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Stirring up bad memories With election on horizon and energy revenues sky-high, Klein plays on federal cash-grab fears, but Canadian government accuses premier of scare tactics Gary Park Petroleum News Calgary Correspondent
It is the ultimate bogeyman that periodically gets dragged out by the Alberta government, often close to election time.
Oil prices rise, the province piles up staggering budget surpluses, investment pours in, taxes get cut, the rich become the super-rich … and the rest of Canada looks on enviously as Alberta tries to figure out what to do with the gusher.
The latest round of booming petroleum revenues has positioned the government of Premier Ralph Klein to wipe out the province’s remaining debt in 2005 and fuel even more growth, with in-migration topping 72,000 in 2003-04.
With Klein gearing up for an election, widely expected in late November, what better time to scare the voters and what better device than to stir memories of the National Energy Program.
The reviled NEP was imposed without warning in 1980 by the federal government of Prime Minister Pierre Trudeau at a time when Alberta was reveling in its first oil and gas windfall that allowed it to create what is now a C$12 billion trust fund “for future generations.”
The NEP capped oil prices at artificially low levels, along with offering incentives to Canadian-owned companies to explore Arctic and offshore regions.
U.S.-controlled firms fled across the border, thousands of jobs were lost, homes were sold for $1 in a wave of foreclosures, suicides were blamed on the desperate mood and the federal Liberals have never again elected a Member of Parliament from Calgary. Program cost provinces billions Until the NEP was dismantled within 10 years of its introduction, the cost to Alberta’s treasury in lost revenues and taxes was calculated in the billions, some say upwards of C$60 billion and as high as C$97 billion for the producing provinces of Alberta, British Columbia and Saskatchewan.
The provincial government accumulated a C$23 billion debt trying to maintain services during a bust.
“You always have to keep the memory in mind,” Klein said Sept. 29.
“I never want to see that again. We have the constitutional authority to protect our resources and keep the profits.”
Warming to his theme, he warned the federal government: “Keep your hands off anything that you aren’t entitled to. We don’t want to see a raid on our treasury. We don’t want to see another NEP.”
Alberta Members of Parliament — the bulk of whom represent the opposition Conservative party in Parliament — have scrambled on Klein’s wagon.
Jason Kenney, the Conservatives’ finance spokesman, noted that Prime Minister Paul Martin has called for “fundamental changes” to the federal formula of redistributing income from the richest provinces to the poorest ones.
“When the feds talk about increasing equalization payments, you’re talking about one thing: taking money from Alberta and Ontario,” Kenney said.
Federal leaders have scoffed at the fear-mongering.
To those who say “Beware of another NEP,” Finance Minister Ralph Goodale replied: “We’ve been there, done that … and didn’t like it, and we sure are not going back.”
Natural Resources Minister John Efford said “my hands are not in (Klein’s) pot.”
Deputy Prime Minister Anne McLellan, who represents an Edmonton constituency in the House of Commons, in a pointed barb at Klein said: “I think it’s most unfortunate that people practice what I call the politics of fear and misrepresentation,” adding her government will not “interfere with Alberta’s ability to exploit its resources for the benefit of its people.”
Pierre Alvarez, president of the Canadian Association of Petroleum Producers, doubted the federal government would put the industry’s success at risk, although it is wary of unintended consequences of public policy.
He noted that C$3 billion in energy sector corporate taxes went into the federal treasury last year and is likely to approach C$4 billion this year.
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