“If you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three.” So said Winston Churchill. So what happens when you put 12 leading economists in a room and ask them to focus on one of the biggest challenges of our time: growing economic and environmental prosperity in Canada? You get Canada’s Ecofiscal Commission. This Commissioner blog series gives you a glimpse into the diverse personalities and perspectives behind our work — and what it takes to wrestle through the big issues together.

1. Why does Canada need an Ecofiscal Commission?

In Canada we tend to believe that protecting the environment hurts economic growth. It’s as though we have to choose one over the other. As a group of economists, the Ecofiscal Commissioners can present solid arguments that we can do better: that it is possible to pursue these two objectives at the same time. That’s the strength of this commission.

2. Economists call environmental damage an “externality” — an expense that companies don’t have to pay. What are some of the most troubling examples of this?

Canada has an economy that is based to a great extent on its natural resources, be it agriculture, mining, forestry, fisheries or the energy sector. Mining, for example, leaves behind a lot of residual waste that can contaminate the soil. And it’s often the public sector that is left to clean up any leftover damages and waste afterwards. If mining companies had to pay for the full cost of their activities, chances are they would adjust their planning and their ways of operating to minimize these costs.

3. How does environmental damage affect Canada’s future prosperity?

It is not just Canada’s future prosperity that’s at stake — it’s a problem on a global scale. However, Canada depends quite heavily on its natural resources to fuel economic growth. If we damage the environment, it will affect our economic prospects, with both immediate and long-term consequences.

4. You serve as Vice President of Research at the Institute for Research on Public Policy. One of the Institute’s research areas is competitiveness, productivity and economic growth. How do ecofiscal policies fit into that picture?

During recent years we’ve published a number of studies that are directly related to ecofiscal issues. One of those studies looked at how governments can promote innovation in the energy sector in order to better reduce greenhouse gas emissions. The authors argue that measures such as a carbon tax would be even more effective if the income they generate was used to encourage the innovation and new energy technologies that will be needed to achieve our objectives.

5. What excites you most about serving on the Commission?

I think that this is one of the most important issues — if not the main issue — Canada has to address in the years to come. I also like the idea of working together with other economists to build a convincing case that there are ways to move Canada forward that are good for the economy and the environment.

6. Are you optimistic that the Commission will be successful?

Now is the right time in Canada to have this discussion. At a minimum, I think we can inform and help move the public debate on this issue – and that will be a good measure of our success.

About the Author

France St-Hilaire is Vice President of Research at the Institute for Research on Public Policy, as well as a Commissioner of Canada’s Ecofiscal Commission.