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We analyze the total factor productivity (TFP) of the pulp and paper industry in three Canadian provinces (British Columbia, Ontario, and Quebec) and in three United States (US) states that are contiguously located south of the border (Washington, Illinois, and Maine) over the period of 1971 to 2005. We find that the industry in the three Canadian provinces had much higher TFP growth rates in the era following the Free-Trade Agreement (FTA) signed in 1988. In terms of productivity level, this relative TFP surge allowed the industry in Ontario and British Columbia to move ahead of Illinois and Washington, respectively; however, Quebec trailed further Maine, which is the overall leader in the sample. Our results in this particular case reveal that the Canadian pulp and paper industry did not contribute to the overall Canada-US productivity gap. [ABSTRACT FROM AUTHOR]

Greenhouse gas (GHG) emissions of the Quebec pulp and paper industry fell by more than 30 percent from 1990 to 2006. We use an energy demand model to analyze the contributions to this decrease of energy prices, product mix, technological change, and biomass use. The product mix is made of pulp, and cardboard, and paper. Pulp is an intermediate product for the industry, but not necessarily so for mills; vertical integration varies across mills and presents different opportunities to transfer heat between stages of production. Chemical and mechanical pulping processes are used to form two groups of pulp and paper mills. We find that changes of product mixes contributed the most to reduce GHG emissions, followed to a lesser extent by increases of fuel prices relative to electricity. The estimated electricity and fuel price elasticities are low. However it is still possible to significantly reduce GHG emissions by substituting natural gas for heavy fuel oil; such a substitution could be brought about by a small change of their relative price. [ABSTRACT FROM AUTHOR]

The work of Boadway and Hayashi (2001) and Smart (2007) tends to confirm the hypothesis that provinces who are the beneficiaries of equalization payments adopt strategic behaviours that reduce their tax capacity and thus increase these payments. In this study, we analyze the impact that a new hydroelectricity royalty paid by Hydro-Quebec to the Quebec Treasury has on total equalization payments received by the province; to do this, we consider the equalization formulas used before 2004 and after 2007. This royalty, which generates approximately $600 million each year, reduces Quebec's equalization payments by just over $100 million, using either formula. Under the terms of the current equalization formula, Quebec loses 38 cents in equalization rights for each additional dollar of income received from natural resources. The new hydroelectricity royalty and the increase in the dividend rates applied to this government-owned corporation have made it possible for the Quebec government to benefit from a transfer of $1.15 billion; on the other hand it loses $437 million in equalization payments. In this study, we provide and describe an important counter example to the hypothesis concerning the strategic behaviour of provinces that benefit from an equalization scheme. [ABSTRACT FROM AUTHOR]

Canada has ratified the Kyoto Protocol while the United States has not; and Canadian industrial producers have expressed their concern with respect to the negative impact of this on competitiveness. To alleviate this concern, the Government of Canada is proposing to cap the price of greenhouse gas (GHG) emission permits and to allocate emission permits on the basis of output. We analyze how such a scheme could affect electricity production and trade between Ontario, Quebec, New Brunswick, New England, and New York. We find that the approach of the Canadian government has little effect on electricity production and trade; it also fails to reduce GHG emissions. if the allocation and production of emission permits were unbundled and if Canadian electricity producers were facing a permit price of $15 per tonne of CO2, then the effect in Canada would depend on how limiting were the constraints on GHG emission in the US region. The impact on total GHG emissions remains small because of production substitution between the various regions. [ABSTRACT FROM AUTHOR]

Presents a study that analyzes the impacts of long term marginal cost pricing of electricity on residential customers in Quebec. Significant increases in the annual bill; Increasing of nominal bills by income class range; Correcting the negative effect on income distribution associated with marginal cost pricing by lowering the fixed monthly charge.