Happy Birthday

Alberta turns 100 today and things have never been brighter in Wild Rose Country. With a surplus of at least 3 billion this year and possible double that, the province is in a position to accomplish pretty much anything it wants. And, heck, the Flames nearly won a Cup last year and the Oilers landed Chris Pronger…times are good.

But you wouldn’t think things were this rosy if you listened to Albertans, from the politicians to the pundits. The latest complaint has been about the non-existant “NEP 2”. Even though there is no such program and no one in Ottawa has hinted that anything will be done to “rob” Alberta of its wealth, it provides a great straw man for people to take shots at.

This has predictably led to many bloggers posting their fond memories of the NEP. The Burkean Canuck gives a good analysis on the effects of the NEP here.

Here’s an excerpt from his post, written somewhat in response to my NEP post from early August.

The biggest lie of all is that central Canada helped Alberta during the dirty thirties. Ain't so. The Government of Alberta went hat in hand to central Canadian banks to restructure Alberta's debt, and they sought loan guarantees from the Government of Canada to take to the central Canadian banks. Both the central Canadian banks and the Canadian government turned Alberta down flat.

Things got so bad that by 1938, there was talk of merging Alberta, Saskatchewan, and Manitoba into one province, and the three Maritime provinces into another.

But the legend of central Canada's helping Alberta when the province was down and out is just that: a legend, a fiction that some occasionally find useful for their own purposes.

I don’t want to dwell on this too much, but I need to come back to it since one of the big defenses of the NEP (or equalization for that matter) is that Alberta had to pay a bit when times were good because the federal government was there, and will be there, for them when times are tough.

In the 30s, the Western Provinces had their loans guaranteed by the federal government to avoid bankruptcy. While digging for a reference to this in old University textbooks in my closet, I also came across this tid-bit in James Struthers' Canadian Unemployment Policy in the 1930s:

By 1937 Ottawa would be paying 85 percent of all relief costs in Saskatchewan; 71 percent in Alberta; 69 percent in British Columbia; and 68 percent in Manitoba; while still insisting that relief was a local responsibility. In Ontario and Quebec, in contrast, Ottawa paid only 29 percent and 32 percent, respectively, of relief costs.

There was also Diefenbaker’s National Oil Program that forced Ontario to buy Alberta oil, thereby helping the oilpatch grow, even if it meant higher prices for Canadian consumers. I also suspect a study on the amount of agricultural subsidies the federal government has dished out of the past century would find a staggering dollar total. And just recently, there was the billion dollar Mad Cow bailout.

Obviously Alberta puts a lot more into confederation than they get out, from a purely dollars and cents perspective. But this isn’t part of some grand conspiracy to rob Alberta of her wealth. This province hit the jackpot, not because Albertans work harder or because they elect Conservative governments, but because a lot of dinosaurs croaked here hundreds of millions of years ago. Like it or not, Canadians believe that the rich should help the poor, so that means Alberta is going to have to share some of the wealth.

I’m not advocating a new NEP, or an oil tax, or a change to the equalization formula – I’d just like to see an end to the over the tops screams that Ottawa is out to “rob” Alberta, when this is simply the nature of Confederation. Albertans should be grateful for the riches we’ve been blessed with and focus on using them to make this province even better.