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Lougheed retaliates against Trudeau for NEP

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.

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Angered by the Liberal government's national energy program, Alberta Premier Peter Lougheed cuts provincial oil production in 1980. Lougheed vows to reduce the industry "to about 85 per cent of its capacity" because Trudeau's energy program aims to increase Canadian oil ownership and interprovincial transfer payments. Lougheed believes this kind of intervention will harm Alberta's lucrative oil industry. Albertans are angry, too. A newspaper poll finds Albertans support the premier's actions 5 to 1.

On a call-in radio program, one resident says "If my voice is trembling it's because I am terribly angry, to the point where I would be happy to fight for our freedom and I literally mean fight with a rifle."
. Lougheed held back the development of heavy oil and two large tar sands. He also took the federal government to court over the legality of the NEP and won. In 1982, the Supreme Court of Canada said the federal government cannot legally tax provincially owned gas and oil wells.
. By the time the court made its ruling the NEP's export tax on Alberta oil had already ceased. Lougheed and Trudeau signed an agreement on Sept. 1, 1981, that put the tax to zero until the court issued a verdict.

. The prime minister's energy program resulted in an intense conflict between the federal and Albertan governments and left a legacy of hatred for Trudeau in that province.
. In reaction to the NEP, foreign companies sold Canadian investments, putting many Albertans out of work. Thousands of Calgarians were unable to pay their mortgages and the real estate market crashed.

. In May 1982, federal Liberal Minister of Energy Marc Lalonde made amendments to the NEP. In his new version of the program, the oil industry paid $2 billion less tax over five years.
. By 1984 a drop in world oil prices and the election of a federal Conservative government meant the NEP's price controls and taxation were gradually eliminated.

. One of Lougheed's important legacies was the creation of the Alberta Heritage Fund. Lougheed set aside a portion of the province's oil and gas profits in long-term investments. At its height, in 1987, the trust was worth $12.7 billion.
Medium: Radio
Program: Sunday Morning
Broadcast Date: Nov. 2, 1980
Guest(s): Peter Lougheed
Duration: 2:27

Last updated: September 14, 2012

Page consulted on August 20, 2014

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