The NEB may be ending...but how did it begin?

The 180's Gavin Fisher tells the dramatic tale of the creation of the National Energy Board. It starts with the Great Pipeline Debate of 1956 — and includes the death of an MP in the House.
A report released May 15, 2017 suggests dismantling the National Energy Board and splitting its operations between two new agencies. (Sue Ogrocki/Associated Press)

Canada's National Energy Board may be in its dying days. 

On May 15 a government-appointed panel recommended an overhaul of the controversial energy regulator. It's been almost 60 years since the NEB was created. 

And as The 180's Gavin Fisher found out, it has a pretty dramatic origin story. 

The year was 1956.

Canada as we know it now had only been in existence for seven years — for Newfoundland had just joined confederation in 1949.

And television broadcasting in Canada had only just begun in the early 50s, with both CBC TV shows and American programmes like I Love Lucy entering Canadian living rooms. 

But the mid-century would see one of the most tumultuous confrontations ever in Canadian politics, which would make the federal Liberal party lose its grip on parliament after 22 years in power — and lead to the creation of the National Energy Board, or NEB.

The event I'm referring to was the Great Pipeline Debate of 1956.

But first, let's back up a bit.

Just nine years earlier, in 1947, a major oil field was discovered in Leduc, Alberta. 

That led to an unprecedented pace of both oil and gas production in Alberta that required finding markets outside of the province for those products to be sold.

A Pipe Lines Act was passed, and just 38 days later a pipeline project was approved, without too much political debate.

An east-west natural gas pipeline

That was until TransCanada Pipe Lines wanted to build a natural gas pipeline from the west to the east. 

The Liberal federal government at the time, led by Louis St. Laurent, insisted on an all-Canadian route for the line from western Canada to Montreal, rather than the line going through the U.S.

Louis St. Laurent was Prime Minister of Canada from Nov.15, 1948 to June 21, 1957. (Canadian Press)

But nobody wanted to pay for it.

Both producers in western Canada and refiners in eastern Canada saw that a northern line was simply not economic, mostly because of the challenging, rocky terrain of northern Ontario.

So federal Trade Minister C.D. Howe encouraged TransCanada Pipe Lines and its competitors to merge and put a bill before Parliament to create a Crown corporation to build and own the Canadian shield portion of the line.

Then, it would be leased back to TransCanada Pipe Lines.

Concerns over U.S. interests

As C.D. Howe said at the time, "Once again, as in the days of railway building, the difficult and sparsely populated Pre-Cambrian shield appeared to present an almost insurmountable barrier to economic transportation between Western and Central Canada."

But the Progressive Conservatives and their then-leader, John Diefenbaker, were opposed to the plan, which would cost the federal governmnet $118 million.

C.D. Howe and the government of the day wanted to push the legislation through so that construction could begin that summer as the Liberals had promised — and so the pipeline would be complete before the next election.

Raucous debate ensued in parliament, over concerns that public funds would benefit U.S. corporate interests, since American businesses owned the consortium building the pipeline.

It was argued that the plan was a sell-out of Canadian interests to Texas oil buccaneers, and that Americans would exploit our gas reserves. 

Angry insults, fainting ... and even a death

"The tactics of the government tonight have been those exactly followed by Hitler in the German Reichstag," said M.J. Coldwell, the leader the Co-operative Commonwealth Federation, to a CBC reporter.

Liberal MPs were called "trained seals" and "jackals". 

M.J. Coldwell, the leader the Co-operative Commonwealth Federation, speaking to a CBC reporter during the Great Pipeline Debate in 1956. (Historica Canada/YouTube)

Desks were thumped, MPs fainted from exhaustion, and a Liberal MP from Vancouver dropped dead in a washroom in the House of Commons.

It was believed his heart attack was caused, at least in part, by the intense debate which had kept him up past 3 a.m. that day.

The Liberals forced closure — a procedure in which voting is used to end debate — and they forced final votes at every stage of the bill. 

In less than 15 days the heavily whipped Liberal caucus pushed the legislation through and construction of the pipeline began that summer. 

But it was the end of the political careers for several Liberal cabinet ministers, as well as St. Laurent, who had been seen leisurely reading a book throughout most of the debate.

Diefenbaker wins the election

One year later, in June 1957, the Liberals lost 66 seats in the election, and John Diefenbaker took over as Canada's 13th Prime Minister.

Dief to become the Chief?

3 years ago
Duration 7:19
John Diefenbaker and Louis St-Laurent try to figure out who has won the 1957 federal election.

One post-election survey showed that almost 40 per cent of those who did not vote Liberal did so because of the pipeline debate. 

In the days after the debate, Diefenbaker advocated for a Canadian energy board to be established.

John G. Diefenbaker campaigning for election as Prime Minister in 1957. (The LIFE Picture Collection/Gett)

The idea was to give decision-making power to an independent, quasi-judicial board, rather than leaving it in the hands of politicians.

Two independent commissions similarly suggested a national energy board.

Eventually, even the Liberal C.D. Howe agreed with the idea, for the acrimonious pipeline debate had convinced him that a quasi-judicial process for energy projects would be preferable than a losing political battle.

And so, in 1959 the National Energy Board was created. 


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