Monday, August 08, 2005

NEP

I'll be out out of town for the next week so don't expect any posts unless there's a national emergency or, you know, Stephen Harper wears a really funny hat. Before I go, a post on a topic Liberals in Calgary get more flack over than any other - the NEP.

I have been door knocking and had people who were in pre-school when the NEP was brought in tell me that it’s the reason they won’t vote Liberal. Over time it has grown to mythic standard even though no one in Alberta really knows what it was or what it did (contrary to popular belief, it did not allow Pierre Trudeau to sacrifice the first born son of all Albertan families). So this post is going to be my abbreviated defense of the NEP.

First of all, a little history. The NEP was implemented by the Trudeau Liberals in 1981 as the world price of oil soared. The NEP had three main goals:

1. Increase Canadian content in the oil industry by giving incentives to Canadian companies.
2. Keep the price of oil bellow the world price to protect consumers.
3. Tax oil exports to increase the federal share of the profits.

After protests, boycotts, and court challenges from Alberta Premier Peter Lougheed, he and Trudeau signed several revised, far less drastic NEP deals.

So what did the NEP actually do? Was it really evil in design? Did it destroy Alberta’s industries? Well, let’s take a look at the three goals I listed above.

Canadian Content
It’s hard to argue against this one. At the time of the NEP, Canada did not control its own oil. With its incentives program, Canadian control of the oil industry rose from 25% to 50% within a few years. By having the industry Canadian controlled, it left Canada more resilient to world events, more self-reliant, and getting a larger profit from the pie OPEC baked.

Fixed Price
Let’s remember that the price of oil had increased ten fold in the previous decade and everyone assumed 90$ or 100$ a barrel oil was on the horizon. Quite simply, the government had to do something to protect the 99% of Canadians who used oil. Albertans often feel they were sold out to protect Ontario consumers but that’s the nature of confederation. In the 1930s, Ontario bailed out Alberta and kept the province from declaring bankruptcy. In the 1960s, Diefenbaker’s National Oil Program helped Alberta’s oil patch at the expense of Ontario consumers. Trudeau had to speak for Canada and with oil prices expected to soar, Canadians wanted him to keep prices low.

Cash Grab
Make no mistake, there was a cash grab element to the NEP. But so what? Lougheed had done the exact same thing in the 1970s, by canceling existing contracts and then increasing the provincial share of the oil royalties. The federal government could legitimately tax exports and Lougheed himself admitted that his court challenge was a 50/50 shot at best.


As for the effects of the NEP – let’s be clear: THE NEP DID NOT CAUSE THE RECESSION. The oil industry in the States tanked at the same time and the NEP did not cause the world price of oil to fall. Trudeau was willing to renegotiate the NEP on multiple occasions as the price of oil fell.

Some will say the federal government was too confrontational, but Lougheed’s extreme inflexibility left them no choice but to be. When Joe Clark took over for his micro-term, his government suffered worse relations with Lougheed than Trudeau’s had. If Lougheed couldn’t work with a decentralizing, Alberta-born PM who swept the West and promised a “community of communities”, it’s hard to blame Trudeau exclusively for the bad relations. Lougheed knew that he could score cheap votes at home by fighting with Ottawa (sound familiar?) – even if it meant advancing the feelings of Western alienation in the process.

The bottom line is the NEP was a legitimate policy that fell victim to poor timing. It’s been an easy scapegoat all these years, even though no one understands its intent or consequences. There are a lot of good reasons for Albertans to be pissed off with Ottawa and the Liberal Party – I just wish they’d focus on some of them instead of living in the past and an ill-fated, good-intentioned policy.

188 Comments:

  • Grit-

    So you're ok with selling out Albertans to save Ontarians? Thats nice.

    Tell that to the hundreds (nay thousands?) of Albertans who lost their jobs, homes, and entire lives to preserve Ontario's "way of life".

    Make no mistake, putting artificial prices on Oil absolutely killed the Albertan oil industry as investment dollars flew out of Alberta to the US. Have you taken primary economics.... try putting an artificial ceiling on an international pricing model.

    The goals of the NEP were thus:

    (1) Remove American influence and replace it with Eastern Canadian. Maybe that is better to you, but not to most Albertans. Once again eastern Canada's grip on the oil economy is slipping as Alberta is becoming more self sufficient and attractive to American and other International investment.

    (2) Ensure Eastern Canada remained economically advantaged, at the cost of destroying the only profitiable industry in Canada. No one in the west benefitted from the NEP whatsoever. The NEP was based on totally disastrous economics.

    (3) Imagine for an instance that the world hadnt had an oil price correction. The Albertan economy was slowly grinding to a halt. As Ontario could no longer poach free oil from Alberta they would have had to import from the US supply, thus killing the artificial advantage sustaining Eastern manufacturing. Canadians reliant on huge social spending would find no money in the nest. Canada most likely would have been bankrupt in less than 10 years. The small 'depression' saved Canada altogether.


    Flash forward to today and we have a scarily similar situation. How long before Ottawa cant stand Western prosperity once again??

    By Anonymous Anonymous, at 5:38 PM  

  • I live in Ottawa, but your ignorance of the economics of the oil industry is breathtaking. Perhaps I will comment one day, after picking myself up off the floor, but for now I'll just note that anyone who believes that a "Made in Canada" oil price is a sensible policy KNOWS NOTHING about how oil markets work.

    Not even Jean Chretien, the first Energy Minister to begin the process of dismantling the NEP, bought in to that crap. You need a big history and economics lesson!!

    By Anonymous Two Cents, at 8:49 PM  

  • Hey CG,

    Thanks for the history lesson you old fossil! Not too many folks left who'll try defend the NEP. I'm glad to see you're still up to the task despite being such a geriatric coot :)

    Anonymous also makes some good points. Although I think he's a little too smart to be posting anonymously. Time to develop a pseudonym methinks.

    By Blogger Senator Catalyst, at 9:09 PM  

  • Intent follows the bullet. If you lean out of the 50th floor of a skyscraper and shoot and kill somebody who jumped off the 100th floor, you are guilty of murder. It is no defence to say "He would have been dead in 10 seconds anyway"

    By Anonymous Anonymous, at 12:16 AM  

  • The provincial PC's have stayed in power creating boogeyman issues with Ottawa. It is always a race to see how long a PC premier will take to blame Ottawa for some made in Alberta problem. Lougheed AGREED on behalf of Albertans to the NEP. If the price of oil had gone up Alberta would have benefited greatly. BUT, Lougheed gambled and lost. Then cried it was Ottawa's fault. This has been an enormously effective way to discourage Albertans from abandoning the abysmal tories.

    Even now as klein piddles our oil wealth away for his personal gain no one challenges him. Tory sheep all bleat how Ottawa is screwing us.

    By Anonymous Anonymous, at 2:59 AM  

  • Nothing to do with the NEP, I won't vote Liberal because I hate the sum'bitches.

    By Anonymous Don Mitchell, at 10:30 AM  

  • Come on Two Cents, discuss your groubdbreaking knowledge on the world oil industry.... We all await with baited breath. And do not forget to talk about the NOP, the program that was initiated by a western Prime Minister to single handedly kill the Ontario economy. I weep for the hundreds (nay thousands?) that lost their homes because of this terrible program. No wonder Conservatives can never win in Ontario, everyone just keeps shoving the NOP in their face and they know they are sunk...

    By Blogger iloveLaP, at 11:01 AM  

  • Most accurate estimates I can find is that the NEP DIRECTLY cost Alberta between 80-100 billion dollars and 50,000 jobs.

    Thanks Ontario!

    By Anonymous Anonymous, at 11:38 AM  

  • Let me put it this way. Does anyone except a Liberal or NDipper truly believe that there would be a single Loonie invested in Canada's oil patch if the government were in charge of setting domestic oil prices?

    Especially if that same government insisted on setting prices below the world market price?

    Or in any other major industry in Canada?

    Bureaucrats who intentionally distort global markets prove they don't understand global investment flows. Their citizens will pay a huge long-term price. Just ask the citizens of the former USSR.

    I lived in Australia at the time of the NEP and watched thousands of jobs shift from Alberta to Perth. These were real jobs and real people.

    And, yes, Virginia, the NEP did have a devastating impact on Canada's economy. (Note I do not say Alberta's economy because the entire country suffered from our socialist experiment.)

    People who ignore the lessons of history are condemned to repeat the errors.

    By Anonymous Two Cents, at 12:24 PM  

  • CG, I sincerely hope you are floating a trial balloon for "son of NEP" which many of us expect if Ontario's auto economy keeps sliding and Alberta's petro economy keeps surging. Oh how I hope the Libs go for it!

    By Anonymous Anonymous, at 2:29 PM  

  • I wonder if all these anonymous posters are the same person.

    By Blogger daveberta, at 2:54 PM  

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    By Anonymous Anonymous, at 3:41 PM  

  • TwoCents-

    That really is the entire shame of this entire debate isnt it?

    Regardless of how much Alberta was harmed by the NEP, over the long term all of Canada was negatively affected, and this is what most easterners fail to even realize. The USSR supported low fuel prices for decades. And it will take decades to recover from the horrible social experimentation.

    Both physical and human capital are fluid and will easily transfer throughout global markets. Canada's loss is always someone elses gain.

    By Anonymous The Original Ananymous, at 4:01 PM  

  • I wonder if Daveberta hurt himself thinking up such brilliant commentary?

    By Anonymous Anonymous, at 4:03 PM  

  • I have a great idea. Why not set a price on cars that are made in Canada for purchase in Canada.

    Say we set a price of $2,500 for compacts, $5,000 for full-size and $10,000 for SUVs.

    That would help people alot by making cars affordable.

    How it would affect the wages of unionized labor in Ontario? To quote Bubbles, "Who gives a #$%DS?"

    By Anonymous Anonymous, at 5:18 PM  

  • "I wonder if Daveberta hurt himself thinking up such brilliant commentary?"

    Nope, not this time. But thanks for caring. :-)

    D

    By Blogger daveberta, at 7:31 PM  

  • http://www.david-kilgour.com/uneasy/chap05.htm

    Marc Lalonde in a candid moment later confessed:

    "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.... 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." The Calgary economist Robert Mansell has calculated that the artificially low domestic price of oil since the early 1970’s cost Albertans approximately $60 billion.

    The results were devastating. The number of oil wells drilled throughout Canada dropped from 9,188 in 1980 to 7,186 in 1981, and the number of drilling rigs in service across Canada fell from 650 to 450 fairly soon after the NEP was introduced. Thousands of jobs in Western Canada were lost, primarily in the drilling and service sectors of the energy industry. Proposed mega-projects such as the Alsands plant at Fort McMurray were cancelled. Numerous western businesses went into bankruptcy. Many careers and families were broken; home mortgages were foreclosed in large numbers. The respected Economist magazine of Britain during the summer of 1982 summed up the NEP in politely brutal language: "The NEP has come close to wrecking an industry that until October, 1980 was drilling like fury finding enormous volumes of gas and much new oil, creating jobs and investment all over Canada and increasingly using Canadian-owned capacity in exploration and management.... The NEP drove Canadian exploration and service companies into the United States until only 150 drilling rigs were left, the lowest number since the 1960’s deCanadianization, in effect. Owners of capped-in gas wells had big debts and no cash flow. Oil serving companies in Alberta withered into bankruptcy."

    By Blogger matt, at 2:04 AM  

  • Having access to cheap oil really helped Ontario's industry int he long-term, didn't it.

    Ontario's manufacturing productivity has never recovered from avoiding the necessary changes from higher priced oil for 5 years of innovation from virtually the rest of the world.

    Alberta has long since recovered, though it suffered terribly from the virtual annihilation of a critical industry. Ontario probably never will. Just one more reason why Trudeay was the worst PM Canada has ever had.

    By Blogger OttawaCon, at 9:28 AM  

  • Actually, Ontario's manufacturing economy is doing just fine, as witnessed by Toyota's decision to expand production by building a new plant near Woodstock. Despite high oil prices, our unemployment remains low (around 4% in my area), and this Ontarian at least feels nothing but goodwill towards Alberta, Saskatchewan, Newfoundland and Nova Scotia for reaping the benefits of (in the latter two cases) long overdue oil riches.

    My recollection is that support for NEP was more about votes from Atlantic Canada than it was about Ontario or Quebec. Liberal support in Ontario at the time was, by no means, absolute (and it still isn't), so to suggest that the NEP was a conspiracy that all Ontarians were privy to is painting with far too broad a brush.

    So, respectfully, let the boogeyman go. I'm willing to debate the issues, but not if you're accusing me of something I wasn't a party to.

    By Blogger James Bow, at 10:44 AM  

  • "The results were devastating. The number of oil wells drilled throughout Canada dropped from 9,188 in 1980 to 7,186 in 1981, and the number of drilling rigs in service across Canada fell from 650 to 450 fairly soon after the NEP was introduced. Thousands of jobs in Western Canada were lost,"

    And the fact that the Saudis turned on the taps in 1980 and let loose a gusher had nothing to do with this?

    By Blogger James Bow, at 10:48 AM  

  • Debating the NEP is probably the funniest thing in blog-land.

    Please, please, please do two things:

    1) Make Joe Volpe your leader.
    2) Make a new NEP your big-ticket item in the next election.

    PLEASE!

    By Anonymous Anonymous, at 12:23 PM  

  • James,

    A single plant does not mean that Ontario's manufacturing productivity is doing fine. For a start, the auto sector gets a disproportionate amount of federal support. But more to the point, Ontario's manufacturing productivity tracked US until the NEP at about 90%, and began a steep decline in 1980 that puts it at less than 70% in some analyses. This is often concealed by using 'business productivity' in the stats, which of course captures, you guesed it, Alberta's increased productivity.

    I don't think it was a conspiracy, just classic Liberal 'buy'em with their own money' policy to everyone's ultimate detriment, using price caps instead of taxes.

    By Blogger OttawaCon, at 12:29 PM  

  • "Please, please, please do two things:

    1) Make Joe Volpe your leader.
    2) Make a new NEP your big-ticket item in the next election.

    PLEASE!"

    Even if the Libs did that, I suspect the Connies would still find a way to snatch defeat from the jaws of victory.

    By Blogger Paladiea, at 12:51 PM  

  • Though da grits’ take on NEP may not be entirely accurate, it does carry with it the important idea that the Albertan take on the situation has little basis in reality. Based on the comments no one seems to understand the origin or the nature of the policy, or the events that prompted it. The idea that some grave injustice was done is lunacy. Let’s take a quick look at what was going on in the world that prompted the NEP:

    1. OPEC had seized or nationalized just about all of the world’s most productive oil fields and had driven up prices dramatically.
    2. during the 70s there were two major oil shocks that drove the price of oil unbelievably high, over 100 dollars a barrel in today’s terms.
    3. in every decade in since the end of World War 2, the total amount of oil that had ever been consumed was equaled or surpassed--- ie: all of the oil consumed from the dawn of civilization to 1950 was consumed during the 50s. Then during the 60s the same thing happened, etc.
    4. The world’s principal supplier, the middle east, was incredibly unstable.
    5. it was agreed by all that there was a world wide shortage of oil and that oil stocks might run out.


    So you have all of these factors that seem to indicate massive price increases, an uncertain and dwindling supply and a demand that might double. For many all of these factors combined to make filling up their cars unaffordable. If this isn’t a case to implement some far reaching policy, I don’t know what is. The fact is, they got some of the facts wrong, but that was only realized based on hindsight.

    Now the 80s produced a totally different oil environment and market. Between Alaska, the North Sea along with other new explorations, oil shocks took on an entirely different meaning. Whereas 7 years earlier people couldn’t afford to fill their tanks, by 83-84 there were many promotions wherein stations would GIVE away gas for FREE. The entire dynamic had changed, and over production was the rule of the day. Once this was realized, what happened? The NEP was essentially dismantled and was eventually totally dismantled, started by PET, finished by Mulroney.

    Frankly, the NEP might best be seen as an example of good government, smart policy change and safe guarding the national interests.

    By Anonymous Luke, at 1:17 PM  

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    By Anonymous Anonymous, at 1:50 PM  

  • I always use High rise construction as a market indicator. (This is just my rule of thumb so dont give me shit).

    Anyhow, if you look at Edmonton's downtown, after the early 80's there wasn't a new high rise built and many more mega projects were cancelled. This was directly due to the NEP program destroying Edmonton's immense economic progress that occurred in the late 70s.

    I know so many people who's careers were destroyed, houses were lost, and lives destroyed because of this stupid program.

    Not even bothering to get into the economics of it, its amazing to see an Albertan trying to defend this divisive program.

    By Anonymous M.K. Braaten, at 2:14 PM  

  • Anonymous sounds like a pinko whiny socialist looking for a cash grab. "thousands lost their jobs, homes, and entire lives" welcome to the free market - lose your job, tough beans, get out there, pull yourself up by the bootstraps and make yourself attractive to the market. The guy who made the pet rock made $1 million. All it takes is innovation not another lazy another bum looking for a government handout. The only people who are ever unemployed in Alberta are the lazy dontcha know?

    By Anonymous Anonymous, at 3:09 PM  

  • NEP is a dead crutch some Albertans use to propregate their own conservative agenda. You have nothing to contribute to the future of Canada so you wallow in the past trying to make it the future. Get of the cross sugar, someone needs the wood.

    First it's Alberta's so wealthy we can separate. Then it's..Alberta is devastated by Ottawa time and again and we're so disadvantaged.

    Alberta's economy must change like the windswept plains.

    So which one is it, boys?

    The ONLY people who have sold out Albertans in the past 20 years is the PC party itself. Privatization of electricity, bad roads, bad schools, bad care of the elderly, Fort Mac...the list goes on.
    We have no debt only because of sacrificing and cuts to the bone on spending. And now??? Looks like we're bouncing backwards to pay for the years of neglect.

    If you want to look at the root of Alberta's plight you better start in Edmonton rather than Ottawa.

    By Blogger Canadian Perasma, at 3:27 PM  

  • Luke-

    Unfortunately, the world isnt based on "origin or the nature of the policy" but rather the effects of such policy.

    The Gun Control program was designed to limit crime, the fact it is totally ineffective and expensive is much more important than the intent.

    The NEP was designed to help Canada, it hurt Albertans especially, but Canada as a whole. Regardless of circumstances, creating artificial market ceilings helps NO ONE.

    Every single one of you your so called "points" deals with limited supply. Of course, the unfettered market deals with supply issues by DECREASING demand or INCREASING supply. More oil supplies were found, in other places than the middle east, at higher rates, and better technological innovation. People have begun to search for other and more efficient fuel sources. All of which would have most likely happened faster, and at less detriment to Albertans, if the NEP never existed.

    But of course, people THOUGHT we might run out of oil. Which is good enough reason to skewer Albertans in your mind? You must live in the East...good government policy doesnt hurt the country overall, genius... unless it just hurts Alberta more?

    By Anonymous Duke, at 3:30 PM  

  • Perasma-

    Take 100 Billion dollars out of Quebec's economy the next couple of years and see how they fare?

    We'd like it back in Edmonton. We wont even charge interest.

    PS- Our private providers are doing a better job than the worlds best socialist states: China, Cuba, and the USSR. Maybe your grandma would like to retire there?

    By Anonymous Anonymous, at 3:35 PM  

  • Two things to start. 1. I understand that Alberta was 'hurt'. 2. Yes, I live in the east.

    However, the fear over a massive energy 'crunch' or shortfall was GLOBAL. If the government had sat back and done nothing it should have been called incompetent. In this case the shortfall proved to be false, however, look at Texas. Texas and Alberta seem to have a lot in common. And you know what, the US had no NEP and Texas also fell on bad times. Not because of the NEP, but because the entire oil sector did. The NEP did not help, and yes, it made things worse, but it was not the cause or origins of Alberta's woes. This is something that Alberta needs to come to understand, along with the fact the NEP has not existed for 20 years!!!

    By Anonymous Luke, at 3:40 PM  

  • Luke, it hasn't been around for 20 years. But, with oil prices rising, its clear that the liberal bloggers are starting to beat the drums for price controls again.

    Of course, they don't want price controls on Ontario cars. they don't want price controls on Quebec cheese. Just oil.

    If it works for oil, it would work for everything else.

    By Anonymous Anonymous, at 3:56 PM  

  • I want oil prices to go SKY high. I think we need to invest in hybrid, clean, electric power, wind power... you name it. I'm happy that the SUV yuppy driving idiots are paying out the ying-yang. Though, I do feel sorry for those that need their trucks for work. I have more than one friend who is getting hit hard.

    By Anonymous Luke, at 4:27 PM  

  • Luke,

    I agree. Thank God Bush is going to get something done on this while the rest of us dick around with Kyoto.

    By Anonymous Anonymous, at 4:32 PM  

  • But, with oil prices rising, its clear that the liberal bloggers are starting to beat the drums for price controls again.

    Um... who are these people that you say exist? Please point them out to me so I can metaphorically bop them on the nose. And I'm saying this as an Easterner who could freeze in the dark.

    There is no support for price controls in my neck of the woods. The high oil prices are seen as an uncontrollable issue that's to be weathered (and which will have the additional benefit of yanking Newfoundland and Nova Scotia off of transfer payments, eventually). I myself have said that high oil prices are a good thing, because the pressure is on for us to stop urban sprawl, drive less, cut pollution, and cut the umbilical cord stretching from the Middle Eastern dictatorships.

    I myself would not be adverse to seeing prices rise higher, to bring about greater efficiencies in our society, to bring about that hydrogen economy that they talk so much about and, oh yeah, channel money into Alberta, Saskatchewan, Nova Scotia and Newfoundland instead of Saudi Arabia. We have lots of construction equipment and computer software that we'd be happy to sell to the oil producers, and high oil prices are something I'm happy to pay to bring about the sale.

    By Blogger James Bow, at 4:35 PM  

  • Ottawacon, it is true that Ontario's automobile economy is too heavily based on subsidy for my liking, but if you compare things with our competitors to the south, that subsidy isn't so heavy. The Woodstock deal was inked in direct competition from cities in Alabama which were offering far more subsidy. What sealed the deal was Ontario's highly educated workforce.

    Ultimately, automobiles may not be the place where I'd invest my money, as our population ages. Fortunately other sectors are going strong, especially the information sector. Here in Waterloo Region, we've had a number of major investments from out of province. We have an unemployment rate of 4%. It is for this reason, and others, that we can expect to see another 2 million people choose to locate around the Greater Toronto Area within the next twenty years; why Waterloo Region's population is expected to rise from 400,000 to 750,000.

    We did have an unproductive manufacturing sector, but a lot of it was blown away by the winds of Free Trade in the early 90s. The companies that stayed behind, and there are plenty, are ready willing and eager to face international competition.

    By Blogger James Bow, at 4:42 PM  

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    By Anonymous Anonymous, at 4:45 PM  

  • James-

    Seems to me your comments are dead on. Let the market dictate how to solve these problems, keep the governments hands out of things!! Capitalism is the worst system of economics, as long as you disqualify all other systems.


    Luke -

    You completely ignore global economics and effects. Alberta's depression hit 2 years earlier than anyone elses, do you honestly believe that was "magic"? Or people just anticipating a global rollback? Investment flocked out of Canada (to places like Texas), do you think that was a good thing? Texans recovered from the oil correction faster than Alberta, was that a good thing for us too?

    PS- 80 Billion dollars and 50,000 jobs 25 years ago is worth alot more than that today. When is Alberta going to be repaid for her generosity during the NEP?

    By Anonymous Anonymous, at 4:50 PM  

  • "PS- Our private providers (long Term Care) are doing a better job than the worlds best socialist states: China, Cuba, and the USSR. Maybe your grandma would like to retire there?"

    Oh really? Care to use a modern industrialized example, like say Sweden or Norway (where they are surpassing us). I mean the socialist providers in Cuba are better than your private providers in 1920s Latvia or in Botswana, so there... Is that even an intelligent point? Guess so by your standards...

    Bottom line is that no ones grandma should be woken up at 3 AM to lie around in there own faeces, but especially not in the richest province, in the richest country in the world. We can do better and we should expect better.

    By Anonymous Tony, at 5:21 PM  

  • Problem is that the federal govt invested billions in projects like the oilsands, and now that oilsands is the future of Alberta Energy - it would have a stake in saying how things are run regardless.

    I think that Edmonton/N. Alberta should separate from Calgary and let those blowhards down south freeze in the dark... Red Deer can come too.

    By Anonymous Anonymous, at 5:25 PM  

  • I’m not going to discuss the relative merits of the NEP because I’m not familiar with the global dynamics of the oil market at the time and don’t have sufficient information to comment intelligently on it with an objective policy perspective from this distant vantage. However I did suffer perhaps indirectly because of it, losing my job back then as a result of the severe downturn in the oil patch. Those were pretty bleak times for someone just starting their career in Edmonton. (I moved there the year before the bottom fell out of the local economy…)

    That being said, given the program has not been in existence for 20 years it seems rather odd that the furious resentment towards it so persistent, even amongst those who know little if anything about it. To me, it seems that the NEP has now simply become mythologized as an example of how those “big, bad easterners” are out to rape and pillage Alberta for their own selfish purposes. This of course feeds into the powerful sense of alienation and estrangement that virtually seems to define many Albertans’ sense of cultural identity. Much in the same way that Canadians in general define themselves as “not being Americans” and experience a mixture of love and hate (or contempt anyway) towards our neighbours to the south, Albertans seem to share this same animus when it comes to “Easterners” and most especially that demonic tribe that lives in and around the GTA. And funnily enough, the analogy works both ways — just as the Americans barely pay the slightest bit of attention to Canada, most folks in Toronto pay scant attention to Alberta (or the rest of the country for that matter — it’s a remarkably insular place in many ways.)

    Just a thought...

    By Anonymous RedTory, at 5:48 PM  

  • Kinsella

    Typical of you, a Prime Minister Cretin ;) lacky, to say "Make no mistake, there was a cash grab element to the NEP. But so what?..."

    Or "It’s been an easy scapegoat all these years, even though no one understands its intent or consequences." If no one understands it, then why the hell are you commenting about it? Is this really how Liberals think?

    Nice attempt at revising history. Where do you live now? Oh, yea it's Toronto.

    By Anonymous Anonymous, at 6:35 PM  

  • I may be pushing my luck posting here on this subject, but to hear some of these posts, you'd think that it was as if Alberta was the only jurisdiction to suffer economically from 1980-1982, and that it was all Ottawa's fault.

    I've not heard anything to suggest that the problem wasn't more to do with the Saudis and OPEC opening up the taps to flood the market with an oil glut -- something I know happened at that time and was directly responsible for the collapse in oil prices. This strikes me as far more damaging to the undiversified Albertan economy than Ottawa's National Energy Policy, regardless of how ill advised the NEP may have been.

    And Alberta was far from the only place to be suffering hard times at the time. Newfoundland's unemployment rate hit 20%. I remember jobs were scarce even in Ontario. I also saw livelihoods suffer. It's a terrible thing, but with the problem so widespread -- with every single nation in North America and Western Europe running serious deficits to fend off the 1980-82 recession (including Ronald Reagan's record debt load) -- I think I can do without the sense of victimhood, here.

    The NEP was twenty-five years ago, and the links between it and Alberta's economic downturn, to my mind, are tenuous. I can already see a more likely culprit to the problems of the day (Saudi Arabia). It doesn't seem right to me to use this as a grudge to hold against all Ontarians or all Easterners or whatever.

    And, BTW, Kinsella may live in Toronto now, but he was Calgary born and bred. Where one is born or lives doesn't always dictate their political viewpoint.

    By Blogger James Bow, at 7:15 PM  

  • I missed the part where Kinsella posted - why are people responding to him?

    By Anonymous Anonymous, at 11:44 PM  

  • I'm not sure, but I think the commentator in question was basically accusing CalgaryGrit of being Warren Kinsella in disguise. He quoted a line of text from the body of the post and then addressed his rebuttal to "Kinsella". Furthermore, by referring to Kinsella's current Toronto home, he seems intent on maintaining this assumption.

    Which is ridiculous. Everybody knows that the man behind CalgaryGrit's mask is Don Knotts. :-)

    By Blogger James Bow, at 12:17 AM  

  • I'm pretty sure the Kinsella comment was directed to me. Just a hunch.

    By Anonymous Luke, at 11:22 AM  

  • Summary of Ontarians Reasoning:

    - Alberta was going into a recession anyways so it was ok to steal 80 billion dollars from them

    - Alberta has recovered from their recession anyways, so it was ok to steal 80 billion dollars anways.

    - The rest of Canada experiences some hardships too, so its ok to steal 80 billion dollars from Alberta.

    - OPEC is bad, so its ok to steal 80 billion dollars from Alberta.


    I cant wait for our Seperation so we can watch Eastern Canada fall apart without being able to drain Alberta of their Natural Resource riches.

    - Alberta is the most prosperous province in Canada, so its ok to let the Eastern bastards freeze in the dark.

    By Anonymous Anonymous, at 12:00 PM  

  • " Texas and Alberta seem to have a lot in common. And you know what, the US had no NEP and Texas also fell on bad times. Not because of the NEP, but because the entire oil sector did." - Luke

    This is a critical piece of data that the Kleinites and Firewallers refuse to acknowledge. Foreclosures, layoffs, divorces, suicides, you can't lay it entirely at the feet of bad policy. You're giving the government too much credit.

    One reason some rigs were still being drilled in the early 80s is precisely because of the NEP's exploration incentives, keeping at least some people working, though not many. They weren't getting drilled in Texas, that's for sure.

    CG, I admire your effort to fluff up this one. But ultimately it's futile. The NEP in its entirety was an act of gross incompetence on the part of the Ottawa bureaucrats who wrote it to please their Quebec and Ontario masters. And this is a Liberal talking here.

    There were many other ways the government could have boosted Canadian participation in the energy industry without delusional price controls. That was just retarded, and was ultimately the most damaging to the economy and Canada's reputation in the industrialized world.

    On the other hand, if we left energy policy entirely in the hands of Gwyn Morgan and the Banker's Hall nobility, Alberta would be as phucked up as Saudi Arabia is now.

    An interesting footnote to the National Energy Program: Can any of you neocon droids guess what your patron propagandist Lorne Gunter was doing when it was introduced? Free subscription to the Western StunnedHerd to the first person with the right answer.

    By Anonymous Derek Raymaker, at 12:25 PM  

  • Summary of Anonymous' Reasoning:

    - The NEP, a front for Ontario, "stole" 80 billion dollars from Alberta TWENTY-FIVE (25) years ago.

    Summary of Anonymous' Conclusions

    - Alberta is owed 80 billion dollars + interest
    - Alberta should separate in retaliation
    - Alberta should never vote Liberal (EVAR)
    - Ontario is out to get Alberta (ALWAYS)

    Summary of Anonymous' "List of Things I'm Willing to Ignore":

    - NEP was signed by Lougheed and Trudeau
    - Alberta oil is owned by Canadian citizens, not strictly Albertans
    - Alberta is out of debt, in the money
    - People don't like whiners

    Grit, isn't there a way to get rid of these trolls? The Anonymous comments posting is getting tiresome...

    By Blogger Jasen, at 1:00 PM  

  • Jasen,

    I would suggest you do a little reading before you start labelling others as trolls.

    Step 1 - Figure out who owns natural resources, then fix your statement.

    And again, since alberta is out of debt, was sold out by the premier of the time, and people are upset their very livlihood was threatened and/or destroyed does that make it ok to decimate one province to save Ontario?

    The act is unparralled in Canadian history and is the biggest single cause of 30% support for Seperation in the west. Are you proud of this?

    By Anonymous Anonymous, at 1:56 PM  

  • Anonymous -

    Regarding the ownership of oil - agreed, I was talking beyond my sphere of knowledge. In my limited understanding of the Alberta Natural Resources Act, I thought that the province acted on behalf of the Crown, in the interest of the Crown. Perhaps I only hoped that was the case...

    As for your other questions: I don't think anyone is supporting the decimation of one province to bolster another. It seems to me that most if not all people commenting would agree that the NEP ended up being an untimely mistake. Where people disagree is with respect to the magnitude of the mistake. In your eyes the mistake warrants retaliation targeted narrowly towards Liberals, Ontario and Canada as it currently stands, despite the fact that it happened 25 years ago.

    You ask whether I'm proud about the NEP (or maybe you're asking whether I'm proud about the alleged 30% support for separation)? Why should I be? I personally don't think it's a matter of pride - I think you do.

    I'm just sick and tired of hearing complaints from citizens of "have" provinces. Stop dealing in the past and deal with the present, or even better the future. You're only a victim if you make yourself out to be one.

    By Blogger Jasen, at 4:44 PM  

  • "Eastern bastards"

    You know, if I was angry enough to call an entire group of people "bastards", and the group that I picked on were, say, Japanese, or Black, people would jump all over me, and rightly so. Because it is simply wrong to ascribe responsibility to an entire group for the actions of a bunch of individuals.

    I was eight years old when the NEP appeared. I really don't see why I should be the target (however unwitting) of this anger. Moreover, if you wish to suggest that all Ontarians are immoral Liberal party supporters thwarting the aspirations of Albertans, please remember that 40% of Ontarians didn't vote in the last election. And of the remaining 60%, only 40% of those decided to support the Liberal party.

    Hardly a ringing endorsement for the policies of Ottawa.

    This province is made up of individuals who are just as decent and hardworking as the average person living in Alberta, and I would like to see us treat each other with a bit more respect and less hatred and anger, because most of us are not responsible for the problems you may have experienced, now or twenty-five years ago.

    By Blogger James Bow, at 6:14 PM  

  • James -

    I'm glad one of us is a writer. Very succinctly and accurately conveyed my thoughts.

    By Blogger Jasen, at 6:47 PM  

  • Based on some of the arguments that have been posted here, I guess the Feds should take back every penny of the mad cow support money that has been dished out?

    By Anonymous Luke, at 2:37 AM  

  • I just met Harper on his glad as hell tour in Montreal.

    First: they had double the people they expected.

    Second: half were francophones (and this was on the West Island of Montreal!!!!)

    Third: he's a really terrific guy.


    GOMERY + 30 !!! GOMERY + 30 !!!

    By Anonymous Anonymous, at 8:58 AM  

  • One of the comments saying Trudeau was the worst PM ever was true until Martin arrived on the scene now it is Martin, Trudeau and Chretien. Imagine having three in one's lifetime. How lucky can a girl be. The NEP was a disgrace and the lieberals are even more of a disgrace. And I was born and raised in Hogtown, Ontario! I am just lucky now to live in sunny, humid free, debt free ALBERTA. Ontario is no longer the centre of the universe and sadly has become the Detroit of Canada. What a pity

    By Anonymous Anonymous, at 9:04 AM  

  • If you have only ever lived in Ontario you really have no idea how the west feels. I have spent half of my life in Ontario and the other half in Alberta/B.C. and let me tell you the arrogance that comes from Ontario (and I am not saying EVERYONE IS ARROGANT) but it is as strong and clear a message that could be felt. And that is why there is so much anger and resentment because actually I can tell you honestly that the west is a much much better quality of life than living in Ontario and the people are very humble and do not show off wealth (and believe me there is plenty of it and always has been) as I have seen in Ontario (basically Toronto my home town) I was born raised and spent over half of my life in Toronto but can tell you that living in the west has opened up my eyes to just how much we are NOT listened to out there and that = bitching. We want elected senate, lower taxes, more provincial control, etc etc. etc. Now I know my family in Ontario all want the same so how do we get it. Blow out the liberals for a long time. Stephen Harper would make the absolute best PM this country has ever seen if you give him a chance. The liberals are driving this country to separation and I know what I am talking about. I have become the biggest eastern born separtist in Alberta. It will happen and Ontario will go down!

    By Anonymous Anonymous, at 9:50 AM  

  • ALberta has full control over it's resources so in fact it is Alberta's oil to do with what they want just as Quebec has full control over their hydro electricity. Ontario is just getting a taste of their own medicine and they don't like it and continue to call it bitching from whiners. Well it ain't bitching or whining it is simply taking control of our own destiny because we don't like the decisions made by Ottawa on our behalf by a corrupt government that Ontario continue to elect. So wake up and then we can all get along again. We NO LONGER HAVE TO PUT UP WITH THE BULLSHIT and can leave and then you will have only yourselves to blame.

    By Anonymous Anonymous, at 9:57 AM  

  • So you're separating because you hate Ontario, eh. Are you jealous you don't have an 8.5% PST like they do?

    By Anonymous Derek Raymaker, at 11:13 AM  

  • Luke-

    Checked out your blog, what a worthless peice of propaganda and uninformed opinionated garbage that is. You should be proud.

    I notice you seem to ban every conservative poster you've had on there that disagrees with you.... maybe you should change the name to liberalthoughtonly.ca??

    PS- What percentage of the mad cow aid came directly to Alberta? And what is the ratio of that amount in comparison to 80 billion, adjusted to present value? Maybe Alberta should sue for the roughly 200 billion its contributed to federation through the NEP and equalization?

    By Anonymous Anonymous, at 11:28 AM  

  • It will happen and Ontario will go down!

    You see, it's very hard to listen to somebody when they express that level of blind hatred and arrogance, and who makes blind assumptions about groups of people he doesn't know. Essentially, when they are (metaphorically speaking) red in the face and shouting at you.

    I know that most people around me here in Ontario support the idea of a triple-E senate. I know that, economically speaking, Ontario can get along just as well as an independent Alberta. We have the brains, we have the resources and, as our trump card, we have water.

    Now, it's possible we can move towards better understanding each other if we checked our attitude at the door. I understand if some of you feel that you've faced enough attitudes or arrogance from assorted Easterners, and I understand exactly how you feel about that, as I'm encountering the self same behaviour here going the other way in one or two posters. But eventually, somebody's got to be the first to lower the rhetoric and try to articulate the points without the overblown accusations or sense of victimhood.

    As a member of a province that's contributing $23 billion per year into confederation, I guess I have as much right to claim that I'm being taken advantage of as you are. Or we can approach each other as reasonable human beings, set out in calm terms, without blame or rancour, what isn't working, and see if we can agree on how best to fix it.

    Interested?

    By Blogger James Bow, at 11:58 AM  

  • James,

    Until some Ontarians aknowledge they have benefitted much more from Confederation than Alberta ever has, and are willing to relinquish their grip on control of the national political scene, you can bet Albertans will remain hostile.

    Remember "the west wants in"? Remember "EEE Senate reform"? Remember who is consistantly demonized in the media?

    Western Canada has been pushing solutions for decades, Ontario is content to simply abuse a system designed to benefit central canada the most. You have the power, if you honestly believe your neighbors share the sentiment, get a movement for decentralization of power and regional representation. Maybe then we will believe your actions are more than just a ruse to maintain the status quo with only promises of reform in order to continue the exploitation of the 'hinterland'.

    By Anonymous Anonymous, at 12:37 PM  

  • to anonymous,

    We've banned two users in the history of the site. One was a holocaust denier and the other was an anti-Bush guy who started to spam us in an effort to shut down the site.

    There has been one temporary ban, for two weeks, after a 'conservative' routinely made libelous and slanderous accussations, for which we were legally responsible since they were on our site.

    The beauty of freethought is that you have the ability to come on and post whatever you want, as well as comment on what I and the others right.

    As for your mad cow stuff, you missed my point. But considering the comments you made about my site, that's not surprising, especially coming from someone who wont even put their name on their comments.

    By Anonymous Luke, at 1:55 PM  

  • Luke:

    I would put my name when I comment (like when I posted an plea for you to put Joe Volpe in charge of the Grits and make NEP your top platform element).

    but, why can't the site work like at commentsplease where you can type your name in and post?

    -- Charles Fallon

    By Anonymous Anonymous, at 2:02 PM  

  • Well, anonymous, part of the problem, as you see it, is that we have more than 33% of the population of Canada within our borders. That's a far higher percentage of the total population than California (the largest American state) represents within the United States. Just how do you suggest we address the weight that naturally gives this province in this nation without making a mockery of the principles of democracy?

    Actually, I have an idea: proportional representation. This Ontarian knows that it is fundamentally wrong when 60% of those who bother to vote favour an option other than the Liberals, but still manage to get more than 60% of their seats saddled with Liberal MPs. Proportional representation, if applied throughout the country, would break up these regional blocks, would elect more Conservatives and New Democrats in Ontario, would elect Liberals and New Democrats in Alberta, and free us from the silly notion that one party or one viewpoint represents the thought process of everybody in one province.

    I know I'm far from the only Ontarian to think this way.

    Will you support the implementation of PR for the federal and provincial elections in Alberta as well as Ontario? If so, I think we've got one deal, and I'll redouble my efforts to make PR a reality.

    It wasn't Ontario that thwarted the inclusion of the triple-E senate under the Meech Lake and Charlottetown accords. It wasn't our fault that the Reform Party gave up on Preston Manning and went with the fundamentally inexperienced Stockwell Day. And most average Ontarians have not and will not vote for the current government in Ottawa. I can understand your frustration, and I can sympathize with it, but I will not be the target of your anger.

    Has Ontario benefitted from confederation? Of course, just as you have. It is true that we have reaped the benefits of bank profits, stock exchanges, sales of equipment, etc, but no more than New York or Chicago reaps the benefits of their surrounding states. At least some of Ontario's capital went west to invest in the farms and oil fields that now provides you with your livelihood. The $23 billion that we send out to confederation each year comes back to us as profits, just as the billions you send out to confederation each year comes back to you in the form of oil revenues. We are consumers of Albertan beef and oil and, right now, I believe we're paying the market price for oil. The Albertan workforce has been stocked with hardworking individuals from the Maritimes, Ontario, Quebec, the rest of the prairies.

    I'm sure there's is more that we can do to lend real and meaningful assistance to each others' problems. Having relatives in farming, I know that we're staring down the barrel that represents the death of family farm, and I think our politicians should do a lot more to fix this (not just in Alberta, but in Saskatchewan and even in Ontario).

    I know that there are other problems that need fixing, but those problems are often not limited to Alberta. And though I want to do my part in the fixing, I am not directly responsible for their founding. I am as decent a human being as you are. I have a family just like you. I pay my taxes and I work hard. I do not deserve to be the target of your anger simply because of where I happen to live.

    I am asking what I can do to help. Please do not accuse me of some conspiracy to maintain the status quo. Let us talk as two individuals, not as representatives of provincial anger.

    By Blogger James Bow, at 2:50 PM  

  • Charles,

    The reason we don't allow comments without memberships is because the site use to get a fair amount of spam posts for russian whores, russian banks and just about everything else russian. The membership solves 99% of those issues. Feel free to send me an email at luke@freethought.ca if you want to discuss anything else. I figure we don't really have the right to use someone else's blog as our personal communications forum.

    By Anonymous Luke, at 3:48 PM  

  • Quebec seperation is inevitable. Then Ontario will out number the rest of the provinces put together in poplulation and votes. How can anyone see that as fair? Even today, with the Bloc effectively neutralizing the Quebec vote this is the way the Canada works right now. Not even blatant corruption can bring down the Liberal government. The history of the Liberals in Canadian government is that of hindering Alberta. The NEP discussion proves that. The Liberals will not change.

    Its not that Alberta hates the anyother part of Canada. Alberta is about to go through another major boom. Why should we want to be screwed over again? The only Albertan that would want to stay is a masochist.

    There needs to be a serious forum that discusses this. Seperation is a reality Canada is going to have to face.

    By Anonymous Anonymous, at 3:57 PM  

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    By Anonymous Anonymous, at 4:17 PM  

  • Quebec seperation is inevitable. Then Ontario will out number the rest of the provinces put together in poplulation and votes. How can anyone see that as fair?

    I have to ask: how is this unfair? Perhaps it is an accident of history or perhaps it's just a sign of our economic strength, but the fact is that we have these people. These people chose to live in Ontario. What would you propose to do to alter that reality? And what measures could you possibly take that wouldn't violate an individual's right to life, liberty and the pursuit of happiness?

    Now, the way that we divvy up our seats *is* unfair, in my opinion. 60% of Ontarians who bothered to vote voted against the Liberal party, and yet we got saddled with at least 60% Liberal representation in parliament. When the Liberals swept this province, they weren't actually sweeping the votes. The first past the post system is the problem, here, producing results that I don't see as democratic.

    But this is not an Ontario problem.

    The Conservatives continue to sweep Alberta the way the Liberals swept Ontario from 1993-2000, despite the fact that there are 40% of Albertans who want somebody other than a Conservative representing them. Perhaps our focus should be on abandoning the first past the post system so that some diversity can show through in our regional representations; Conservatives in Alberta can find allies in Conservative Ontario MPs, and vice versa. Are you willing to go for this? If so, it sounds like something that we can work towards, regardless of whether we're from Ontario or Alberta.

    By Blogger James Bow, at 5:27 PM  

  • Life, Liberty, and the pursuit of happiness???? James Bow, that is not the Canadian way. One phrase which sums Canada better than a thousand pages of rhetoric is "peace, order and good government. The contrast could not be more stark.

    I'll paraphrase: Subsidize the weak, hamstring the strong, package it well and no one will bitch too much.

    By Anonymous Anonymous, at 6:09 PM  

  • Alberta contribute 13 billion. Ontario 23 billion. Alberta has population of 3 million plus and Ontario has a population of 10 million plus. Do the math

    By Anonymous Anonymous, at 6:14 PM  

  • look at the controversy you started! and from a whole bunch of faceless people too.

    anyways, i'm glad you wrote that entry. i don't what the truth is either way, but i do know that we need people to challenge conventional facts and wisdom, lest they become ossified into dogma.

    By Anonymous djc, at 6:26 PM  

  • Perhaps it would be well for CG to go back to the original doctrine that brought on the NEP. As a Grit, though, I'm not sure what he is after.
    On Oct 28/1980, when MacEachen stood to deliver his speech one of the first things out of his mouth was this statement:
    "The economic problems the international community is facing cannot be solved by nations acting on their own...This gov't...is ready to assume it's responsibilities in achieving an international economic system adapted to the world of the 80's."

    To some this might seem like a noble goal, but the agenda for this was established by a group of socialists, led by Willy Brandt, who produced 'North-South, a Program For Survival'.
    If you read this study, along with 'The Parliamentary Task Force Report on the Brandt Commission Report' you will clearly understand how it was designed to rape Alberta. It was socialism on a broad scale. Trudeau established the North-South Institute, in Ottawa, which remains a major influence on Liberal foreign policy, to promote this agenda.
    You might also want to compare the Club of Rome study titled 'Reshaping the International Order' for additional influences.
    The 1980 and 1981 budgets were pulled directly from those 2 studies.
    The Liberals continue to try and implement the policies outlined in these studies, so it would be worthwhile studying them as original documents, while examining more recent developments in this thought process.

    By Anonymous Larry, at 7:25 PM  

  • In fairness, I should point out that all Canadians were as much adversely affected by these budgets as Alberta was.
    I was involved in a national petition to get the Governor-General to dissolve parliament and call a federal election over these two budgets, and we got as much support from Ontario and Eastern Canada as we did from the West. Ironically, the petition was killed by Colin Brown and the National Citizens Coalition.
    Another example of ways that conservatives keep stabbing each other in the back.
    There are good people from the Conservatives and Liberals, who want good, responsible governance, and we would do well to agree on principles, instead of bashing each other over the head.
    I don't mind that we don't agree on everything. How boring it would be, and how distatseful to good governance. In fact our differences are the only checks and balances we have in this country.
    But let's at least agree that good government must first be established, so that it's not spinning that becomes the order of the day and the resulting justification of foul deeds done to all Canadians.

    By Anonymous Larry, at 7:47 PM  

  • "Alberta contribute 13 billion. Ontario 23 billion. Alberta has population of 3 million plus and Ontario has a population of 10 million plus. Do the math"

    Actually, 12 million. I never said we were contributing more than you, but we were contributing. Thus, any suggestion that "Ontario is going down" is not only hateful, but inaccurate.

    Frankly, if Alberta and Quebec went, we'd go it alone as well. We could make it, as could Newfoundland and Nova Scotia. British Columbia has its access to the Pacific. But where does that leave the other five provinces?

    By Blogger James Bow, at 8:11 PM  

  • Are you going to answer the other points about proportional representation and the silly notion that swept provinces think with one party's worldview?

    Thanks for your sensible contribution, Larry.

    By Blogger James Bow, at 8:15 PM  

  • Life here in Alberta is so much better than it is anywhere else. Clean air, low taxes, you name it. I'm so glad I live here and not in socialist Ontario/Quebec/wherever. Furthermore, we're going to separate from Canada. Why? Because we're forever being screwed and generally oppressed by the dark forces of Ontario/Quebec/the ghost of Trudeau. Poor us, poor us!

    By Anonymous Get a grip!, at 10:44 PM  

  • I love Ontario and Alberta and for that matter let's include B.C (the three provinces I have lived in) but by far the best is Alberta because we demand good government, we really do look after ourselves and detest depending on government but at the same time we would like some respect for all the contribution we make to this country and we NEED a voice. However, we DO NOT want or will ever want a voice which is coming from a government that will do and say anything to be elected. They have lied and stolen money from us (all of US not just Albertans) and they are ruining this country. Quebec detests them and so does the majority of westerners. So if Ontario is interested in preserving this country get out and work against the liberals in the next election. They have to be put out of office for a long long time. Then and only then will we start to get along and work together to build this country to be the once strong united force we were in the past. Having said that, I also fear that things have been destroyed too much and that is not possible. But we can no longer be controlled by this government which has continued to pull the wool over the eyes of Ontarians. We are living in a very autocratic country by continually having the same government back in office. Klein has not been perfect but he has always gone to the people to find out what we want and then he proceeds. Martin does what he thinks will get him back in office and he dithers about everything that comes before him. He is a very incompetent pm and has to go. Let's clean house there by getting rid of the liberals next time and start to build a new party of liberals that can be trusted and admired.

    By Anonymous Anonymous, at 12:06 PM  

  • I do not want to defend the NEP, but ideological comments here are, well, silly. The World price of Oil peaked in 1979/1980 with the Iranian revolution fell rapidly after that. This had must bigger impact on the oil industry than anything Ottawa could ever dream up. In fact the impact of the two was not even close.

    Now, what should have been mentioned but has not is what a god awful job Klein is doing taking care of the oil industry. Even with transfer payments, Alberta should be just rolling in cash a la Norway. The are not. The Walrus had an article on this a while back.

    By Blogger Koby, at 9:42 PM  

  • That's thanks to the monumental Ponzi scheme that is electricity deregulation, a program so retarded it makes the NEP look like a stroke of genius.

    By Anonymous Derek Raymaker, at 11:24 PM  

  • I can't believe we're still talking about this. We aren't mad at the Germans or the Japanese for WWII! Or the Russians for the cold war!

    It's time to move on. If we dwell on what a bunch of geezers did to each other in the past, of course there will be problems.

    By Blogger Brent Gilliard, at 1:10 AM  

  • Ah my favoirte topic the NEP, good on ya Grit. Since Waugh, Levant, Gunter, Byfield and the rest of the old Alberta Report crew spread through out the Alberta dailies constantly harp(er)on about this, it was nice of you to put the record straight.
    Those of us rational and reasonable enough to look at the historical empirical data are lone voices in the wilderness. And the knee jerk reaction of the responses here show it.
    1980 World Recession begins, oil begins to rise, but inflation spirals, most provinces EXCEPT Alberta experience a recession as does the Federal Government.

    1982 Oil prices top out. Alberta Government makes budget predictions on high price of oil, $32-$35 a barrel.

    1984 Alberta in the throes of full fledged recession along with the rest of North America and the bottom drops out of the Stock Market, worst crash since 1929.

    From a short artifical boom, the recession that hit Alberta coincided with the NEP. But it was the recession stupid NOT the NEP that caused the collapse of the oil industry, as Americans packed up and headed south.

    Coincidently those same American Oil companies folded up their operations in Texas devstating that states economy as well. And Texas did not have a NEP.

    The creation of Petro Canada an NDP idea saved the oil industry and revitalized it in Alberta during the crash.

    And it made a profit, as did the Federal and Provincial Government priming the pump of oil sands development,(Kyensianism Lougheed style) despite the continuing cost overruns of Bechtel.
    (Which like Halliburton today is still doing cost overruns in the millions).

    We are suffering with low royalty and tax payments in Alberta from big oil now cause of the tax relief given them in 1982. Yep the deficit crisis of 1993-1995 was a result of this royalty and tax give away.

    This year Alberta earned a measly $385 million in oil revenues, our revenues from Cigarettes and Gambling are higher.

    So for all you right wing nut respondants quit whining about the NEP and take a course in MacroEconomics.

    By Blogger eugene plawiuk, at 3:37 AM  

  • Eugene-

    You obviously have no idea what you are talking about.

    385 million in oil revenues...? Maybe you should check that out.


    Oh and BTW: What does macroeconomics say about artificial price controls in a global marketplace?

    Another libby-lefter sucking up the propaganda.

    By Anonymous Anonymous, at 12:27 PM  

  • Eugene,

    Good job, keep posting!

    What are trying to do? Get your own show on the CBC?

    Thanks for reminding how the NDP ideas "saved the Oil Industry" with Petro Canada.

    For those not around during that time, Petro Canada was notorious for overpaying for its assets and for patronage posts by hiring Liberals as executives.

    The first Petro Canada CEO was Maurice Strong. Maurice Strong has recently resigned as Executive Co-Ordinator for United Nations Reform because of patronage and his involvement in the food for oil scandal. He put his step-daughter on the payroll and he has ties to Tongsun Park. Tongsun Park allegedly invested millions of Saddam money in a business of Strong's son. Google it, you will be suprised at what papers like the London Telegraph in the UK are reporting. He used to work for Power Corp, and gave Paul Martin his first job and was his mentor. Strong is also the primary Kyoto architect. Another Alberta sore spot.

    By Anonymous Anonymous, at 2:45 PM  

  • Traitor.

    By Anonymous Jefferson N. Glapski, at 12:31 AM  

  • To quote an anonymous idiot...

    I cant wait for our Seperation so we can watch Eastern Canada fall apart without being able to drain Alberta of their Natural Resource riches.

    Right, and in 20-30 years when Alberta's oil economy dies up completely and the rest of the country has weathered the storm and moved on to hydrogen and other alternative energy sources, where will the Alberta Empire be then?

    By Anonymous Anonymous, at 8:33 PM  

  • NEP 25 years on.
    Blame Trudeau and blame Ontario for the continued hard feelings. Ontario votes 'em in and holds the purse strings. By doling out the money to the Atlantic provinces and Quebec, Ontario keeps its grips on the purse.
    That game only lasts as long as there is the money. Alberta with these levels of surplus have the ability to bypass any program bribe/blackmail that Ontario has.
    Incidentally a nice stat on the debt. Summing across the nine years of Conservative government, the federal government actually spent about $14-billion less on programs than it collected in revenues. Every dollar of the $300-billion added to the debt during the Tory years was interest on the debt the Liberals left behind.
    Blame Trudeau again.

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  • When Petro Canada was formed we were stuck with a 1 cent a liter tax on gasoline to pay for the creation of that same company. I wonder if we still are paying it? By the way, the NEP cost me my job, I didn't see any federal job money like auto workers in Ontarion get when they get laid off, and they don't have to qualify for that EI benefit like we do out here. Kyoto is the same, tax and punsh Alberta's oil and gas industry, but the auto plants are exempt. Do it again and we should have our own "Boston Tea Party" and then youe "eastern bums and creeps" can "freeze in the dark".

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    By Anonymous Anonymous, at 8:37 PM  

  • Hey, all you brains from Ontario who feel the NEP didn't do too much damage. My family literally lost our life savings while trying to make a go of it in Fort St. John and literally, over a period of about a week, our savings were gone, so were the people. Try and think how you would feel driving away from your house that the bankd just took back with your kids in the back. Don't feel to good. We don't forget your socialist experiments. By the way if the west was so bad, why are so many people moving away from the hell hole they call Toronto and moving west where families can actually flourish in good healthy communities. Martin can take Trudeaus middle finger and stick "you know where".

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  • As a lifelong Albertan highly familiar with the history of the NEP, I'd like to make a few comments:

    -The NEP was, in fact, the primary cause of severe downturn in the oilpatch in Alberta. The American investors and oil companies immediately left the province in droves (which was exactly the NEP's goal). PIP (petroleum investment and production) credits were "designed into the NEP" to encourage Canadian producers to offset the effect of American producers leaving the province. Unfortunately, the PIP component of the NEP failed to promote the discovery of new oil in northern Canada and Alberta at anywhere near the rate that the Americans had been finding oil in Alberta. There is a famous saying in Calgary-- Dome Petroleum (as an example) was great at finding PIP grants, but not particularly good at finding oil.

    The world crash happened in 1982-1983, not 1980 as one poster seems to believe. It was NOT contemporaneous with the introduction of the NEP. For 2 years Alberta spiralled into recession while Texas enjoyed huge oil revenues.

    Because the NEP didn't hold up the "exploration and discovery" side of its promise, were it not for the crash, the NEP probably would have eventually destroyed eastern Canadian industry by shutting down the oil industry in Western Canada, forcing Central Canada to purchase expensive oil at world prices. It would, in effect, have had the exact opposite effect it was intended to have. It was a fundamentally flawed policy.

    Estimates put the cost to Alberta at between 50 and 100 billion dollars, but there is no consensus as to whether the NEP really did anything positive for central Canada.

    About 80% of the oil and gas in Alberta is owned by the Alberta government. 20% is owned by private freeholders. Zero is owned by the federal government or the "people of Canada." Regardless of whether you think this is a good thing or not, this state of affairs is guaranteed by the Natural Resources Transfer Act, which was constitutionalized in the Constitution Act, 1982.

    My guess is that Lougheed agreed on television that the “revised” NEP (allowing the Canadian price to eventually trend to world levels) was “good” for Alberta is because he knew it was impossible to stop the NEP and could at best only bargain for minor improvements to the program.

    Some like to pretend that Alberta will run out of oil in 25 years. Unfortunately for this prediction, the total amount of oil locked away in Alberta’s oilsands is on the order of twice the rest of the world’s reserves, i.e. 1.7T barrels. (Source: Syncrude website). About 400B barrels is recoverable using present technology, which, at current rates of production, would take Alberta about 400 years to produce. Some also like to pretend that Ontario will soon be a hydrogen powered economy. The world will probably turn to alternative sources of energy well before Alberta runs out of oil, but California is light years ahead of Ontario in hydrogen technology, and they have barely begun to make the transition.

    Although there is some expansion in foreign automakers’ presence in Ontario (i.e. Toyota’s plant), the general consensus is that Canadian automobile production will decline. Public subsidies of the “big 3” go directly to the shareholders of those corporations, who are, of course, much wealthier than the taxpayers who support those payments. Presently, Asian manufacturers (notably, Hyundai, Honda, and Toyota) are forced to build in Canada in order to get around import tariffs. As their market share in Canada increases, they are required to build more in Canada in order to sell product that can compete on price with that of the big-3 producers. However, this will decline in the long run: as the big 3 producers continue to decline in market share, there will be less incentive for foreign manufacturers to expand production in Canada.

    The fact is, Ontario labour, not energy, is the prime cost determinant of mass production. As a fixed cost unit, it declines to a certain extent with mass production but then begins to level off. Ontario cannot, and will not, compete with Asia, Mexico, etc. Some like to pretend that Ontario’s educated labour force is a source of competitive advantage in mass production, but everyone knows that nobody who has a university education or a trade certificate aspires to be an automobile production line worker. It is likely the combination of investment subsidies and lower health care costs in Canada that won the battle between Ontario and Alabama. The education of production line workers is completely irrelevant, b/c they are among the most uneducated people in either of Alabama or Ontario.

    Ontario really is in deep shit. It’s pretending it’s not to be for now but that will change with a few more plant closures. The only hope is in moving toward more ‘high tech manufacturing,’ as in Waterloo and Ottawa.

    By Anonymous Anonymous, at 4:27 PM  

  • I'd also like to make one more comment. The comment has been made that "The NEP cannot be blamed because the crash killed the industry anyway."

    This is tantamount to murdering a person who happens to be terminally ill and then saying, "the victim was going to die anyway, so I'm not guilty of murder."

    Just a thought...

    By Anonymous Anonymous, at 4:49 PM  

  • Ummm, if you read your history books, the Government of Canada did not come in and resue Alberta from Bankrupcy.

    The good folks of eastern Canada pitched and helped out big time though... the citizens did that not Ottawa.

    Ottawa did create some oppresive relief camps... see the Regina Riot.

    By Anonymous Anonymous, at 6:55 PM  

  • Okay, first off - I do not, never have and never will think that the NEP was a good program. A well intentioned idea - yes - but very reactionary. Now despite the failures of the NEP, it was not the NEP that ruined the Alberta economy as Alberta Conservatives have successfully made many believe. The NEP is simply a convenient scapegoat that has allowed the Alberta Conservatives to stay in power for 35 years - turning democracy in Alberta into a futile exercise. If one actually examines world and economic factors outside of the dreaded NEP, it is evident that Alberta's fall from grace cannot be attributed to the NEP.
    The price of oil before the Arab oil embargo of 1973 was around $3.50 per barrel. The price of oil immediately spiked to over $10, and continued to rise exponentially almost to the $40 mark by 1980. There is a direct correlation between the Albertan economy at the time, and the price of oil. During oil's break-neck increase, the United States enacted programs such as phased price controls and an oil windfall profits tax. Canada was by no means alone in the quest to stabilize oil prices. Various price and usage controls were widespread across the globe.
    Albertan Conservatives attribute the 1981/82 bust to the NEP - yet 1981/82 saw the worst worldwide recession in 40 years. Prime interest rate reached a horrific 22.75% and mortgage rates were well over 20%. Borrowing money for anything - let alone large oil capital investments - was very tough and very costly. The price of gold dropped from $780 in 1980 to $315 in 1982. The TSX had the biggest drop of most of our lifetimes between 1981 and the end of 1982. Inflation reached about 13% in 1981. The Canadian dollar continued its decline (starting in 1977)to below the $0.80 USD level.
    The price of oil steadily declined from 1982 to the $11.50 mark in 1986. The fall of Alberta's economy can be directly correlated to the drop in the price of oil and the dramatic increase of the cost to borrow money. Oil sands projects are not profitable even now unless the price of oil is well above the $15-$18 mark. The cost to process tar sand into crude was even greater in the 1980s as the technology was not what it is today (all prices and costs in 2005 dollars of course). Of course, large oil sand projects were cancelled once it cost over 20% to borrow the money and the profit margin disappeared within a couple of years - regardless of the NEP.
    It is time for Albertans to move on. It is time for Albertans to see their country and the world through a clear lens - one not tainted by Tory propaganda and lies repeated so often that nobody is willing to dispute their accuracy or validity.
    The NEP was a political and economic mistake, but it has already been made. Federal politicians are free from making the same mistake again as we have all learned from it. Albertan anger should not be directed towards the party that has moved on, but at the party that keeps dragging out a 25 year old scapegoat everytime it is politically expedient.

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