Title
The Effects of Energy Price Changes on Commodity Prices, Interprovincial Trade, and Employment (Heritage),Used
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This study investigates how an increase in the price of petroleum and natural gas would alter commodity prices in Ontario, and then estimates the effects on production and employment. A 100 per cent increase in energy prices is assumed. Using the Ontario inputoutput table it is found that commodity price increases would be relatively small, on average 2.7 per cent overall and less than 1.6 per cent in basic manufacturing. However, using CobbDouglas utility functions it is also calculated that the Ontario labour force would suffer an employment reduction of 2 to 4 per cent.Economic policy alternatives open to Ontario are then considered. Subsidies to offset commodity price increases would be very expensive and difficult to administer. Retaliatory measures, such as a change in the Ontario Corporate Income Tax, would be inefficient. It is concluded that from Ontario
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