OTTAWA (CP) -- The debate over how much oil should cost, who should control it and how governments should tax it has become the most important issue of the Feb. 18 election campaign.
PRIME MINISTER CLARK's Progressive Conservative government fell Dec. 13 mainly because of a budget proposal to excise tax on gasoline by 18 cents a gallon and to apply the tax for the first time to farmers, fishermen, airlines and public transit systems.
Liberal Leader PIERRE TRUDEAU has blasted the planned increase in the excise tax at nearly every stop on his campaign tour, part of his general condemnation of Conservative proposals for energy price increases. His attacks are echoed by NDP Leader ED BROADBENT.
A Liberal government first imposed the gasoline excise tax, 10 cents a gallon in 1975 later reduced to seven cents. But Trudeau attacks it as little more than revenue grab by the Conservatives and promises a Liberal government would abandon the proposal for a massive increase.
Clark and the Conservatives say the tax is needed to encourage conservation, ironically, the same reason used by former Liberal finance minister JOHN TURNER when he imposed it in 1975.
While the specifics of the energy policies of each major party may differ it's clear that whoever wins the election, Canadians can expect the following in the next few years- Sharply higher prices, more conservation, greater use of natural gas, less dependence on imported oil and increased Canadian control of the foreign-dominated oil and gas industry.
Each party agrees Canada is running out of cheap oil from the conventional oil wells that now provide about 70% of the daily consumption of two million barrels. That means higher prices to finance costly exploration in the North and off the East coast where oil and gas have been found. There will also have to be rapid development of the vast oil sands of Alberta where it is said there is as much oil as in Saudi Arabia. Separating it from the sand is tricky and expensive.
Clark and Broadbent say the right mix of policies can make the country energy self sufficient by 1990 while Trudeau dismisses the target as a sham. He promotes a policy of energy security under which PETRO-CANADA, the state owned oil company, would nail down firm supply contracts with Venezuela and Mexico.
After five months of wrangling with Alberta, the Clark government reached a tentative agreement to raise the domestic price $4 a barrel this year and $4.50 each year through 1983. Each $1 adds about four cents to a gallon of gasoline and heating oil.
ENERGY EMERGES AS MAJOR ISSUE.
When the budget was defeated in December, the government reverted to an old agreement under which the price went up Jan. 1 and is due to increase again later this year. The price could go higher than the Conservatives predicted if world prices increase dramatically. But Clark has promised it will never exceed 85% of either the world price or the U.S. price to give Canadian industry an advantage.
Trudeau and Broadbent condemn Clark's proposals without saying how much they would allow the price to rise. Broadbent wants to toll back the Jan. 1 increase. Both say future prices should be tied to costs of new exploration and development and not to world or U.S. prices.
Trudeau has proposed a new bureaucracy to investigate the costs of exploration and development of new resources and to advise on an appropriate price. He has outlined a formula for what he calls a blended price that would take into account costs of conventional, oil sands and offshore oil.