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Government’s tight grasp on Alberta oil: A short(ish) history

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An NDP premier ordering production limits on private industry might normally bring widespread cries about government intervention, but not this week. The move announced Sunday by Alberta’s Rachel Notley to mandate an 8.7-per-cent holdback on oil extraction drew more praise than scorn, even from conservative rivals, because most agreed this was the only real short-term solution to a massive supply glut caused by a failure to build pipelines to move the product. Notley, as others did, reminded Albertans that they are owners of the province’s natural resources. That’s something not invoked too often these days in free-market-loving Alberta. But free-market-loving Alberta’s biggest private enterprise has felt the friendly or prickly hand of government involvement throughout its history—through direct control, subsidy and state ownership.

Early interventions

Let’s start with the Social Credit government of Alberta, a radical reform movement that took power in 1935 under the leadership of William “Bible Bill” Aberhart, who proposed to distribute “prosperity certificates” to residents outside of Canada’s existing currency system. Under populist control, the legislature passed a 1938 resolution to consider taking over the wholesale and retail petroleum markets to guarantee lower gasoline prices for consumers.

That didn’t happen, but the same year Aberhart’s government created the Oil and Gas Conservation Board, to tame the rapidly developing Turner Valley oilfield near Calgary with production quotas and a crackdown on flaring of excess gas, an expedient practice which was literally creating towering infernos of wasted fuel. “It became evident that some wells were being produces at rates that would soon ruin them and which would result in terribly small ultimate recovery as compared with what might be expected if production was restricted and carried out on the basis of orderly development,” the province stated, according to Prairie Capitalism: Power and Influence in the New West. A previous government unsuccessfully created a conservation board in the early 1930s, but this time opposition couldn’t hamstring it: in the 1940s, the Social Credit’s provincial regulator closed down wells that overproduced.

RELATED: Rachel Notley to oil sands foes: Be progressive, support pipelines

Later that decade came the gusher at Leduc No. 1 near Edmonton, confirming massive reserves and triggering a major development boom. Soon, Alberta was producing twice as much as pipelines could deliver. “By 1950 Alberta literally had oil coming out its ears compared to what it could consume or market to other parts of the country,” one official said in a history of the provincial regulator. The board imposed a system called “pro-rationing” that required companies to throttle back drilling to ensure companies collectively avoided a supply glut; sometimes limits were as low as 40 per cent of capacity. This quota system remained in place until it was greatly loosened in 1987.

Pipelines

When Ottawa acquired the Trans Mountain pipeline and the controversial expansion project from Kinder Morgan earlier this spring, the $4.5-billion purchase marked not so much a precedent as a return to government’s former role as the architect of Canada’s fossil fuel transmission system. During the Second World War, Ottawa even let a foreign entity—the U.S. military—build one pipeline from Norman Wells, N.W.T., to Whitehorse, Yukon, to serve the war effort’s fuel hunger via Alaska. In the 1950s, Parliament enacted federal charters to build the Interprovincial oil pipeline to Wisconsin, the TransCanada natural gas conduit to Quebec and the original Trans Mountain oil line to British Columbia. The government sanctioned investor groups to build the pipelines (Interprovincial is now Enbridge, an international giant alongside TransCanada). Meanwhile, Alberta built its own natural gas transmission system—government funds and a public share sale to residents financed the Alberta Gas Trunk Line. It was privatized in 1961.

Companies

In 1973, Arab countries proclaimed an oil embargo on several western countries, quadrupling the world oil price and setting to boil the simmering Canadian worries its oil supply was too heavily under foreign control, primarily by U.S. firms. Pierre Trudeau’s government created Petro-Canada as a Crown corporation in 1975, and it expanded by snapping up private firms. The company was widely hated in the oil sector and Calgary; its red granite headquarters became known derisively as Red Square.

RELATED: Pipelines aren’t just an Alberta issue—they are crucial to national prosperity

The Alberta government, under Tory premier Peter Lougheed, also had ambitions to cut into the dominance of foreign oil companies and to maximize the value of Alberta’s resources for the public that owned them. In 1973 it launched the Alberta Energy Company, an exploration and production firm; the government’s half-stake supplemented by another Albertans-first share offering.

AEC was fully privatized in 1993 and later became part of Encana. Meanwhile, the federal government gradually sold off Petro-Canada between 1991 and 2004, and the company later got swallowed up by Suncor, another oil giant with a public ownership history.

Oil sands

After decades of both government nudging and private interest in the oil-soaked sands around Fort McMurray, Sun Oil of Pennsylvania spearheaded Great Canadian Oil Sands Co. (later Suncor) to develop the first major bitumen mine in northeast Alberta. Raising capital for the quarter-billion-dollar megaproject proved tricky, so the Alberta government in 1964 demanded a share sale that let provincial residents each invest up to $12,500 in the project. In 1981, then-Ontario premier Bill Davis wanted a piece of that action for his province, which bought a 25-per-cent stake in Suncor; it took Ontario’s NDP government to unload the shares a dozen years later.

In those days, Alberta seemed keen for the Ontario government to leap into its project investments if Ottawa or private players got cold feet. Suncor was in fact the second Queen’s Park purchase in Alberta’s oil sands: when a private consortium faced ballooning costs in the early ’70s to launch Syncrude, the second major bitumen player, Ontario swooped in to take a one-tenth share, and so did Alberta’s government, while Ottawa put in for 15 per cent.

RELATED: How to make Canada an energy superpower

Lougheed, meanwhile, used oil royalties to launch the Alberta Oil Sands Technology and Research Authority, a provincial R&D branch for the industry that helped spur today’s extraction methods of harder-to-reach bitumen. And in the early 1990s, when oil sands development needed its next big boost, the Alberta government and Liberal-led Ottawa again stepped in—not with investments, but with major breaks in royalty rates and taxes as projects began.

Central planning

Before Trudeau and his National Energy Program (NEP, still a three-letter epithet out west; more on that shortly), there was former prime minister’s John Diefenbaker’s NOP of 1961. The National Oil Policy sought to ensure a domestic market for Alberta crude, so the government created a captive one: all refineries west of Ottawa were banned from foreign oil imports. A Royal Commission on Energy in 1957 had considered a broader domestic-only zone, aided by a possible Edmonton-to-Montreal crude pipeline. But Montreal and Atlantic refineries preferred retaining access to cheaper imports (to this day, Albertans grumble about the region’s reliance on Mideast and overseas supply.) The Energy East pipeline through Quebec to New Brunswick would have brought Alberta oil to the other side of Canada. But that project flamed out amid protest, daunting regulatory demands and shifting economics.

The NEP that Trudeau’s government dropped in 1980 wasn’t for Alberta oil sector’s benefit; it was to give the rest of Canada cheaper fuel and redistributed energy revenues. Among its meddling ways, the program mandated lower prices for Canadian customers, levied taxes on oil and gas exports and further supercharged Petro-Canada. Together with plunging oil prices and a global recession, these policies battered the oil sector and led to massive layoffs. Lougheed fought back with a jurisdictional court fight against the tax on a provincial resource—and won. But his flashier, more currently relevant move was using old curtailment powers to throttle back the industry’s provincial output by about 15 per cent, nearly double the cut Notley has announced. Within a year of the retaliatory measure, Lougheed got Trudeau to ease off the tax; under Mulroney in the mid-1980s, the NEP died. But it gets resurrected often when critics decry the currently ruling Trudeau’s attempts to balance energy development with environmental regulation.

Aside from his pipeline purchase, Justin Trudeau’s energy policy has been far more hands-off than those of his father or others—more standard government stuff like a carbon tax here, a pipeline approval cancellation there, regulatory oversight reforms hither and yon. But, his many western detractors say, all these smaller actions have led to the effective moratorium on pipeline construction that caused Notley to reach back into history and get heavy-handed.

CORRECTION, Dec. 7, 2018: An earlier version of this story referred to the former Petro-Canada headquarters in Calgary as red marble. In fact, it is granite.

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List of Tourist Attractions Open Now in Ottawa

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With Ontario now in Step 3 of 2021 three-step plan for reopening, museums and other indoor attractions are allowed to reopen with capacity limited to not exceed 50 per cent capacity indoors and 75 per cent capacity outdoors.

Here is a list of Ottawa attractions you can visit starting July 16th.

Do remember to wear masks and buy tickets in advance.

Parliament Hill

Parliament’s Centre Block and Peace Tower are closed for renovation.

You can join for tours of the Senate of Canada Building (2 Rideau Street), House of Commons at West Block (111 Wellington Street) on Parliament Hill, and East Block at East Block (111 Wellington Street) on Parliament Hill.

When: Grounds open; guided tours of Parliament are suspended through the summer of 2021.
Where: 111 Wellington Street, Downtown Ottawa

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Ottawa performer leapfrogs from gymnastics to Broadway to TV

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A new AppleTV+ series set in a magical town that’s stuck in a neverending 1940s musical includes a pair of Ottawa siblings in the cast. 

Warren Yang and his sister, Ericka Hunter, play two of the singing, dancing residents of the village portrayed in Schmigadoon!, a small-screen series that takes its cues from classic musicals like Brigadoon, Wizard of Oz and Sound of Music, and skewers them with the offbeat comedic mastery of Saturday Night Live. 

In fact, you’ll recognize many of the names from SNL, starting with executive producer Lorne Michaels, creator of the late-night, live-comedy sketch show. Schmigadoon! also stars SNL cast member Cecily Strong and comedian Keegan-Michael Key, who hosted SNL in May. They play a New York couple who get lost on a hike and stumble into a strange town where everyone sings and dances. 

For Yang, a relative newcomer to show-biz, the series marks his television debut. For Hunter, the younger of his two older sisters, it’s the latest in a career path that began with dance lessons as a child more than 30 years ago. She attended Canterbury High School, Ottawa’s arts-focused secondary school. 

“Her dream was always to perform,” said Yang, 34, in an interview. “But that was never the path I thought was an option for me.” 

While his sister studied dance, Yang did gymnastics. He was an elite gymnast throughout his youth, ultimately leaving Merivale High School at 16 to train in Montreal, finishing high school through correspondence courses. He was a member of the Canadian National Team and received a scholarship to study at Penn State, majoring in marketing. 

A few years after graduation, Yang was working at an advertising agency in Toronto when he got a call from a Manhattan number. To his astonishment, they asked if he would be interested in auditioning for a Broadway revival of Miss Saigon.

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COVID-19: uOttawa to require vaccination for students living in residence

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Vaccination will be mandatory for students who want to live in residence at the University of Ottawa this year, with proof of vaccination and at least one dose required before move-in, or within two weeks of doing so if they can’t secure a shot before arriving.

Those who can’t receive a vaccine for “health-related reasons or other grounds protected under the Ontario Human Rights Code” will be able to submit a request for accommodation through the university’s housing portal, according to information on the university’s website.

Students with one dose living in residence will also have to receive their second dose “within the timeframe recommended by Ottawa Public Health.”

People who haven’t been granted an exemption and don’t get vaccinated or submit proof of having done so by the deadlines set out by the school will have their residence agreements terminated, uOttawa warns.

“Medical and health professionals are clear that vaccination is the most (effective) means of protecting people and those around them,” reads a statement provided to this newspaper by uOttawa’s director of strategic communications, Patrick Charette.

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“It is precisely for this reason that the University of Ottawa is requiring all students living in residence for the 2021-2022 academic year to be fully vaccinated. The University recognizes that some students may require accommodations for a variety of reasons and will be treating exceptions appropriately.”

Faculty, staff and students are also strongly encouraged to get vaccinated, the statement notes.

“Ensuring a high vaccine coverage in all communities is critical to ensuring an ongoing decline in cases and ending the pandemic. This will be especially important with the return of students to post-secondary institutions in our region in the fall of 2021.”

Neither Carleton University nor Algonquin College is currently mandating vaccination for students living in residence, according to the websites for both schools. But uOttawa isn’t alone in its policy – Western University, Trent University, Durham College and Fanshawe College have all implemented similar requirements. Seneca College, in the GTA, is going even further, making vaccination mandatory for students and staff to come to campus, in-person, for the fall term.

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