10 How the West was Lost: Pierre E. Trudeau’s 1980-1985 National Energy Program
10 How the West was Lost: Pierre E. Trudeau’s 1980-1985 National Energy Program and Western Alienation
Jesse Fuchs
Introduction
It is the summer of 1973 in North America. Marvin Gaye and Jim Croce are topping the music charts, the United States has ended its war in Vietnam, pride events are taking place in cities across Canada for the first time in history,[1] the President of the United States was insisting he is not a crook,[2] and the international price of oil is a cool $3.40 a barrel.[3] Meanwhile, across the Atlantic, in the Middle East, a conflict is mounting between Israel and an Arab coalition led by Egypt and Syria. The conflict escalates to war when the Arab Coalition attacks Israel on the Jewish holy day, Yom Kippur. Global oil prices spike three-fold. Hostilities would eventually end between Israel, Egypt, and Syria, and global oil prices remained steady until 1979, when a revolution in Iran caused global oil prices to climb once again.
In the 1960s and early 1970s, the Western provinces of Alberta and Saskatchewan, Canada’s major producers of oil, exported most of their oil east to either Ontario and Quebec or south to the United States at world prices.[4] The world price of oil is the calculated by taking the average of the West Texas Intermediate market, the Fateh Petroleum Market, and The Dated Brent Petroleum Market.[5] That all changed in the 1970s, when the Organization of the Petroleum Export Countries (OPEC) oil embargo and the Iranian Revolution of 1979, saw oil prices soar from around three dollars in the early 1970s to over $34 in 1980.[6] The oil-rich provinces of Alberta and Saskatchewan began to enjoy healthy profits as the US increased the volume of oil imported from Canada. The two provinces that had once struggled economically, looked to capitalize further on oil revenue by creating financial safe guards. In 1975, Saskatchewan NDP Premier Allan Blakeney created SASKOIL, a crown corporation to capture a greater share of oil production revenues for the province.[7] In 1976, Alberta was flush with cash and created a Heritage fund, where 30 percent of oil revenue would be deposited for future generations. [8] [9] Not all of Canada was enjoying the financial windfall of high oil prices. While the Western provinces were generating increased tax revenues from exporting excess oil reserves, Eastern Canada, which was dependent on oil imports, suffered under the financial strains of high gasoline prices. The situation became a crisis in Canadian federalism.
On 18 February 1980, the Liberal Party won the federal election with Pierre E. Trudeau at the helm. The Liberals won a majority government with 147 seats but lacked representation west of Manitoba, where Conservatives dominated the vote. Although Trudeau had resigned as Liberal leader after losing the 1979 election to the Progressive Conservatives and Joe Clark, he returned in 1980 with an ambitious political agenda. For the next four years, his goals consisted of quashing