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August 29, 2005

Looking Back - And Forward At The NEP

Russ Kuykendall provides a little history clarification in his post on how the National Energy Program created the Reform Party of Canada;

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.

When Ernest Manning succeeded William Aberhart as Alberta's premier in 1943, he went elsewhere for financing to a consortium of New York City banks led by Chase Manhattan. Chase Manhattan was only too glad to take the risk, and Alberta proved to be good for it. Leduc No. 1 kicked off the Alberta oil industry in 1947, and Ernest Manning created a system of oil leases and royalties that is a model throughout the world, including in such far-flung oil producers as Azerbaijan.


Via the Shotgun where his crosspost has generated plenty of discussion.

Over at Waking Up On Planet X, frequent SDA commentor Candace has been tracking the media chatter suggesting that Alberta should start "sharing" the wealth before eastern Canada takes it becomes resentful. Be sure to check out this one with links to the CBC news archives about the NEP and creation of Petro-Canada.

Watch for that chatter to spike if Alberta continues to muse about the elimination of provincial income tax - something that I hope that comes to pass, if only to see what little blood there is drain from Lorne Calvert's face as he contemplates a Saskatchewan economy limited to civil servants and crown employees living off each other's taxes and utility bills.

Posted by Kate at August 29, 2005 1:44 PM
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Comments

Still don't know why Saskatchewan doesn't deleop it's oil sector. Oh wait. Yeah. NDP - No Drilling Province.

Posted by: Aaron at August 29, 2005 3:51 PM

Slightly O/T, but while I do support a cut in both personal and corporate taxes in Alberta, I gotta say the first thing I'd like to see Ralph do would be to eliminate the Alberta Health Premium...to the average family it would immediately save $1056 each year.

Posted by: Shabbadoo at August 29, 2005 3:58 PM

I don't think Alberta will be eliminating Income Tax in any big hurry. Apparently that would create too many problems for other provinces. Ralph Klien is just not in the game enough to do anything bold these days.

As an Albertan I'd like to see some of the "user fees" eliminated, especially the health care premium. I read that corporate taxes will go down to 8% by 2008 or something but being that I'm not a corporation and there is already a manpower shortage in Alberta I'm not entirely convinced this is a sound policy. I'm guessing that the strategy is, long term, you diversity the economy by enticing other industry into the province but where are these corporations going to find replacement employees for all the ones that don't come along for the ride.

Posted by: sheila at August 29, 2005 4:00 PM

Ralph, Bank it. Then buy the rest of Canada!

No Drilling in Sask because the rates and rules are outrageous compared to Alberta.

Posted by: Saskalerbatanwannabe at August 29, 2005 4:08 PM

Below an excerpt from Levan't column in the Calgary Sun--Appointing Lalonde--can the NEP be far behind?
BTW--NFLD did send aid to the West during the depression--they sent food and clothing to help out--and they weren't even part of Canada then!

-------------------------------------------------
Paul Martin has appointed Marc Lalonde to be the Quebec co-chair of the Liberal party's re-election campaign, expected in the spring.
Lalonde was Pierre Trudeau's energy minister who enacted the National Energy Program that brought Alberta to its knees. The Liberal party has never recanted or apologized for the NEP. Martin's rehabilitation of Lalonde shows that, if anything, the NEP and its abusive taxes and regulations are still considered morally valid by Liberals.

Posted by: George at August 29, 2005 4:09 PM

Aaron, Sask does have an active oil sector, at least it did when I lived there 'till '78. All those huge steel horsies teeter-tottering on the prairie... I guess you may have meant developing it further. I don't know what's happening there now. Perhaps Kate would?

BTW, I see parallels between Sask and NB, economically. Seems neither it really bothering to develop its existing resource assets. As long as Ottawa won't give us a hand up with these, we'll have to do it on our own, like Alberta did.

NB is getting nowhere fast. So what if we're bilingual and cheap? So what if we're a tourist destination (been losing tourist influx the past five years, according to the Telegraph Journal this AM)? We must develop our natural physical resources and advantages. The Port of Saint John hasn't grown at all and actually is far less active than when I moved here from Sask. Why not seriously look into tide-generated electricity (why, we've the world's highest tides!)?

I personally like the concept of having just one or two Atlantic provinces. It'd save so much in terms of the civil service costs, for just one thing. That'd make it possible to slash taxes quite a bit. Too bad there's no visionaries out here.

Posted by: Stephen McAllister at August 29, 2005 4:25 PM

One atlantic province? I can hardly wait for the naming disputes to begin.

Posted by: Monique at August 29, 2005 5:17 PM

I think it was Preston Manning who proposed the name, "Atlantica", to describe a north-south economic bloc between the Maritimes and New England. Or was it "Cascadia", which more likely pertains to a Western economic bloc?

I doubt, however, there's anytime soon going to be any political appetite for this sort of thing. If the region remains have-not much longer, expect a Reform Party of Atlantic Canada or something like that. I'm getting quite antsy here on the East Coast...

Posted by: Stephen McAllister at August 29, 2005 5:39 PM

Who cares about naming, anyway? It's the economy. It's efficiency and cost-effectiveness of government. It's about a better standard of living for Maritimers, as once was enjoyed (no more, though). It's about self-sufficiency. We deserve it as much as the West!

Hibernia and Sable Island oil and gas must only be seen as the BEGINNING...

Posted by: Stephen McAllister at August 29, 2005 5:45 PM

Speaking of natural resources and regional economy, according to Bourque, Canadian natural gas prices have skyrocketed due to Katrina. I bloody well hope the producing provinces, including NS, take full advantage of this and tell Paulie to P.F.O. if he reaches out to the windfall with his dirty hands...

Posted by: Stephen McAllister at August 29, 2005 6:52 PM

Marc Lalonde? How desperate can you be? Is he sending a signal to the west, or trying to look like he's doing something in the east. Libs must be real short of talent if they have to drain the old guys of embalming fluid and stand 'em and make 'em co-chair of anything. The Tories will have a field day with this.

Posted by: Mrs Thatcher at August 29, 2005 7:46 PM

Alphonso GAGliano for Minister of Energy! (That will teach you western clodhoppers to quityerbitchin.)

Posted by: dave at August 29, 2005 7:53 PM

I'm still mad that Diefembaker cancelled the Avro Arrow and a whole bunch of other things from 25 or more years ago.

Posted by: a at August 29, 2005 8:28 PM

Yeah, I'd still like to kick Dief in the pants for that one. MAJOR bad karma for Tories in general. Hmmm... should I sacrifice a few drops of jet fuel to placate the angry Arrow spirits?

Posted by: Monique at August 29, 2005 9:05 PM

Of course, the Avro Arrow was to serve as a long range bomber in the age when everyone else was building intercontinental ballistic missiles.... but let's not little things like obsolescence get in the way of hand-wringing.

Posted by: Kate at August 29, 2005 9:28 PM

Marc Lalonde's resurrection for the Liberal Party's re-election bid is a sign that the Liberals believe they are eternally entitled to rule the Dominion.

Side remark: Diefenbaker had warned Parliament, six months prior to the actual cancellation, that the Avro Arrow project was facing possible termination. Hindsight being 20/20, cancellation of the Arrow was a tragic mistake in that it set back military interceptor aircraft technology back several years. Suffice to say that it took the U.S. aerospace industry quite a few years to reach the performance of the Arrow - think about September 11th and the amount of time it took for America's best interceptors to attempt to catch up with the hijacked commercial airliners.

I believe Diefenbaker used his best judgment based on the information his government had at the time, but it was not the best decision given the intervening history of the world.

Posted by: SpaceNeedleBoy at August 29, 2005 9:38 PM

Didn't we get a Polaris Missile and a silo in North Bay, Ontario in return for dumping the Arrow? (And then announce-after the fact- that we would not accept the nuclear warhead that it was designed to deliver?) That missile is still there, and it still has a full crew looking after it. ( I wonder if it is still pointed at Russia?)

Posted by: dave at August 29, 2005 10:24 PM

That brings back memories... of driving by the missile silos in North Dakota.

*sniff*

They're almost all gone now.

Posted by: Kate at August 29, 2005 10:39 PM

This comment is for sheila who felt that instead of reducing income tax the Alberta government should remove the health care premiums. I think that would be a mistake. The premiums remind everyone that health care has a cost. All government services have a cost. Making those costs transparent and known to everyone is one form of empowerment and a means of control for the population at large.

Posted by: rebarbarian at August 29, 2005 10:44 PM

Sask has the right idea, if you have no money or at least spend all that you do have then no one will get jealous. I,m looking on the internet for an American wife so I can get the hell out of here

Posted by: kado at August 29, 2005 11:11 PM

"... a Saskatchewan economy limited to civil servants and crown employees..."

You mean like Regina? On the upside, "rush hour" traffic is virtually non-existent on Fridays.

Posted by: Sean e at August 30, 2005 3:08 PM

On Alberta tax-cuts rebates: I agree with rebarbarian; if you give things to people, they stop trying to get it themselves and they then begin to think they are entitled to that and more. Look at the welfare state and Indian reservations conditions at present. If everything is for free; then there is no need to work for it.
On Saskatchewan oil; they do have an active oil industry; unfortunately more than half the province lies over the Canadian shield where there are no hydrocarbons. Where they do produce; the pools are not as large.

Posted by: dave at August 31, 2005 9:43 AM

"Didn't we get a Polaris Missile and a silo in North Bay, Ontario in return for dumping the Arrow?"

No.

They were Bomarc missiles, to be used to intercept and destroy incoming Soviet bombers. The usual big Canadian dither was over the question of nuclear warheads. Diefenbaker eventually opted for convential warheads. That split his cabinet and his government eventually collapsed in 1963. The Liberals came to power, and accepted the nukes. But Trudeau phased them out in the early Seventies.

There are no Bomarcs in Canada now - or in the States for that matter.

Posted by: JJM at August 31, 2005 7:53 PM

"[I]t took the U.S. aerospace industry quite a few years to reach the performance of the Arrow"

Actually, the US aerospace industry was a net benefactor of the Arrow cancellation.

Where do you think all those Avro aeronautical engineers headed afterwards?

Posted by: JJM at August 31, 2005 7:58 PM

Given historical creedance to Alberta being the
Hinterland of the East. Who then really own's the
resource rolyalties and why should Alberta be the
whole benifactor? I believe Upper Canada is not only
entitled but historically the landlord. If the BNA was ever, so should it's spirit. ...Or is it Denmark?

Posted by: Rob at August 31, 2005 10:52 PM

Stephen,

What NB resources? A potash mine in Sussex? Trees? After PEI, New Brunswick probably has the worst endowment of natural resources in Canada (tidal energy is not cost effective). That wasn't true in the past, its forest endowment made it a great resource for the Royal Navy in the colonial days and led to a huge shipbuilding concern in Saint John. The best asset it has now is geographic location - and it's Moncton that's cashing in as the logisitcal Hub City (and its bilingualism). NB needs to concentrate on human capital and education - there are few easy outs on the natural resource side.

Others,

As far as the NEP is concerned, I'm pretty sure NAFTA would block any such nonsense. At the FEDERAL level, all of Canada's energy sector (subject to NEB regulation) is open for business. This issue is a red herring.

Posted by: Soviet Canuckastani at September 1, 2005 12:48 AM

"We deserve it as much as the West!"


WHY do you deserve it?????

That's like demanding respect. You can't demand it, you can only earn it.
Horny Toad

Posted by: Horny Toad at September 1, 2005 12:53 AM

JJM:
Regarding the Avro Arrow cancellation - you got it partly right. Large numbers of the displaced Avro engineers and professionals were quickly snapped up by NASA, McDonnell Douglas, Northup Grumman and Boeing in the weeks following the abrupt termination of their jobs.

However - the actual TECHNOLOGY which was developed for the Avro Arrow fighter interceptor was the most advanced in history. As Ottawa chose to immediately shut the plants to prevent (for the most part) Avro employees from taking drawings and specifications - and Ottawa essentially destroyed most of the work product..... the American plane makers did not receive access to the Avro Arrow design specs.

In short: the development of ultra-high-speed interceptor planes was set back about 15 years - not merely because Canada cancelled the Avro project, but that Canada and Avro management essentially destroyed everything they could get their hands on. I guess their Cold War hysteria was that the Soviets could obtain the information and exploit it sooner than their allies....we will never know the true story.

Coming from a BIG aerospace town here in Seattle, I recall as a little kid when Congress took a similar action with Boeing. In 1971, after two years of extraordinarily advanced research and production work, the Boeing Supersonic Transport project funding was cancelled by Congress. The project was shut down, throwing about 15,000 Boeing professionals out of jobs almost immediately - in addition to about 40,000 Boeing jobs that were eliminated during 1970-73 due to declining military and civilian aircraft production.

Ever heard the phrase, "Will the Last Person to Leave Seattle PLEASE TURN OUT THE LIGHTS?" Those were posted on some billboards - and I remember seeing them as a kid.

Posted by: SpaceNeedleBoy at September 1, 2005 10:07 PM
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