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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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Future of Ottawa: Chefs with Kathryn Ferries

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This week in the Future of Ottawa series, we’re taking a deep dive into the bar and restaurant industry—what it’s like now and where it’s headed. Read on for a guest post from Kat Ferries on the future of chefs, or read posts from Quinn Taylor on bars or Justin Champagne on fine dining.

Kat Ferries is Sous-Chef at Stofa Restaurant and a 2020 San Pellegrino North American Young Chef Social Responsibility Award Winner.

Apt613: What is the current landscape for chefs in Ottawa?

Kat Ferries: There is such great talent in Ottawa with so many chefs either being from here originally or have returned after traveling and have since opened some incredible restaurants. Many chefs have focused menus that really highlight their strengths, their heritage, and their passion for food. Dominique Dufour of Gray Jay, Marc Doiron of Town/Citizen, Steve Wall of Supply & Demand, Daniela Manrique Lucca of The Soca Kitchen, and so many more are all cooking up beautiful and delicious food in this city.

If you care to make a prediction… Where is the food industry in Ottawa going for chefs in 2021?

The industry right now is, unfortunately, in a really tough spot. The pandemic has been so devastating on mental, physical and emotional levels for so many and I know that many of my friends in this industry are burning out. There are many discussions happening on work/life balance and what is healthy for everyone. Some may never return to the long, hard hours we are expected to put in day after day and instead opt for a more flexible schedule or hire more staff to lighten the load on everyone, with some even leaving the industry indefinitely. Some may throw themselves back into this industry 10x as hard and create some of the best restaurants and concepts we’ve yet to see. I think all that will happen after the pandemic though.

For this year, it’s mostly about survival and finding happiness in creating what we can in the spaces we have while following all the laws and guidelines from public health officials. I think we will see more chefs creating experiences for guests that we otherwise wouldn’t have: think pop-ups, virtual dinner clubs, cocktail seminars, collabs, etc.

Where in your wildest dreams could the Ottawa culinary community grow in your lifetime?

I would love to see the Ottawa community support more small, local restaurants so our streets are bustling late into the nights like they are in Montreal, New York, or Europe. Having a local restaurant to frequent should be so much more commonplace, where you can enjoy a night out more often than just Friday or Saturday night. I would also love to see many more of our local chefs highlighted for the amazing food they create!

What is the best innovation to take place in your industry since the pandemic started affecting Ottawa?

Turning all our restaurants into mini-markets for customers to enjoy the food and wine of their favourite places at home. We have bottle shops for all your wine, beer and cocktail needs as well as menus that reflect what each restaurant does best. Some have even pivoted to a point where they are 100% a store and have paused any type of “service-style” dining.

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Future of Ottawa: Fine Dining with Justin Champagne

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This week in the Future of Ottawa series, we’re taking a deep dive into the bar and restaurant industry—what it’s like now and where it’s headed. Read on for a guest post from Justin Champagne on the future of fine dining, or read posts from Kathryn Ferries on chefs or Quinn Taylor on bars.

Justin Champagne went to culinary school at Northwest Culinary Academy of Vancouver. He got his start in fine dining restaurants at C Restaurant under Chef Robert Clark, then at Hawksworth Restaurant under Chef Eligh. He staged at three-Michelin-starred Atelier Crenn under Chef Dominque Crenn before moving to Ottawa and spending five years at Atelier, working his way up to Sous-Chef. He’s now the Head Chef of Bar Lupulus.

Apt613: What is the current landscape of fine dining restaurants in Ottawa?

Justin Champagne: Ottawa punches well above its weight class when it comes to quality restaurants in general. Fine dining is no exception to that—we have some amazing chefs here that are doing really great things. We also have some phenomenal sommeliers in town that are a huge factor when it comes to a guest’s experience in a fine dining restaurant. While there are some fantastic fine dining restaurants in town I do believe there’s room for more, and definitely room for more creativity and unique styles of cooking! I think we’ll see more small fine dining restaurants opening up, “micro-restaurants” where there’s maybe 20 seats. This will be over the next few weeks as the industry did take a big hit financially with COVID-19, but we still have a lot of great young chefs who have the fire inside of them to open their own location!

If you care to make a prediction… Where is fine dining going in Ottawa in 2021?

I’m not sure it’ll be 2021 or 2022 with the way the vaccine rollout and stay-at-home order is going, but I do expect there to be a wave of people looking to go out to fine dining restaurants. We’ve been cooped up cooking for ourselves or ordering takeout for over a year now. People are getting antsy and ready to go out and have fantastic meals again with exceptional wine and not have to worry about doing all the dishes afterwards!

Where in your wildest dreams could fine dining go in Ottawa in your lifetime?

That’s the fun part about “fine dining,” it can go anywhere and it can mean many things. Fine dining is about amazing service and well thought out, unique food that the kitchen spent hours fussing over, being meticulous in execution. Outside of that, you can have a lot of fun and be creative in different ways. My wildest dream I guess is that fine dinning restaurants begin to thrive and are able to charge without backlash the kind of prices that they need to charge in order to keep the lights on and pay their staff a proper living wage!!

What is the best innovation to take place in your industry since the pandemic started affecting Ottawa?

I’m not sure if I would really say there’s been a best “innovation” in my industry during the pandemic, but I will say that seeing the “adaptability” by all the restaurants in Ottawa has been incredibly inspiring. Ottawa’s food scene has always been a tight-knit community, “everyone helping everyone” kind of mentality. And this pandemic has really helped show that—restaurants helping restaurants through all of this!

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Ottawa’s Giant Tiger chain celebrating 60 years in business

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OTTAWA — An Ottawa staple, along with what might be the most famous cat in Canada, are celebrating a milestone Monday.

Giant Tiger is 60 years old.

“It all started with a very simple idea,” says Alison Scarlett, associate VP of communications at Giant Tiger. “Help Canadians save money every single day. Bring them products that they want and need. When you focus on those core principals, it really is quite simple to succeed.”

In 1961, Gordon Reid opened the first Giant Tiger in Ottawa’s ByWard Market. The company now has more than 260 locations across Canada and employs roughly 10,000 people.

“If you were at our store on opening day 60 years ago, the in store experience would be a little bit different from your local Giant Tiger store today. So that’s changed. A lot of our products and offerings have changed or expanded as Canadian consumers wants and needs have changed or expanded,” says Scarlett.

The homegrown department store continues to be a favourite for many shoppers looking to for the best deals on everyday products.

Helen Binda has been shopping here for decades.

“Many years. I can’t remember when. I’ve always loved Giant Tiger. It’s always been a good store for me.”

“I think its amazing and I think that we need more department stores,” says shopper Fay Ball. “And if it’s Canadian, all the better.”

The Canadian-owned family discount store carries everything from clothing to groceries, as well as everyday household needs. They’ve also expanded their online store and like most retailers provide curbside pickup during the pandemic.

“Doing what is right for our customers, associates, and communities. That has enabled us to be so successful for all of these years,” says Scarlett.

To celebrate, Giant Tiger is hosting a virtual birthday party at 7 p.m. Monday with live musical performances from some iconic Canadian artists.

You can visit their Facebook page to tune in. 

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