Applause, Premier John Horgan. You’ve proven your chops as a big stakes political troll. (He is the current leader of the New Democrat Party (NDP) which forms the British Columbia government. The NDP is socialism/communism-light in Canada.)
He’s also proven that the political left is always about chaos. Its game theory strategy is always:
Defect to any defection.
Defect-squared to any cooperation.
The troll you may ask, is saying the Canadian federal government should intervene to give British Columbia (B.C.) relief from high gas prices. This strikes a nerve that was irritated raw in the early 1980s, and has never rested since.
For non-Canuckophiles, to review: B.C. and Alberta, provinces within Canada, are currently in a fight, regarding the use of B.C.’s coastline to export Alberta oil. Alberta’s economy relies significantly on oil and natural gas, and a substantial part of that is bitumen extracted from oil sands. Her Majesty the Queen in Right of Alberta (the “Crown”; it’s a long story) owns about 81% of the oil and gas trapped underground in Alberta. All development is handled by private companies, who pay a royalty for the privilege. Government revenues rely on these royalties. The more oil and gas produced, the more money for the Crown, the more jobs, the more income, the more taxes…you get the picture.
Alberta is big in land, but small in population: less than four million people reside there, with about 35 million total living in Canada. But Alberta’s reserves are gigantic: just Alberta’s reserves (for the whole province, not just the Crown owned portion), were in 2014 the third largest reserves in the world (behind Venezuela and Saudi Arabia, but larger than Iran, Iraq, Russia and the U.S.) This is a lot of oil in a small market. And so, getting oil around the country and for international export is a big issue. Alberta is landlocked, so getting oil to sea involves someone else’s jurisdiction. The best way to do this is by pipeline, and this is where the current fight begins.
Pipeline companies have attempted to expand Alberta’s capacity to deliver oil to outside markets. They wanted to change an existing pipeline in eastern Canada, to get oil from Alberta to Québec and the Maritime provinces, and so the Energy East project was proposed. They wanted to get oil from near Edmonton, Alberta, to a loading facility on the B.C.’s coast near Kitimat, and so Enbridge proposed the Northern Gateway pipeline. Access already existed to terminals on the Texas coast of the Gulf of Mexico, and expansion plans were proposed (Keystone XL). Also, an expansion to an existing pipeline (Trans-Mountain) was proposed, which would result in more oil getting to an existing terminal in Burnaby, B.C. for foreign export. All of this sounds great: more Alberta oil sold, more Crown royalties, more income taxes and GST (Canada’s VAT) for Canada. Except, it’s not, because, you know…reasons.
The National Energy Board reviews applications for pipelines in Canada. If they approve an application (often, with conditions), it goes to the Governor-In-Council (GIC) for final approval. The GIC is the Prime Minister of Canada and his cabinet: that’s right, Justin Trudeau and his “’cuz it’s 2015” cabinet. They overruled the previous government’s decision to allow the Northern Gateway pipeline (2014), disallowed it in 2016, and effectively killed the project by banning tanker traffic into Kitimat. One down.
Energy East died a different death. While approved by the GIC, it was killed by the governments of Ontario and Québec, along with a somewhat dubious claim that 180 different First Nations all opposed it, and could veto the project approval under the United Nations Declaration on the Rights of Indigenous Peoples. Last year, the project was abandoned, with one side arguing it was due to political interference, and the other, claiming it was simply an economic choice.
Keystone XL was approved by the NEB back in 2007, but as it was also under U.S. jurisdiction, President Obama put it on indefinite hold. President Trump signed an executive order allowing the project to go ahead in early 2017.
So, Alberta is down 2-1 at this point (with Trump being their only ally.) Trans-Mountain pipeline, an expansion to an existing project, has been approved by the NEB and the GIC. This expansion has faced stiff resistance from protestors, First Nations, and now, the provincial government of B.C., which threatened to take steps to restrict the amount of oil (diluted bitumen, in this case) in the pipeline pending an environmental review, a step which many are calling illegal.
The B.C. NDP don’t have a choice, really. They do not have a majority of seats in the B.C. legislature. This is a problem because a minority government can always be put to a confidence vote in their legislature, and if they lose, their government is dissolved, and either some other party steps in to govern, or they go to election. They know, they used that trick to get into power, forcing the Liberals, who won the most seats in last years provincial election, out of government. The NDP then made a deal with the local Green Party, who had three seats, to form a coalition government which could survive a confidence vote.
But this comes at a price, and that is the current B.C. government must now take a hard stance on any environmental issue to satisfy the NDP voters, and must pander to the Greens as well (this won’t work: see the game theory strategy of the left, above.) This is democracy in Canada for you. The second place party is now held hostage by a party with a miniscule amount of power, and policy on major issues is now beholden to that minority.
No one thinks for a second that a majority of British Columbians are represented in this current quagmire. And with the defect-defect2 (lets call it “d/d2”) game strategy of the left, any acquiescence to the Greens will just lead to further demands. And so, B.C. is now rattling sabres and quite frankly, will block the Trans-Mountain expansion if it can. Ottawa, and Justin Trudeau, rattle off platitudes, seemingly ignorant of B.C.’s outright threats to defy the law and the decisions of the NEB and GIC, but take no steps to resolve the matter. And this puts Rachel Notley, Premier of Alberta, in a bad spot.
See, a while back, Premier Notley (another NDP government leader) put a carbon tax in place in Alberta. She claimed it was to acquire “social license” for pipeline expansions. When Justin Trudeau approved the Trans-Mountain expansion and Energy East (and killed Northern Gateway), he claimed her carbon tax helped to justify the decision. The carbon tax was highly unpopular within Alberta, however. Fast-forward a few years, and with Energy East dead, and Trans-Mountain facing an opposition determined to stop it, people in Alberta are asking: where’s the social license, and our pipelines?
On top of that, Premier Notley now faces an election in a little over a year. Alberta is notoriously a conservative voting province, with the same conservative party ruling from 1971 to 2015. She put an unpopular tax (is there any other kind?) in place in exchange for getting Alberta oil to bigger markets, and got zip for it. She looks weak and naïve, and faces a hostile electorate to boot. (Personally, I don’t think it matters. She would have put the tax in anyway, regardless of pipeline issues. However, she needed to sell it, and so made a deal with a federal government who does not need a single vote from her province to stay in power. And, predictably, it has backfired completely.)
And so, the battle is now waging. B.C. has no choice but to oppose the pipeline bitterly to keep the Greens happy, and Alberta has no choice but to posture and fight so Premier Notley can appear she wants the pipeline to go through. And, in the d/d2 world of the left, it’s only going to get nastier.
(Man, I love watching the left eat itself. You know what will be even funnier, when in five to ten years, when the current batch of leftist politicians in this mess have gone the way of the Weather Underground, and have six and seven figure incomes (with NGOs or private concerns) after wrecking ordinary people’s livelihoods with their antics, while still claiming to “fight the good fight against the 1%.” Never mind the trolling, what about the lulz!?!)
National Energy Troll
So, we arrive, at the troll. Horgan’s allusion to federal government intervention on gasoline pricing is a reference to the National Energy Program (NEP). The NEP was created by Pierre Elliot Trudeau, Canada’s 15th Prime Minister (and in a real life expression of universal irony, father of Justin Trudeau), in order to deal with Canada’s inability to control either oil supply or price in the 1970s. It all started with OAPEC’s embargo on oil sales to several western nations, Canada included, in 1973, as retribution for supporting Israel in the Yom Kippur War. Trudeau was in a bind because Canada was still largely dependent on foreign oil imports. The embargo hurt because it reminded all of Canada that they were beholden to OPEC, because OPEC could fuck with their economy on a whim. It was not that Canada could not get oil during an embargo, but rather that the price was driven through the roof.
Trudeau did make efforts to increase domestic production starting in the mid-70s, going so far as to allow oil and gas development on Canadian Forces Bases. The 1979 oil shock (caused by the Iranian Revolution, which reduced Iran’s oil production by 75%) made it clear: Canada was dependent on oil from abroad, and had zip to say about its price.
So, Pierre Trudeau sort-of nationalized the oil industry in Canada. Some will scream this was Trudeau the Communist who did this, which is wrong. Trudeau’s plan was Socialism (control of the means of production), not Communism (central ownership of the means of production.) His plan was more akin to what the Nazis did in Germany (that’s right, I went there), than what Stalin did in the USSR (except, way fewer thugs.) Petro-Canada was created, a national oil company which would invest in oil development, and the National Energy Program was implemented, which if I understand correctly, required oil producers to sell oil to the government for a price which would never be greater than 85% of the world oil price, and was set much lower to begin with. However, oil purchased abroad would also be sold domestically at this lower price. This was intended to lower fuel prices across Canada for all, but also, to stabilize supply and price. It failed, and ironically, it subsidized foreign oil imports and penalized local producers.
First, when it was fully rolled out on January 1, 1981, world oil prices had begun a steady 20 year decline. Second, no one seems to be able to say whether it was beneficial to Canadians as a whole (gasoline prices went up, not down, while the world oil price fell.) Third, it ruined the Alberta economy and stalled development in the province, and especially in city of Calgary, the white collar center for oil and gas development and investment for Alberta, for about 10 years. Estimates vary from 20 billion to 100 billion dollars lost or taken from the Alberta economy in the half decade or so that it ran. Prime Minister Brian Mulroney ended the program in 1985. Even today, the rhetoric around this issue is so charged and polarized I can’t find a source that’s impartial enough to actually give a good basis to start looking at these issues. 37 years later, people on both sides are still pissed-right-off on this issue. It’s not really important about the details: it remains a highly charged, emotional and divisive issue and even today prompts calls for Alberta’s secession from Canada.
I was in Calgary when the NEP was developed and rolled out. I was a child, and did not understand real hatred, born of frustration and helplessness, and why everyone HATED Trudeau. Hatred against the Prime Minister and Ottawa was sharp, visceral, and frightening. There were bumper stickers saying “let those eastern bastards freeze in the dark”, meaning Alberta should just cut-off the supply of oil entirely. There was a joke at that time that Petro-Canada was an acronym for “Pierre Elliot Trudeau Rips-Off Canada.” No one in Calgary laughed: it was a fact. Investment in oil and gas disappeared, people were laid-off in swaths, people lost houses (or quitclaimed them for a $1; mortgage interest rates were in double-digits at that time), and lost their fortunes and retirements. I remember my father having to move over 700 km away to find work, which precipitated the end of his marriage and my family. There are all kinds of stories like mine abound in Calgary and in Alberta writ large. We don’t forget the man who caused it and we take note of his progeny.
And this is why Premier Horgan’s reference to federal government relief on the price of gas is the ultimate form of troll: bring back the NEP is his allusion. If he was looking to make a significant part of Alberta react unfavourably, to conjure up past grievances, and to open old wounds while pouring (100% organic, orca friendly) sea salt in them, he succeeded. He’s now a gold-star leftist: he’s done the endless defect chain against Notley, taking a pot-shot at Albertans. It was a low blow, dealt out by an amateur, too childish and stupid to see some things must let lie, and that one should not place yourself and your province in subservience to a political party which knows only chaos and defection.
Applause Premier Horgan, applause.
 Oops, sorry, I meant “People, I love watching the left eat itself.”