Closing The Books on Petro-Canada

20 years later, Petro-Canada goes away quietly

The recent announcement of a merger between Petro-Canada and Suncor made news internationally.

More than simply a monster merger in the energy industry, the merger also marks the final closure on a long chapter of Canadian history.

Petro-Canada was founded in 1975 as part of Pierre Trudeau's scheme to partially nationalize the Canadian oil industry. It was founded in 1973 as a response to the quadrupling of world oil prices. Working in close cooperation with the NDP -- who actually tabled the bill to create the company -- the Liberals created the company, and placed more stringent controls on it than was usual for a crown corporation. The goal was to use the company as a policy tool.

The company was also the beneficiary of a surcharge at all the country's gas pumps, which was used to finance Petro-Canada buyouts of foreign-owned oil companies.

When Joe Clark arrived in office in 1979, his first goal was to eliminate this surcharge -- a goal he attempted to achieve in his ill-fated first budget. However, Clark also proposed an 18% tax on gasoline as a deficit-fighting measure. The Liberal party officially insisted that they defeated Clark's government over this fuel tax hike.

But Trudeau had also warned Clark against dismantling Petro-Canada. His proposed elimination of the Petro-Canada surcharge seemed to be a prelude to dismantling the company.

When Trudeau, returned to government, introduced the National Energy Program in 1980, Petro-Canada was used to administer it, making the company even more unpopular in Western Canada -- particularly in Alberta.

In 1991 Brian Mulroney finally began to privatize the company. Now, only a regulatory approval by Stephen Harper's government stands between Petro-Canada and its absorption into Suncor.

It's taken 20 years and the efforts of three different Prime Ministers to finally ferry Petro-Canada into the turning pages of history, but the task has finally been finished.

Forget Thee Not

Michael Ignatieff underestimates the memory of Western Canadians

During a current swing through Western Canada, Liberal leader has some sincere words for western Canadians.

We fucked up! Sorry!

"God knows this party has made mistakes out in Western Canada and I know them," Ignatieff admitted during a speech in Regina. "We have to be honest enough with our neighbours and citizens to say 'We didn't always get it right. We didn't always listen with respect. We didn't always understand what had to be done.'"

There are numerous examples of the Liberal party's careless approach to western Canada. Pierre Trudeau's National Energy Program is merely the foremost among them.

It's likely in this vein that the Liberal party was utterly foolish to come west and try to peddle what essentially amounted to NEP II -- Stephane Dion's proposed Green Shift program.

Except that Stephane Dion's Green Shift was actually Michael Ignatieff's Green Shift -- and he seems to expect that western Canadians are somehow going to forget.

Canadians -- and, especially, western Canadians -- will remember that a carbon tax was central to Dion's Green Shift. The problem for Ignatieff was that he proposed the carbon tax first and probably even pushed Dion behind the scenes to implement it as part of the Liberal party's platform.

Ignatieff at least seems to understand the utter folly of trying to run on something like a Carbon tax in Western Canada.

"The dumbest thing you can do is run against Western Canada," Ignatieff noted. "The dumbest thing you can do is run against the energy sectors in Western Canada."

The Green Shift policy, regardless of any corporate or personal tax reductions, would have reaked havoc on the energy industry, resulting in higher energy prices for every Canadian.

Western Canadians, being not nearly as naive or foolish as the average Liberal party strategist has always imagined them to be, knew this. Even the calls for a softening of the policy by western Liberal candidates like David Orchard went largely unheeded, and the Green Shift led to a decisive Liberal defeat in the west.

"The retail politics of this were pretty tough for us," he mused. Yet Ignatieff wants to continue his dabbling in energy policy.

"We want to bring energy policy and environmental policy together around a simple goal, which is to make Canada the most efficient user of energy and the most efficient developer of sustainable energy on the planet," he said. "When we elaborate those policies in detail, I think it'll be a vote winner out west."

This is a fine idea. But Ignatieff has proven adept at bungling energy policy so badly as to have his ideas absolutely clobbered in the realm of retail politics.

Ignatieff thought he had a winner before. He and his party insisted that the tax would be revenue neutral (despite the fact that there really is no such thing as a revenue neutral tax).

Regardless of whatever Michael Ignatieff may think, western Canadians don't have a short memory. When he comes back to Western Canada to address the issue of energy policy, he'd better have something a far sight better than NEP III.

Otherwise, Ignatieff will join Trudeau and Dion amongst the Liberal leaders who fucked up in regards to Western Canada.


Other bloggers writing on this topic:

Far and Wide - "Busy Guy"

Kristian Klima - "Conquering West or conquering rural Canada?"

So Cozy...

Alberta and Saskatchewawn natural bedfellows

When Alberta premier Ed Stelmach and Saskatchewan premier Brad Wall teamed up to oppose a proposed inter-provincial cap-and-trade scheme on greenhouse gas emissions it became apparent that a potent new political coalition had been formed.

The article, written by Murray Mandryk and published in the Saskatoon Star Phoenix and Regina-Leader Post, asks an interesting question: how did Alberta and Saskatchewan become so cozy in the first place?

"Here's one of the more intriguing "chicken or the egg" type of argument you'll hear on coffee row:

"Did this province elect a Saskatchewan Party government because we were already becoming more like Alberta, or has the election of a Saskatchewan Party government made this province more like Alberta?"

Regardless of which side of he debate you support, what's indisputable is the premise is that Saskatchewan has become more like Alberta."

Some residents of Saskatchewan may find the very premise to be alarming. In the same vein as Canadians who cry foul every time Canada inches too close to our southern neighbours for their liking, many of those who feel Saskatchewan's unique character -- as it were -- is threatened by too closely associating with the cowboys west of Lloydminster, they'll insist that too closely associating with Alberta somehow diminishes Saskatchewan.

Of course, there are some traits that Saskatchewan shouldn't be so eager to share with Alberta.

"More like it, mind you. Not exactly alike.

The outcome of elections in Saskatchewan, after all, are still not a foregone conclusion and will remain so for some time. This province also still has significantly deeper agricultural and small-town roots and significantly less urban pull than does Alberta (or any other province, for that matter)."

Indeed, democracy in Saskatchewan is much healthier than in Alberta.

During the 2007 provincial election, 76% of eligible voters reported to the polls, compared to the absolutely dismal figure of 41% in Alberta's 2008 election.

Saskatchewan does maintain a largely rural character, but a newfound determination to develop the province's considerable energy resources -- including oil sand reserves that may rival those in Alberta will inevitably change that. The kind of building projects necessary to support such development will require increased manufacturing capacity throughout Saskatchewan, particularly in the urban centers.

"Most significantly, Saskatchewan is the birthplace of the CCF-NDP and its social democratic influence isn't about to disappear anytime soon. Even at one of its historically low ebbs, the NDP still has 20 seats in the legislature and something close to 40 per cent of public support.

But it's also telling that on the very week that the NDP is celebrating the 75th anniversary of the Regina Manifesto, which urged the eradication of capitalism, the most exciting speculation within New Democratic ranks is the possibility of the return of a conservative-minded capitalist such as Dwain Lingenfelter to lead the party."

Certainly, being defeated after 16 years in power must certainly be deflating for the provincial NDP. Likewise, the party's federal prospects in the province are less than encouraging.

"That Saskatchewan's affinity for Alberta actually might have started under an NDP administration is more than a little ironic.

It was under former NDP premier Roy Romanow that deficit control, a curtailing of public investments and even income tax cuts really began. Romanow's successor as NDP leader and premier, Lorne Calvert, extended this agenda with cuts to the province's sales, business and corporate taxes."

Certainly, this would seem ironic if it weren't entirely in line with the political trends of the time.

Consider that Jean Chretien, one considered a stalwart of the liberal wing of the Liberal party, led a government that reduced the country's deficit drastically, and posted some of the only surpluses of the day in the Western World.

Chretien was responding to pressures being exerted upon his government by Preston Manning's Reform party, just as Roy Romanow -- and Lorne Calvert after him -- were responding to pressure being exerted by the upstart Saskatchewan party.

"This change under NDP governance happened at the same time that Saskatchewan's economic interests became more closely tied to the oil economy. The prospect of oil at nearly $100 a barrel was something that even an NDP government from this province could share eagerly with the Progressive Conservative government in Alberta.

It can be argued that Saskatchewan grew that much closer to Alberta with each dollar that a barrel of oil increased in price over the past four years. What's been bad for everyone else's economy has been great for ours, especially since the Saskatchewan Party's election win last November that has coincided with the price hike in a barrel of oil by $50."

It should be considered only natural that Saskatchewan and Alberta would grow closer considering the number of interests they hold in common. Both economies have constantly strengthened with the increasing value of oil and gas. Thus, as goes oil and gas will go the economies of Alberta and Saskatchewan -- although with some creative government and appropriate investment, this need not always be so -- and as goes the economy of Alberta or Saskatchewan will almost inevitably go the other.

"That said, Saskatchewan and Alberta today appear to be as closely bonded by political ties as economic ones. At least that's what some recent developments suggest.

The first ministers meeting in Quebec last week, where Premier Brad Wall and Alberta Premier Ed Stelmach found themselves at odds with their counterparts who were promoting cap-and-trade system on carbon emissions, was only the latest evidence of this emerging alliance.

We saw pretty much the same reaction from the two provinces to federal Liberal Leader Stephane Dion' Green Shift strategy, which takes square aim at Alberta and Saskatchewan's energy resources.

Stuck in the same foxhole and dodging bullets from eastern critics eager to portray Alberta and Saskatchewan as greedy, selfish and environmentally irresponsible, it's only natural that the two provinces would become that much closer.

That said, it's highly unlikely that an NDP government in Saskatchewan would have jumped into that same foxhole on the Green Shift or perhaps even on a cap-and-trade scheme."

Of course not.

It's easy to get along with your neighbours when you see eye-to-eye. And it would simply be less than reasonable to expect a Progressive Conservative government -- particularly one led by an individual like Ralph Klein -- to see eye-to-eye with an NDP government.

Likewise, there's nothing like an external threat -- say, that posed by a federal party with a history of confiscatory tax policies and a habit of breaking its promises -- to bring two provinces even closer together.

"The latest evidence of the bi-provincial political link came Monday with the Saskatchewan Party government signing on to Pacific North West Economic Region (PNWER) -- something the New Democrats of this province not only wouldn't do but would vigorously oppose, because they see it as precursor to joining the Trade and Investment Mobility Agreement reached by Alberta and British Columbia."

Then again, considering the vehemence of the NDP's opposition to NAFTA, it should be considered unsurprising that the NDP would decline to join an organization such as PNWER.

It's also less than surprising that a Saskatchewan party government -- considering that the Saskatchewan party was founded out of a coalition Progressive Conservatives and conservative-minded Liberals -- would be so eager to join.

It's also less than surprising that Alberta -- looking for any dance partner it can find in an effort to resist a potential replay of the infamous National Energy Policy -- would be so eager to get Saskatchewan on board.

"Lest there be any doubt about this newfound closeness, consider what deputy Alberta premier Ron Stevens said about sponsoring Saskatchewan's application to join the private-sector organization his province helped to create:

"I can tell you, as a neighbouring sister province, (Alberta has) seen under Premier Wall a change in attitude," Stevens said during Monday's PNWER press conference.

"The province now has a outward looking, engaging, active attitude and I think that Saskatchewan is going to be a robust, full member of this organization. We are all going to be beneficiaries of that."

Maybe the close bond with Alberta wasn't forged quite overnight. But make no mistake that Alberta and Saskatchewan have become closer than they've been in decades."

Certainly, Alberta and Saskatchewan have grown closer -- more than simply economically or politically.

Numerous residents of either province have migrated to the other over the past numerous years. In particular, there has been a strong trend of Albertans moving to Saskatchewan. And anywhere Albertans are moving in such numbers is almost inevitably due for a conservative resurgence.

In other words, it's no surprise that Alberta and Saskatchewan have become so cozy. Furthermore, it's about time.

And They Wonder Why We Don't Trust Them

Liberal MP envokes spectre of NEP, Garth turner feins shock

With Liberal leader Stephane Dion just having finished a tour of the west trying to sell his carbon tax plan, yet another Liberal MP has made that task significantly harder.

First it was Halton MP Garth Turner, who made offensive comments about Quebec separatists and alleged Albertan separatists.

Now, it's Thunder Bay-Rainy River MP Ken Boschoff, who published a statement on his website insisting that the green shift would provide a Liberal opportunity with a tool for further wealth redistribution:

"The Liberal Party’s Green Shift announced on June 19th marked the most aggressive anti-poverty program in 40 years. The ‘shift’ will transfer wealth from rich to poor, from the oil patch to the rest of the country, and from the coffers of big business to the pockets of low-income Canadians."

Not only does Boshcoff insist that the "green shift" plan will do all this, he even has a pretty good idea as to how:

"Roughly $9 billion of the $15.3 billion expected to be collected annually in carbon tax revenues would be returned to Canadians earning less than $40,000 annually. This would be done through a combination of income tax cuts and benefits targeted at children, low wage earners, rural residents, and individuals with disabilities."

All of this with the revenue being transferred from "the oil patch to the rest of the country".

Considering that Alberta, Saskatchewan, British Columbia, Manitoba, Newfoundland and Nova Scotia are Canada's leading oil producers, it's hard to interpret their comments as anything other than Liberal party intent to transfer wealth out of these provinces to Ontario and Quebec.

Of course, Garth Turner insists that the "mild-mannered" Boshcoff only wrote what he wrote for political gain:

"Ken Boschoff is a mild and caring guy, as far as I can tell. He’s my colleague from the Thunder Bay area, and an extremely effective communicator in his riding. That may be why, since his chief political opposition there is the NDP, he chose to write a piece the other day stressing the social aspects of the Dion Green Shift.

...

So, yeah, I know what Ken wrote. I also know why, and what he meant. I can also tell everyone reading this that not a single time, not once, has the notion of (a) screwing the West, (b) finding a new NEP, (c) transferring wealth from Big Oil to Toronto, (d) funding lavish new social programs or (e) dreaming up a plan to secure the Eastern vote, been discussed in national Liberal caucus. But I have heard Dion tell a room full of MPs, none of whom were from Alberta, that his plan will help diversify that oil-dependent economy and lead to a better life for every person living there."

But it's hard to decide what Dion would be saying to an Albertan MP, considering that he doesn't have any in his caucus.

Beyond that, while he again mischaracterizes reactions to Boshcoff's comments -- be they candid or otherwise -- as evidence of Alberta's allegedly bubbling separatism, Garth overlooks a very important fact:

There's a reason why Albertans don't trust the Liberal party. And yes, it does have a lot to do with the National Energy Program. And rightfully so.

The unconstitutionality of the NEP -- intervening in a policy sphere constitutionally ceded to provincial jurisdiction -- has long been established. The irreversable and irrecoverable damage done to the Albertan economy has long been established.

But the biggest slight -- the one that provokes the greatest amount of anger and resentment -- is the Liberal insistence that the damaging results of the National Energy Program should simply be dismissed to the pages of history.

All too often, this is insisted by individuals who lost nothing in the course of the NEP. And Albertans -- who, yes, do have a long memory -- remember these things quite vividly. And, no, Albertans do not believe those losses have beome irrelevant. And they certainly don't believe those losses are "yesterday's news".

Meanwhile, the Liberal party promises the carbon tax won't hurt our economy, and promise it won't result in any additional taxes. Yet the Liberal party has made such promises before, and broken them before.

Mr Boshcoff, Mr Turner: there is a reason westerners -- and Albertans in particular -- don't trust the Liberal party. And to figure out precisely what that reason is, all you need do is take a good, hard look at your own comments... and in a mirror.

We don't trust you.

Those Who Forget History

Are destined to remain clueless while it repeats itself

If we at the Nexus have learned anything, it's that as far as being a political commentator or historian goes, Lindsay Stewart makes a really bad actor (presumably a decent enough waiter, though).

A few days ago (while we were otherwise indisposed) Stewart decided to take aim at the recent "Stephane Dion's tax trick" ads being offered by the Conservative party:

"The Stephen Harper Party of New Canada is set to launch yet more attack ads in their permanent and constant election campaign. We've grown used to seeing the shrugging visage of hapless Liberal person-that-is-supposed-to-be-in-charge, Stephane Dion in the Con's endless efforts to blame the state of their nation on the other guys. This time the Cons have targeted the gas pump. Their new ads will be a brightly coloured blamefest, designed to take advantage of consumer anger at the spiraling price of fuel.

All of this trouser dampening and fear mongering is aimed at Dion's terrifying carbon tax proposal. You know, nothing says Conservative quite like the reek of stale urine, well, except for estrangement from the truth.

"However, Jane Taber and Craig Oliver, co-hosts of CTV's Question Period, noted that the Liberal tax -- which hasn't been formally presented yet -- rules out an additional tax on gasoline."

Details, bitches. Let loose your bladders and join the widdling chorus of Conservative he-men and women. What ever you do, don't pay any attention to the fact that it is during Conservative rule that those fearsome prices have gathered. That the Harper Conservatives are at the helm as auto sector jobs vanish and food prices sky-rocket, that means nothing. Shiny thing ADSCAM shiny thing."

One wonders precisely where to start.

Stewart wants to draw the readers' attention toward various "facts" and impel them draw some extremely dubious conclusions regarding them.

Namely, that if gas prices rise, auto sector jobs disappear and food prices rise while the Conservative party is in power, then, by golly, they simply must be to blame!

Pay no attention to the fact that rising oil and fuel prices have much more to do with increased demand for oil from China and India and its accompanying increase in speculators.

Pay no attention to the fact that the coming cuts in auto manufacturing actually have more to do with ever-increasing market competition between North American, European and Asian car makers, as well as recent dips in demand for uneconomical makes and models of cars being produced in Ontario plants. And certainly don't blame Ontario's McGuinty government for being "at the helm" in Ontario while job losses menace the population. They surely have nothing at all to do with it.

Pay no attention to the fact that the increase in food prices has more to do with increasing demand and transportation costs then any Harper government policy.

(Also pay no attention that the most striking food shortage in the world today is a shortage of rice -- which virtually no one is using for biofuels.)

Pay no attention to these facts.

"Oh yes, fellow Canadians, cower in fear before the tax and spend Liberals. Dread the party that balanced the federal budget. Fear the wicked men and women that brought us the sinister and awful budget surplus. Take solace in the doughy embrace of the bold Conservatives who have cut some taxes and presided over the decimation of the terrible surplus. Rejoice friends, soon with Conservative governance, diligence and care, we will return to the comfort and security of deficits and the slashing of ever more social programs. Infrastructure is for pussies. Why, Dion wants to tax something and all taxes are tools of the devil. He wants to take your money and give it foreign talking atheist abortion lesbians that are married.

"In addition, the carbon tax is supposed to be "revenue neutral" -- meaning revenue raised by the carbon tax is to be offset by accompanying cuts in income and other taxes, Taber said."

Don't pay any mind to the facts. We can't change tack, not now, not ever. Trust Stephen, he is large."

Ignore the fact that the Liberal party balanced the federal budget by slashing and burning public healthcare and education. Ignore the fact that the Liberal party built huge surpluses off of high taxes and the exporting benefits of a devalued Canadian dollar.

Ignore the fact that Liberals diverted billions of dollars away from gas taxes intended to help the provinces maintain infrastructure to fund their own pet projects and left provincial governments holding the bag for the maintenance of streets and highways (who, in turn, increasingly left municipalities holding the bag).

Pay no attention to these facts.

"He knows that doing anything to hamper the strip mining and carbon spewing filthy habits of his backers will destroy the economy. ADSCAM. Working cleaner, living smarter, why that's commie talk. Innovation and change will mean the end of everything as Stephen Harper knows it, the way he likes it and the way he wants to keep it. Fuck the fucking climate, screw the stupid rivers, lakes and waterways. There is money in them thar poisoned hills and ain't nothing more important than harvesting money for corporate profit. In this era, to be Conservative is divorced from conservation, let's call it unreconcilable differences shall we. Tomorrow is just a lie that keeps us from the rapture and Stephen and Stockwell are always at the ready to saddle up their dinosaurs and ride us off the cliff into the pretty, poisoned sunset."

Ignore the fact that the promise of a "revenue neutral" carbon tax (as Stewart constantly alludes to but never quite gets around to actually addressing) is far from innovative, and when one examines some basic political history, it's quite similar to promises we've heard before.

The idea is that the Liberal party will cut income taxes and "other taxes" in order to offset the cost of a carbon tax and prevent the necessity of additonal taxes on fuel.

We've heard similar promises from the Liberals before: namely, in the leadup to the 1993 federal election, when Jean Chretien promised the Liberals would abolish the critically-unpopular Goods and Services Tax. Liberal deputy leader Sheila Copps even promised to resign if the Liberals failed to do so.

As those who are familiar with Canadian political history will recall, the Liberals failed to do so, and Copps resigned -- only to immediately seek reelection in a by-election in a Liberal stronghold riding.

Flash forward 15 years in the future, and Liberal leader Stephane Dion -- the very same man who's promising a "revenue neutral" carbon tax -- has become a strident defender of the GST, not only opposing an abolition of the tax, but also opposing any cuts to it, decrying the very same "lost revenue" that Stewart laments.

Then one remembers the promised structure of the so-called "revenue neutral carbon tax" -- wherein taxes would be shifted away from income tax, and Canadians would instead be taxed for their carbon emissions -- taxes they could theoretically reduce by reducing their carbon emissions.

It would be a brilliant proposal if Canadians could actually trust the Liberals to keep such promises.

Yet as Canadians cut their emissions, reducing their tax burden, the government would eventually face billions and billions of dollars in lost revenue, facing a potential Liberal government with the very same cash flow problems they claim the Conservatives are causing for the country.

How to deal with that? Simple: shift tax receipts increasingly back toward income tax, slowly wiping out the carbon tax savings of Canadians with increased income taxes.

It's a clever tax trick, but it remains just that: a trick.

Beyond that, there's a huge question of who, precisely, will bear the burden of the carbon tax. Will it be shared equally by citizens and business, and by all sectors of the Canadian economy?

Not bloody likely. Anyone who honestly believes that the party of corporate Canada will impose an equal carbon tax burden on sectors such as the Ontario manufacturing sector need to give their head a shake. There's very little question that the Liberals very much miss the support of their corporate friends, and are eager to find a way back into their good books.

Which almost certainly means that citizens will bear a disproportionate share of this tax burden, and will likely see this manifest itself at the fuel pump, which will inevitably manifest itself in increasing costs -- and thus prices -- for everything.

Lindsay Stewart believes he can obscure the issue by never really addressing it, then dressing it up with various empty ruminations about how simply awful he believes the Harper government is.

What he doesn't seem to want to address is the fact that, when it comes down to tax-related promises, Canadians have precisely zero reason to trust the Liberal party, given the litany of their previously-broken promises.

We've also seen what they do with our tax dollars: when they aren't stealing them, wasting them on various pet projects.

It's previously been noted that the Carbon tax is "big-game politics". And it is.

Unfortunately, Stephane Dion and Lindsay Stewart are both betting on the ignorane and naivete of Canadians in playing this hand.

Only time (and an election) will tell if Canadians will call their bluff or not.