The National Energy Program (NEP) 40 yrs later

[KinAlberta]

A really great article! Should be a “MUST READ!” for all Canadians.



Corbella: 40 years later, National Energy Program has lessons to teach today | Edmonton Journal

https://calgaryherald.com/news/local-news/corbella-nep





Its also great to see actual detailed facts laid out in an article and not just airy-fairy quotes and opinions strung together. The article even mentions the PGRT and the “back-in”!!!! This is all so exceedingly rare! Corbella even provided some inflationary adjustments for an even better retrospective!

Excerpt:

“Economist Robert Mansell agrees and says the assertion that Alberta’s ruined economy was caused by a drop in oil prices, and not the NEP, is inaccurate.

“Oil prices didn’t collapse until 1986. The precipitous decline in oil and gas activity in Canada was directly attributable to the NEP,” says Mansell, who has written a book on the NEP called Strength in Adversity: A Study of the Alberta Economy.

According to InflationData.com, Mansell is correct and Lalonde is wrong.

In 1980, the WTI price of crude was US$37.42 ($117.30 inflation adjusted price); it was US$35.75 in 1981; US$31.83 in 1982; US$29 in 1983; US$28.75 in 1984; and US$26.92 in 1985.

It wasn’t until 1986 that the price of a barrel of oil plunged to US$14.44 ($33.97 in today’s dollars).
...”

https://edmontonjournal.com/news/loc...e-c9c847c271b3


https://calgaryherald.com/news/local-news/corbella-nep

.

[elkhunter11]

Both Trudeaus seem to have wanted to destroy the Alberta oil and gas industry, while directing the profits it brings to eastern Canada.

[calgarychef]

Fantastic article.

[tbiddy]

Looks like JR is trying to finish what SR started.

I was born in ‘77 and remember the effects this had on our family. Lost our house and I remember the local church delivering toys and food around Xmas. We had to move away from friends and family so the folks could squeak out a living. Didn’t grow up with much but always had a roof over our heads.

[Redhorse Ranch]

Remember this: the majority of people in the ROC didn't give a damn back then, and they don't now. They keep right on electing politicians who are hostile to the west, and attacking those who are not.

[Twisted Canuck]

Thanks for posting that article...sort of. It actually upset me so much I feel sick, because I had to remember it all over again. Trying to start out as a young man in 1985, after Alberta was crushed by the NEp. And reading the comments from Lalonde about Albertans whining and bitching and feeling sorry for themselves....and seeing how JT has been absolutely maliciously bent on finishing the job. In 1985, I couldn't hardly find a job and now in 2020 my business is essentially wiped out after 20 years....Jesus wept, and I hate the Trudeau's and the liberals. The comment from Lalonde about the way for Alberta to participate is by electing Liberals...??? I'd choke myself to death on broken glass and drain cleaner first.

Separation for Alberta. That's my final answer.

[beansgunsghandi]

My dad worked in an energy related industry in Calgary during the NEP, and felt the pain. But he had the sense to realize that relying on a volatile industry wasn't solid long term, and diversified into another business. One day maybe Alberta will do that instead of blaming everything else (Ottawa, NEP, etc) for the problems when the price of oil starts declining (as it did by about 25 percent from 80 to 81 after a spike that any sane investor would recognize as a bubble, as the oil companies did). Prices kept declining, and Albertans kept blaming the NEP... Had the NEP remained in place Alberta and Canada might look more like Norway (no debt, huge reserve funds) and less like the **** show it is today after yet another energy bust where everybody blames Ottawa and not cyclical trends. But that will be an unpopular opinion , so I'll end it there and hope everyone enjoyed the new snow and tracking, the hunting has been great.

[Twisted Canuck]

Originally Posted by beansgunsghandi

My dad worked in an energy related industry in Calgary during the NEP, and felt the pain. But he had the sense to realize that relying on a volatile industry wasn't solid long term, and diversified into another business. One day maybe Alberta will do that instead of blaming everything else (Ottawa, NEP, etc) for the problems when the price of oil starts declining (as it did by about 25 percent from 80 to 81 after a spike that any sane investor would recognize as a bubble, as the oil companies did). Prices kept declining, and Albertans kept blaming the NEP... Had the NEP remained in place Alberta and Canada might look more like Norway (no debt, huge reserve funds) and less like the **** show it is today after yet another energy bust where everybody blames Ottawa and not cyclical trends. But that will be an unpopular opinion , so I'll end it there and hope everyone enjoyed the new snow and tracking, the hunting has been great.

So, you didn't read the article then, because you already had your mind made up about the real issue, and government policies had nothing to do with it? I will politely agree to disagree with your opinion, but you are welcome to it.

[OL_JR]

Great read thanks for posting that. Was just a wee lad in the depths of that recession but it had a big impact on my family like many others.

[beansgunsghandi]

Originally Posted by Twisted Canuck

So, you didn't read the article then, because you already had your mind made up about the real issue, and government policies had nothing to do with it? I will politely agree to disagree with your opinion, but you are welcome to it.

I did read the article carefully, and I think it's well-written rosy propaganda. That's an opinion, and you're respectfully welcome to yours too, but there are facts that don't agree with the author's position that it's all the NEP's fault. The dominant factor was the price of oil. Oil declined nearly 25 percent from its height in 1980 when the NEP came in through 1981, and continued to decline in a really ****ty global economy. That decline from its crazy peak in a high-interest rate bad economy is what kicked Alberta's economic buttocks, not the NEP, although some oil companies, the Alberta government and some Albertans continue to blame the NEP because that's easier than looking in the mirror. I'll blame maybe ten percent of the economic slam on the NEP, and 90 percent on bad planning, the general economy and the price of oil tanking to incredible lows from '80 to '86. Same thing as today: It's not Ottawa's fault, it's ours for relying on a volatile resource, but everybody wants to blame Ottawa and Trudeau again. It's a tired narrative that doesn't hold, ah oil... Back to cleaning hunting gear...

[calgarychef]

Originally Posted by beansgunsghandi

I did read the article carefully, and I think it's well-written rosy propaganda. That's an opinion, and you're respectfully welcome to yours too, but there are facts that don't agree with the author's position that it's all the NEP's fault. The dominant factor was the price of oil. Oil declined nearly 25 percent from its height in 1980 when the NEP came in through 1981, and continued to decline in a really ****ty global economy. That decline from its crazy peak in a high-interest rate bad economy is what kicked Alberta's economic buttocks, not the NEP, although some oil companies, the Alberta government and some Albertans continue to blame the NEP because that's easier than looking in the mirror. I'll blame maybe ten percent of the economic slam on the NEP, and 90 percent on bad planning, the general economy and the price of oil tanking to incredible lows from '80 to '86. Same thing as today: It's not Ottawa's fault, it's ours for relying on a volatile resource, but everybody wants to blame Ottawa and Trudeau again. It's a tired narrative that doesn't hold, ah oil... Back to cleaning hunting gear...

I imagine if Ottawa wasn’t busy cleaning out our wallets we would be like Norway. They don’t have that problem.

[ctd]

[QUOTE=beansgunsghandi;4255188]([URL=. Had the NEP remained in place Alberta and Canada might look more like Norway (no debt, huge reserve funds) and less like the **** show it is today after yet another energy bust where everybody blames Ottawa and not cyclical trends. [/QUOTE]


I would like to understand how you believe the NEP would have benefitted Alberta and Canada had it been kept going?

Comparing a Country such as Norway with a population of 5.3million and 385,207 km² in size, to Alberta let alone Canada, Alberta has a population of 4.73million and a size of 661,848 km² is not really a fair comparison. Anyone who compares that has to look at more then revenues, assets and liabilities.

[Gifted Intuitive]

Originally Posted by calgarychef

I imagine if Ottawa wasn’t busy cleaning out our wallets we would be like Norway. They don’t have that problem.

Was Ottawa cleaning out our pockets or was the Conservative government of Alberta giving royalty money to their rich friends ? Norway doesn't have the problem because the Norwegian government kept the citizens share of resource revenue for its people. Why doesn't Alberta have a royalty fund like Norway ? Because the Conservative government gave the resource owner's money, the citizens of Alberta money, to their rich friends !
This fact is addressed by the statement made by Marc Lalonde. "The goal was not to kill the goose. The hope was to get what we considered as our fair share of the goose...".It was recognized that the Conservative government was giving the resource away so the NEP was implemented to recover the loss.

[ctd]

Originally Posted by Gifted Intuitive

Was Ottawa cleaning out our pockets or was the Conservative government of Alberta giving royalty money to their rich friends ? Norway doesn't have the problem because the Norwegian government kept the citizens share of resource revenue for its people. Why doesn't Alberta have a royalty fund like Norway ? Because the Conservative government gave the resource owner's money, the citizens of Alberta money, to their rich friends !
This fact is addressed by the statement made by Marc Lalonde. "The goal was not to kill the goose. The hope was to get what we considered as our fair share of the goose...".It was recognized that the Conservative government was giving the resource away so the NEP was implemented to recover the loss.

Have you ever read this page.

https://www.alberta.ca/heritage-savings-trust-fund.aspx

[KinAlberta]

Originally Posted by ctd

Have you ever read this page.

https://www.alberta.ca/heritage-savings-trust-fund.aspx

Norway wealth fund grows to record 10 trillion crowns | Reuters
https://www.reuters.com/article/us-n...-idUSKBN1X41AO


Norway wealth fund earned a record $180 billion in 2019
https://www.cnbc.com/2020/02/27/norw...n-in-2019.html
“ Last year’s return on investment amounted to almost $34,000 for each of the 5.3 million people living in Norway, ...”


About $44,000+ CAD. I’d say thats a well earned notional “Universal Basic Income”.

Alaska Gives Cash To Its Citizens Every Year. The Rest Of The U.S. Could Too. | HuffPost Canada

“In one of America’s most libertarian states, people are benefiting from what is essentially a universal basic income. In 1976, Alaska Gov. Jay Hammond, a liberal Republican, established the Alaska Permanent Fund, putting a percentage of all state oil revenues into a fund, which buys stocks, bonds, real estate and other assets. Money made on these investments is distributed to every man, woman and child in Alaska in the form of an annual dividend, which since 1982 has ranged between $330 and $2,000.

This cash has reduced income inequality in Alaska to the lowest level in America in 2016. And the state’s libertarian bent has not dampened enthusiasm for redistributing wealth from oil companies into money for all. “It’s been described as the most popular program in the history of the U.S.,”...”

https://www.huffpost.com/entry/sover...b0cd327dfe878e

Bolding mine
.

[tranq78]

Originally Posted by KinAlberta

Norway wealth fund grows to record 10 trillion crowns | Reuters
https://www.reuters.com/article/us-n...-idUSKBN1X41AO


Norway wealth fund earned a record $180 billion in 2019
https://www.cnbc.com/2020/02/27/norw...n-in-2019.html
“ Last year’s return on investment amounted to almost $34,000 for each of the 5.3 million people living in Norway, ...”


About $44,000+ CAD. I’d say thats a well earned notional “Universal Basic Income”.

Bolding mine
.

Norway is a national government. Alberta's Heritage Fund is provincial. It's not a realistic comparison.

There is zero chance the rest of Canada will ever let Alberta get wealthier than them especially the provinces east of Manitoba - those are the provinces with all the votes. If the Heritage Fund got to be as big as Norway's, it's guaranteed the other provinces AND the feds will find a way to take it away. Bet you $1 billion on this and I won't lose my bet.

If the federal government set up a fund like Norway that will be comparing apples to apples. But our feds didn't set up a national fund because they were addicted to debt during PET's stint.

It wasn't just the energy industry that suffered under NEP-1. I lived in BC and watched my parents almost go bankrupt because of the other provinces AND the feds were not going to let Alberta get wealthier than them. We're in NEP-2 right now.

[MyAlberta]

Originally Posted by beansgunsghandi

My dad worked in an energy related industry in Calgary during the NEP, and felt the pain. But he had the sense to realize that relying on a volatile industry wasn't solid long term, and diversified into another business. One day maybe Alberta will do that instead of blaming everything else (Ottawa, NEP, etc) for the problems when the price of oil starts declining (as it did by about 25 percent from 80 to 81 after a spike that any sane investor would recognize as a bubble, as the oil companies did). Prices kept declining, and Albertans kept blaming the NEP... Had the NEP remained in place Alberta and Canada might look more like Norway (no debt, huge reserve funds) and less like the **** show it is today after yet another energy bust where everybody blames Ottawa and not cyclical trends. But that will be an unpopular opinion , so I'll end it there and hope everyone enjoyed the new snow and tracking, the hunting has been great.

I tend to agree. Alberta failed miserably in negotiating the NEP, and continue to whine about the repercussions.

[KinAlberta]

Originally Posted by tranq78

Norway is a national government. Alberta's Heritage Fund is provincial. It's not a realistic comparison.

There is zero chance the rest of Canada will ever let Alberta get wealthier than them especially the provinces east of Manitoba - those are the provinces with all the votes. If the Heritage Fund got to be as big as Norway's, it's guaranteed the other provinces AND the feds will find a way to take it away. Bet you $1 billion on this and I won't lose my bet.

If the federal government set up a fund like Norway that will be comparing apples to apples. But our feds didn't set up a national fund because they were addicted to debt during PET's stint.

It wasn't just the energy industry that suffered under NEP-1. I lived in BC and watched my parents almost go bankrupt because of the other provinces AND the feds were not going to let Alberta get wealthier than them. We're in NEP-2 right now.

Ok why doesn’t Canada then show the foresight to create a national fund? Because resources are provincial? :-)

Nothing progressive or preventative ever happens anywhere anymore. All the cans just get kicked further down the road.

[tranq78]

Originally Posted by KinAlberta

Ok why doesn’t Canada then show the foresight to create a national fund? Because resources are provincial? :-)

Nothing progressive or preventative ever happens anywhere anymore. All the cans just get kicked further down the road.

Trudeau 1.0 was busy racking up debt in that time. In 1970s parlance, only squares save for a rainy day, man!

But the answer is real easy. The feds should take all the transfer payments Alberta gave to the Rest of Canada since 1970 (that includes you Quebec) and write us a cheque for the same amount. With all the free money being thrown out right now, it's easy-peasy! It's fun! It's progressive! Our prime minister said we can afford it because interest rates are low and we can grow the economy from the heart out!

(I am going to be in so much trouble with my friends and family East of Manitoba if they see this. They all love Trudeau.)

[KegRiver]

I was riding in a company truck heading south for the Christmas holiday the day they announced the NEP was law.

It was like we were on our way to a funeral for the rest of the trip, no one spoke a word the whole way.

Within two years the company we were working for and many more had gone bankrupt and I had left the oilfields forever.

We were a Seismic drilling company contracted to a Calgary exploration company. The company I worked for survived by turning to drilling water wells, with a skeleton crew.

Ever since that day I have heard story after story about how the NEP wasn't such a big deal. I've heard again and again how we were just a bunch of whiners.

I never heard a single co worker whine, there was simply a cold hard reality that we had to move on, find work elsewhere in another industry.
And we did.

Earlier that year we were paying .65 cents a gallon for fuel.
Two years later we were paying nearly that much per liter.

Trudeau had introduced the metric system five years earlier but fuel continued to be dispensed in gallons until late in 1980.

The NEP introduced a new tax of 5 cents a liter on fuel which meant an additional 25 cents a gallon was added to what we had been paying.

That set off a round of price gouging and price increases that lead to fuel prices almost doubling within a couple of years.

We were told that this new tax would finance the buying out of American interests in Canadian oil industries.
That never really happened. Instead a few small Canadian companies were bought out and used to form Petro Canada.

Then the new tax was diverted into general revenue and this continues to this day.

The government has done a incredible job of rewriting history.

Today the NEP is considered a hick-up in Alberta's past.

It was way more then a hick-up and it is not in the past. It devastated our economy and continues to do so.

Hundreds of companies went bankrupt because of it, thousands lost their jobs and their homes because of it.
Our oil industry never totally recovered and our fuel prices have been climbing ever since. Climbing faster then they ever did before PET left his Montreal fascist club to become Prime Minister.