The National Energy Program (French: Programme énergétique national, NEP) was an energy policy of the Canadian federal government from 1980 to 1985. The economically nationalist policy sought to secure Canadian energy independence, though was strongly opposed by the private sector and the oil-producing Western Canadian provinces, most notably Alberta. Created under the Liberal government of Prime Minister Pierre Trudeau on October 28, 1980, following the two oil crises of the 1970s, the NEP had three main objectives: increase ownership of the oil industry by Canadians; price energy fairly for Canadian consumers; and provide Canadian energy self-sufficiency. The NEP was also designed to promote lower prices through price controls; promote exploration for oil in Canada; promote alternative energy sources; and increase federal government revenues from oil sales through a variety of taxes and revenue-sharing with the oil-producing Western Canadian provinces. The NEP proved to be a highly controversial policy initiative and sparked intense opposition and anger in Western Canada, particularly in Alberta. The province's premier, Peter Lougheed, was a vocal opponent of the NEP on the grounds that it interfered with provincial jurisdiction and unfairly deprived Alberta of oil revenue. In 1981, Lougheed and Trudeau reached a revenue-sharing agreement. Opponents say that due to the NEP, the unemployment rate in Alberta rose from 3.7 percent to 12.4 percent, the bankruptcy rate in Alberta rose by 150 percent, and Alberta's losses were estimated to be between $50 billion and $100 billion (though Alberta's unemployment rate, bankruptcy rate, and revenue losses were also affected by the early 1980s recession and a crash in oil prices). The term "Western alienation" was coined as a result of the NEP. The policy was repealed by the newly-elected Progressive Conservative (PC) government of Prime Minister Brian Mulroney on June 1, 1985. The NEP contributed to the creation and rise of the Western Canadian-based and right-wing populist Reform Party which made a major breakthrough in the 1993 federal election; the Reform Party merged with the PCs in 2003, becoming the Conservative Party which governed Canada under Prime Minister Stephen Harper from 2006 to 2015.
Background In his preamble to the announcement of the National Energy Program, introduced as part of the October 1980 federal budget, Finance Minister Allan MacEachen echoed concerns by leaders of developed countries regarding the recession that followed both oil crises of the 1970s and the "deeply troubling air of uncertainty and anxiety" that was shared by Canadians. The Bank of Canada reported that economic problems had been accelerated and magnified. Inflation was most commonly between 9% and 10% annually, and prime interest rates were over 10%.
...ever since the oil crisis of 1973 industrial countries have had to struggle with the problems of inflation and stubbornly high rates of unemployment. In 1979 the world was shaken by a second major oil shock. For the industrial world this has meant a sharp renewal of inflationary forces and real income losses. For the developing world this second oil shock has been a major tragedy. Their international deficits are now three to four times the sum they receive in aid from the rest of the world.... They are not just Canadian problems. ...they are world-wide problems. At the Venice Summit and at meetings of Finance Ministers of the IMF and OECD, we have seen these new themes emerge.
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