The Energy Futures Modeling system is dependent on macroeconomic projections for key inputs that influence our energy projections. These inputs drive activity levels across the economy, and shape end-use consumer technology and energy prices. Energy investment, production and price projections from the Energy Futures Modeling System, in turn impact the macroeconomic projections.
An external macroeconomic expert creates these projections. Since 2016, this has been Stokes Economics and its PROVMODS economic model.
PROVMODS is a Canada-focused, bottom-up model, where provinces and territories are represented and then summed up to Canadian totals. The supply-side of PROVMODS covers close to 50 industries including primary sectors (e.g., agriculture, forestry, mining, etc.), utilities, construction, manufacturing, and private and public service sectors. Each industry incorporates input/output relationships from Statistics Canada to model inter and intra-industry demand and price relationships (including energy prices), and final demand expenditures impacts. The demand side of PROVMODS incorporates the Canadian System of Macroeconomic Accounts and is based on the expenditure-based accounting framework for gross domestic product (GDP). PROVMODS includes a major projects inventory and an endogenous population model.
To make the scenarios internally consistent, PROVMODS exchanges a variety of information with the Energy Futures Modeling System. PROVMODS receives key energy-related parameters like crude oil and natural gas price assumptions, climate policy assumptions, major energy projects (including LNG exports, major electricity developments, hydrogen, carbon capture and storage, etc.), oil and gas production projections, and carbon pricing revenues. PROVMODS supplies the Energy Futures Modeling System key inputs such as population, households, buildings floorspace, gross output by industry, GDP by province and territory, inflation, and exchange rate.
Key macroeconomic drivers, including GDP growth, population, inflation, and exchange rate, are available in the Canada’s Energy Future dataset.
