Tuesday, April 17, 2018

Remember the Petro Canada experiment? PM Pierre Trudeau created it; PM Jean Chretien Sold it; and now PM Justin Trudeau is buying into Trans Mountain pipelines. What a waste!

There's a lesson there but too bad Pierre Elliot Trudeau is no longer around to coach his kid on the perils of 43 years ago about not going anywhere near the petroleum industry in Canada.  The Petro Canada experiment in 1975 seems to be forgotten when it comes to the Liberals buying into Trans Mountain.

The Americans were a problem back then and they are today.  Nothing has changed.

Petro Canada   Wikipedia:
In 1973, world oil prices quadrupled due to the Arab oil embargo following the Yom Kippur War. The province of Alberta had substantial oil reserves, whose extraction had long been controlled by American corporations. The government of Prime Minister Pierre Trudeau and the opposition New Democratic Party felt that these corporations geared most of their production to the American market, and as a result little of the benefit of rising oil prices went to Canadians.

The bill to create a publicly run oil company was introduced by the New Democratic Party in 1973.  Trudeau's Liberals were then in a minority government and dependent upon the support of the NDP to stay in power. The idea also fit with the growing movement toward economic nationalism within the Liberals. The Liberals and NDP passed the bill over the opposition of the Progressive Conservative Party led by Robert Stanfield.

Petro-Canada was founded as a Crown Corporation in 1975 by an act of Parliament. It started its operations on 1 January 1976. The company was given C$1.5 billion in start-up money and easy access to new sources of capital. It was set up in Calgary, despite the hostility of existing oil firms.   Its first president was Maurice Strong. The Progressive Conservatives (PCs), then led by Albertan Joe Clark, were opponents of the company, and advocated breaking it up and selling it. However, they were unable to proceed with these plans during their brief time in power.   .................. SNIP

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The federal government will sell its stake in Petro-Canada within the next 12 months, Finance Minister Ralph Goodale said Tuesday in“ a transaction that could bring in almost $3 billion.

Goodale confirmed media speculation about the impending sale just hours before he was due to deliver the budget speech.

In a three-paragraph statement, Goodale said the government would sell its stake in the 2004-2005 fiscal year, but "the precise timing of the sale is yet to be determined."

Rumours have been mounting since a media report on the weekend said Ottawa was considering selling its Petro-Canada (TSX:PCA) stock. Since then, there have been more stories citing unnamed sources.

Three arguments have been advanced to explain the sale of government's 49.4 million shares (about 18.7 per cent) in the Calgary-based company:

  • it needs the money;
  • the timing is right because high oil prices have driven up the value of oil company stocks;
  • the move would be popular in the west, where the Liberals need to bolster their support.
Petrocan shares fell $1.05 to $55.85, valuing Ottawa's stake at about $2.76 billion.   SNIP
PS

Alberta Premier Calgarian Notley is backstopping Justin and Ian just like in the old days

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