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EDMONTON — Ed Stelmach remembers clearly the anxiety that gripped him one day 25 years ago while driving home from a particularly gloomy meeting with the bank.
Then a farmer with two young sons, Mr. Stelmach was heading back to the homestead settled by his grandfather, wondering how he would pay for a new parcel of land he had recently added to his operation northeast of Edmonton. With interest rates heading toward 24 per cent and the national energy program wreaking havoc on the Alberta economy, the prospects weren't good.
“It was devastating,” the Alberta Premier recalled last month in an interview from his third-floor legislature office. “You go to the bank and they tell you how much interest you've got to pay and I remember driving home that one day and wondering, ‘What future do I have?'”
His future, as it turned out, was to survive the NEP and lead the province. But ask Mr. Stelmach today how he would react to a federal government tempted to apply an environmental tax on Alberta's oil-sands sector and you'll get a blunt answer.
Alberta Premier Ed Stelmach (File)
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Internet Links
- Globe poll: How Albertans view the oil sands
- Shifting Sands: Globe stories, photos, discussions and interactives from our eight-day series on the Alberta oil sands
“Back off.”
Those two words sum up the current political climate around the incredible potential of Alberta's oil reserves, with some predicting new federal-provincial tensions reminiscent of those caused by the NEP.
With that policy in the early 1980s, Ottawa moved to increase Canadian ownership of the industry in Alberta and to capture a cut of the oil revenues. Compounded by the plummeting price for oil and by high interest rates, the program helped to torch billions of dollars of investments, devastating the provincial economy.
Big-ticket projects, such as the $13.5-billion Fort McMurray oil-sands development known as Alsands, died off, construction cranes disappeared from the Calgary skyline and thousands of homes were lost. It laid the seeds for western alienation and the founding of the Reform Party, and sparked loose talk of separation.
Most experts would concede today that the hated NEP was a misguided policy that no federal government would ever repeat.
But the boom being fuelled by the oil sands is bringing a new set of fears and regional tensions.
Alberta's oil wealth is already being blamed for the high dollar that is harming the nation's manufacturing base in Central Canada, while also helping to shift political and economic power to the West. And efforts to control carbon emissions alarm many Albertans, who fear that restrictions will curb development of the oil sands and their province's wealth.
“Is this going to present some real challenges to some parts of our country? Yes it is,” Ontario Premier Dalton McGuinty said of Canada's environmental challenges in a recent interview.
Indeed, Mr. McGuinty himself may have provided the first hint of regional tension over the oil sands when he suggested to his fellow premiers last summer that they adopt a national carbon-trading system to combat climate change.
Under such a scheme, companies would be given emissions limits that they can exceed only if they buy credits from companies that pollute less. Although referred to as a carbon trading system, many Albertans see it as an outright tax that discriminates against their industry.
But six months after first pushing the idea, Mr. McGuinty has no regrets, saying a carbon-trading system cannot work without Alberta. “It's not sensible to even contemplate that,” he said. “We need to be in this together.”
Among those most worried about the potential national implications of the new boom is Alberta's premier emeritus, the blue-eyed sheik, Peter Lougheed, who ran the province from 1971 to 1985 and led the building of the Syncrude Canada Ltd. oil-sands plant.
In a speech to the Canadian Bar Association last summer, Mr. Lougheed envisaged a fight over oil-sands development that would be “10 times greater” than the divisive controversy engendered by the NEP.
Last month, in a small corner office atop a Calgary office tower, he said in an interview that “maybe, with reflection, ‘10 times' was extreme.” But the environmental issues are “so sensitive to the public generally, as the polls show,” he added.
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