Encouraging Environmentally Sustainable Growth in Canada

This paper analyses aspects of natural resource policy and environmental policy in Canada. In the taxation of resource-based activities, the management of water supply and the Atlantic fisheries management, the paper finds that there are incentives that may lead to overexploitation, over-harvesting or over-use, with possible harmful environmental consequences. Water prices are kept low, especially for agricultural use, exacerbating water availability problems in some areas, whereas the ban on bulk water removal and exports reveals a high implicit valuation of water. The use of economic water pricing and transferable water rights in some areas would establish more consistent incentives. The evolution of the crisis in the Atlantic fisheries illustrated the problems of balancing short-term adjustment costs against long-term sustainability. A more precautionary approach in setting total allowable catches and the removal of incentives for labour to remain in the sector may ...