The Quebec referendum, Alberta separation and the politics of Big Oil in Canada

The Quebec referendum, Alberta separation and the politics of Big Oil in Canada

History doesn’t repeat itself, but it often rhymes. 

It’s not easy to pick up on this when things happen — particularly big events that seem without precedent. Establishment news media doesn’t help as they tend to declare — often without justification — that a given event is “unprecedented.” Ignoring how much our society may talk about history and its importance, we are startlingly historically illiterate, and it is our societal inability to connect the historical dots that — if not dooming us to repeat the mistakes of the past — certainly precludes our evolution. 

Forty-five years ago today, René Lévesque’s sovereignty question was rejected by nearly 60% of voters. Pierre Trudeau interpreted the result as a wake-up call: Canada had to change. 

Trudeau had the momentum: though he lost the May 1979 election and even announced his resignation, he won a majority government in February of 1980, and then three months later carried the federalist side to victory in the referendum. Rather than rest on his laurels, Trudeau immediately dove into the hard, thankless work of nation-building, creating the foundational documents of modern Canada, such as the Constitution, the Charter of Rights and Freedoms and the Canada Health Act, among others. Though Canadians now count these as among our greatest accomplishments as a nation, the unfortunate and ironic reality is that Trudeau’s popularity as a leader suffered precisely because he engaged in this hard work to begin with.

Were that not ironic enough, today’s Alberta separation movement can trace its roots back to the conditions that led to the First Quebec Referendum as much as its consequences.

Then as now, Canada’s economy was overly reliant on the United States. This had been an issue throughout the postwar economic boom, primarily in Quebec and Ontario where the bulk of the population resides and most of the industry is located. Though Canada was generally prosperous, we didn’t hold the reins to our own economic development. American corporations could close a branch plant without warning and decimate the economy of a small town. Quebec was particularly vulnerable, as it had long been used as a source of cheap labour and resources. Quebec reacted to this unfair and exploitative economic arrangement by electing Jean Lesage in 1960, ushering in the Quiet Revolution under the banner “Maitres chez nous.” Lesage laid out a blueprint for nation-building in Quebec, including the development of public education and healthcare, as well as Hydro-Québec to provide inexpensive electricity. 

The oil crises of the 1970s demonstrated that events happening on the other side of the globe could nonetheless negatively impact our economy, and that we weren’t just vulnerable to an economic over-reliance on the Americans. Canadians were hit with inflation, unemployment and scarcity all at the same time.

Sound familiar?

One of Trudeau’s solutions to this problem was the development of Petro-Canada, which evolved into a vertically integrated oil company over the course of the 1970s. The motivation was simple: If Canadian consumers and industry can no longer rely on shipments of cheap oil from the Middle East, a nationalized Canadian oil company would step in to replace it.

But then there was another oil crisis, beginning in late 1978, and it was even worse, leading to the early-1980s global recession, the worst economic slump since the Great Depression.

While Trudeau moved ahead on the constitutional negotiations that would result in the charter, on the economic side of things he proposed the National Energy Program (NEP), a federal program designed to use Canadian oil and gas resources to make Canada “energy sovereign.” Building off ideas originally put forward in the mid-1970s — like building new east-west pipelines, exploring for new oil and gas fields outside of Alberta, research and development into new synthetic oil derived from bitumen, as well as energy conservation policies and home retrofitting programs — the NEP aimed to shield Canadians from external economic disruptions caused by geopolitical crises Canada had nothing to do with.

Initially the program was very popular amongst Canadian consumers nationwide, but Alberta’s American-owned oil sector reacted poorly, arguing the NEP was communism, and accused Trudeau of screwing the West.

Sound familiar? 

This is the root of “Western separatism”: the federal government tried to do something that would benefit all Canadians but a small yet vocal minority of oil tycoons felt Western energy resources existed only for their immediate benefit. An unholy alliance between the oil and gas sector and Canada’s conservative movement took form to oppose Trudeau, the NEP and nation-building in general. Brian Mulroney’s election victory in 1984 started the conservative ‘counter-revolution’. Plans moved ahead not only to fully dismantle NEP and privatize Petro-Canada, but Mulroney advanced a free trade policy that would have the ultimate effect of eliminating whatever economic sovereignty Canada had left. Most Canadians voted against free trade in the 1988 election, but Mulroney moved ahead with the deeply unpopular agreement anyway. No sooner was the ink dry on the free trade accord than Canada entered yet another recession, this one striking hard at Ontario and resulting in hundreds of thousands of job losses in just a few years.

Mulroney’s Progressive Conservatives were annihilated in the 1993 election, leaving Canada with a free trade agreement no one wanted, and two new political parties that wanted a lot less federal government. The Bloc Québécois tried its hand at Referendum No. 2, while the Reform Party developed into a new national conservative party based in Western Canada and with unambiguous ties to the oil and gas industry. A new generation of conservative talking heads became fanatical boosters of the energy industry. They argued that Canada’s oil and gas resources were key drivers of the national economy, that they’re somehow inherently ethical, and that any attempt to limit or regulate production was a foreign or liberal plot to destroy the country.

After the U.S. economy collapsed in 2008 the oil and gas sector took a hit that it struggled to recover from, and then oil prices tanked in 2014. But rather than invest in Canada or move towards restructuring our economy to make us less vulnerable to this dependency on the United States, oil boosting politicians and pundits spent 2011-2015 blaming Quebec for standing in the way of resource development, and for allegedly taking advantage of Western provinces to fund social programs. 

The myth that Western oil rich provinces are subsidizing Quebec’s “lavish welfare state” is an argument recycled from the early-1980s when conservatives protested the NEP. 

No provinces send money to any other province, equalization payments come from federal tax revenue. Alberta has never paid for Quebec daycare.

It’s a lie deliberately spread by politicians who’d rather demonize the people of Quebec than ask tough questions of an American-owned fossil fuel sector that’s ruthlessly exploited Canadians and sucked nearly all the value out of the oil fields. Energy projects that failed in the last decade did so for financial reasons, not because of Quebec environmental activists.

Justin Trudeau spent tens of billions of taxpayers’ dollars subsidizing the oil and gas industry throughout his time in office, but it was never enough to silence conservatives who always treated him as somehow illegitimate. The underlying economics of oil and gas didn’t and would not have improved irrespective of how much money Trudeau doled out. Making matters worse, the fossil fuel sector’s dependence and vulnerability to the United States would be exacerbated by the COVID-19 pandemic, and then by the Biden administration’s Inflation Reduction Act.

Then Trump started the tariff war and called on Canada to be annexed. 

This proved that free trade agreements aren’t worth the paper they’re written on, but compounding matters is that Trump tried to make fossil fuels a wedge issue in the last election. Canadians — having rediscovered that their economy is too reliant on the U.S. for the umpteenth time — nonetheless appear ready to embrace retaliatory tariffs and economic nationalism.

Except for Canada’s still largely American-owned fossil fuel sector. Under the guise of economic nationalism, they demand the federal government unequivocally support their plans to build pipelines in all directions, and further that they eliminate all regulations and oversight. Pierre Poilievre immediately agreed. Danielle Smith insisted the federal government should do whatever the fossil fuel sector says to avoid a separatism crisis. Mark Carney supported this in theory but also mentioned a national renewable electrical grid. Surprising no one, the leading lights of the Sore Loser Party of Canada started tiptoeing around the idea of separation, something the overwhelming majority of Albertans and all other Canadians do not support. 

We’ve traded separation anxiety from one region to another, with a national population eager for economic nationalism in the face of external threats and vulnerabilities. 

Plus ça change… 

Nation-building projects with an eye towards economic sovereignty make even more sense today, now that we know the Americans can’t be trusted. By contrast, those arguing for rapprochement with Trump, like Danielle Smith, are transparently doing so for the benefit of the oil and gas sector. Their appeals for economic nationalism ring hollow, as they’re primarily arguing against the last remnants of federal control over an industry whose profits will continue to flow south irrespective of how many new pipelines to various coasts get built. 

If Carney capitulates to their demands to avoid an Alberta separation crisis, the people of Canada really don’t have any sovereignty to speak of. Furthermore, giving in to Big Oil and the separatist wing of the conservative movement in Canada won’t change the economics of oil and gas, both of which are headed for gluts that will sink prices and make Canadian fossil fuel resources too expensive to exploit. 

If history is any guide, the oil and gas sector — and their petulant lickspittles, politicians as much as pundits—will complain once again that the federal government didn’t support them enough, or that Quebec stood in the way. 

The ‘party of personal responsibility’ always finds a way to blame everyone but themselves.  

Yves-François Blanchet makes a good point when he says oil and gas doesn’t qualify as a distinct society worth separating for.

At the heart of the sovereignty question asked by René Lévesque 45 years ago was an appeal for economic sovereignty and union. Rather than demonize them for allegedly trying to break up the country, we should have paid more attention to the underlying economic conditions and concerns from which the original Quebec sovereignty movement grew. Pierre Trudeau clearly did, as he spent his last five years in office doing all he could to help Canada stand on its own two feet. He did so even though it was obvious at the time it would likely cost him his job. Today we can’t imagine a country without all he accomplished in that time, and yearn for an era in which we tried to assert ourselves.

We’ve come a long way to get back to where we started. ■

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