Canadian Oil Sands Investments: FOCUS on a Controversial Energy Source

Abstract

Rising energy demand and prices, particularly for oil, has led to a search for solutions to quell this increase. With the advent of the Oil Sands, we have stumbled upon an opportunity to increase Oil supplies and thus stabilize prices and satisfy demand. A large portion of the oil sands are located in Canada and this gives Canada an opportunity to improve its economy. Since the discovery, Canada has seen a vast influx in investment for the purpose of extracting these oil deposits. Using the University of Toronto's FOCUS model, which simulates the Canadian economy, this paper simulates and forecasts current and future trends in the Canadian economy that arise from this increase in investment. This paper breaks down the impacts on the various aspects of the Canadian economy and also analyzes many social issues that arise from the expansion of the oil sands, particularly the environmental issues. By doing so, one can analyze the current policies in place to deal with this expansion and revise them or create new policy which can prove more efficient in dealing with a potentially bubbling economy and the externalities that come from it