National Energy Program - NEP and The Federal Budget

NEP and The Federal Budget

The 1980 federal government budget introduced by Minister of Finance Allan MacEachen projected a reduction of federal deficits from $14.2 billion in 1980 to $11.8 billion in fiscal 1984 due primarily to substantial increases in revenues from the oil and gas sector while maintaining expenditures. Some economists speculated the NEP would discourage large-scale oil investment projects and thus reduce these projected revenues. Whether or not the NEP itself was the cause, the program failed to deliver the anticipated revenues and, by 1983, the Department of Finance had concluded that the federal government had established a structural deficit of $29.7 billion, an increase from 3.5 per cent of GNP in 1980 to 6.2 per cent of GNP in 1983.