Impact
The economic effect of the program is debated. After it was implemented, Canada, along with all of the economies of Europe (except for Norway due to their petroleum industry) and the economy of the United States, fell into a worldwide recession. It would turn out to be the worst economic downturn since the Great Depression.
Given that bankruptcies and real estate prices did not fare as negatively in Central Canada as in the rest of Canada and the United States during the NEP, it is possible that the NEP had a positive effect in Central Canada.
However, given that bankruptcies and real estate did much worse in Alberta than in other parts of Canada and the United States, petroleum exporting economies like Norway performed well, coupled with the estimated loss of between $50 and $100 billion in provincial GDP (at the time, this was an entire year's GDP for the province) due to the NEP during this period, it is plausible the NEP had a negative effect in Alberta.
Perhaps the greatest impact was the NEP's failure to deliver the revenues forecast originally in the 1980 federal budget. Federal deficits had been expected to decrease primarily due to substantial increases in revenues from the oil and gas sector. Instead, by 1983 the Department of Finance had concluded that the federal government had established a structural deficit of 6.2 per cent of GNP ($29.7 billion).
Finally, politically the NEP heightened distrust of the federal government in Western Canada, especially in Alberta where many Albertans believed that the NEP was an intrusion of the federal government into an area of provincial jurisdiction.
Read more about this topic: National Energy Program
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