy price on the economy. Policy-makers require a better understanding of how various policies affect the health of an economy and of how to mitigate the most pernicious costs. Key to gaining this improved understanding is to recognize one simple fact: some firms are more productive than others. As a consequence, it matters how workers, machines, energy, and other inputs are distributed between these firms. More productive firms should be larger — it is that simple. Some policies, however, increase input costs differently across firms and create costly ...
ABSTRACT This article examines policy responses in Canada and the US to the shale revolution and ... more ABSTRACT This article examines policy responses in Canada and the US to the shale revolution and changing North American oil and gas markets. We outline the effect of the shale revolution on North American oil and gas markets, and how the subsequent energy policy choices in each country changed the relationship between Canada and the US. In the US, increasing production, combined with the policy imperative of maintaining energy security, led to less support for Canadian supply and the subsequent on-off-on saga of the Keystone XL pipeline. In Canada, growing concern about the balance between the environment and the economy led to stalled pipeline development and reform of regulatory systems, problems exacerbated by the new policy direction in the US.
Page 1. Plucking a Goose of Unknown Size: Optimal Rent-Extraction with Exhaustible Resources John... more Page 1. Plucking a Goose of Unknown Size: Optimal Rent-Extraction with Exhaustible Resources John R. Boyce∗ Jennifer L. Winter University of Calgary August 31, 2010 Abstract This paper models exhaustible resource rent ...
Page 1. Estimating the Credibility of the Co-operative Commonwealth Federation's Threat to N... more Page 1. Estimating the Credibility of the Co-operative Commonwealth Federation's Threat to Nationalize Oil Resources in Saskatchewan JC Herbert Emery∗ Jennifer L. Winter May 20, 2008 )>IJH=?J Preliminary. Several scholars ...
The Government of Canada first announced its intention to implement a
nation-wide carbon price in... more The Government of Canada first announced its intention to implement a nation-wide carbon price in October 2016. After two years of announcements, retractions, discussions and debate, the rollout of carbon pricing in each province was finalized in October 2018: the federal government announced its assessment of proposed and implemented provincial carbon pricing plans. We now can compare the coverage, stringency and efficacy of provincial climate policies, and to consider how they measure up with each other and with the federal government’s standards. This paper focuses primarily on provincial systems’ emissions coverage: the share of emissions subject to a carbon price. The federal government has set a pricing benchmark, the minimum level of emissions coverage that provincial pricing policies are required to meet. The federal backstop — consisting of a carbon tax and output-based pricing system (OBPS) for large emitters — is imposed on provinces whose policies don’t measure up to the federal benchmark. We examine how the coverage of implemented, announced and former provincial pricing policies measure up to the benchmark and backstop. Using reported emissions data for each province from 2015, we provide an estimate of emissions coverage in each province from the policies in effect in 2019.
Starting in January 2019, the Canadian federal government will require all provinces and territor... more Starting in January 2019, the Canadian federal government will require all provinces and territories to have a carbon pricing policy in place. Due to the inevitable increase in costs to industry, carbon pricing reduces the international competitiveness of Canadian industries that are emissions-intensive and trade-exposed (EITE). As a result, most provincial carbon pricing policies, as well as the federal government's carbon pricing backstop, contain complementary supports for EITE industries. The goal of these supports is to help Canadian EITE firms maintain their competitiveness compared to industries from international jurisdictions that do not have carbon pricing. When governments price emissions, costs increase for firms and consumers. The challenge that EITE industries face, however, is that the prices for their goods are set in international markets. Without the ability to pass at least of portion of the increased costs on to consumers, EITE industries must absorb them against their bottom line. This in turn can result in carbon leakage, where the affected industries move elsewhere to avoid the emissions price, or their domestic activity declines in response to the higher costs. Carbon leakage leads to a drop in the area's economic activity while the effect of industries moving away results in an increase in emissions internationally. In short, carbon leakage is a " lose-lose " outcome — it reduces the effectiveness of the carbon pricing policy at the expense of local industry. Through well-designed EITE support policies, governments can mitigate carbon leakage. Specifically, EITE support policies should lower the cost of the carbon pricing policy while maintaining the incentive for EITE industries to invest in emissions reductions. This paper examines the EITE support policies of the Canadian federal government, the provinces of British Columbia, Alberta, Ontario, and Quebec, and the international jurisdictions of Australia, California, and the European Union. It additionally identifies the best practices that have evolved in jurisdictions that have implemented EITE support policies alongside carbon pricing.
The train derailment and subsequent explosion in Lac-Mégantic, Que. on July 6, 2013 brought the d... more The train derailment and subsequent explosion in Lac-Mégantic, Que. on July 6, 2013 brought the danger of rail transportation to the forefront of public consciousness. Given the increased public awareness and scrutiny of the issue of dangerous-goods transportation by rail, an important question being asked is “how safe are Canadian railroads?” Put another way, the question is “how risky is it to transport dangerous goods by rail?” While basic statistics on the number of “accidents” and “incidents”1 are not hard to find, those two questions are not necessarily easy to answer due to data limitations. This communiqué briefly reviews the available data on rail activity and finds them insufficient for evaluating how safe Canadian railroads are. The communiqué concludes with recommendations for improving the quality and accessibility of rail safety data so that these questions can be answered.
Canada's federal government has championed the prospect of exporting liquefied natural gas (LNG) ... more Canada's federal government has championed the prospect of exporting liquefied natural gas (LNG) to overseas markets. The government of British Columbia is aggressively planning to turn itself into a global LNG-export hub, and the prospect for Canadian LNG exports is positive. However, there are market and political uncertainties that must be overcome in a relatively short period of time if Canada is to become a natural gas exporter to a country other than the United States. This report assesses the feasibility of Canadian exports and examines the policy challenges involved in making the opportunity a reality.
Approximately 60 per cent of Alberta's oil sands production is non-upgraded bitumen which, after ... more Approximately 60 per cent of Alberta's oil sands production is non-upgraded bitumen which, after being mixed with a diluting agent (diluent) to allow transport, is exported. A popular view within Alberta — and particularly among Albertan politicians — is that a much larger share of oil sands bitumen should be upgraded in the province. However, without public subsidies or government underwriting, it is uneconomic to build and operate new facilities in Alberta to fully upgrade the bitumen into synthetic crude oil. But there are new partial upgrading technologies being developed that, subject to successful testing at a larger (commercial) pilot scale, can prove to be not only economic in Alberta, but also generate large social and economic benefits for the province. The advantages include a much smaller capital investment, a significant increase in the value of the product and market for the product and, even more importantly, a dramatic reduction in the need for large amounts of expensive diluent to transport the product to market. Indeed, the only diluent required will be that to move the bitumen from the production site to the partial upgrader and this can be continually recycled.
The United States today is Canada’s largest customer for oil and refined oil products. However, t... more The United States today is Canada’s largest customer for oil and refined oil products. However, this relationship may be strained due to physical, economic and political influences. Pipeline capacity is approaching its limits; Canadian oil is selling at substantive discounts to world market prices; and U.S. demand for crude oil and finished products (such as gasoline), has begun to flatten significantly relative to historical rates. Lower demand, combined with increased shale oil production, means U.S. demand for Canadian oil is expected to continue to decline. Under these circumstances, gaining access to new markets such as those in the Asia-Pacific region is becoming more and more important for the Canadian economy. However, expanding pipeline capacity to the Pacific via the proposed Northern Gateway pipeline and the planned Trans Mountain pipeline expansion is only feasible when there is sufficient demand and processing capacity to support Canadian crude blends. Canadian heavy oil requires more refining and produces less valuable end products than other lighter and sweeter blends. Canadian producers must compete with lighter, sweeter oils from the Middle East, and elsewhere, for a place in the Pacific Basin refineries built to handle heavy crude blends. Through this survey of the capacity of Pacific Basin refineries, including existing and proposed facilities, we have concluded that there is sufficient technical capacity in the Pacific Basin to refine the additional Canadian volume; however, there may be some modifications required to certain refineries to allow them to process Western Canadian crude. Any additional capacity for Canadian oil would require refinery modifications or additional refineries, both of which are not expected, given the volume of lighter and more valuable crude from the Middle East finding its way to Pacific Basin markets. Consequently, any new refinery capacity is not likely to be dedicated to Canadian crude shipments. This places increasing importance on the need to enter into long-term contracts to supply Pacific Basin refineries, backed up by evidence of adequate transportation capacity. Canadians will have to show first, and quickly, that we are committed to building pipelines that will bring sufficient volumes of oil to the Pacific coast necessary to give the refiners the certainty they need to invest in infrastructure for refining Canadian oil. Access to this crucial market will depend critically on the outcome of the pipeline approval process, and also the cost to ship from Canada. If Canada does not approve of the Pacific coast pipeline expansions, or takes too long in doing so, it could find its crude unable to effectively penetrate the world’s most promising oil export market.
This paper is a re-print of four op-eds providing advice to Alberta's new premier, elected in Sep... more This paper is a re-print of four op-eds providing advice to Alberta's new premier, elected in September 2014.
Partial upgrading of bitumen (PUB) improves the quality (increases the value) of crude oil from b... more Partial upgrading of bitumen (PUB) improves the quality (increases the value) of crude oil from bituminous sands to the level where pipeline specifications are met without—or with reduced use of—costly diluent. By reducing the cost of transportation to downstream refineries, PUB can serve as a solution to market access challenges and takeaway capacity constraints for oil sand producers. However, despite significant government and private investments, proponents in the Canadian province of Alberta still face challenges in commercializing the technology. We used a capacity investment model to explore the expected effects of different policy support types on a firm’s decision to invest in a partial upgrading facility integrated with an existing oil sands extraction facility. We evaluated 10 potential policy interventions and their expected effects on investments in partial upgrading. We focused our analysis of these policy interventions on the revenues and costs of firms, risk sharing,...
In January 2019, the Canadian province of Alberta enacted limits on crude oil and bitumen product... more In January 2019, the Canadian province of Alberta enacted limits on crude oil and bitumen production. These production controls, a policy referred to as curtailment, represent a shift for a government that historically avoided market intervention. The policy was designed to shrink a growing and prolonged price differential between the Western Canadian Select price of oil, the key benchmark for Alberta’s heavy oil production, and the West Texas Intermediate benchmark. The curtailment created artificial scarcity, shrinking the price differential from more than $40 USD per barrel in November 2018 to less than $15 USD per barrel in February 2019. In the process, this policy transferred market surplus from refiners, mainly those in the US Midwest, to producers in Alberta. We review this large-scale market intervention and calculate the magnitude of the economic transfer. We find the curtailment increased producer surplus by $659M CAD per month and reduced consumer surplus by $763M per mo...
A multi-modal corridor accommodates multiple modes of energy and transportation infrastructure wi... more A multi-modal corridor accommodates multiple modes of energy and transportation infrastructure within the same right-of-way. The existing literature on corridor routing in raster space often focuses on one mode with no consideration of the width. This is not a realistic assumption, especially if multiple modes are to co-exist within the same wide right-of-way. Moreover, newer routing methods that consider corridor width cannot take into account multi-modality and the arrangement of modes within a corridor. We developed two multi-modal wide-corridor routing methods using raster data. In the first method, the cost rasters of all modes are weighted and aggregated into a single composite on which a wide LCP is found. This wide LCP is then divided among the modes based on the desired arrangement. The second method uses a directed transformed graph in which the weight of each edge is calculated using different layers of cost data based on the edge direction, the desired widths and arrange...
Firm-level idiosyncratic policy distortions misallocate resources between firms, lowering aggrega... more Firm-level idiosyncratic policy distortions misallocate resources between firms, lowering aggregate productivity. Many environmental policies create such distortions; in particular, output-based intensity standards (which limit firms’ energy use or emissions per unit of output) are easier for high-productivity firms to achieve. We investigate the productivity effect of intensity standards using a tractable general-equilibrium model featuring multiple sectors and firm-level heterogeneity. Qualitatively, we demonstrate standards are always inferior to uniform taxes, as they misallocate both dirty and clean inputs across firms and sectors, which lowers productivity. Quantitatively, we calibrate the model to US data and show these productivity losses can be large. JEL Classification: Q4, Q5, H2, E6
The drive by Canadian governments, at the provincial and federal level, to lower greenhouse gas e... more The drive by Canadian governments, at the provincial and federal level, to lower greenhouse gas emissions has resulted in a hodgepodge of different policy approaches. Some governments have opted for energy taxes, others for regulated limits on total emissions or emission intensity. Unfortunately, not all policy solutions are created equal; some are more effective than others in lowering total emissions and, worse still, may exact a heavy price on the economy. Policy-makers require a better understanding of how various policies affect the health of an economy and of how to mitigate the most pernicious costs. Key to gaining this improved understanding is to recognize one simple fact: some firms are more productive than others. As a consequence, it matters how workers, machines, energy, and other inputs are distributed between these firms. More productive firms should be larger — it is that simple. Some policies, however, increase input costs differently across firms and create costly ...
ABSTRACT This article examines policy responses in Canada and the US to the shale revolution and ... more ABSTRACT This article examines policy responses in Canada and the US to the shale revolution and changing North American oil and gas markets. We outline the effect of the shale revolution on North American oil and gas markets, and how the subsequent energy policy choices in each country changed the relationship between Canada and the US. In the US, increasing production, combined with the policy imperative of maintaining energy security, led to less support for Canadian supply and the subsequent on-off-on saga of the Keystone XL pipeline. In Canada, growing concern about the balance between the environment and the economy led to stalled pipeline development and reform of regulatory systems, problems exacerbated by the new policy direction in the US.
Page 1. Plucking a Goose of Unknown Size: Optimal Rent-Extraction with Exhaustible Resources John... more Page 1. Plucking a Goose of Unknown Size: Optimal Rent-Extraction with Exhaustible Resources John R. Boyce∗ Jennifer L. Winter University of Calgary August 31, 2010 Abstract This paper models exhaustible resource rent ...
Page 1. Estimating the Credibility of the Co-operative Commonwealth Federation's Threat to N... more Page 1. Estimating the Credibility of the Co-operative Commonwealth Federation's Threat to Nationalize Oil Resources in Saskatchewan JC Herbert Emery∗ Jennifer L. Winter May 20, 2008 )>IJH=?J Preliminary. Several scholars ...
The Government of Canada first announced its intention to implement a
nation-wide carbon price in... more The Government of Canada first announced its intention to implement a nation-wide carbon price in October 2016. After two years of announcements, retractions, discussions and debate, the rollout of carbon pricing in each province was finalized in October 2018: the federal government announced its assessment of proposed and implemented provincial carbon pricing plans. We now can compare the coverage, stringency and efficacy of provincial climate policies, and to consider how they measure up with each other and with the federal government’s standards. This paper focuses primarily on provincial systems’ emissions coverage: the share of emissions subject to a carbon price. The federal government has set a pricing benchmark, the minimum level of emissions coverage that provincial pricing policies are required to meet. The federal backstop — consisting of a carbon tax and output-based pricing system (OBPS) for large emitters — is imposed on provinces whose policies don’t measure up to the federal benchmark. We examine how the coverage of implemented, announced and former provincial pricing policies measure up to the benchmark and backstop. Using reported emissions data for each province from 2015, we provide an estimate of emissions coverage in each province from the policies in effect in 2019.
Starting in January 2019, the Canadian federal government will require all provinces and territor... more Starting in January 2019, the Canadian federal government will require all provinces and territories to have a carbon pricing policy in place. Due to the inevitable increase in costs to industry, carbon pricing reduces the international competitiveness of Canadian industries that are emissions-intensive and trade-exposed (EITE). As a result, most provincial carbon pricing policies, as well as the federal government's carbon pricing backstop, contain complementary supports for EITE industries. The goal of these supports is to help Canadian EITE firms maintain their competitiveness compared to industries from international jurisdictions that do not have carbon pricing. When governments price emissions, costs increase for firms and consumers. The challenge that EITE industries face, however, is that the prices for their goods are set in international markets. Without the ability to pass at least of portion of the increased costs on to consumers, EITE industries must absorb them against their bottom line. This in turn can result in carbon leakage, where the affected industries move elsewhere to avoid the emissions price, or their domestic activity declines in response to the higher costs. Carbon leakage leads to a drop in the area's economic activity while the effect of industries moving away results in an increase in emissions internationally. In short, carbon leakage is a " lose-lose " outcome — it reduces the effectiveness of the carbon pricing policy at the expense of local industry. Through well-designed EITE support policies, governments can mitigate carbon leakage. Specifically, EITE support policies should lower the cost of the carbon pricing policy while maintaining the incentive for EITE industries to invest in emissions reductions. This paper examines the EITE support policies of the Canadian federal government, the provinces of British Columbia, Alberta, Ontario, and Quebec, and the international jurisdictions of Australia, California, and the European Union. It additionally identifies the best practices that have evolved in jurisdictions that have implemented EITE support policies alongside carbon pricing.
The train derailment and subsequent explosion in Lac-Mégantic, Que. on July 6, 2013 brought the d... more The train derailment and subsequent explosion in Lac-Mégantic, Que. on July 6, 2013 brought the danger of rail transportation to the forefront of public consciousness. Given the increased public awareness and scrutiny of the issue of dangerous-goods transportation by rail, an important question being asked is “how safe are Canadian railroads?” Put another way, the question is “how risky is it to transport dangerous goods by rail?” While basic statistics on the number of “accidents” and “incidents”1 are not hard to find, those two questions are not necessarily easy to answer due to data limitations. This communiqué briefly reviews the available data on rail activity and finds them insufficient for evaluating how safe Canadian railroads are. The communiqué concludes with recommendations for improving the quality and accessibility of rail safety data so that these questions can be answered.
Canada's federal government has championed the prospect of exporting liquefied natural gas (LNG) ... more Canada's federal government has championed the prospect of exporting liquefied natural gas (LNG) to overseas markets. The government of British Columbia is aggressively planning to turn itself into a global LNG-export hub, and the prospect for Canadian LNG exports is positive. However, there are market and political uncertainties that must be overcome in a relatively short period of time if Canada is to become a natural gas exporter to a country other than the United States. This report assesses the feasibility of Canadian exports and examines the policy challenges involved in making the opportunity a reality.
Approximately 60 per cent of Alberta's oil sands production is non-upgraded bitumen which, after ... more Approximately 60 per cent of Alberta's oil sands production is non-upgraded bitumen which, after being mixed with a diluting agent (diluent) to allow transport, is exported. A popular view within Alberta — and particularly among Albertan politicians — is that a much larger share of oil sands bitumen should be upgraded in the province. However, without public subsidies or government underwriting, it is uneconomic to build and operate new facilities in Alberta to fully upgrade the bitumen into synthetic crude oil. But there are new partial upgrading technologies being developed that, subject to successful testing at a larger (commercial) pilot scale, can prove to be not only economic in Alberta, but also generate large social and economic benefits for the province. The advantages include a much smaller capital investment, a significant increase in the value of the product and market for the product and, even more importantly, a dramatic reduction in the need for large amounts of expensive diluent to transport the product to market. Indeed, the only diluent required will be that to move the bitumen from the production site to the partial upgrader and this can be continually recycled.
The United States today is Canada’s largest customer for oil and refined oil products. However, t... more The United States today is Canada’s largest customer for oil and refined oil products. However, this relationship may be strained due to physical, economic and political influences. Pipeline capacity is approaching its limits; Canadian oil is selling at substantive discounts to world market prices; and U.S. demand for crude oil and finished products (such as gasoline), has begun to flatten significantly relative to historical rates. Lower demand, combined with increased shale oil production, means U.S. demand for Canadian oil is expected to continue to decline. Under these circumstances, gaining access to new markets such as those in the Asia-Pacific region is becoming more and more important for the Canadian economy. However, expanding pipeline capacity to the Pacific via the proposed Northern Gateway pipeline and the planned Trans Mountain pipeline expansion is only feasible when there is sufficient demand and processing capacity to support Canadian crude blends. Canadian heavy oil requires more refining and produces less valuable end products than other lighter and sweeter blends. Canadian producers must compete with lighter, sweeter oils from the Middle East, and elsewhere, for a place in the Pacific Basin refineries built to handle heavy crude blends. Through this survey of the capacity of Pacific Basin refineries, including existing and proposed facilities, we have concluded that there is sufficient technical capacity in the Pacific Basin to refine the additional Canadian volume; however, there may be some modifications required to certain refineries to allow them to process Western Canadian crude. Any additional capacity for Canadian oil would require refinery modifications or additional refineries, both of which are not expected, given the volume of lighter and more valuable crude from the Middle East finding its way to Pacific Basin markets. Consequently, any new refinery capacity is not likely to be dedicated to Canadian crude shipments. This places increasing importance on the need to enter into long-term contracts to supply Pacific Basin refineries, backed up by evidence of adequate transportation capacity. Canadians will have to show first, and quickly, that we are committed to building pipelines that will bring sufficient volumes of oil to the Pacific coast necessary to give the refiners the certainty they need to invest in infrastructure for refining Canadian oil. Access to this crucial market will depend critically on the outcome of the pipeline approval process, and also the cost to ship from Canada. If Canada does not approve of the Pacific coast pipeline expansions, or takes too long in doing so, it could find its crude unable to effectively penetrate the world’s most promising oil export market.
This paper is a re-print of four op-eds providing advice to Alberta's new premier, elected in Sep... more This paper is a re-print of four op-eds providing advice to Alberta's new premier, elected in September 2014.
Financial transfers between regions of a country are ubiquitous. Richer regions contribute (often... more Financial transfers between regions of a country are ubiquitous. Richer regions contribute (often indirectly) to poorer regions, and this affects their welfare, productivity, and industry composition. Financial inflows raise welfare by funding current account deficits, and imports raise productivity by shutting down the lowest productivity firms. But there is little quantitative work examining these effects for fiscal transfers within countries. We fill this gap by augmenting and exploring a rich quantitative trade model with endogenous fiscal transfers, calibrated to detailed data for trade and financial flows within Canada. We find transfers significantly increase welfare, productivity, and specialization in downstream (final goods) sectors in recipient regions; the reverse is true in contributor regions. The effects are large. Alberta's welfare and productivity are 9% and 0.6% lower, respectively, while increase PEI's are 33% and 1.6% higher. Overall, real income differences are less than half what they would without fiscal integration. Finally, transfers affect gains from trade and spread those gains across all regions, even if policy (like the New West Partnership) liberalizes trade only among some.
Report for a SSHRC Knowledge Synthesis Grant, exploring knowledge gaps in scientific/academic wor... more Report for a SSHRC Knowledge Synthesis Grant, exploring knowledge gaps in scientific/academic work, grey literature, and policy and regulatory documents related to the costs and benefits of hydraulic fracturing in Canada.
Canadian energy policy is defined by three primary themes. First, the tension between federal and... more Canadian energy policy is defined by three primary themes. First, the tension between federal and provincial jurisdictions over energy development and energy transmission. Provinces have control over the development of their energy resources, while interprovincial transport and offshore development is federally regulated, creating interregional tensions over market access. Secondly, regional resource endowments led to disparity in economic development, and federal policies that benefited some regions at the expense of others, furthering inter-regional tensions. Thirdly, the proximity of the United States as a primary export market has influenced interprovincial cooperation and coordination in energy policy. These three themes will be explored in describing the evolution of energy policy in Canada. Coupled with environmental concerns around energy development, energy policy in Canada has been fraught with tension.
Report for a SSHRC Knowledge Synthesis Grant, exploring current understandings and interpretation... more Report for a SSHRC Knowledge Synthesis Grant, exploring current understandings and interpretations of engagement and the duty to consult with Indigenous Peoples in the context of resource development in Canada through analysis of public available documents on consultation and engagement from Indigenous groups, governments and industry.
We examine the validity of the commonly held view that the ideology and policies of the Cooperati... more We examine the validity of the commonly held view that the ideology and policies of the Cooperative Commonwealth Federation (CCF) governments in Saskatchewan (1944-1964) retarded the development of Saskatchewan's oil and gas resources. We develop a model to value land with an exhaustible resource under uncertainty. The uncertainty comes from a positive probability of expropriation with zero compensation. This research adds to the existing literature as the model results in the derivation of a simple equation that allows identification and estimation of the effect of expropriation risk, given appropriate data are available. The model is used to evaluate the effect of the CCF on the natural resource industry in Saskatchewan. The tenure of the CCF is used as a proxy for the perceived probability of expropriation. The results indicate the CCF government did affect expenditure on mineral rights in Saskatchewan. More precisely, the effect of the CCF was to reduce the discounting of current profits in determining the value of land, which decreased expenditures on land. The expropriation threat did not reduce investment in production, but did reduce willingness to pay for mineral rights relative to Alberta.
This paper examines how concealing the existence of private information affects winning bids in a... more This paper examines how concealing the existence of private information affects winning bids in a large, well-functioning auction environment. Standard auction theory suggests firms should wish to advertise the existence of private information in order to reduce the bids of their competitors (Milgrom and Weber, 1982). To my knowledge, there is no theoretical or empirical work on how concealing the existence of private information affects bids. The theoretical predictions center on how information asymmetries affect equilibrium bids, or incentives to gather information (Milgrom and Weber, 1982; Engelbrecht-Wiggans et al., 1983). Most empirical articles test for the presence of private information, rather than the effect of revealing or concealing its existence. An institutional feature of the auctions for petroleum and natural gas leases in Alberta is that firms can hire a broker to bid on their behalf, thereby hiding their identity. Anecdotal evidence suggests firms use brokers to conceal information from their competitors. In order to test the predictions of standard theory, I develop a model of bidding behaviour incorporating the choice to use a broker. The model provides an explicit relationship between broker usage, firms' private information, and equilibrium bids. Using a newly constructed dataset, I estimate this relationship. I find results consistent with standard theory: bids are higher when brokers are used to hide the existence of some private information.
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Papers by Jennifer Winter
nation-wide carbon price in October 2016. After two years of announcements, retractions, discussions and debate, the rollout of carbon pricing in each province was finalized in October 2018: the federal government announced its assessment of proposed and implemented provincial carbon pricing plans. We now can compare the coverage, stringency and efficacy of provincial climate policies, and to consider how they measure up with each other and with the federal government’s standards.
This paper focuses primarily on provincial systems’ emissions coverage: the share of emissions subject to a carbon price. The federal government has set a pricing benchmark, the minimum level of emissions coverage that provincial pricing policies are required to meet. The federal backstop — consisting of a carbon tax and output-based pricing system (OBPS) for large emitters — is imposed on provinces whose policies don’t measure up to the federal benchmark. We
examine how the coverage of implemented, announced and former provincial pricing policies measure up to the benchmark and backstop. Using reported emissions data for each province from 2015, we provide an estimate of emissions coverage in each province from the policies in effect in 2019.
important question being asked is “how safe are Canadian railroads?” Put another way, the question is “how risky is it to transport dangerous goods by rail?” While basic statistics on the number of “accidents” and “incidents”1 are not hard to find, those two questions are not
necessarily easy to answer due to data limitations. This communiqué briefly reviews the available data on rail activity and finds them insufficient for evaluating how safe Canadian railroads are. The communiqué concludes with recommendations for improving the quality and accessibility of rail safety data so that these questions can be answered.
the additional Canadian volume; however, there may be some modifications required to certain refineries to allow them to process Western Canadian crude. Any additional capacity for Canadian oil would require refinery modifications or additional refineries, both of which are not expected, given the volume of lighter and more valuable crude from the Middle East finding its way to Pacific Basin markets. Consequently, any new refinery capacity is not likely to be dedicated to Canadian crude
shipments. This places increasing importance on the need to enter into long-term contracts to supply Pacific Basin refineries, backed up by evidence of adequate transportation capacity. Canadians will have to show first, and quickly, that we are committed to building pipelines that will bring sufficient volumes of oil to the Pacific coast necessary to give the refiners the certainty they need to invest in infrastructure for refining Canadian oil. Access to this crucial market will depend critically on the outcome of the pipeline approval process, and also the cost to ship from Canada. If Canada does not approve of the Pacific coast pipeline expansions, or takes too long in doing so, it could find its crude unable to
effectively penetrate the world’s most promising oil export market.
nation-wide carbon price in October 2016. After two years of announcements, retractions, discussions and debate, the rollout of carbon pricing in each province was finalized in October 2018: the federal government announced its assessment of proposed and implemented provincial carbon pricing plans. We now can compare the coverage, stringency and efficacy of provincial climate policies, and to consider how they measure up with each other and with the federal government’s standards.
This paper focuses primarily on provincial systems’ emissions coverage: the share of emissions subject to a carbon price. The federal government has set a pricing benchmark, the minimum level of emissions coverage that provincial pricing policies are required to meet. The federal backstop — consisting of a carbon tax and output-based pricing system (OBPS) for large emitters — is imposed on provinces whose policies don’t measure up to the federal benchmark. We
examine how the coverage of implemented, announced and former provincial pricing policies measure up to the benchmark and backstop. Using reported emissions data for each province from 2015, we provide an estimate of emissions coverage in each province from the policies in effect in 2019.
important question being asked is “how safe are Canadian railroads?” Put another way, the question is “how risky is it to transport dangerous goods by rail?” While basic statistics on the number of “accidents” and “incidents”1 are not hard to find, those two questions are not
necessarily easy to answer due to data limitations. This communiqué briefly reviews the available data on rail activity and finds them insufficient for evaluating how safe Canadian railroads are. The communiqué concludes with recommendations for improving the quality and accessibility of rail safety data so that these questions can be answered.
the additional Canadian volume; however, there may be some modifications required to certain refineries to allow them to process Western Canadian crude. Any additional capacity for Canadian oil would require refinery modifications or additional refineries, both of which are not expected, given the volume of lighter and more valuable crude from the Middle East finding its way to Pacific Basin markets. Consequently, any new refinery capacity is not likely to be dedicated to Canadian crude
shipments. This places increasing importance on the need to enter into long-term contracts to supply Pacific Basin refineries, backed up by evidence of adequate transportation capacity. Canadians will have to show first, and quickly, that we are committed to building pipelines that will bring sufficient volumes of oil to the Pacific coast necessary to give the refiners the certainty they need to invest in infrastructure for refining Canadian oil. Access to this crucial market will depend critically on the outcome of the pipeline approval process, and also the cost to ship from Canada. If Canada does not approve of the Pacific coast pipeline expansions, or takes too long in doing so, it could find its crude unable to
effectively penetrate the world’s most promising oil export market.