Contending Loyalties: Western Alienation

Harsimar Singh, Vision Rijal, Kushagra Patel, Hafis Ayub, Simarjeet Singh

Script
(sentences to be said exactly as written)
Note-The name on the top of each paragraph indicates who says it)

SAM
contending loyalties: Canada and Alberta
The relationship between the province of Alberta and the government of the nation-state of
Canada has been a long delicate relationship, with changing balances with regional autonomy
and national interests. Pipeline politics, economic disparities, different stances on environmental
issues, and the rich oil reserves of the province are some of the main factors that have caused
numerous debates, political struggles, and the introduction of different politics.

Vision
The Loyalties in question

The people of Alberta face a conflict between their loyalty to Alberta and their loyalty to Canada.
The struggle is between prioritizing the provincial interests of Alberta, economic matters, and
regional identity, and their loyalty to Canada, asking for considering the broader national
interests, identity, and matters.

Harsimar
Alberta becoming a Canadian province

On September 1, 1905, Alberta officially became a province of the confederation of Canada.

Alberta joined the confederation along with Saskatchewan, and Canada only consisted of seven
states before. The official ceremony for the entrance took place in the city of Edmonton, and the
city was also declared the capital of the province. This was a significant expansion for Canada,
in terms of its identity and landmass.

Kush
What caused it all
In 1947, around 30 kilometers to the south of Edmonton, Rich oil reserves were found. This is
regarded as the most significant oil discovery in all of Canada and Alberta’s history. Oil
companies had tested sites for oil presence numerous times and they had found no reserves,
and this test was one of the last to be conducted. The discovery of oil at this site, changed the
approach of the oil companies, towards their efforts to discover oil. The efforts for discovering oil
intensified in Alberta since the Leduc oil discovery signaled to the companies that Alberta
contained vast oil reserves. As the discovery efforts intensified, many more sites with oil
reserves were found in the province, bringing economic prosperity to the province. Oil
companies in Alberta attracted significant investment both from inside of Canada and
internationally, due to the promising resources found. As companies started to develop the
infrastructure needed to meet their oil production targets, there was a mass migration of workers
from other provinces in the next few years. Oil is often described as ‘liquid gold’ or ‘black gold’
due to its significance in the industrialized world, and the discovery of such large reserves
changed Alberta’s financial conditions forever. This positive discovery can also be considered
as the root of the political tensions between Alberta, and Canada since this discovery, as the
starting subjects of debate in the two sides are directly or indirectly related to oil found in
Alberta.

Hafiz
1973 Oil Crisis

In 1973, a group of Arab states Attacked Israel, and Western countries including the US,
France, and the UK provided support to Israel. The US provided a significant amount of military
aid to the Israeli military, which helped them counter the combined military forces led by Egypt
and Syria. The Arab members of the Organization of the Petroleum Exporting Countries,
(OPEC) refused to export oil to the United States of America, this was a response to the support
the US had provided to Israel. This caused the oil prices in the US to skyrocket, Canada as a
close ally of the United States was perceived to support Israel. The effects of the crisis also
spread to Canada, resulting in high surges in oil prices. Although Alberta produced a lot of oil, a
lot of Eastern Canada’s oil needs were dependent on Exports, mainly oil exports from the
Middle East.

Vision
How the oil crisis affected Alberta

By 1973, The oil reserve discoveries had helped Alberta establish a strong oil-based economy.
Not only was Alberta self-sufficient for its oil and natural gas needs in 1973, but it was also a
major contributor to Canada and international markets. Canada in 1973, didn't have the needed
infrastructure of pipelines, for large amounts of Albertan oil to be transported to the Eastern part
of Canada. There were pipelines in the Trans Mountain that served the Western coast of
Canada, and other existing pipelines transported oil to the US. Not only was Alberta self-
sufficient, meaning no energy shortages would be caused by the historical increase in prices,
but the province would receive great benefits from the high prices in the market, since selling at
high prices would increase the profits of oil companies, indirectly increasing the provincial
government’s revenue. On September 4th, 1973, the prime Minister of Canada, Pierre Trudeau
announced a temporary freeze on oil prices, this was a regulatory action taken by the
government, and there was strong opposition against the decision by the government of Alberta.
The Progressive Conservative Party (PC), was in power, and Peter Lougheed was in power. He
strongly criticized the decisions taken by Pierre Trudeau and the Liberal party in power. The fire
of conflict was fueled when the government placed a 40% federal tax, on all the oil exported to
the United States, and the revenue generated by the placed taxes was used to subsidize the oil
price of the imported oil in the Eastern provinces. This decision was taken just nine days after a
freeze on oil prices. This meant that Alberta couldn’t only not capitalize on the opportunity of
high prices, but they also had to pay a 40% tax on the excess profits made by exporting oil
close to or at international market prices. The premier of Alberta famously called this decision by
the Federal government “the most discriminatory action taken by a federal government against
a particular province in the entire history of Confederation” (Energy wars. Energy Wars - Oil
Sands - Alberta’s Energy Heritage. (n.d.-a)). This statement represents the viewpoint of many
Albertans, who believed that the decision taken by the Federal government was unfair and
partial. This was the crisis that made ‘western alienation’ a familiar feeling for Albertans, this
was also the time when small talks of separation from Canada started, much weaker than the
ones in Quebec.

Harsimar
NEP
The National Energy Program (NEP), was introduced under Prime Minister Pierre Trudeau in
1980, and it was a set or group of Energy policies for Canada. This energy plan was designed
to counter the multiple energy crises that had happened in the 70s and was subject to a large
amount of criticism from Alberta. The main aim of the program was to distribute the wealth of
Canadian oil, in a more diversified way and maintain the national oil prices, slightly lower than
the international average. One of the key policies introduced in the program included a domestic
oil pricing system, which was meant to protect Canadian oil consumers from high oil prices. The
NEP also introduced the Petroleum and Gas Revenue Tax, also known as the PGRT, which
taxed the portion of profits made from the difference between the domestic oil prices and the
international oil prices. These two policies introduced in the NEP, impacted Alberta the most
and caused huge controversies and conflicts in the government of Alberta.

SAM
How the NEP Impacted Alberta
The policies introduced in the NEP had a direct impact on Alberta’s ability to maximize the
profits from its rich oil resources and generate maximum revenue for the provincial government.
The Made in Canada oil pricing system was the main policy, responsible for reducing the profits
generated by Oil companies in Alberta. The policy kept oil prices lower than that in the
international market, forcing companies to sell oil at lower prices than they could have without
the provisions. This directly resulted in lower revenue for the provincial government, since the
government makes money from oil companies through royalties, leases, issuing licenses, rental
fees, and other fees. The newly introduced taxes were placed on any oil sold closer to global
prices, which was mainly oil exported to the US. A lot of Albertan oil was transported down to
the United States because there was no proper infrastructure to transport enough oil to eastern
Canada. These taxes wiped off a lot of extra profits generated by Albertan companies and
transferred them directly to the federal government.

Kush
The Albertan response to the NEP

This policy was when the term “Western Alienation” became a strong feeling for Albertans, it
had been felt before in the 70s but this policy became the biggest controversy between the
province and the federal governments in history. The policy was met with immediate concern in
Alberta as soon as it was released, and the conservative government started analyzing the
specifications and implications of the program immediately. The premier, Laugheed promised to
protect the province’s rights over its resources. The oil production was strategically cut by
60,000 barrels a day as a protest, and the aim was to reduce the national supply. In 1981, the
provincial government further cut the oil production by 15% from what the levels had been in
1979, and discussions and negotiations began between both governments. The main aim of the
provincial government was to get more control and more benefits for Alberta. By 1982, the
effects of the NEP had started to show impacts on Alberta, international investment was
decreasing in the province, and concerns about job losses were growing. As September started,
negotiations finally came to a result and the Petroleum and Gas Revenue Tax was reduced, and
the federal government committed to reducing its involvement, but the program was not
eliminated. In 1983, and 1984, the provincial government kept the negotiations over NEP going
on, the world oil market faced a downturn, impacting Alberta’s economy even more. The federal
government changed in 1984 when The Progressive Conservative Party of Canada won the
federal election with the largest majority in Canadian history. During the two years, Alberta
struggled with its economy, but since the new federal government sympathized with Canada
more than the previous government, the end of the Nation Energy program had started. In 1985,
the Western Accord was signed and the measures introduced in the National Energy Program
were no longer applicable. The new policy had taken into mind the changes in the international
oil market and ended the protectionist policies and regulations of the federal government.

Harsimar
History of Equalization Payments in Canada
Equalization payments were first introduced in 1957, to assess the fiscal disparities between
different provinces in the federation. The program includes the federal government transferring
payments to governments of provinces that have lower fiscal capacity than the national
average. Alberta has been a net contributor to the program throughout most of its history, and
the formula for calculating the ‘have’ and ‘have not’ provinces has been changed multiple times.
In 1967, the formula for calculations was changed, to include 50% of revenue that is generated
from natural resources. This was a crucial change for Alberta since a lot of revenue generated
by the provincial government was from oil and gas. In 1982, this measure was added to the
constitution. Over the years many changes have happened to the program, and in 2007 the
formula was once again updated to include 100% revenue from natural resources. The system
works in a way no provincial governments transfer money to other provinces, but the federal
government pays funds for the program

Hafis
Alberta’s perspective

Currently, the system works in a way no provincial governments transfer money to other
provinces, but the federal government funds the program. Alberta, since the introduction of this
program, has always been a ‘have province’ because of its strong fiscal capacity because of the
oil-dependent economy. Over the 20th century, Alberta experienced many boosts in its
economy, due to increasing oil prices and increasing production. Alberta has historically had
individuals with higher salaries and incomes due to the growing oil industries, as a result of high
incomes, Albertan contribution to the program has been high. Alberta did receive some
payments after this program was started in 1957, but after those few years, the amount of
money to be transferred has been close to zero. In the late 1980s and 1990s, the debates over
the fairness of the program started to intensify, and the provincial government submitted many
requests and proposals that recommended changes to the formula of equalization payments. In
the late 2000s, international economic downturns affected Alberta’s economy, unemployment
rates rose, oil prices dropped and even during the economic challenges, Alberta was still a net
contributor to the equalization program due to its status. This caused the calls for reform in the
policy to be intensified. In 2014-2016, in a similar situation, oil prices dropped hitting the
Albertan economy, again intensifying the debates over the equalization policy. In 2021, a
referendum was held in Alberta over daylight savings time, and equalization payments. Over
60% of the 1 million Albertans who voted, called for the Equalization policies to be dropped from
the constitution. This referendum did not have the power to change the constitution, but it was a
clear indication of the stance of Albertans on the issue. The increased contribution of Albertans
to the federal government, and the view of unfairness from Ottawa over several subjects like the
energy policies, have contributed a lot in making equalization payments a big controversy.

Kush
Conflicts over Kyoto protocols and Environmental policies
The Kyoto Protocol was a UN international treaty, aiming to reduce greenhouse gas emissions,
all over the world. Canada signed the protocol in 1997, and the formal process of approval in
Canada took place in 2002. In the process of signing the treaty and after the signing in 1997,
the Albertan government raised concerns about the potential downsides of adhering to the
protocols. From 1997-2002, debates, discussions, and proposals were held on the effective way
of meeting the targets of the protocol, and Alberta presented strong objections to a lot of the
policies. The Albertan government believed that following the exact protocols would damage the
Albertan economy, due to dependency on oil and result in significant job losses. In 2011, the
conservative Prime Minister, Stephen Harper, withdrew Canada from the Kyoto Protocol. The
decision was because the government believed that China and the US were not doing enough
to reduce their emissions, and the protocols also had economic impacts on Canada. During the
years, the policy was in effect after 2002, the set practices were not properly implemented due
to economic reasons, and differences in provincial interests. The government of Canada
changed in 2015, and the power was back to the liberals, and under the new government
multiple new environmental policies have been introduced, becoming a topic of debate in
Alberta. From 2015 to 2019 the Progressive Conservative Party was out of power in Alberta,
and the NDP held a different position over environmental policies. The federal government
introduced various policies to reduce carbon emissions, including a carbon pricing system; the
NDP government also introduced its carbon tax in Alberta. In 2019, the Newly formed UCP
party won the elections and ripped the provincial carbon tax as one of its first actions. Since
then, the debate and conflicts on environmental protection policies have been ongoing.

Harsimar
Pipeline Interests
Alberta, as a province with rich oil resources, has always sought to expand its transportation
infrastructure to be able to move more oil within Canada and outside Canada. One of the
popular pipeline controversies is the Northern Gateway pipeline, which intended to transport oil
to the West Coast for exports to Asia, and the project faced hurdles over environmental
concerns. The project was canceled by the federal government in 2016. Another popular subject
of debate was the Energy East pipeline, which was intended to Connect the Eastern provinces
to Albertan oil. This project faced environmental concerns, regulatory problems, and opposition
from Quebec. These pipeline cancellations were seen as lost opportunities for Alberta and
raised the choice between provincial gains and wider national interests.

The role of Different political parties over the years

SAM
Liberal Party of Canada

The Liberal Party of Canada has historically been the party in power at the federal level when
the conflicts between Alberta and the federal government were at their peak. During the early
and mid-80s, the Albertan criticism of the Federal decisions was at its highest, because of the
newly introduced Federal energy policies under Pierre Trudeau. Pierre Trudeau has historically
been a hated name in Alberta due to his leadership in the 1980 energy policies. His centrist
policies also clashed with the province’s interests in self-governance to a certain extent. His son
Justin Trudeau, has carried the legacy of his father since he faces similar criticism in Alberta.
Justin Trudeau has been criticized by Albertans on various environmental policies introduced in
his tenure, including the carbon tax and his stance on the different pipeline conflicts. Looking at
the Liberal Party from a broader stance, it has not won the premiership in Alberta since 1921.
The party was in power at the federal level during the majority of the disputes between the
province and the federal government. Many of the policies introduced by the party have
historically been met with great resistance in Alberta.

Harsimar
Progressive Conservative Association of Alberta

The Progressive Conservative Association of Alberta has been the central figure of leadership,
in the modern and historical relationships with the federal government of Canada. This party
was in power during all the significant conflicts that occurred between Alberta and Canada.
When talking about this party, it is important to differentiate this party from the Progressive
Conservative Party of Canada, which operated on a much larger scale on the national level and
merged with the Canadian Alliance in 2003, to form the Conservative Party of Canada. The
Provincial Conservative Association of Alberta was a strictly provincial party, and positioned its
policies, keeping Albertan interests before other ones. Protecting Albertan interests was the
dominant characteristic of the party, and the leaders portrayed it as the ‘defender’ of provincial
sovereignty. The party remained in power from 1971 to 2015, for a tenure of over 4 decades.
Peter Lougheed who was the Premier from 1971 to 1985, stands to be one of the most
influential leaders in Alberta politics. His tenure can be explained by continuous resistance
against the federal government and Pierre Trudeau, and he played a vital role in leading the
Albertan response to the Energy policies and plans introduced by the Federal government. The
party transitioned through multiple premiers including Don Getty, Ralph Klein, and Alison
Redford, who continued the trend of prioritizing Albertan interests. The party eventually lost to
the NDP, in 2015 and merged with the Wildrose party in 2017, to form the United conservative
party, also known as the UCP. The newly formed party won the election in 2019, continuing the
old patterns of resistance with the federal government, due to concerns over the environmental
policies.

Vision
The NDP

The National Democratic Party or NDP came into power in 2015, under the leadership of Rachel
Notley. This election result ended the 44-year reign of the progressive conservatives. In the
same year, the Liberal Party of Canada came into power on the Federal level. The clashes
between the provincial and Federal governments were not as prominent as before, since the
NDP positioned itself on balancing economic growth and addressing climate concerns. The
provincial NDP recognized the dependence on oil and gas and also committed to look at the
broader national interests of environmental policies. The government had a different stance than
the conservatives, who had placed a stronger emphasis on the importance of the oil and gas
industry. The NDP government did have some clashes with the federal government, on the topic
of pipeline expansions. The provincial NDP government was a proponent of pipeline projects
like the Trans Mountain pipeline expansion, because of the economic benefits of increasing oil
exports. The provincial NDP did not place as much importance on environmental concerns as
the national leadership of the NDP party and leaders, causing some skirmishes. However,
during most of the term, the provincial government's approach aligned with the approach of the
Federal government, keeping feelings of Western Alienation low.

Hafis
The current situation

As we trace the long history behind the alignments and disputes, between the Albertan vs
federal governments, it is important to recognize that not only these events have shaped the
decisions in the past and developed feelings of Western Alienation, but also rooted in the
groundwork for conflicts that exist today. The situation stands today, better than what had
happened at the peak of tensions, but stands unsolved. The newly formed United Conservative
Party won the elections, bringing a new chapter into the conflict. The party won the election
again in 2023, highlighting the importance placed by Albertans on provincial interests.

Sam
Current events

The situation does not seem to resolve any time soon, as the provincial government continues
to debate the Federal government over environmental policies, and other issues.

SAM
Alberta Sovereignty Act

On December 8th, 2020, The Alberta Sovereignty within a United Canada Act was passed in
the Legislative Assembly of Alberta. This act gives Alberta the power to bypass any Federal
laws, which the Alberta legislature considers to be unconstitutional, or a law that deems to be
harmful to the province or its economic growth. Such areas include but are not limited to natural
resources, gun control, education, health, etc. This act can be used when the federal
government passes legislation or a law that fits one or more categories described in the
Sovereignty Act. The act seems to have a range of public opinions from people supporting it to
people completely against it. This division reflects the broad national vs. provincial loyalty
conflict, faced by Albertans. In-text citation (Alberta sovereignty within a United Canada act.
Alberta.ca. (n.d.-a) )

Hafis
Alberta Pension Plan

The Albertan government released a report on September 21st, 2023, the report suggests the
possibility of establishing an Albertan-only pension plan, separate from the National, Canada
Pension Plan. The CPP is a federal government program that can be explained as a big pool of
money, which employees and employers contribute to, in working years. When an employee
retires or under some other conditions, they receive payments from the pension plan. The
amount of money received depends on their contribution to the plan. The government presented
that such a decision to leave the CPP will not be through without a referendum, and is still in the
beginning stages. The report also suggested that if Alberta is to leave the program, it would be
entitled to almost half the CPP’s assets, which total around $334 Billion. However, some other
sources suggest it is close to 20-25% of the assets of the CPP. The Albertan government
believes that a provincial pension plan would bring a fair share to Albertans for their
contributions to the program. A Three-year notice is to be required if a province wants to leave
the national pension plan. If the plan to leave the program does go ahead, there will be some
tensions with the Federal government and other provinces, on the percentage of assets Alberta
is entitled to.

Vision
Alberta not Hesitant to use the Sovereignty Act

The Federal government has environmental targets that require Alberta to cut down carbon
emissions from the oil and gas industry by 42%, by 2035. The targets also require Alberta to
have a net zero emissions power grid by the same year. The Albertan government and Premier
Danielle Smith, believe that these expectations are too unrealistic, and will harm Albertans in a
significant way. 60% of Alberta’s electricity grid still depends on natural gas, and the provincial
government believes that following such a plan would cause blackouts. The provincial
government believes that 2050 would be a much more realistic target for Alberta to achieve
these goals. The premier hinted that she would not be reluctant to use theAlberta Sovereignty in
a United Canada Act, that was passed just last year, to protect Alberta from Federal policy.
Power grid operators have backed such claims, and do believe that transitioning to a carbon-
neutral grid by 2035, can cause major blackouts.

Kush
Conclusion
The relationship of Albertans to Alberta, and a wider confederation, presents a unique case of
contending loyalties. The Albertan vast natural resources of oil and gas, have placed it’s interest
distinct to the larger national agendas numerous times in Canadian history. Albertans have
always found themselves torn, and still do, because of the historical debates on energy policies,
and contemporary debates, about the national environmental policies and equalization
payments. As history continues to write itself, a balance must be remained between both the
loyalties, to maintain the unity of the confederation of Canada.

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