National Energy Program
From Open Encyclopedia
The National Energy Program (NEP) was an energy policy of the Government of Canada. It was enacted by the government of Prime Minister Pierre Trudeau in 1980, and administered by the Department of Energy, Mines and Resources (Canada).
The NEP was introduced in the wake of the energy crises of the 1970s, and was designed to promote oil self-sufficiency for Canada, maintain the oil supply, particularly for the industrial base in eastern Canada, promote Canadian ownership of the energy industry, promote lower prices, promote exploration for oil in Canada, promote alternative energy sources, and increase government revenues from oil sales through a variety of taxes and agreements. At the status quo even with transfer/equalization payments, there was still a flow of wealth from the eastern oil-dependent provinces, particularly Ontario and Quebec, to the western oil-producing provinces.
The program was extremely unpopular in Western Canada, where most of Canada's oil is produced, and heightened distrust of the federal government, especially in Alberta, British Columbia and Saskatchewan. Many Albertans believed that the NEP was an unjustified intrusion of the federal government into an area of provincial jurisdiction and was designed to strip their province of its natural wealth. By keeping the oil prices below world market prices, it was essentially subsidizing the eastern provinces where Trudeau's support base lay.
However, Trudeau had underestimated the resolve of Alberta Premier Peter Lougheed, who responded by stalling development on several oil sands projects. Lougheed endeared himself to Albertans when he went on national television to announce that oil shipments to the rest of Canada would be cut. As a result, the NEP was revised so that Canadian oil would eventually rise to the world price.
The justification for the program died when oil prices fell in the early 1980s, leading to its abandonment by the new Progressive Conservative government of Brian Mulroney that campaigned against the policy in the 1984 election.
The actual success of the program is still debated. Shortly after it was implemented, Canada fell into a recession that hit Alberta especially hard. Some blame the National Energy Program for the recession, while others point to external factors.
Resulting from the National Energy Program, Petro-Canada was the nationalized oil company headquartered in Calgary. Petro-Canada was given the nickname "Pierre Elliot Trudeau Rips Off - Canada" by opponents of the National Energy Program, and the Petro-Canada Centre in Calgary became known as "Red Square" to those same opponents.
A popular western slogan during the NEP - appearing on many bumper stickers - was, "Let the Eastern bastards freeze in the dark."
