CBC Digital Archives

West is the new East as Alberta oil boom continues

One spewing geyser of oil at Leduc, Alta., on Feb. 13, 1947, transformed the province's economy. Until the oil strike Alberta struggled as a have-not province. Leduc "blowing in" was famous and rare because Albertans had never imagined large oil reserves existed beneath the wheat. But ownership of the resource challenged by the national energy program became a political battle: East versus West, Trudeau versus Lougheed. Today, the Leduc legacy lives on with Alberta paying off its debt in 2000 and countless barrels of crude yet to be extracted.

media clip
The eastern Canadian economy depends on the West during the 1970s energy crisis. With North America deep in a recession and the world oil price jumping from $1.80 to $20 a barrel, cities like Toronto and Montreal rely on Alberta's oil producers. Remembering the tough times of the '30s and '40s, University of Alberta professor Larry Pratt told CBC TV that Westerners feel bitter about the new Eastern economic dependence. "Where was Bay Street? Where was Montreal, when we needed them?"

He explains that during the Dirty '30s, Toronto companies turned down oil men looking for investment capital, forcing Alberta companies to partially sell out to Americans.
. In response to the energy crisis, Trudeau's Liberals announced the creation of Petro-Canada in 1973 and the company was formed by an act of Parliament on July 30, 1975. With the creation of the federally owned gas company, the government aimed to accelerate oil exploration in the North and the Alberta tar sands. By 1980, Petro-Canada had become one of Canada's largest petroleum companies.

. Between 1973 and 1978, oil prices rose as a result of various agreements made between the federal and provincial governments. In 1979, the Iranian Revolution inflated world oil prices 150 per cent.
. When Prime Minister Pierre Elliott Trudeau refused to allow Canada's oil prices to rise to world prices, relations between the feds and Alberta became strained.

. Historically in Canada provincial governments have struggled with Ottawa for power over their resources. Provinces legally control and levy royalties (payments made to Ottawa) on their own natural resources, according to Section 109 of the Constitution Act of 1867. However, Ottawa may veto provincial legislation, apply broad taxation and claim jurisdiction over interprovincial trade.
Medium: Television
Program: CBC Television News
Broadcast Date: June 24, 1979
Guest(s): Larry Pratt
Reporter: Russ Patrick
Duration: 5:45

Last updated: October 17, 2014

Page consulted on October 17, 2014

All Clips from this Topic

Related Content

Striking Oil in Alberta

One spewing geyser of oil at Leduc, Alta., on Feb. 13, 1947, transformed the province's econom...

1973: Hundreds flee from poison gas cloud

A sour gas leak sparks panic and a mass evacuation in rural Alberta.

1990: The Hibernia oil project is launched

Corks are popping in St. John's but an economist has a sobering prediction.