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Prime Minister Pierre Trudeau slaps taxes on oil with National Energy Program

The Story

In October 1980, Prime Minister Pierre Elliott Trudeau introduces a tougher, more rigid national energy program (NEP). During a decade-long energy crisis, the federal government wants more control over the country's energy. Ottawa also says that Alberta's oil profits must be shared throughout the country. Alberta's Premier Peter Lougheed says he'll take Trudeau's NEP to the courts. In the House of Commons, Trudeau surprisingly responds that Lougheed is taking a "reasonable and rational approach." Alberta Liberal Senator Bud Olson is impressed with the prime minister's conciliatory approach. But in this CBC Radio clip, Barbara Frum asks Olson if the invitation implies that Trudeau knows or believes that a court will always find that the federal power has more authority.

*Oct. 14, 2020: A previous version of this story incorrectly identified Bud Olson, the Liberal Senator from Alberta, as a Progressive Conservative.

Medium: Radio
Program: As It Happens
Broadcast Date: Oct. 31, 1980
Guest(s): Bud Olson
Host: Barbara Frum, Alan Maitland
Duration: 6:36

Did You know?

• The federal government's 1980 NEP had three main objectives: To boost Canadian ownership in the oil industry, to make the country a self-sufficient oil producer and to increase the federal share of energy revenue.

• The Feds introduced the NEP after deadlocked negotiations with Alberta and without consulting the oil industry.

• As part of the program, Trudeau launched a tax to fund the federal government's gas company Petro-Canada and gave grants to Canadian-owned oil companies.

• When the world oil price was inflated by 150 per cent, Ottawa kept the national oil price at a considerably lower rate.

• The federal government had created a Canadian energy policy in 1867 to ensure the country used its own coal reserves by taxing American imports.

• Until 1973, the energy policy barely intervened in Alberta's oil industry. Since the 1970s energy crisis and increased world oil prices, Canadian and world government energy policies have been more interventionist.

• During the 1970s, Lougheed resisted federal actions that infringed upon his province's rights and lobbied for Alberta to have more influence in Ottawa's decision-making. He believed the province's economic strength allowed Alberta the right to more national representation.

• While negotiating the 1982 Constitution Act, Lougheed created an amending formula that allowed provinces to opt out of sections of the Constitution. It is known as the "notwithstanding clause."



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