Controversy between Ottawa and Alberta over oil is nothing new. In the 1970s there was a spike in international oil prices which enriched Alberta but drove inflation in Canada. Alberta feared what Pierre Trudeau’s Liberal government would do in response. Premier Peter Lougheed outlined the issues as he saw them during an October 1980 speech in the legislature. He had been a corporate lawyer, and his remarks resembled those of a CEO reporting to his board of directors. What Lougheed described then bears similarities to today’s disputes.
“The federal government is determined to move unilaterally”
I think there’s no need for me to emphasize to this Assembly the significance of oil and gas revenues to our province. We’re aware that 55 percent of our budget comes from natural resource revenues. We’re aware that we utilize 70 percent of natural resource revenues for current purposes and put aside only 30 percent for the Heritage Trust Savings Fund. I believe all members of this Assembly do not need any reminder about the economic significance of oil and gas, and an active petroleum industry in terms of job security and stability and prospects for advancement.
Trade and ownership reconciled
I’m sure all honourable members are aware [that] under the Canadian Constitution, Section 109, the provinces own the resources, and with the ownership go rights and jurisdictional positions. Of course that involves the determination of what resources should be developed, in what way, and the pace of that development. Those are clearly the rights of the provinces, who own resources under our Constitution. However, as we have said before, but important to repeat: when a province produces a resource and it moves from the wellhead into interprovincial trade, at that time the federal jurisdiction comes into play under the Constitution. So you have the obvious balance in our nation today, where you have federal jurisdiction over interprovincial trade and provincial ownership rights. Quite clearly they have to be reconciled, and that has been the way between 1974 and 1979 . . .
I’d like to remind members of the negotiations this government conducted last fall with the then-federal administration under Prime Minister Joe Clark. That negotiation was conducted essentially with the same civil servants in senior capacity who are in place today in the federal Department of Energy, Mines and Resources . . .
Liberals lose in West
We’re aware of the decision of the voters of Canada [in the federal election] on February 18, which saw a shift in support for the Clark administration in Ontario and certain other parts of the country but certainly not in western Canada. The support in western Canada on February 18 for the whole concept of approach to the provinces as reflected by the Clark administration is illustrated by the results of that day. The present federal government, as we all know, has no representation at all in the provinces of Saskatchewan, Alberta, and British Columbia, and nominally in Manitoba, with two seats. That is a situation that any Canadian looking at this matter should not ignore. It’s a message to be very much aware of . . .
The minister of energy and natural resources has tabled in the legislature today a very important document. I ask our honourable members to consider it very carefully. I believe it’s important that it be reviewed here at this time. It starts with an oil-pricing proposal over a four-year period and sets as its target not 85 percent of the world price, which was the arrangement made with the Clark administration, but 75 percent of the North American price. That is a very major compromise and concession, if you like, by the government of Alberta in an effort to make an arrangement with the federal government . . .
The proposal was rejected in its entirety by the prime minister and the federal government. Many throughout all parts of Canada have assessed that proposal as being reasonable, generous, and in the best interests of Canadians. It was rejected in its entirety as a package proposal for energy self-sufficiency for Canada, in the interests of Canadian harmony, Canadian unity, and Canadian economic strength . . .
I want to assure the legislature that we have done and will continue to do everything we can to work out this situation on the basis of negotiations. However, indications are that the federal government is determined to move unilaterally in eight days, and try, no matter how it might be interpreted or presented, to take over control of Alberta resource to all intents and purposes.
I sadly say that if they proceed on that basis, we will throw away, for as long as one could judge, our prospect of the economic potential for Canada, and what that means for us in terms of jobs and reducing employment by being oil self-sufficient, when many other countries in the world in the late ’80s will not be able to. Throwing away an opportunity to create activity in this country will have a multiplier effect across all of Canada, and a very significant impact on the Canadian economy in all parts, with a strong west and a multiplier effect in the manufacturing centre. We’re on the verge of throwing that opportunity away by the actions of the federal government. I hope I’m wrong, but today I can give this Legislative Assembly no indication other than that analysis.
Soon after Lougheed’s speech, Ottawa introduced a National Energy Program which raised taxes and royalties and set a price for domestic oil, which was below the world price. Albertans were angry and the Liberals have never recovered politically in western Canada.
Source: Legislative Assembly of Alberta Hansard, 10th Legislature, 2nd Session, October 20, 1980, pp: 1142-46.
More information: The Canadian Encyclopedia, Edgar Peter Lougheed.
Further Reading: The Canadian Encyclopedia, National Energy Program.
Photo: Alberta Culture and Tourism.
Dennis Gruending is an Ottawa-based author, blogger and a former Member of Parliament. His latest book is Speeches That Changed Canada.