Is Canada heading into Civil War?

[blueblood]

Lucrative for who?

For the federal government, certainly, as they dramatically increased their share of revenue from oil at the expense of the province and the producer. And certainly for Central Canada industry. I don't think anybody thought it would be lucrative for the economy of Alberta.

Lougheed was so excited about the NEP that he threatened to "turn off the taps" and took the federal government to the Supreme Court over it. He grudgingly signed on after managing to gain a few concessions in regards to oil sands development.

And while the drastic drop in world oil prices hurt the industry, the sharp increase in the share of money that the federal government took for each barrel was about the last thing the industry needed at that time. (present day analogy: slap a $3000 dollar federal surcharge on each new car built in Canada. Just what an industry needs at a time like that.)

I have read that other oil-dependent economies at that time survived the price-plunge quite well; presumably in those countries the government opted not to pick that particular time to start gouging the industry with massive royalty increases.

-k

I done knowed it the whole time!!! LOL

[guyser]

I believe a challenge was thought of (Supreme Court) but not followed through on.

Lucrative for who?

The oil producers and the feds.

For the federal government, certainly, as they dramatically increased their share of revenue from oil at the expense of the province and the producer. And certainly for Central Canada industry. I don't think anybody thought it would be lucrative for the economy of Alberta.

Sure , lots of people thought it would be lucrative. And it was,for awhile.

It was Ray Hnatyshyn (under Joe Clark) who proposed the increase of revenue to the feds because Energy Mines and Resources felt that Alberta was getting too much. It was big oil not investing any money that was holding everyone back.

Then the Cons pegged the price at or close to, the OPEC price and profits soared for Alberta , as it should have.It was then that Crosbie brought in the budget $6.30 tax per bbl. The govt fell soon after.

And while the drastic drop in world oil prices hurt the industry, the sharp increase in the share of money that the federal government took for each barrel was about the last thing the industry needed at that time. (present day analogy: slap a $3000 dollar federal surcharge on each new car built in Canada. Just what an industry needs at a time like that.)

Except it didnt operate in a vacuum.

The cost of exploration for northern and off shore + western drilling (depending on CDN ownership) was funded at 80% by the feds.

The cost to explore and find oil is very costly, and that was paid in large degree by the feds.(I dont know if exp and finding oil is more expensive than drilling it-I imagine so)

I have read that other oil-dependent economies at that time survived the price-plunge quite well; presumably in those countries the government opted not to pick that particular time to start gouging the industry with massive royalty increases.

-k

Most countries instituted similar taxes.Old oil in the US (already drilled and waiting in tanks) was set at lower prices than in Canada. England increased its tax shares to almost 90% of the sales revenue of north sea oil

Lets not forget that some of the funds from the NEP were turned around and deposited into the Western Development Fund, used primarily for the improvement of railway issues, which the west had been complaining about for eons.(plenty think the money was spent entirely in the east)

The slump in the world price set many to lose their shirts. No question about it. But to blame all of this on Ottawa (when we can blame them for legit shite they pull) when the economy was starting to suck and prices falling is unfair.Thus my flippant use of the word myth.

[kimmy]

I believe a challenge was thought of (Supreme Court) but not followed through on.

That's not correct. Aspects of the NEP were taken to the court and ruled unconstitutional. The struck down sections dealt with the levying of federal export taxes on natural gas exports to the United States.

It was Ray Hnatyshyn (under Joe Clark) who proposed the increase of revenue to the feds because Energy Mines and Resources felt that Alberta was getting too much. It was big oil not investing any money that was holding everyone back.

Then the Cons pegged the price at or close to, the OPEC price and profits soared for Alberta , as it should have.It was then that Crosbie brought in the budget $6.30 tax per bbl. The govt fell soon after.

First off, it must be pointed out that Clark was also intent on letting the price for domestic oil move towards the world price, from the price that Trudeau had frozen it at at the start of the OPEC crisis in the mid 1970s. Increasing the federal tax on oil wouldn't have been so hard to swallow if oil had been allowed to sell at closer to world prices instead of the price where Trudeau had frozen it.

Secondly, if the NEP had just been a simple cash-grab, it probably wouldn't have been received so poorly. But it was far more than that. It contained a variety of measures.

It put punitive taxes on energy exports to the United States, to force energy to be sold to domestic markets at discounted prices. It contained punitive measures directed toward the American firms that made up 3/4 of Alberta's oil industry, intended to drive them out or sell to Canadian ownership. It controlled where energy could be sold, and at what price. It dramatically altered the way in which companies in the industry conducted their business, to great detriment of the large majority of them. Some American companies, facing increased royalties, increased costs, capped prices, and having no access to the subsidies available to their Canadian competitors, simply took their equipment and went back home, taking jobs with them.

Except it didnt operate in a vacuum.

The cost of exploration for northern and off shore + western drilling (depending on CDN ownership) was funded at 80% by the feds.

The cost to explore and find oil is very costly, and that was paid in large degree by the feds.(I dont know if exp and finding oil is more expensive than drilling it-I imagine so)

Well, as you point out, these subsidies were not available to the American firms that made up 3/4 of Alberta's oil industry, which considerably dampened any positive impact this might have had. I think you'll also find that these subsidies were primarily targetted toward discovering "new" oil sources (read offshore and Arctic), not "conventional" (read Alberta) oil sources. I think giving the Maritimes and the far north a "hand up" is great... but trying to sell this as a feature of the NEP that Albertans should have really appreciated is just not going to work. Taxing Alberta's oil industry to subsidize exploration in other parts of the country is not the bonanza for Albertans that you make it out to be.

(A cynic might wonder if the federal government's enthusiasm for finding oil offshore and in the Territories might have been spurred by the fact that they wouldn't have to share the royalties with any provincial governments.)

Most countries instituted similar taxes.Old oil in the US (already drilled and waiting in tanks) was set at lower prices than in Canada. England increased its tax shares to almost 90% of the sales revenue of north sea oil

Lets not forget that some of the funds from the NEP were turned around and deposited into the Western Development Fund, used primarily for the improvement of railway issues, which the west had been complaining about for eons.(plenty think the money was spent entirely in the east)

If you've got any specific information about that, I'm all ears. The NEP raised billions of dollars from the west... and what portion of that was spent on upgrading railroads in western Canada? $462.83? Considering the difference in scale, I have a hard time taking that response seriously. It sounds like putting lipstick on a pig (as the President Elect likes to say.)

The slump in the world price set many to lose their shirts. No question about it. But to blame all of this on Ottawa (when we can blame them for legit shite they pull) when the economy was starting to suck and prices falling is unfair.Thus my flippant use of the word myth.

Some of your earlier messages on the topic gave me the impression that you felt everybody thought the NEP was great at first and only got mad about it later when the world oil price plunged. But that's patently false. It was hated from day one, long before oil prices plunged.

Your messages also give the impression that you feel the draconian measures in the NEP wouldn't have been so devastating for Alberta's economy if only the world price of oil hadn't plunged. I don't even know how to respond to that. It's like arguing that the shortage of lifeboats on the Titanic wouldn't have been such a big deal if they hadn't hit that darned iceberg.

In the early 1970s, the federal government refused to extend the pipelines to Montreal. It was more profitable for Montreal refineries to buy oil from the Middle East and South America. Shortly after that, they put an end to Diefenbaker's National Oil Plan, so that Ontario refineries could also increase their margins a bit with import oil. All of this energy was being sold to the Western US because Central Canada didn't even want it. And it's funny that there was this enthusiasm for market forces in Central Canada when prices were low, but a couple of years later when prices were high, market forces weren't important, nation building was what mattered.

You can argue that the economic catastrophe that came later wasn't directly caused by the NEP... but the economic catastrophe was not the only part that Albertans resented. Albertans also kind of resented the NEP because it placed the interests of central Canada consumers above the interests of western Canada producers, because it was a massive tax grab directed almost exclusively at one industry in one province, because it was an intrusion on provincial jurisdiction, and because it was a massive federal intervention into the private industry that Alberta depended on for its economic well-being. None of that is a myth.

-k

{"The major factor behind the NEP wasn’t Canadianization or getting more from the industry or even self-sufficiency. The determinant factor was the fiscal imbalance between the provinces and the federal government... Our proposal was to increase Ottawa’s share appreciably, so that the share of the producing provinces would decline significantly and the industry’s share would decline somewhat."

-Marc Lalonde, Trudeau's energy minister in charge of the NEP.}

[kimmy]

I'm too young to remember the NEP myself; I wasn't born when it was installed and I was a toddler when the last portions of it were finally dismantled. I don't hold any first-hand bitterness over it. I only know the hatred it inspired through the lasting resentment held by people like my dad, who never worked in the oil industry. And yet I've had this discussion numerous times with online friends from other parts of the country who reject the idea that there was anything to actually be upset about. The arguments usually range along the lines of

"it was actually a really great idea, it's just that the timing was bad" or

"it was actually a really great idea, it's just that the benefits weren't explained very well" or

"they had to hurt one part of the country to save the rest of the country" or

"it had built in protections that would have saved Alberta and helped the energy industry except that Mulroney shut it down before they could kick in" or

"you guys just hated it because you're greedy".

So I've researched the topic myself because I just couldn't really believe that my parents and every other Albertan their age were upset about nothing.

One thing that surprises me is that people who think the NEP was a great idea that would have benefited all Canadians don't seem to have considered how awesome it would be if the same principles were applied to hydroelectric power.

I mean, I think we all understand the importance of Green Power now. And I think one of the most important things we could do to meeting Canada's energy challenges of the future would be to shut down coal-burning electricity plants from coast to coast, and replace them with clean, renewable hydroelectric power. As part of meeting Canada's commitments to reducing greenhouse gasses, I think it makes sense that we stop selling clean electricity to the United States, and use this green energy at home so that we can shut down Canada's dirty generating stations. Clean power should be sold to Canadians at below market prices, so that all Canadians can benefit from reduced energy costs. This would establish a permanent domestic market for Canadian-produced hydroelectricity so that producing provinces would never need worry about international price fluctuations. As well, the federal government should take a share of profits resulting from hydroelectric power. This share of the hydroelectric windfall could be used to help all Canada by funding the construction of clean electricity projects from coast to coast. The federal share of hydroelectric revenues could also be used to fund other made-in-Canada eco-friendly projects, such as the Kimmy Green Energy Center for Wind-powered Scooter Innovation. And the federal share could also be used to upgrade and modernize Canada's coast-to-coast power grid, which is in need of infrastructure investment.

I mean, all of this makes such perfect sense that I can't imagine why some Prime Minister hasn't already done it.

-k

[kimmy]

And to return us to the topic that was at hand earlier...

Got to agree with that.

Probably the worst aspect is the polarization of the country, west vs east.

Would a charismatic leader be able to overcome the biases ? (regardless of party)

IOW, could Alberta vote for a Liberal headed by a charismatic Quebecor?

Could Ontario vote for a Con from the west ?

He might not be from Quebec, but if Michael Ignatieff showed leadership in providing an alternative solution to this current situation, he seems like the sort of guy that Albertans would be willing to give a chance.

-k

[cybercoma]

I'm strongly considering putting the entire forum on ignore so I can come here and read this website as though it were the blog of kimmy.

[M.Dancer]

I'm strongly considering putting the entire forum on ignore so I can come here and read this website as though it were the blog of kimmy.

That would be worth the effort. I truly enjoy my daily Kimmy fix

[Argus]

I mean, I think we all understand the importance of Green Power now. And I think one of the most important things we could do to meeting Canada's energy challenges of the future would be to shut down coal-burning electricity plants from coast to coast, and replace them with clean, renewable hydroelectric power. As part of meeting Canada's commitments to reducing greenhouse gasses, I think it makes sense that we stop selling clean electricity to the United States, and use this green energy at home so that we can shut down Canada's dirty generating stations. Clean power should be sold to Canadians at below market prices, so that all Canadians can benefit from reduced energy costs. This would establish a permanent domestic market for Canadian-produced hydroelectricity so that producing provinces would never need worry about international price fluctuations. As well, the federal government should take a share of profits resulting from hydroelectric power. This share of the hydroelectric windfall could be used to help all Canada by funding the construction of clean electricity projects from coast to coast. The federal share of hydroelectric revenues could also be used to fund other made-in-Canada eco-friendly projects, such as the Kimmy Green Energy Center for Wind-powered Scooter Innovation. And the federal share could also be used to upgrade and modernize Canada's coast-to-coast power grid, which is in need of infrastructure investment.

I mean, all of this makes such perfect sense that I can't imagine why some Prime Minister hasn't already done it.

-k

Because Quebec would seperate the day after it was announced. Not that it would ever be announced given almost all our political leaders over the last thirty years have been Quebecers.

[fellowtraveller]

And to return us to the topic that was at hand earlier...

He might not be from Quebec, but if Michael Ignatieff showed leadership in providing an alternative solution to this current situation, he seems like the sort of guy that Albertans would be willing to give a chance.

-k

Time will tell, but I think that you have chosen the wrong tense given recent events.

Your post should read "he seems like the sort of guy that Albertans would have been willing to give a chance."

[kimmy]

I'm strongly considering putting the entire forum on ignore so I can come here and read this website as though it were the blog of kimmy.

That would be worth the effort. I truly enjoy my daily Kimmy fix

aww, you guys...

Because Quebec would seperate the day after it was announced. Not that it would ever be announced given almost all our political leaders over the last thirty years have been Quebecers.

Yes, that's what I was kind of getting at. One was a great idea that people just didn't get, the other is political suicide. The real difference between Trudeau's National Energy Program and Kimmy's National Electricity Program? About 54 seats in Parliament and a credible separatist threat.

Time will tell, but I think that you have chosen the wrong tense given recent events.

Your post should read "he seems like the sort of guy that Albertans would have been willing to give a chance."

We will have to see... but I think there is plenty of time for some serious White Knight type action from either or both of the Liberal leadership contenders. Arriving at a coalition with the Conservatives rather than the NDP and BQ would show the kind of qualities that Albertans would respect in a Liberal leader: integrity, willingness to listen to the whole country, the ability to rise above partisanship. If Ignatieff (or Rae) made this happen, I think it would probably be an excellent start on rebuilding the party's fortunes in the west. I suspect that it would also put him on a short road to the Prime Minister's office, which is why Harper might be reluctant to participate.

-k

[guyser]

He might not be from Quebec, but if Michael Ignatieff showed leadership in providing an alternative solution to this current situation, he seems like the sort of guy that Albertans would be willing to give a chance.

-k

If I thought (and hope) your view was the predominant one out west all would be good.

But Iggy is IMO not the guy who will do it. Frankly I find him the worst of the pompus professors we have paraded as leaders.

Not to mention the stain of all this is on all of their hands.

[Oleg Bach]

Ignatieff - is adored by the Americans - because he is an American for all intent and purpose..the question is - to what American faction to his ideologies belong? What American class and sector is he loyal to? AND where was he when we needed him 10 years ago? Did he come back to Canada as a loving saviour or because there was opportunity here for him - for HIMSELF. What this man says is one thing - but what is the sub-text that is at his core? Just a few questions! I don't have a clue what he is really thinking - do you...Is he like the guy that does not drink because he is hiding what might emerge?

[guyser]

One thing that surprises me is that people who think the NEP was a great idea that would have benefited all Canadians don't seem to have considered how awesome it would be if the same principles were applied to hydroelectric power.

You mean like OPG?

Clean power should be sold to Canadians at below market prices, so that all Canadians can benefit from reduced energy costs.

I am unaware that any prices were to be "below market" oil prices.

[bush_cheney2004]

Ignatieff - is adored by the Americans - because he is an American for all intent and purpose..the question is - to what American faction to his ideologies belong? What American class and sector is he loyal to?

None....Americans don't have a clue about Iggy...and don't really care. However, we were happy to imprison Mr. Black.

[kimmy]

You mean like OPG?

No, Mr. Guyser, not like your narrow-minded provincial electrical concern. I mean, a National Electrical Program. I am talking about this country's future. I am talking about nation building, Mr Guyser.

Your OPG has some hydroelectric capacity, but most of its generating capacity is nuclear and coal plants. Do you imagine your coal smoke stops at Ontario's borders? And where does your radioactive waste go when you're done with it? Continuing to operate these coal fired plant flies in the face of our commitment to reduce Canada's greenhouse gas emissions. And nuclear power, it goes without saying, is icky and scary.

My National Electrical Plan will phase out these unacceptable relics of the cold-war era, and replace them with the Green Electricity of the Future ™ !

How? What we need to do is leverage the massive hydroelectric capacity of your friendly neighbors!

Did you know that if the electricity Quebec sells to the United States were directed to Ontario, OPG could shut down most of its coal plants right now?

Of course, Hydro Quebec could not be allowed to charge Canadian consumers the full export price they've been receiving from American customers. We need a made-in-Canada price. The difference between the fair market price charged to consumers and the discount price paid to Hydro Quebec would be used to establish a federal fund to fund green energy development all across Canada. New hydro sites, solar, wind, bioreactors, technologies we haven't even thought of yet, you name it. And the federal fund would upgrade Canada's electrical infrastructure, which desperately needs investment. Before too long, every province could have huge renewable green energy capability! Every province could be making big profits exporting power to American customers!

What I'm talking about, Mr Guyser, is nothing like your "OPG". I'm talking about the opposite, a national plan that will make Canada the world leader in green energy and show the world how to move away from fossil fuels and use clean renewable energy sources. I'm talking about a plan that will shut down OPG's dirty coal plants and icky nuclear plants.

It might seem as if this plan places a huge burden on Quebec in the short term, but how selfish would they be to stand in the way of Canada's Energy Future ™?

-k

[Wilber]

Did you know that if the electricity Quebec sells to the United States were directed to Ontario, OPG could shut down most of its coal plants right now?

Nothing against green energy kimmy but US coal smoke doesn't stop at their borders either.

[blueblood]

Nothing against green energy kimmy but US coal smoke doesn't stop at their borders either.

Her post is satire...

[bush_cheney2004]

Nothing against green energy kimmy but US coal smoke doesn't stop at their borders either.

Very true....the Americans have to compete with that awsome Nanticoke cross border pollution!

[Oleg Bach]

Nothing against green energy kimmy but US coal smoke doesn't stop at their borders either.

You can GREEN all of North America but the black cloud of industrial filth will still blow over from OUR factory - called China. We have a payroll to meet to keep China inc. going. We could just declare bankrupcy and stiff all two billion of them for their pay and the smoke would stop

[kimmy]

Nothing against green energy kimmy but US coal smoke doesn't stop at their borders either.

Well, maybe not, but our emissions reduction targets do stop at our border. Keeping green electricity in Canada might not reduce the amount of emissions going into the atmosphere, but our commitment is to reduce made-in-Canada emissions. The Americans could make up the short-fall by burning humpback whales, baby harp seals, and spotted owls if they wanted, and it would still be Good, since we've come nearer to meeting our emissions reductions targets.

But that's not even what I was getting at. The point I was trying to make was, as Argus put it:

Because Quebec would seperate the day after it was announced. Not that it would ever be announced given almost all our political leaders over the last thirty years have been Quebecers.

A federal assault on one province's resources is great public policy; a federal assault on another's would be unthinkable... and the difference between the two provinces? 47 MPs and a credible separatist threat.

-k

[Oleg Bach]

Canada is a corporation. All that is happening federally at this point is a massive firing of middle management that had it to good for to long ..............greed stupidy and lazyness=government - they had to go...if we are to survive. You have to understand that we live in a huge company...and every once in a while the dead wood has to be burned so new growth and thought can occur. This is the end of the civil war and guys like Layton and Dion and the rest of them are being publically executed and humilitated symbolically - they just don't know it yet - relax.

[-VMG-]

I think if Canada went to civil war it would be the most pitiful war in the history of man.... one side would have all the guns (alberta)... and the other side would have a massive amount of people to throw at alberta....

And then they would realize thats a really long boring walk/drive across Saskatchewan and give up...

Edited December 7, 2008 by -VMG-

[Mr.Canada]

Canada needs a good civil war to right the injustices present. Either that or a Tea Party like they have in the US.

[Michael Hardner]

Canada needs a good civil war to right the injustices present. Either that or a Tea Party like they have in the US.

Are you serious ?

You show up after a long absence to resurrect a 1 1/2 year old thread, and call for civil war ?

Do you fart openly at cocktail parties as well ?

[PIK]

I agree with you on that, the Americans would never allow an armed conflict just north of them...they would be in here so fast it would make your head spin!

Post of the year.