Like the NEP Before It, the ‘Just Transition’ Initiative Is Another Attack on Canada’s Oil and Gas Industry

Commentary

1980 was a difficult year for me as a MBA student. I was exposed to the innovative ideas of Chicago school economists Milton Friedman and George Stigler. Also, Austrian school giants Ludwig von Mises or Friedrich Hayek were my mentors at the University of Toronto.

These are the two “schools” Economic thinking championed individual freedom, capitalism, and challenged the Keynesian orthodoxy that the government should be constantly intervening in the economy. Keynesian pragmatists continue to influence economic decision-makers. They believe that the government should pick the winners and losers from various industries and businesses. They have done this with varying levels of commitment and limited success. The strategy almost always proves to be harmful.

Pierre Trudeau’s Liberal government passed the National Energy Program in 80. The program was a de facto partial nationalization and privatization of the oil-and-gas industry with the stated goal of making Canada energy independent by 1990. This goal, given Canada’s large exports of fossil fuels, seems absurd in hindsight.

NEP had also the goal to increase Canadian participation and ownership in oil and gas resources. This was used to justify greater government control and nationalization. The program’s advocates assured us that the program would be beneficial for consumers. “fair” Energy pricing is a term that too many Canadians have equated with “artificially cheap.”

To understand the motivations behind a government’s actions and strategies, it is essential to look at the context. Inflation was high, and oil prices were on the rise. Few people realized that just around the corner we would see cheap energy returning to our shores, that inflation would be stopped, and that Canada would become an energy superpower.

Some U of T professors were furious at the NEP. They explained that it would be an economic disaster. The history quickly proved them right, as oil prices fell. The West Canadian economy had to cope simultaneously with a serious global recession and collapsing oil price. Many also felt that the government intentionally hurt the West. This led to Western alienation that continues today. As an economist and an easterner, I thought the Pierre Trudeau government’s actions towards Alberta were appalling.

Lucky for us, Marc Lalonde, then minister of Energy, Mines and Resources, was speaking right next to our faculty on NEP. Mel Hurtig, a prominent Canadian socialist and nationalist, was hosting him. He was also the head of the group at that time. Lalonde received the praise of all the audience, except a few students. It was evident, even to young minds, that the NEP did not make economic sense and was based in very shoddy, almost childish thinking.

It was this moment that I realized the truth about powerful political leaders being completely wrong and utterly ignorant of what they were advocating. This belief has been supported by little evidence in the past four decades. The talk was loved by the crowd, and the NEP was considered a brilliant idea by most Canadians. This was particularly true for elites in central Canada, who saw the program a massive wealth transfer between Alberta and Montreal, Toronto and Ottawa.

Fast forward to 2023. Canada is again represented by Trudeau as its prime minister, and he seems determined to undermine Canada’s resource-based economy. Another example of an inflation problem. Unfortunately, even though there is ample evidence to support the futility of government interference, the government continues to choose winners and losers.

The NEP has been taken over by the “just transition” The government promises that this initiative will boost economic growth by eliminating a critical industry with highly productive workers. Instead, more government spending will be used to increase the parasite class as well as an ever larger and more destructive environmental industrial complex. Workers in oil and gas will magically be able to transition to green jobs. Climate activists will have greater access to taxpayer funds. This initiative, despite its intentions, will not help us reach the government’s goal. “net-zero.”

Trudeau’s younger brother has also made a grave mistake, just like his father. By trying to ignore economic reality and reason, Trudeau is having the government dictate economics to the private sector based on misguided and irrational economic beliefs. As with the NEP his timing could not have been worse. A public that lives off cheap and plentiful fossil fuels is putting pressure on the climate industrial complex. The data that is growing shows that decades-old climate models have grossly underestimated the degree of global warming. Consumers are increasingly taking the economic red pill, realizing that the misguided efforts to remake the world by a corrupt and mediocre elite will cause more death than the climate models can predict.

According to our definition, the climate industrial complicated is simply the NGOs that are funded by companies and individuals who profit from climate hysteria. Their existence would be impossible if there were no crisis. This is the same reason the U.S. military complex spends hundreds of trillions of money exaggerating risks to its homeland. Millions of people are making a living off climate change anxiety. Their lucrative cash flows must be justified. They are unlikely to stop making money from climate change anxiety any time soon.

The “just transition” This initiative is a boondoggle of the climate industrial and another attack against the oil and gas industries. Canadians and others who rely on Canada’s exports will suffer severe economic consequences from this policy and its resulting climate policy. Trudeau is determined to carry out his green agenda, regardless of any consequences.

The views expressed in this article reflect the opinions of the author, and not necessarily the views of The Epoch Times.

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