In 1980, a newly elected prime minister from Quebec, Pierre Trudeau, decided to mobilize the resource wealth of Western Canada in order to subsidize Eastern Canada. The result was the national energy program (NEP 1), which fixed domestic prices for oil and gas below world levels, levied an export tax to boost federal revenues and confiscated producing assets to give to Petro-Canada.
In 2012, a would-be prime minister from Quebec, Thomas Mulcair, has resurrected the idea of diverting Western Canadian income, but with an environmental gloss. According to statements by Mr. Mulcair and other leading members of the New Democratic Party, there should be a carbon tax to raise federal revenue, environmental controls to limit or even terminate oil sands production, and requirements to refine hydrocarbons in Canada rather than in other countries, even if it's uneconomic. Call it NEP 2.
NEP 1 was an economic disaster that had to be repealed within a few years, but the political consequences lasted longer. It jump-started the development of Western separatism, previously a fringe phenomenon. A separatist candidate was elected in an Alberta by-election in 1982, and his party got over 10 per cent of the vote in the general election that followed within a few months.
Western separatism, however, gradually petered out, not least because Preston Manning convinced Westerners that their grievances could be rectified within Canada. Under the inspired slogan “The West Wants In,” many who had flirted with Western separatism were attracted to Mr. Manning's Reform Party. It was a long and winding road, through the Reform Party, the United Alternative, the Canadian Alliance and the merger with the Progressive Conservatives, but those whose livelihood was threatened by NEP 1 became part of a new electoral coalition controlling the federal government through the Conservative Party of Canada – a protracted but ultimately happy ending for those who believe in Canada and Canadian democracy. But the ending might not be so happy if the NDP rides to power on Mr. Mulcair's NEP 2.
To understand the reaction in Western Canada to NEP 2, try a little thought experiment. Assume that a federal party with a leader from Alberta decides it's time to make Quebec's electricity industry benefit all Canadians. Put a stop to the immense environmental damage – drowned river systems that jeopardize fish populations; flooded forests that contribute to climate change; unsightly transmission lines that endanger human health through electromagnetic radiation.
A federal tax on the export of electricity would help redistribute the revenue resulting from Quebec's unmerited rainfall advantage. How further to mobilize Quebec's electricity for the welfare of all Canadians? Electricity is sold through Hydro-Québec at a subsidized price to residents of Quebec (which also increases Quebec's equalization payments), but exported at market prices to consumers in the United States. A better approach for Canadians would be to require Quebec to sell surplus electricity to other provinces at the same subsidized price it offers to its own residents. What a boon to the manufacturers about whom Mr. Mulcair professes concern! Cheap electricity across the country would also help combat global warming by enabling an earlier phase-out of coal-burning power plants.
It's not hard to envision the reaction in Quebec if the federal government tried to adopt such policies. Quebec would be out the door faster than you can say fleur-de-lis – and who could blame them in light of such a co-ordinated attack on their principal industry? By the same token, don't be surprised if there is an outraged reaction in Western Canada to NEP 2 if Mr. Mulcair comes to power. It will be ironic and sad if Western separatism, having been defeated once by the region's own residents, is again resurrected by rent-seeking federal politicians.
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