Talk:National Energy Program

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[edit] Editing Needed

This type of article should be kept as factual as possible. This topic is often a very devisive one in Canadian politics. Opinions based on partisan views should be restricted to discussion forums only.

[edit] Possible NPOV

I admit to not really knowing much about the issue at hand (and as such, will not edit), however this line struck me as possibly NPOV:

Unlike the culture-focused movement for separation in Quebec through the Parti Québécois, the impetus for Alberta's separatist movement was largely of provincial economic self-interest during a time when the Canadian people and economy suffered greatly under the burden of inflated energy prices.

It's different in tone from much of the rest of the article and basically sticks out like a sore thumb. I'm not even sure why it's particularly relevant to this article; it seems like something that might better belong on an article about Western Canadian Separatism or something. Although I don't have a horse in this race one way or the other, it just seems needlessly inflammatory. -Kadin2048 (talk) 00:20, 11 June 2008 (UTC)

[edit] Questions

What was the implication of the NEP on ordinary Albertans? I've heard stories of people riping out their hardwood floors and just abandoning their houses because it was so bad. What other things happened?

I've heard those stories too70.75.22.190 (talk) 10:35, 6 February 2008 (UTC)
The term used at the time was "Dollar deals." People lost their jobs, couldn't maintain their mortgage, so they "flip it" to another buyer for the price of one dollar. Very quickly, bank lobbyists got this illegal-ized.

What happened to the oil/gas industries in other countries of the world (such as Mexico) at the time of the NEP? Could the recession in Alberta have been misattributed to the NEP?

Good question. The oil dominated export economy of Norway saw terrific growth 1980 through until "... oil prices fell dramatically from December 1985 onwards" - http://eh.net/encyclopedia/article/grytten.norway . I'll see about integrating this into the article. DWiatzka (talk) 20:50, 2 April 2008 (UTC)

What would the NEP have done to Canadian ownership & participation in Canada's oil industry?

The NEP gave its newly created Petrocan a twenty-five percent "back-in" to any project it wished to take. Twenty-five percent of Hibernia is, ... a lot.

What were the general goals of the NEP? (increased self-sufficiency, security of Canada's oil supply, etc?)

Slap an obstreperous and hostile province around, currying favour with voters who did vote for your party?

How does the $16 billion in Alberta's Heritage Fund compare with similar funds elsewhere, such as Norway and Alaska?

As of April, 2007 the Petroleum Fund of Norway had $317 billion in it. It is forecast to reach $522 billion by the end of 2009. That's more than $100,000 per Norwegian. The Alaska Permanent Fund was worth about $40 billion as of July 13, 2007, despite paying out annual dividends to every Alaskan. The Alberta Heritage fund is chickenfeed by comparison. RockyMtnGuy 03:53, 5 October 2007 (UTC)

What is Canada's current energy security strategy? Is it better for Canada than the NEP was? How does it compare with the energy strategies of other countries in the world?

Why did Pierre Trudeau enact this? What was his motivation? Peak Oil?

- His motivation was to destory the Province of Alberta because they didn't vote for his party.

-- Keep in mind wage and price controls were 'in vogue' in the 1970's and early 1980's, both in Canada and in the U.S. While these methods do not work in the long term to solve economic problems, they were still very popular with the leadership of both countries.

-haha. His motivation was that he believed the NEP to be the right course for Canada. The guy was pretty much a socialist....if only we still had him... -Not Actually Vladimir Lenin 02:25, 18 March 2007 (UTC)

Yet everyone who ever talks about him says he was so intelligent, so quick witted, yet he was stupid enough to misunderstand basic supply and demand effects on prices and availability? This is not rocket science.
He was a big fan of fascist leaders and command economics. Trudeau's recently released university papers are reported to have been quite positive in their analysis of fascist politics and economics. DWiatzka (talk) 20:50, 2 April 2008 (UTC)

[edit] Impact on West

What proof is there that the policy had a severe effect on the economy in the west? Deleting Unnecessary Words 21:24, 8 Dec 2004 (UTC)

Agreed, need some sources on immigration, housing starts, jobless rates, whatever.70.75.22.190 (talk) 10:35, 6 February 2008 (UTC)

- Did you even read the article? If you suck $100 billion out of any economy, you will destory it.

I read the article and if found the $50 to $100 billion figure that Alberta lost poorly referenced. The article that's referenced at abheritage.ca merely mentions "scholars" as the source of the information without references.Pillowtalkbaby (talk)

Over the years a number of university professors have analyzed the federal transfers of money out of Alberta to the other provinces as a result of federal energy policies. It's a favorite topic of economists. I added a citation for one of them to the article. RockyMtnGuy (talk) 05:35, 27 April 2008 (UTC)

[edit] What did the NEP even do?

The article has vague allusions to what the NEP actually did. Maybe someone could add what it did and why that was opposed by the West? As far as I understand it (and this is why I don't edit the text) it wrestled control over the oil sands away from Alberta and to Ottawa, which promptly prevented foreign companies to invest / control the oil sands. - - I think the intent behind this was that the Government wanted to make sure that the oil would be available to Canada if necessary. - - Why was it so unpopular in Alberta? Because it prevented any investment into Alberta (who heavily was into the oil and natural resources business). - - Even today (in 2005) you can see that, be it in Edmonton or even Fort McMurray (I was there today), you can still see that somewhere around 1981 everything was frozen and only now it seems to be coming back.

Hello I am a grade 12 history student and am currently researching this article for my semester project. To the question why Pierre Trudeau established the NEP was simply for the fact that he wanted a more ( sorry ) communist approach on the spreading of resources that were being harvested in large amounts in the west. Though the money that was being pooled out of the west hurt the growing refineries/businesses and the fight against Americanism ( manifest destiny ), the east was in need of this money and this as well, in turn, allowed the french ( quebec ) referendum to slow down and settle allowing them to realize what mistake they could be making by dismantling from Canada itself. Truedeau was a great man, and even though bad at economics, knew what to get and how to get it done.

As with most things in economics the key is scarcity of resources. Oil rigs, like any other commodity, is a scarce resource. In enacting the NEP Trudeau increased the expenses related to drilling in Canada. This lead to a number of rigs leaving Alberta for more profitable jurisdictions. It exacerbated the effects of the economic downturn of the early 80s. Had the NEP not been in place the effects of that downturn in Alberta would not have been so severe. Schoeppe 00:55, 7 August 2007 (UTC)

To simplify as much as possible: In the late 1970s the price of oil was artificially inflated by OPEC. Canadians were paying these artificially high market prices. The NEP was designed to provide Canadians with lower priced oil that was more in line with it's "true" value. The crtiticisms occur whereas, Ontario's manufacturing base was the most reliant and the most hurt by an inflated oil price, and oil producing provinces (principly Alberta) in the West were forced to sell their oil at below market prices. The idea was that it didn't make much sense to cripple Canada's manufacturing industry with an artificially high bubble in oil prices when we had our own oil reserves that would be much cheaper. Hope this helps Rizla 20:33, 3 October 2007 (UTC)
That is an oversimplication. Actually, the crisis was precipitated by the Iranian Revolution, which caused the world's second largest oil exporter to cease exporting. This caused a global supply shortfall and a sharp spike in prices. It was complicated by the United States, which introduced a gasoline rationing system which badly misallocated supply to places where demand was not and caused service stations in major US cities to run out of gasoline while large amounts of gasoline were sloshing around rural areas. TV images of this panicked Canadian consumers (who were not at all at risk of running out since Canada could just cut back exports to the US) and caused demands for the government to do something. However, the federal government had a political problem in that Alberta oil only went as far east as Ontario. Quebec and the Atlantic provinces were dependent on oil imports and if they had simply frozen the price of Canadian oil, the price differentials would have resulted in the Ontario refineries putting all the refineries in Montreal and points east out of business. Since most of Liberals' political support was in Montreal and points east, this didn't work for them. As a result, they crafted the NEP to equalize prices at a low level across the country by taxing exports and subsidizing imports. However, the system had holes in it you could drive an H2 Hummer through. Biggest of these was the fact that the Alberta government had enough control over oil production to break the NEP, and took steps to do so. Alberta ensured that Ontario was well supplied while cutting back exports to the U.S., thereby avoiding a domestic supply crisis while causing major financial hemorrhaging in Ottawa. In addition, the NEP assumed the price of oil would go up to $100 per barrel, but the high world price eventually pulled a lot of non-OPEC oil onto the market, Iran came back on production, and the world price went down to $10 per barrel which wrecked the financial model of the NEP. As a result, the federal government, which had spent billions subsidizing oil imports and drilling for salt water in the Arctic Ocean, got very little back in the form of revenues, and instead of the promised cheap gasoline and tax revenues to spend on social programs, Canadians got expensive gasoline and massive government debt. Thus after a government change the NEP went the way of the dodo. This is the short version, I can elaborate if you want. RockyMtnGuy 03:35, 5 October 2007 (UTC)

[edit] 'Ever Since'

To mention the idea that 'ever since' the NEP the liberals would only wi a few seats and then refer to often shut outs is fine. I believe that the continuing feeling against the liberals in AB is in significant part due to the NEP. However a poll reported July 1st, 2005 in the Globe and mail about Canadians knowledge of history found that of the Albertans who answered only 21% could name it as the policy that brought the slogan: Let the eastern bastards freeze in the dark. 21% of Canadians OUTSIDE the maratimes could identify the Bricklin (compared to 7% of Canadains outside Alberta for NEP, and 44% of Maritimers for the Bricklin also:3000 Canadian pages for google search Bricklin New Brunswick and 21000 for search: NEP Alberta, and none of the first ten on Bricklin say:So hated is the Bricklin in New Brunswick that it has become firmly entrenched in the province’s psyche, an epic chapter of biblical proportions in New Brunswick’s 100 year[1] - dated September 2005, two months after the poll was done). If we refer to ever since and shut outs shouldn't this be mentioned? Alternatively we can drop the references to 'ever since' and 'shut out's which 'often' occur. Either or is fine in my view, but not both. It would appear there is continued anger against real historic grievances, but when people fight long enough they often forget what they were originally angry about. —The preceding unsigned comment was added by Jethro 82 (talk • contribs) 22:13, 5 April 2007 (UTC).

[edit] Impact on Western Canada - revisionist history

Okay, some Toronto-centric effete eastern urban fiction has crept into this article (2008-04-03), so let's discuss it:

  • Alberta Premier Peter Lougheed stopped development on several oil sands projects.[10] No he didn't and that's not what the cited reference [10] says. In fact, it was the international oil companies that pulled the plug on the projects. I know because I was part of the plug-pulling process. The night the NEP was announced, we plugged the new numbers into the economic models and reran the economics on all the projects. (The particular giant multinational I worked for had four giant supercomputers sitting on hot standby in the US for that purpose.) Then, at 08:00 the next morning, all the managers sat down with computer printouts, picked up the phone, and canceled every project that didn't show a profit. That was almost all of them. It only takes a few hours to cancel a few billion dollars in projects.
  • Given that oil sands production was not yet technologically or economically feasible, the gesture was largely symbolic. Not only was it feasible, it was being done. The Suncor plant had been in operation for several years, and at those prices was highly profitable. The Syncrude plant was under construction and would also make a profit. The problem was in all the other projects on the drawing boards, because the economics on those went negative under the new tax system (see pulled the plug, above)
  • He went on national television to announce that oil shipments to the rest of Canada would be cut, forcing the federal government to import more expensive oil to compensate. No he didn't, he cut back exports to the US. The sinister result of that was that the Federal government could no longer tax the exports to subsidize oil imports into Eastern Canada, so it ended up having to subsidize them by taxing consumers, which ruined the whole concept of "cheap oil" from their perspective. Trudeau couldn't just control the price of Canadian oil, because all the refineries east of Ottawa used imported oil and would have gone had to charge much more for gasoline than Ontario refineries - including the six refineries in his home town of Montreal.
  • After negotiations between Trudeau and Lougheed, the NEP was revised so that the price of so called "new" Canadian oil (discovered after December 31, 1980) would eventually rise to the world price but existing "old" oil would still be capped at 75% of the world price.[11] Yes, but that's not what happened in real life. Instead of going up to over $75/barrel, the world price of oil fell to around $10/barrel by 1990. This again ruined the whole concept from the Federal perspective, since (in addition to bailing out the Eastern refineries) they had to bail out the banks who had loaned money to the Canadian oil companies (enough to bankrupt most of the Canadian banks). This resulted in both gasoline prices and interest rates being higher in Canada than in the US, which was not the original intention at all.

Now, this interpretation isn't really NPOV, since I wasn't really an uninvolved observer, but at least it isn't fiction. RockyMtnGuy (talk)