Few people remember the history of Pierre Trudeau’s National Energy Program (NEP) anymore, but we may be doomed to repeat it..The parallels between the political circumstances leading to the NEP of 1980 and the those of today are chilling..The most obvious, is that we have another Trudeau at the helm of Canada..Prior to the mid-1970s, Canada had little interest in Alberta’s oil and gas. While Alberta premiers and business leaders had tried to make a case for Central-Eastern Canada to embrace Albertan hydrocarbon products for decades, they were invariably turned away. We were told our oil was too expensive and impractical to serve the needs of the East. We were instructed to find other investors, and we did..Alberta oil and gas field development was carried out mostly by American companies in the 1950s and 1960s. Most of our products were sold to American markets including oil shipped through the Transmountain pipeline constructed in 1951. Eastern Canada got their energy products predominantly from foreign tankers and ironically from American sources in the east..In 1974 everything changed as OPEC imposed an oil embargo in retaliation against countries that supported Israel during the Yom Kippur War. North America was thrown into a prolonged energy crisis as oil shortages hit and costs skyrocketed. While the embargo ended after a few months, OPEC quotas and energy supply manipulations made insecurity a problem for years to come. By 1978 the world price for a barrel of crude oil had risen 700% to $13.54 USD per barrel. The Iran-Iraq war in 1979 cause the price of oil to peak at $40 USD per barrel..Canadians suddenly discovered the price of oil does indeed impact the price of everything. Inflation that had been problematic became a crisis. The standard of living for Canadians was being impacted and citizens demanded Trudeau (The First) do something, so he did..With the implementation of the National Energy Program (NEP) in 1980, Alberta’s oil suddenly became Canada’s oil..Massive tariffs were placed upon oil exports while Alberta was forced to sell oil to the rest of Canada at a mandatory discount. An 8% pre-royalty tax was placed on petroleum and gas revenues and the federal share of petroleum revenues was slated to increase while provinces (mostly Alberta) were to decrease their take. A Canadian ownership levy was applied to multinational companies to try and increase Canadian ownership to 50%. Again, we can’t forget it was Eastern indifference to Albertan oil and gas that created a large amount of foreign ownership in the first place..The impact on Alberta’s oil and gas sector was immediate and devastating. Companies went bankrupt or fled under the new restrictions. Petro Canada was created as a state-capitalist crown corporation. They couldn’t fill the void left by the companies ruined by the NEP..The NEP remained in place until 1986. During that period it drained upwards of $100 billion from Alberta while businesses and citizens suffered. Coupled with the high-interest rates of the day, many Albertans were literally forced to walk away from their homes..Brian Mulroney promised to end the NEP when he successfully campaigned to become prime minister in 1984. Mulroney waited two years before dismantling the program. He only followed through on his promise to Westerners when the price of oil collapsed. And he had devious reasons for it..Under the NEP, Ottawa placed a ceiling on oil prices, capping how much money Alberta could make. To add a little honey to the vinegar, Ottawa also placed a theoretical price floor, whereby Canada would pay artificially high prices for Alberta oil if prices collapsed..Mulroney was happy to keep the NEP while prices remained high. As soon as prices fell and Ottawa would have to pay a net-loss for Alberta oil, he got around to keeping his promise..Alberta was left drained, humiliated, and broke. It took nearly a decade to financially recover..Fast forward to today and we have another Trudeau in power as world oil prices are spiking. Inflation is reaching levels not seen in generations and the cost of living for Canadians is on the rise. OPEC is actively working to keep oil prices high. Europe is in the midst of an energy crisis while President Biden is begging OPEC to increase oil production in order to bring down world prices. Canadians are starting to raise concerns about the rising cost of living and the government is looking for a source of cash. Carbon-tax happy politicians like Trudeau and BC Premier John Horgan bemoan the high price of gas at the pump, without a hint of irony..The federal government has been signaling for years they don’t want the West’s “dirty” oil. The Energy East pipeline was and the Teck Frontier oilsands mega-mine regulated to death while Northern Gateway was outright killed. Biden killed the Keystone XL line with nary a peep of opposition from Trudeau while we are being told we must transition away from producing hydrocarbons. Prices for oil and gas were low and we were told demand wouldn’t be returning. That tune may suddenly change..While rising oil prices are putting pressure on other jurisdictions, they are greatly improving Alberta’s financial outlook. Total government revenue for 2021-22 is forecast to be $14.2 billion higher than initial budget estimates. While the UCP is understandably celebratory with this budget windfall (despite a large deficit remaining), they should keep their celebrations muted. Alberta’s good fortune is also painting a big red target on our back as the federal government desperately seeks revenue sources..Justin Trudeau has never held much love for the prairie provinces and don’t think for a second he wouldn’t repeat the actions of his father with another federal cash grab..They won’t call it a national energy program again, but we can expect much the same thing. Western oil and gas producers will be drained in the name of the national interest. Anybody in the West who dares complain of this depredation will be accused of being selfish and heartless..If and when oil and gas prices return to lower levels, Ottawa will back off and leave the West alone. We will lay besmirched and used again..This fate doesn’t have to befall us though. We can be proactive rather than reactive for a change..Western provinces need to demonstrate they won’t take unprovoked attacks from Ottawa any longer. Saskatchewan Premier Scott Moe was mocked for saying Saskatchewan must become a nation within a nation, but he is right and is asking for nothing that hasn’t been given Quebec a dozen times over. Nobody is going to look out for the interests of the Western provinces aside from ourselves, so let’s get on with it..No more talk. It’s time for action. Form provincial pension plans as we withdraw from the CPP. Create provincial police forces as we withdraw from Ottawa’s RCMP. Bring in real citizens’ initiated referenda legislation and don’t be afraid to talk about full sovereignty for provinces as free states. It has to be made crystal clear to Ottawa that another NEP-style incursion upon Western resources will lead to nothing less than the dissolution of confederation. Nothing short of this will stop the federal government from pillaging us again..If Premier Jason Kenney wants a path to restoring respect for his leadership, it’s right in front of him. Peter Lougheed’s time in office likely would have been somewhat forgettable had it not been for his battles with Ottawa. Alberta wants a leader who will put Alberta first. Kenney has been less than solid on that front and it is indicated in his abysmal support numbers. So far, he has had little but words and failed court challenges for Ottawa..Demand Kenney either stands up with strength for Alberta, or make it clear he will be replaced by a leader who will..Otherwise, we will indeed be doomed to repeat history..Cory Morgan is Assistant Opinion & Broadcast Editor for the Western Standard.,.cmorgan@westernstandardonline.com
Few people remember the history of Pierre Trudeau’s National Energy Program (NEP) anymore, but we may be doomed to repeat it..The parallels between the political circumstances leading to the NEP of 1980 and the those of today are chilling..The most obvious, is that we have another Trudeau at the helm of Canada..Prior to the mid-1970s, Canada had little interest in Alberta’s oil and gas. While Alberta premiers and business leaders had tried to make a case for Central-Eastern Canada to embrace Albertan hydrocarbon products for decades, they were invariably turned away. We were told our oil was too expensive and impractical to serve the needs of the East. We were instructed to find other investors, and we did..Alberta oil and gas field development was carried out mostly by American companies in the 1950s and 1960s. Most of our products were sold to American markets including oil shipped through the Transmountain pipeline constructed in 1951. Eastern Canada got their energy products predominantly from foreign tankers and ironically from American sources in the east..In 1974 everything changed as OPEC imposed an oil embargo in retaliation against countries that supported Israel during the Yom Kippur War. North America was thrown into a prolonged energy crisis as oil shortages hit and costs skyrocketed. While the embargo ended after a few months, OPEC quotas and energy supply manipulations made insecurity a problem for years to come. By 1978 the world price for a barrel of crude oil had risen 700% to $13.54 USD per barrel. The Iran-Iraq war in 1979 cause the price of oil to peak at $40 USD per barrel..Canadians suddenly discovered the price of oil does indeed impact the price of everything. Inflation that had been problematic became a crisis. The standard of living for Canadians was being impacted and citizens demanded Trudeau (The First) do something, so he did..With the implementation of the National Energy Program (NEP) in 1980, Alberta’s oil suddenly became Canada’s oil..Massive tariffs were placed upon oil exports while Alberta was forced to sell oil to the rest of Canada at a mandatory discount. An 8% pre-royalty tax was placed on petroleum and gas revenues and the federal share of petroleum revenues was slated to increase while provinces (mostly Alberta) were to decrease their take. A Canadian ownership levy was applied to multinational companies to try and increase Canadian ownership to 50%. Again, we can’t forget it was Eastern indifference to Albertan oil and gas that created a large amount of foreign ownership in the first place..The impact on Alberta’s oil and gas sector was immediate and devastating. Companies went bankrupt or fled under the new restrictions. Petro Canada was created as a state-capitalist crown corporation. They couldn’t fill the void left by the companies ruined by the NEP..The NEP remained in place until 1986. During that period it drained upwards of $100 billion from Alberta while businesses and citizens suffered. Coupled with the high-interest rates of the day, many Albertans were literally forced to walk away from their homes..Brian Mulroney promised to end the NEP when he successfully campaigned to become prime minister in 1984. Mulroney waited two years before dismantling the program. He only followed through on his promise to Westerners when the price of oil collapsed. And he had devious reasons for it..Under the NEP, Ottawa placed a ceiling on oil prices, capping how much money Alberta could make. To add a little honey to the vinegar, Ottawa also placed a theoretical price floor, whereby Canada would pay artificially high prices for Alberta oil if prices collapsed..Mulroney was happy to keep the NEP while prices remained high. As soon as prices fell and Ottawa would have to pay a net-loss for Alberta oil, he got around to keeping his promise..Alberta was left drained, humiliated, and broke. It took nearly a decade to financially recover..Fast forward to today and we have another Trudeau in power as world oil prices are spiking. Inflation is reaching levels not seen in generations and the cost of living for Canadians is on the rise. OPEC is actively working to keep oil prices high. Europe is in the midst of an energy crisis while President Biden is begging OPEC to increase oil production in order to bring down world prices. Canadians are starting to raise concerns about the rising cost of living and the government is looking for a source of cash. Carbon-tax happy politicians like Trudeau and BC Premier John Horgan bemoan the high price of gas at the pump, without a hint of irony..The federal government has been signaling for years they don’t want the West’s “dirty” oil. The Energy East pipeline was and the Teck Frontier oilsands mega-mine regulated to death while Northern Gateway was outright killed. Biden killed the Keystone XL line with nary a peep of opposition from Trudeau while we are being told we must transition away from producing hydrocarbons. Prices for oil and gas were low and we were told demand wouldn’t be returning. That tune may suddenly change..While rising oil prices are putting pressure on other jurisdictions, they are greatly improving Alberta’s financial outlook. Total government revenue for 2021-22 is forecast to be $14.2 billion higher than initial budget estimates. While the UCP is understandably celebratory with this budget windfall (despite a large deficit remaining), they should keep their celebrations muted. Alberta’s good fortune is also painting a big red target on our back as the federal government desperately seeks revenue sources..Justin Trudeau has never held much love for the prairie provinces and don’t think for a second he wouldn’t repeat the actions of his father with another federal cash grab..They won’t call it a national energy program again, but we can expect much the same thing. Western oil and gas producers will be drained in the name of the national interest. Anybody in the West who dares complain of this depredation will be accused of being selfish and heartless..If and when oil and gas prices return to lower levels, Ottawa will back off and leave the West alone. We will lay besmirched and used again..This fate doesn’t have to befall us though. We can be proactive rather than reactive for a change..Western provinces need to demonstrate they won’t take unprovoked attacks from Ottawa any longer. Saskatchewan Premier Scott Moe was mocked for saying Saskatchewan must become a nation within a nation, but he is right and is asking for nothing that hasn’t been given Quebec a dozen times over. Nobody is going to look out for the interests of the Western provinces aside from ourselves, so let’s get on with it..No more talk. It’s time for action. Form provincial pension plans as we withdraw from the CPP. Create provincial police forces as we withdraw from Ottawa’s RCMP. Bring in real citizens’ initiated referenda legislation and don’t be afraid to talk about full sovereignty for provinces as free states. It has to be made crystal clear to Ottawa that another NEP-style incursion upon Western resources will lead to nothing less than the dissolution of confederation. Nothing short of this will stop the federal government from pillaging us again..If Premier Jason Kenney wants a path to restoring respect for his leadership, it’s right in front of him. Peter Lougheed’s time in office likely would have been somewhat forgettable had it not been for his battles with Ottawa. Alberta wants a leader who will put Alberta first. Kenney has been less than solid on that front and it is indicated in his abysmal support numbers. So far, he has had little but words and failed court challenges for Ottawa..Demand Kenney either stands up with strength for Alberta, or make it clear he will be replaced by a leader who will..Otherwise, we will indeed be doomed to repeat history..Cory Morgan is Assistant Opinion & Broadcast Editor for the Western Standard.,.cmorgan@westernstandardonline.com
