Alberta Unbound
Grievances over energy, amplified by enemies
(Separatist activists at a May 3rd pro-US rally in Edmonton)
Two major factors have brought Canada to the point where an Alberta separatist movement is consistently making headlines across the country.
The first one has a long history.
Albertans (and others in western Canada) have always reacted strongly to policies made in Ottawa that did not serve their interests.
The United Farmers of Alberta, which governed the province from 1921 to 1935, was a direct reaction to the National Policy of Sir John A. Macdonald, which created a captive market for eastern manufactures. The failure to achieve reciprocity with the US denied Alberta farmers a lucrative outlet for grain and other crops.
The Alberta Social Credit Party, in government from 1935 to 1971, was a response to Ottawa’s late adoption of Keynesianism in the Great Depression. Aberhart and Manning offered their own schemes to put money in the pockets of Albertans and save farmers from bankruptcy. Servus Credit Union — the largest in Canada today — and Alberta Treasury Branches (now ATB Financial), founded in 1938, are contemporary institutions that grew our of that era.
By penalizing Alberta for its oil wealth, Pierre Elliott Trudeau’s National Energy Policy fuelled alienation and populism across western Canada, becoming one of the key triggers for the founding of the Reform Party of Canada in 1987.
Today a legitimate new grievance has arisen because of federal government policies championed by Justin Trudeau after 2015 that seriously constrained the growth of Canada’s oil and gas sector.
In concrete terms, Canadian oil production in 2015 was about 3.7 million barrels per day (bpd). Today it is about 1.5 million bpd higher, at 5.2 million bpd.
In 2015, the United States produced 9.4 million; today it produces 13.6 million bpd — a gain of 4.2 million bpd.
Over a decade oil production grew faster in the US than in Canada.
But if Canada had not had industrial and consumer carbon taxes; if we had not banned new pipelines, refineries and tanker traffic on the Pacific coast; if we had reduced the discount on Alberta oil by opening new markets; if we had not triggered the largest capital exodus in Canadian history, estimated by RBC to total $1 trillion — Canada might easily be producing 2.0 million bpd more oil today.
The current price for West Texas intermediate crude is US $91 — or $125 Canadian. So $250 million per day in exports was lost to Canada over the past decade.
That means $91 billion in exports was lost per year. With $2.30 in total economic impact for every dollar in exports, Canada lost over C$200 billion in annual GDP.
By failing to build mines, port infrastructure and LNG export capacity over the same period, the total national opportunity cost was likely over C$350 billion — well over ten percent of today’s nominal GDP of C$3.24 trillion.
Canadian GDP per capita would be, on average, ten or even 20-30 percent higher.
The most direct, most brutal impact of this punitive policy was in Alberta.
