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Read the case and answer the questions

The Atlantic Provinces are slowly recovering economically from generations of misfortune, mistakes, and questionable political treatment.   With major projects now including offshore energy in Newfoundland and Nova Scotia, new hydro power in Labrador (Newfoundland), military shipbuilding now underway in Halifax, along with the deepening research base at universities across the region and new infrastructure investment coming from the Federal government, we can say the future is looking brighter for the region than in many decades.  The new trade agreement between Canada and Europe presents new opportunities for Atlantic Canada as Canada’s gateway.  And more… 

But policy direction, in particular energy policy and options are now crucial in light on commitments to address climate change.  In addition there is major political uncertainty in the US, our largest trading partner, regarding term of trade.  

Underneath all these developments is the question of What kind of prosperity should the Atlantic provinces be seeking? How can a small, open, economy like ours be a  sustainable economy? How can it take take advantage of its assets including location, to develop beyond the extremes of boom and bust cycles, which often beset small regions?

What policies will help most to address these questions? 

In particular, since energy and our dependence on imported fuels is one of the most crucial, but unpredictable,  levers of economic stability, what direction can and should our energy policy in this region take?

Questions:  As a prospective economist, please provide your advice to government on policy and investment in this region which may encourage sustainable economic development here, and in particular the development of energy- its use and development.

Background questions include how can we encourage new investment in hard and soft infrastructure while accepting the very limited financial resources available to our governments.  The financial constraints are real, a result of many deficits needed in the region to overcome historic downturns.  How should we approach the issue of economic growth vs.  sustainability, particularly in the contentious area of energy?  Is your view that it’s a matter of economy vs  environment, or is that a false dichotomy?

Specifically, in no less than 2 and no more than 3 pages (double spaced, 12 pt), provide your most full response to the following:

a) What, in your view, are the key economic issues for the Atlantic provinces to address in the coming years, given our limited financial resources but strong human capital?

b) In particular, describe the most appropriate, sustainable vision for energy use and development in this region?

c) Finally, what indicators of prosperity should the region focus on?  Along with output (GDP), what indicators will be the most important for the future of a small, open economy like ours?

For information and perspective on these questions,  please use the Coursepack reading #6  and # 9, plus the handouts, lectures, and discussion in class.  For an advanced perspective on measuring progress, review Reading # 7, especially pages 69-71.

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