Canada

ALBERTA DEMANDS ITS DUE

Suzanne Zwarun September 15 1980
Canada

ALBERTA DEMANDS ITS DUE

Suzanne Zwarun September 15 1980

ALBERTA DEMANDS ITS DUE

Canada

Suzanne Zwarun

Calgary oilman Don Harris ran out of patience with the 620-year-old Douglas fir growing on a beach adjoining his cottage at Invermere, in southeastern B.C. For 60 years the tree had been a nesting spot for osprey, a protected predatory bird, but Harris was tired of the fowl-smelling droppings icing his veranda and car. So last December he cut it down. Whatever the rights and wrongs of the surgery, the incident created a tempest in a treetop. “People here just cried when they found out,” an area naturalist reported. Others choked back their tears and called down Ugly Calgarians. “They see us coming with our big cars and boats and building homes in the $100,000 range,” said another Calgary “cottage” owner. “A thing like this certainly doesn’t help our cause.”

In the Invermere valley, which British Columbians once considered their own piece of paradise, the phrase Ugly Albertan has become the currency of the recreational realm. The formeríy tranquil dale, half a day’s drive from Calgary, has been invaded by wealthy Albertans, the people best able to afford the soaring real estate prices their demand caused. Thousands of acres have been gobbled up, millions of dollars spent, services stretched to the snapping point. The osprey nest was the final straw. Even though he anted up $2,000 to build an artificial bird’s nest, the unfortunate Harris could neatly personify the image many Canadians currently cherish about Albertans— those inhabitants of an oil sheikdom who got too soon rich and too little civilized. The Ugly Albertan has crowded out, in the Canadian mind, the traditional vision of the good western farmer and rancher, the hewers of wood and the drawers of water, who grew their grain, corailed their cattle and needed to be polled only once a year on the state of the weather.

Even schoolchildren recognize this new Albertan. A 13-year-old in Ottawa, writing for a Canada Day essay contest,; threatened, if prime minister, to shape; up the country. “First of all,” wrote Bruce Hartledge, “I would do something; about Premier Lougheed. I don’t seef why he should have all the money from Alberta’s natural resources. It just makes him sound like a pig. I would divide everything amongst Canadians.” The child’s elders are equally piercing. Toronto Sun columnist Claire Hoy accuses “oil-rich Albertans of pure, unadulterated, un-Canadian greed ... obsessed with the notion of punishing Ontario for a series of real and/or imagined indignities.” Rude to boot, he added, when Albertans protested his assessment. From Vancouver, Laurier Lapierre reported after a visit that he found himself “overwhelmed” by Alberta’s fear, insecurity and lack of moral purpose. “Successive [provincial] governments have . . . painted gloomy pic-

tures of declining resources, of plots by eastern bankers to seize them for their own benefit and of cabals by the federal government to rob Albertans of their fundamental rights in the resource area.”

Albertans, in fact, see clearly that successive governments have created Alberta’s alienation, an alienation that is now absolutely justified, and the culprits, in their eyes, are 113 years of federal governments. Just as any Ontario schoolchild sees one version of Albertans, Albertan teen-agers can readily parrot their premier’s views. “The [constitutional] controls have made Alberta a rich and powerful province,” wrote a Grade 10 essay-contest winner in Calgary, Fiona Foran. “But the money from oil and gas will not last forever. Alberta must manage its resources wisely, so that future generations can enjoy the prosperity that Alberta has today.”

That, in a nutshell, is the Alberta viewpoint, a two-sentence summation

of what the summer-long oil pricing negotiations have been about, what the 11 first ministers are talking about at this week’s constitutional conference in Ottawa. Albertans are willing to augment their argument and do, in hundreds of letters to the editor, in thousands of calls to phone-in radio shows, in dozens of think-tank seminars and speeches to service clubs. But they have cause to wonder, as the premiers face a prime minister determined to patriate the British North America Act this year, whether anyone is listening.

While Alberta and Ottawa are apart

on the pace at which oil prices should rise, and sharply split over a gas export tax, Premier Peter Lougheed (see box) agrees that the two governments are talking about more than $2 more a barrel, now or later: “We’re not talking about simply money or numbers. We are talking about a matter of very important principle.” The principle, the boil festering under constitutional talks, is whether the West goes on being the handmaiden of Central Canada.

Albertans see Canada as a partnership of 10 provinces and two territories that has always, belying the very definition of partnership, been run for the exclusive benefit of Ontario and Quebec. Scratch an Albertan, from cab driver to chemistry professor, and a century’s worth of grievances bleed. Thanks to freight-rate inequities, the East charges Albertans 40 per cent more than the going price for clothing, 12 per cent more for automobiles, 30 to 50 per cent more for appliances. Both sides have their “proven statistics.” On the one hand, Ontario boasts that it provides 43 per cent of all the money distributed, under equalization payments, to the have-not provinces. But

Alberta and B.C. say that, on a per capita basis, they contribute 2.8 times what wealthy Ontario scrapes up. Central Canada expects the West to sell its oil at bargain-basement prices when it, in turn, charges exorbitantly high prices for its products. That alone will cost every Alberta man, woman and child $5,000 this year, never mind the billions lost over past years. Says Lougheed: “Two million Albertans know precisely what they’d be paying for oil if Ontario owned the oil.”

The academically inclined can embroider elaborate theses proving that

the Central Canadian manufacturing complex was built on the bones of a tariff structure that protected the East to the detriment of the West. C. V. Myers takes it down to a small Prairie boy and an apple. “I was born on the Alberta prairie,” recalls Myers, founder of Oilweek magazine and an international economic consultant. “We lived in a shack 40 miles from a railway. As a kid, I rarely had fruit; we couldn’t afford it. I don’t ever remember being offered a discount on Nova Scotia apples.” Due to difficulties with the federal government’s tax department, Myers is living now in the U.S., an exile wanted for tax evasion, but he continues to preach the provincial viewpoint: Albertans pay one-quarter to one-third more for an automobile, more for textiles, outrageously higher prices for radios and TV sets, all to protect manufacturing interests in Eastern Canada. “At least onequarter of your hard-earned income comes right out of your pocket into the pockets of people in the eastern provinces.” Myers calculates the return as inadequate—armed forces protection

and markets for grain and wheat that Eastern Canada would otherwise have to buy on the world market, as well as paying the freight.

A small boy hankering after an apple might tug the heartstrings of the same Canadians who once packed CARE packages for drought-stricken Depression farmers. The whining of the wealthy rouses less sympathy. Westerners are chronic complainers about Confederation, agrees David Bercuson, a Montreal-born historian at the University of Calgary. “The West has never been richer, more stable or more assured of a

golden future as food and energy resources grow more expensive in a world beset by increasing scarcity. The rules of the game that westerners complain about—Confederation—give the ownership of natural resources to the provinces [unlike the U.S.] and have made westerners winners. And still the West complains, as bitterly as in the Depression years.”

Bercuson was so intrigued by Alberta in full voice that, three years ago, he published a book of essays, “a historic critique of Confederation from the point of view of the boondocks.” He found there valid ways of looking at Canada other than from the traditional “Donald Creighton-Centralist” viewpoint. Bercuson points out that Canadians assume that their West, like the American West, was settled by people moving from east to west, but “it never happened.” Instead, the Liberal government of Wilfrid Laurier had to wage a campaign in Europe to attract immigrants to open the West, and these newcomers had no knowledge of, no connection with, Canada. They saw Central Canada, as merely “a barren world of trees and rock flashing by frosted train

m-;■ n the rarefied world of constituI tional debating, the expression I was, to put it mildly, jarring. There was Alberta’s Premier Peter Lougheed warning that if Ottawa imposed an export tax on natural gas, he would consider it a "declaration of war" on Western Canada. In an interview with Maclean’s Calgary bureau chief, Suzanne Zwarun, on the eve of this week's conference, he elaborated:

Maclean’s: What did you mean by ‘‘declaration of war"?

Lougheed: Well, I meant obviously that it would be like a declaration of war in the sense of an invasion of a province’s rights of ownership.

Maclean’s: That conjures up visions of going to the barricades physically. Lougheed: No, of course it doesn't mean that at all. What it conjures up, I hope, is an understanding of the deep resolve of Albertans about the issue because they know that our present prosperity, which may be short-lived, is based upon our ownership of resources, and that we have a short time in our history in which to develop an economy and society here that is less dependent on external forces.

Maclean’s: You’re not meeting this declaration of war with anything stronger than words?

Lougheed: The way the questions are phrased it sounds like I'm declaring the war. What we’re saying is that if the federal government unilaterally imposes an export tax on natural gas on the people of Alberta it will mean a loss of thousands of Alberta jobs, and that will happen because the explorers will feel that the circumstances in which they’re operating in this province simply don’t warrant their continuing with their exploration budgets and communities, small or large, in Alberta would be adversely affected, jobs would be lost and opportunities would be lost.

Maclean’s: Albertans say they are paying $600 per capita per day to Central Canada in lost oil revenues. Is that so? Lougheed: It certainly is not a myth. In 1980, in terms of value, Albertans will forgo collectively for two million people about an aggregate of $10 billion in one year. That’s $5,000 for every man, woman and child in Alberta [which amounts to about $13 per capita per day],

Maclean’s: Some of the pundits say that all Alberta and Ottawa are arguing about is numbers and that sensible people will eventually reach agreement on numbers. Lougheed: That’s just not so. It is not so in the minds and the hearts of Albertans. We are not talking about simply money or numbers. We are talking about a matter of very important principle. Our province and our people have lived with the rules of Confederation, including paying for freight rates, paying for tariffs, paying equalization, in our total history. Now circumstances have for a short period of time

altered to favor our province and the federal government, supported by the Ontario government, are trying to change the rules. Albertans know and understand this instinctively. And they consider it unfair in the extreme.

Maclean’s: Has the shift of power west happened yet?

Lougheed: It’s not so much power; it’s control over one’s own destiny. And if we continue to be in a position where we are a long way from the decision making, and the decision making in the past has tended to favor those parts of the country that have large representation in the House of Com-

mons, that has to be to the detriment of Western Canada.

Maclean’s: Do you ever worry that your vision of Canada might be wrong, that when the struggle ends there might not be anything left of Canada?

Lougheed: No, I worry that we will be weakened and lose our resolve and return to a centralized nation from which will come very great disunity and dissatisfaction and frustration.

Maclean’s: Do you have a population estimate for the year 2000 in Alberta? Lougheed: Not that I can recall because there are about three scenarios. One is the same level of growth as today, and the other one is more traditional growth, and the other one is continued uncertainty with the federal government which would be very low growth. I think we’ll grow rapidly, or should if we resolve our issues with the federal government, but if the rest of the country was strong and economically vital then our growth would not be out of proportion. Maclean’s: Is there any way to equalize it, other than Hibernia?

Lougheed: Hibernia is the biggest opportunity of all for us, I think, in balancing. I

think it's a great plus for the West. The Atlantic provinces are going to emerge. I’m sure there will be some jurisdictional and other battles but if they're resolved, and after they’re resolved, I think you’ll see the Atlantic provinces starting to be a strong growth region of employment and that will counterbalance the West.

Maclean’s: That certainly leaves Ontario squeezed.

Lougheed: Well, Ontario is really being very shortsighted. If Canada could develop its position of being energy self-sufficient, the manufacturing components in Ontario are going to be so much stronger than they

will be across the border because the Americans haven’t got anywhere near the chance that Canadians have to become energy self-sufficient.

Maclean’s: Having watched Ontario’s problems, does Alberta want to get into a labor-intensive manufacturing roller coaster?

Lougheed: No, and that’s not our intention. We don’t want the smokestacks. I think what we want to do is take more of our agricultural production and process it here so that we’re sort of the food producing centre of Canada. I think that we certainly want to build the petrochemical industry because you get into third and fourth stages that are exciting. I think we could really build on the technological strengths that have come, and then through that to the Alberta Oil Sands Technology and Research Authority, the Alberta Research Council, the medical research foundation, and make this the brain centre for Canada. And I think being a financial centre of Western Canada, we’ve already made great progress in that. Those are the main areas that I see as part of our economic strategy.

`I worry that we will be weakened and lose our resolve'

windows.” Once settled, local allegiances grew naturally. The West turned in on itself, nurturing political revolt through third parties (the Social Credit, Progressives and CCF) directed at smashing the system. Concludes Bercuson: “Our [western] sense of the national interest is usually too weak to override the local or regional interest in our thinking.”

Albertans certainly aren’t deeply committed to a concept of Canada that relegates the hinterlands to cannon fodder. Maritimers and westerners, writing in Bercuson’s Canada and the Burden of Unity, point out that Central Canadians adhere equally to their regional viewpoint and, by sheer force of numbers, have been able to impose on Canada the view that what is good for Central Canada is good for all Canadians. Confederation, in the view from the boondocks, was a union of convenience, engineered by a Conservative party with an ideological lean toward the use of centralized power, led by a prime minister who wished the provinces to be no more than glorified municipalities. Sir John A. Macdonald firmly identified the interests of the great majority of voters living in Central Canada with the desires of all Canadians and embarked, in 1879, on a national policy “designed to hold the resource hinterlands of Atlantic and Western Canada in permanent fiefdom to the intended industrial heartland of Ontario and Quebec.” The tariff to protect eastern industry and freight rates which discriminate against Western Canada on everything except unprocessed grain products was imposed despite protests and left the West at a permanent disadvantage in federal politics. Westerners, thus, long ago turned to their provincial governments for protection. And after a 60year battle, the provinces wrested for the West the rock on which Confederation is currently threatening to crash— the right, granted by Ottawa in 1930, for the provinces to own their own resources and therefore the money they earn. But that transfer of natural resources occurred on the eve of the Depression and did the West scant good then, while threatening the rest of Canada not at all. Now, having the means to an energy-based munificence and autonomy, westerners grow frantic at the spectre of Central Canada, in the guise of Ottawa, once again doing for Canada what’s best for Central Canada and the hinterlands take the hind leg.

People as divergent as Saskatchewan’s NDP Premier Allan Blakeney and Alberta’s Conservative Lougheed are united in the view that Western Canadians played the game by the rules when it was disadvantageous to them, and that the rules shouldn’t be changed simply because Central Canada feels it-

self at a disadvantage. “The issue of energy is not really one about dollars,” says Lougheed. “It’s a matter that we feel we have lived by the rules of Confederation in the 75-year history of our province. Now, we seem to be winning for a short period of time and there’s an attempt being made to change the rules.”

Or, as Blakeney sums it up; “Westerners see provincial control of resources as their single best bet to shake off their semicolonial status, to develop mature and stable economies, to become full economic partners in Canada.” The rub is that the resources cannot be relied on for another 113 years of federalprovincial conferences. “We’ve caught a wave and we’re riding it,” says Calgary oilman Jim Gray, executive vice-president of Canadian Hunter Exploration Ltd. “We know it has a beginning and an end. A wave peters out. We want to maximize our ride on it.”

The wave is already petering out. For the 10th consecutive year, new Alberta oil discoveries in 1979 failed to keep pace with production. Although 34 million cubic metres of new oil was discovered during the year, production hit

68 million cubic metres, meaning that Alberta’s remaining established reserve figure has dropped to 761 million cubic metres, enough perhaps to last out the 1980s. The outlook for natural gas is brighter—remaining reserves of 1,718 billion cubic metres, an increase of 53 billion cubic metres in 1978. But natural gas isn’t banking the profits it once was. Provincial Treasurer Lou Hyndman admitted in August that Alberta’s contentious Heritage Savings Trust Fund likely won’t reach the $8.5-billion level previously forecast for March 31,1981; a drop in natural gas exports to the U.S., prompted by American resistance to increasing Canadian prices, will lighten the sum by $200 to $300 million. A federal decision to impose a natural gas export tax would create a crisis, says Lougheed, and cost Albertans “thousands and thousands” of jobs. “We have a province where almost half of our labor force is employed, directly or indirectly, by the petroleum industry. If the petroleum industry decides. . .to reduce budgets, it just has to affect, in a very significant way, jobs in this province and the total economy of the province.” The whine of the wealthy, again. Bill Yurko, a Tory who left the Alberta legislature to become federal MP for Edmonton East, allows now that the heritage fund might not have been such a capital idea. “The Heritage Trust Fund is probably the greatest mistake the Alberta government ever made,” he sighs. While the fund—$6.4 billion after five years of saving—may make Albertans look piggy to other Canadians, Yurko points out that the entire fund is barely more than the cost of running the province for a year, that the whole wad could bankroll but a single oil sands plant, while one Cold Lake heavy oil plant could, in turn, save the federal government $2 billion a year in oil subsidies. Albertans aren’t obsessed with being rich misers, Yurko says. They simply need enough money to cover the mas-

sive, and potentially crippling, costs of further oil and gas development which are inevitable if Canadians—not just Albertans—are ever to be self-sufficient in energy.

By Yurko’s calculation, Alberta will have to lay hands on $60 billion—almost 10 heritage funds—in the next decade, to house, hospitalize and highway the 80,000 Canadians a year arriving in Alberta to moil for oil, and to enable the province to cover the costs of future oil development, development that Yurko argues convincingly could solve the whole country’s energy problems for the foreseeable future. Up to now, he says, the eastern-based banking institutions (most of them with assets far outstripping the heritage fund’s) have been the “points of decision” for

the distribution of capital in Canada. “What Alberta wants to do is create a capital pool from oil and gas revenues so that the point of decision—for the interests of Albertans—is here in this province.”

Canadians are going through their first major shift in wealth. The U.S. has seen its economic power shift from the eastern seaboard, to the Midwest, and on to California in 150 years. It’s sliding now to the Sun Belt. Canadians, Yurko says, have yet to come to grips with the natural flow of capital and human resources to the points of natural resources. And Central Canada, founded on Macdonald’s National Policy, is doing everything possible to alter, stop and restrain the otherwise natural flow of capital and wealth from one region to another.

Lougheed and Prime Minister Pierre Trudeau, on the eve of this week’s constitutional talks which Lougheed predicted, in advance, would fail, got themselves mired in a schoolkids’ dispute over a birthday party. Trudeau’s office made it clear he wanted to be invited to Alberta’s 75th anniversary celebration on Labor Day. Lougheed’s office invited him, belatedly, to a lunch when the PM really hankered after the outdoor party with the birthday cake. The pettiness of

the dispute threw an even bigger pall over the real issues than the $32,000 worth of fireworks sent up in Edmonton that day. Trudeau and Lougheed are locked in a battle to their death, or retirement, over what Canada is to become. Whether it’s as Trudeau says: “If you weaken the centre [the federal government], you weaken Canada. And if you weaken Canada, you damage all of its parts.” Or as Lougheed says: “Canada is too large a country, with too small a population, to have decision making even more centralized in Ottawa.” They might, as Lougheed halfwearily, half-laughingly suggests, go on arguing until the year 2000.

“My belief is that 1980 will be recorded as the year Canada either survived intact, or it didn’t,” says Stanley Roberts, president of the Canada West research organization. He sees an unshakable determination in the province and, furthermore, after a summer of rallying the troops, Lougheed has eight premiers, more or less, lined up behind him (the exception being Ontario’s William Davis).

In the face of that determination is

the news, leaked from the Privy Council last month, that Ottawa expects (wants, even) the constitutional talks to fail. Then, shortly after the session ends, Trudeau will recall Parliament to announce he will move unilaterally to patriate the British North America Act, complete with amending formula. About the same time, Trudeau will announce that since Alberta won’t budge on the oil-pricing issue, Ottawa must also act unilaterally on a new agreement, complete with natural gas export tax. That would lead Canada into a national referendum.

And that, says Stanley Roberts, would be fatal. The referendum would pass because populous Central Canada

has a majority. The West would reject it “and the West would not react to such a defeat in the subdued manner that Quebec has to its referendum. The western mood would be politically explosive and most dangerous to our nation’s future.”

Albertans, when they’re not being truculent, are baffled and bewildered because other Canadians can’t see the utter justice of their case. They played the game and now, faced with a rule change, it has become more than a game. The pricing of oil, the repatriation of the BN A Act, have become the fabric of a war that has smoldered since Confederation and has, in the characteristic Canadian way, become a civil war, in everything but the shooting of live ammunition.

On Dominion Day in the Lord Nelson Inn in downtown Calgary, a chap made sentimental by scotch stood up and proposed a toast: “Hey, ladies and gentlemen, let’s drink to Canada on its birthday.” There were, in the big bar, seconds of absolute silence. Then the house exploded into cheers. “It was,” an abashed drinker said later, “quite unCanadian. We only do that sort of thing when we go to war.” The country is, in a sense, at war. The good news is that Albertans are still willing to drink to Canada.