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History shows that political leaders who rely heavily on oil earnings to paper over economic cracks, balance budgets and spread largesse among the voting public can end up paying a heavy price for putting too many eggs in the energy basket.

We are about to find out if that holds true in Canada, where the Bank of Canada responded to the steep drop in oil prices with a surprise rate cut Wednesday.

Every major oil exporter is scrambling to deal with sudden economic reversals, tax shortfalls and greater demands on the public purse as capital investment is slashed, massive projects are shelved and layoffs mount in the wake of plunging oil prices.

It was a Saudi-orchestrated price collapse in 1986 – when oil bottomed at $10 (U.S.) a barrel after dropping by two-thirds in just four months – that set the stage for a stunning falloff in Russian production in the late 1980s and the breakup of the Soviet empire.

Another price crash in 1998 played a key part in the collapse of the ruble and a humiliating bond default that cleared the way for Vladimir Putin's swift rise to the top of the Russian heap. It also brought former coup plotter Hugo Chavez to power in Venezuela on a wave of populist anger.

Mr. Putin never championed the reforms necessary to steer the Russian economy away from its heavy reliance on energy, whose fortunes he entrusted to a group of trusted cronies. But it's a model of competence compared with what has been going on with such basket-cases as Venezuela.

Under the misdirection of President Nicolas Maduro, Mr. Chavez's handpicked successor, the country was already heading toward self-destruction – with an official inflation rate of 64 per cent and a staggering budget deficit amounting to 14 per cent of GDP – even when oil was still riding high.

No one would put Prime Minister Stephen Harper in the same leaking oil tanker as the political chiefs of such desperate cases as Venezuela, Iran, Nigeria or Angola. Canada does not have a broken economy.

But Mr. Harper's political fortunes have long been closely tied to energy. The ambitious development of the oil sands and the long-distance pipelines needed to move the stuff amount to the Conservative government's version of a national industrial policy.

The strategy worked as long as prices kept rising. It was the energy boom and commodity supercycle that kept Canada growing when other major developed countries were being hammered by the Great Recession. Mr. Harper managed to position himself as a successful, yet prudent manager of both the economy and the public purse.

But as the central bank has just underscored, the Canadian picture has darkened in a hurry.

As plunging oil prices threaten to blow a multibillion-dollar hole in federal finances, making a hash of balanced-budget promises, it's time for Mr. Harper to show off that self-proclaimed managerial competence.

Unless oil recovers a lot sooner than most experts expect, it ought to make for an interesting fall election.