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Gaétan Caron is an executive fellow at the School of Public Policy of the University of Calgary and former CEO and chair of the National Energy Board

Canada is at an energy crossroads. Despite the fact that oil and gas prices have fallen – likely temporary – Canada holds vast amounts of renewable and non-renewable energy, representing vast potential wealth. So, will Canada actually join the ranks of the world's energy leaders? If policy makers at the federal, territorial and provincial levels understand and grasp the challenges, the future looks promising.

Premiers recently endorsed a Canadian energy strategy. This is an unprecedented and positive step toward concerted action to manage our energy systems and tackle their environmental effects. Concrete action must follow if we are to see, in the words of the premiers, "continued economic growth and prosperity for all Canadians." Why? Because facing the other challenges that an energy-producing economy presents requires unified action, or at least clear lines of demarcation. Canada will simply not be taken seriously by our trading partners if we cannot get basic agreement among jurisdictions on matters as simple as the development and transportation of the energy we need and that we can export.

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On the climate front, Canada cannot bury its head in the sand. The world is preparing for the UN Climate Change Conference in Paris in December. Canada must present concrete environmental goals and actions. We need to earn the respect of the international community if we hope to make the world our trading destination. Europe has threatened energy imports from Canada before, and could again. Anti-Canadian angst could spread globally.

There are hopeful signs that Canada is, in fact, preparing well for Paris. We have a new Quebec-Ontario-California coalition on carbon pricing. Alberta has had a carbon policy for years that is about to be updated. News reports indicate that Canada, the United States and Mexico are discussing a joint action plan on carbon. Small steps, but important global signals.

Domestically, we will simply not be able to realize a sustainable future for our nation without fully integrating the goals and aspirations of Canada's aboriginal peoples. We have the opportunity for a full reset of the relationship between Canada and aboriginal peoples on energy, and all the determinants of a promising future for all Canadians. We do need to rethink how we engage aboriginal peoples. The status quo is not working. And, again, the world is watching.

As for energy prices, they consistently surprise us. In the past 12 months, the price of North American oil has gone from $98 (U.S.) a barrel to a low of $43. The Canadian economy has responded with a "mild contraction." People who have seen many oil price cycles know all too well that when everybody says the same thing about future oil prices, something else will happen. Expect to see a reversal soon in this short-term collapse of energy prices. The world's demand for energy in all its forms, renewable and non-renewable, is on the rise, inexorably. In its 450 Scenario, the International Energy Agency provides a forecast of energy supply and demand that seeks to limit the rise in earth's temperature by 2 degrees Celsius. Under that scenario, total world demand for fossil fuels remains significant until 2040 and beyond. Even assuming, perhaps optimistically, that the world becomes united in action on climate change, that carbon pricing is in place, and that all sectors of the economy, including transportation and end-use are subject to carbon taxes, the world in 2040 would still require vast amounts of fossil fuels.

Canada should be well placed to be a leader in satisfying the world's demand for renewable and non-renewable energies. We have a solid track record on innovation, environmental performance, human rights and transparency, especially when compared to some of the rogue states vying for a significant part of the economic rent derived from energy production, and the use some of these states make of it, for instance in radicalism, militarism, terrorism and abuses of human rights.

Based on recent policy and political developments, Canada's ducks are finally getting into a row. But the challenge for the all levels of government will be to provide leadership to align themselves, be much more aggressive in international action on climate change and related environmental issues, and to push the reset button with Canada's aboriginal peoples. Despite the oil price shock, global circumstances are such that Canada could benefit extraordinarily now and into the foreseeable future from our energy sector. Let's reach now to grasp that prize.

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