Originally posted by Asher
blackice, it's generally accepeted by everyone that The West was hurt far more by the NEP than the East. You're the one saying otherwise, you have to link it.
blackice, it's generally accepeted by everyone that The West was hurt far more by the NEP than the East. You're the one saying otherwise, you have to link it.
To study the history of that time requires more than just looking at policies and statistics. You need to understand how people perceived the world at that time without benefit of 20/20 hindsight.
Between 1945 and 1972, the Canadian economy was growing strongly, with a few minor recessions. The massive oil price hikes and oil shortages in 72-73 changed all of that. Suddenly inflation, caused by rising fuel prices, went through the roof. Interest rates shot up Unemployment rose. People were being laid off. Thousands of people were forced to walk away from their homes because they couldn't pay the mortgage.
The only area that benefited from the oil crisis was Alberta (BC and Sask to a much lesser extant) and the oil industry. Profits shot up. Lots of jobs were created (but not enough to offset overall job losses in Canada).
The economy remained in stagflation (stagnant growth and high inflation) throughout the seventies. Most people struggled to make ends meet. Many were forced to walk away from their homes. Many lost their life's savings.
After the 79 Iranian revolution, oil prices again shot up causing even more inflation and even higher interest rates. Again, thousands of people were forced to walk away from their homes. Companies laid off staff or closed down businesses.
This is also a period where people believed that we were going to run out of oil and that rising oil prices and the related high inflation would be a fact of life forever.
When the politicians started talking about using controlling the cost of nationally produced oil (something that was quite common), Albertans responded by saying "Let the Eastern Bastards freeze in the dark." IIRC, that was a popular bumper sticker in Alberta.
The Clark government and the Trudeau government were both under extensive pressure to find some solution. Rightly or wrongly, people perceived the times as being desparate. People believed that the Canadian economy was going to collapse unless something was done. It is from this background that the NEP is born.
In hindsight, we know that high oil prices created demand for more efficient machines which, when the machines came on line, reduced the demand for oil.
But we didn't know that at that time.
The NEP hurt the Alberta oil industry, but the oil industry damaged the Albertan economy by shutting down as much for a political protest as for business reasons. What happened in Alberta in the early 80s was not much different from what most of Canada had experienced in the preceeding 10 years.
That's the background you need to understand when you talk about the NEP.
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