Column ignored the complexity of National Energy Program

Re: Imagine if the NEP had never become federal policy?, Opinion, Oct. 28

Unfortunately, Licia Corbella's two-parter on the 1979 National Energy Program (NEP) is both simplistic and amounts to merely a diatribe against the federal Liberals. While there were many victims in Alberta, scratching below the surface will show the context to be: (1) the 1973 OPEC price hike, raising a barrel of oil from $17.50 to over $70 in today's dollars ($3 to $12 in 1973 dollars), creating stagflation across the Western world; (2) the 1979 OPEC price hike from $71 to $142/ barrel ($20 to $40), with an expectation that this would rise to almost $350 ($90 in 1979 dollars) in a few years.

Contrary to Corbella's assertion of a “grossly malevolent and incompetent policy,” the NEP was a reasonable, co-ordinated approach to the issue, including (1) a “made in Canada price,” to ensure the majority of Canadians didn't freeze in the dark; (2) incentives to encourage Canadians to switch away from oil heating; and (3) a desire to break the stranglehold of American oil companies, to emulate countries such as Norway, which, starting in 1965, became the major shareholder in their country's oil and gas. Because oil and gas companies couldn't allow Canada to copy upstart Norway (or the U.K.), and because they resented the modest increase in federal take — from 10 to 24 per cent — they took their ball and went home.

Compare Canada's timid approach to Norway's current petroleum exports' marginal tax rate of 78 per cent and you'll see why our Heritage Fund is a joke in comparison.

Tom Kerwin, Calgary