“If my voice is trembling, it’s because I am terribly angry, to the point where I would be happy to fight for our freedom and I literally mean with a rifle.”
“Let the Eastern bastards freeze in the dark!”
Very strong language, most will agree. The above quotes effectively illustrate the emotions felt by a majority of Albertans directed towards the Pierre Trudeau led federal government of the early 1980’s. The emotional outcry, of course, was in the wake of Trudeau’s infamous 1980 National Energy Policy.
The first quote came from an Albertan who called in to a radio station to voice displeasure and outrage with Trudeau’s policy. The latter was a phrase all too popular among the bumpers of many an Albertan car.
Ultimately, the political trauma induced by the wayward energy policy set off a generation of political bitterness. Albertans felt Trudeau couldn’t care less about their welfare. He mocked then Alberta premier, Peter Lougheed, saying Lougheed had been outsmarted by multinational oil firms. As Kevin Libin recently reported for the National Post, “Keith Davey, the Liberals’ campaign strategist, put it bluntly during the Liberals’ 1980 federal election: ‘Screw the West, we’ll take the rest.’”
The National Energy Program, largely the brainchild of Trudeau’s energy minister Marc Lalonde, sought more federal control over the energy industry. The impetus for such goals came in the wake of the extremely volatile oil price climate throughout the 1970’s.
It had three main goals: increase the federal share of energy revenues, boost Canadian ownership in the oil industry, and make Canada self-sufficient as an oil producer. The Trudeau government also introduced a tax to finance the federally owned energy company Petro-Canada, and gave grants to Canadian-owned companies to encourage exploration.
The Program was promoted as an effort to counter the prevalence of rising world oil prices ($1.80 a barrel in 1970, oil hit $30 by 1980), and the unpredictably wild price swings of 1972, and 1979.
Trudeau argued the NEP would pave the way for Canada to become self-sufficient in energy. How so? By forcing Albertan producers to sell domestically at a deep discount to world prices and allowing Petro-Canada an advantage in purchasing producing assets. Self-sufficiency would protect Canada from the volatility of the international oil prices so the logic went. Furthermore, Eastern Canadians would then be able to buy oil at below-market rates, and the federal government would have a view into an industry dominated by foreign owned petroleum companies.
Economic disaster quickly followed. Alberta’s unemployment rate shot from 4% to more than 10%. Bankruptcies soared 150%. A housing crisis ensued resulting in values collapsing 40% in both Edmonton and Calgary. As Libin notes, “it would take office landlords a decade to work off the glut.” Alberta’s government plunged into significant debt levels.
Ted Byfield, founder of the now defunct Alberta Report, was quoted as saying “there was an enormous amount of pain everywhere, Alberta was very much a small-business province. Behind the big oil companies, there were thousands of little people..all this was just brought to a crashing halt.”
Former premier Ralph Klein, who was mayor of Calgary at the time, said “thousands of people lost their jobs, their homes, their businesses, their dignity. Some took their own lives.”
By the time the Brian Mulroney led Progressive Conservatives cancelled the NEP in 1986, the federal government collected more than $100-billion in today’s dollars from Alberta. Many billions more in potential investment fled the province of Alberta that up until that point, reveled in an economic boom. The damage caused was immense: construction and energy projects were nixed overnight.
Energy minister Marc Lalonde later said the motive was what Albertans had suspected all along: “to transfer wealth from Alberta to Central Canada. The major factor behind the NEP wasn’t Canadianization or getting more from the industry or even self-sufficiency. The determinant factor was the fiscal imbalance between the provinces and the federal government,”
Lalonde added. “Our proposal was to increase Ottawa’s share appreciably, so that the share of the producing provinces would decline significantly and the industry’s share would decline somewhat.”
In effect, the NEP gutted the Alberta energy sector and jeopardized the country’s energy future.
The Canadian Association of Petroleum Producers later blamed the NEP for the loss of 15,000 jobs, a 22% drop in drilling activity, and a 25% decline in exploration budgets. Overall, industry cash flow and earnings fell 34% to $3.1 billion in 1981 from $4.7 billion a year before. As oil patch historian Paul Chastko notes, “the price paid by consumers of petroleum products almost doubled as consumption dropped by 6%. The industry realized far too late that the energy struggles between the province and the federal government had little to do with oil and everything to do with political power.”
Chastko adds, “the NEP decimated the oil and gas industry after Lalonde designed the NEP to alter the structure of power between Ottawa and the industry, between Ottawa and foreign owned energy companies, and between Ottawa and Alberta.” Economists later said that ultimately, the NEP cost the Alberta provincial economy more than $97 billion.
Albertans have long memories. The last liberal MP to be elected in the city of Calgary was Pat Mahoney. The year? 1968.
With ever changing demographics and the sifting sands of time, will Alberta forgive, in the upcoming federal election, the long tarnished Liberal brand? Will Albertans help elect the son of the man who did so much to damage Albertan prosperity? In politics, stranger things have happened. After all, did anyone in Canada think Rachel Notley and the Alberta NDP had a chance?