The National Energy Program (NEP) was first declared in October 1980, and with the Liberal majority government, they implemented it. This issue of more federal control over the resources produced and sold was a thorn in the provincials’ side. During this time, the only power that could change the Canadian Constitution 1867 was the House of Commons at Westminster. Pierre Trudeau was elected in 1968, and in 12 years’ time, he used the Canadians feeling of nationalism and anti-Americanism to bring forth a policy that would try to keep Canadian oil and gas for Canadians.
The three main objective of the NEP was to have Canadian companies own 50% of the Canadian oil and gas industry, have Canadian companies be the leaders in exploration of Canadian …show more content…
The Canadian Constitution 1867 outlines that the Provinces have the right to produce and sell their own resources. The NEP suddenly gives more power to the federal government to govern how and when these resources are to be produced and to whom. The federal government also increased the federal government’s share of the oil and gas revenues from 10% to 24%. This decreased the provincial’s share of the revenues from 45% to 43%, and the energy companies share of 45% to 33%. Peter Lougheed protested the NEP by cutting production 15%, and the energy companies slowed down production themselves to evaluate the situation. The NEP also had a provision of a new tax of 8% for existing oil and gas wells called the Petroleum and Gas Revenue Tax (PGRT). The federal government also developed a grant for Canadian Companies to balance the PGRT called the Petroleum Incentive Program (PIP). This grant was designed so Canadian owned companies could explore Canadian lands for reserves, these lands were set to be off the east coast or far up north. Which Alberta didn’t like, seeing as demographically they are neither, so Albertan exploration gets extra taxed of the PGRT and they aren’t eligible for the PIP grant and the PGRT financed the …show more content…
With the price of oil being no longer $80/bbl and companies withdrawing from new developments and shutting-in wells. The government might view this as a perfect opportunity to bring in new Canadian companies to provide for Canadians. We might see a tax like the Petroleum and Gas Revenue Tax, with a new name, which the government might say that it will be used to fund an ‘Exploration Incentive Program’. With talks of a National Energy Policy to come into being, makes it not hard to believe that the Federal Government isn’t already talking about it. I believe that it would hurt the economy even more to have a new NEP. Governments have good intentions of trying to be more present in the Industry and energy companies, with making sure that it benefits the economy. Governments when they interfere and effect industry and business, it causes business to be run poorly and allows the market to close to smaller businesses and entrepreneurs. They should be there to make sure that there are guidelines that companies have to follow like good business practice and environment, health and safety. The fact that Joseph Schumpeter said that government bureaucracy dominating industry was antagonistic to capitalism and the economy itself, make one wonder about the possibility that Trudeau must have slept during that class at Harvard where
The three main objective of the NEP was to have Canadian companies own 50% of the Canadian oil and gas industry, have Canadian companies be the leaders in exploration of Canadian …show more content…
The Canadian Constitution 1867 outlines that the Provinces have the right to produce and sell their own resources. The NEP suddenly gives more power to the federal government to govern how and when these resources are to be produced and to whom. The federal government also increased the federal government’s share of the oil and gas revenues from 10% to 24%. This decreased the provincial’s share of the revenues from 45% to 43%, and the energy companies share of 45% to 33%. Peter Lougheed protested the NEP by cutting production 15%, and the energy companies slowed down production themselves to evaluate the situation. The NEP also had a provision of a new tax of 8% for existing oil and gas wells called the Petroleum and Gas Revenue Tax (PGRT). The federal government also developed a grant for Canadian Companies to balance the PGRT called the Petroleum Incentive Program (PIP). This grant was designed so Canadian owned companies could explore Canadian lands for reserves, these lands were set to be off the east coast or far up north. Which Alberta didn’t like, seeing as demographically they are neither, so Albertan exploration gets extra taxed of the PGRT and they aren’t eligible for the PIP grant and the PGRT financed the …show more content…
With the price of oil being no longer $80/bbl and companies withdrawing from new developments and shutting-in wells. The government might view this as a perfect opportunity to bring in new Canadian companies to provide for Canadians. We might see a tax like the Petroleum and Gas Revenue Tax, with a new name, which the government might say that it will be used to fund an ‘Exploration Incentive Program’. With talks of a National Energy Policy to come into being, makes it not hard to believe that the Federal Government isn’t already talking about it. I believe that it would hurt the economy even more to have a new NEP. Governments have good intentions of trying to be more present in the Industry and energy companies, with making sure that it benefits the economy. Governments when they interfere and effect industry and business, it causes business to be run poorly and allows the market to close to smaller businesses and entrepreneurs. They should be there to make sure that there are guidelines that companies have to follow like good business practice and environment, health and safety. The fact that Joseph Schumpeter said that government bureaucracy dominating industry was antagonistic to capitalism and the economy itself, make one wonder about the possibility that Trudeau must have slept during that class at Harvard where