1970s Economic Growth
In 1973, Alberta's economy received a
dramatic boost when the Organization of Petroleum
Exporting Countries (OPEC) restricted oil exports to
Canada, the United States and other supporters of Israel
during that country's war against Syria and Egypt.
Suddenly, the price for crude oil quadrupled. Demand for
Alberta's oil skyrocketed.
The Progressive Conservative
government under Peter Lougheed had just come to office in
1971, replacing the Social Credit government that had
been in power since 1935. As hundreds of thousands of
workers immigrated to Alberta seeking to share in the
province's wealth, Lougheed's government was forced to
deal with the needs of Alberta's rapidly expanding
population. Using money from increasing oil and gas
royalties, they expanded services to smaller urban
centres, including airports, roads and hospitals. In the
major cities, they contributed money to establish parks
and other facilities. In 1976, they set up the Alberta
Heritage Savings Trust Fund to invest surplus money for
the province's future.
While Alberta was booming after the
OPEC embargo, the rest of the country had to pay for
increasing fuel costs. The federal Liberal government
under Pierre Trudeau attempted to reduce fuel costs by
freezing oil prices and taxing oil exports. Lougheed
responded by further raising royalty charges. These
actions encouraged many American oil corporations to
leave the province. The Alberta government subsequently
became more involved in developing the province's energy
resources. Late in 1973, it set up the Alberta Energy
Company, which became the province's second largest oil
developer. The government also helped Syncrude develop
the Athabasca oil sands surrounding Fort McMurray.
Alberta's economy was highly dictated
by oil in the last half of the 20th century.
While high oil revenues meant a prosperous economy in
the 1970s, declining oil prices led to a recession in