On May 29th, Alberta Can Slip Its American Noose

On May 29th, Alberta Can Slip Its American Noose

May 23, 2023

Regan Boychuk

Green Party of Alberta energy critic & May 2023 candidate for Banff-Kananaskis

Author’s note

This article will prove the United States imposed its foreign policy doctrine of “Minimum Duty” on Alberta in November 1938 and that politics in Alberta and Canada today remain in the shadow cast by that imposition of Minimum Duty. The May 29th provincial election may be Albertans’ last chance to assert their independence from US empire and “Act Like Owners” before it’s too late.

Alberta’s Rockefeller Coups Part 4: U.S. doctrine of ‘Minimum Duty’ vs. the Alberta doctrine of ‘Acting Like Owners’

In a diplomatic note sent to Mexico in 1918, the United States explained its doctrine of Minimum Duty. The doctrine asserted that American investors were a ‘special, privileged class, not subject to the laws of the nation in which they do business.’ In effect, countries were free to regulate business activity, so long as these laws ‘did not apply to foreigners’ (Shaffer 1983, pp. 49-50).1

With this doctrine in mind, let’s look at the unequal relationship between the US and Canada. This relationship centers around oil, which Alberta enjoys enough of to be the crown jewel of any empire (Breen 1993, pp. 701n24, 164-65).

Although Alberta was subject of US imperialism for much of the 20th century, local control of Alberta’s oil was reasserted by Peter Lougheed after his landslide victory in August 1971 (Richards & Pratt 1979, pp. 165-66). However, Alberta’s independence was later reversed by a secret deal between industry and regulators in January 1991 and the US installation of the comprador Ralph Klein as premier in December 1992 (Boychuk 2022a n13; Boychuk 2022b n13).2

To make sense of this political coup, we need to understand US imperial ambitions, which date back three centuries. George Washington described the United States as a “rising empire” (Van Alstyne 1960, p. 1). Thomas Jefferson declared that the American confederacy was “the nest, from which all America, North and South, is to be peopled” (Chomsky 1987, p. 13). John Quincy Adams claimed that by the “law of nature”, America’s “proper dominion” was the entire continent of North America (Chomsky 1987, p. 13).

Given this imperial ambition, Canada’s first Prime Minister John A. Macdonald, summed up Ottawa’s apprehensions after confederation:

It is quite evident to me … that the United States Government are resolved to do all they can, short of war, to get possession of the western territory and we must take immediate and vigorous steps to counteract them.

(quoted in Stacey 1940, p. 7)3

In hindsight, it appears that this fear was well grounded. Arch-imperialist Cecil Rhodes observed that the British considered it their white supremacist duty to “seize every opportunity of acquiring more territory”. To accomplish this goal, which was obviously contrary to the wishes of local peoples, Rhodes argued that a secret society would be a “splendid help” (Rhodes 1877a).

To this end, the British Round Table was quietly organized in Canada in 1908 before its official British birth in 1909. While masquerading as a study group, the Round Table was really a propaganda organization devoted to influencing imperial policy and eliminating diverse opinions. In short, it was a puppet of London (Quigley 1962, pp. 218-19).4 Noting the power of the Round Table, Wilfred Laurier wrote in 1917 that “Canada is now governed by a junta sitting at London” (Eayrs 1957, pp. 5-6).

Summarizing the importance of the Round Table movement, Carroll Quigley writes:

There is no necessity here to emphasize the importance of the Round Table group. Anyone who is at all familiar with Canadian history has merely to look at the names of Round Table members and recall the positions they held to see the significance of the group in Canadian history especially in external affairs, in banking, and in the press.

They were very influential in Canadian education (with memberships on the Boards of Governors of the University of Toronto and Upper Canada College), especially in the writing of Canadian history, and played a major role in forming Canadian opinion on external affairs, through various agencies, including subsidiary organizations such as the Royal Institute of International Affairs and the Institute of Pacific Relations (both creations of the Round Table group in London).

This pattern of interests and influence was repeated in England, in all the Dominions, and in the United States and frequently can be discovered by digging only slightly below the surface in episodes which, at first glance, seem utterly remote from the Round Table or the Rhodes Trust.

(Quigley 1962, p. 224)5

British-American competition over Alberta drew a million Americans north of the 49th parallel between the US Civil War and World War I, (Maclean’s 1/1/36, pp. 14-15) and by the 1930s American interest was growing with regards to previous threats of annexation in the 1860’s (Smith 1935, p. 67).

The same year Standard Oil installed the provincial government in Alberta, (Boychuk 2022c) US General Smedley Butler — who declared ‘I was a racketeer for capitalism’ (Butler 1935) — advised “in these times”, “look for the oil deposits when you are trying to get at the bottom of deep international intrigue” (Katz 2021, p. 201).

In June 1935, on the advice of Canadian Prime Minister R.B. Bennett (a former Rockefeller executive in Calgary), King George V appointed John Buchan as the first Lord Tweedsmuir and Governor General of Canada. He held the post until his death in 1940 (Wikipedia, John Buchan; London Gazette 1935, p. 3620).6

Judge magazine (29 June 1895). Source: US Mint

Not unlike American “Free Silver” enthusiasts who had been driven north by hopes of free money after the civil war, (Encyclopedia Britannica, Free Silver Movement) Standard Oil used the promise of free money to install its legislative agents in Alberta on August 22, 1935:

To depression-ridden Albertans, harassed by drought and debt, Aberhart’s promise [to give each Albertan $25 per month] was an inducement that no other party could match. … Aberhart was ushered into office pledged to fulfil his campaign promise of a monthly dividend within eighteen months.

(Schultz 1960, p. 1)

After Aberhart’s election, the New York Times wrote that the previous United Farmer government has been substituted by the ‘almost personal rule of a man who is a school teacher by profession and a radio evangelist by vocation’ (NYT 1/9/35, p. 55).7

A few months later in January 1936, Britain’s ‘King George V died and his eldest son, Edward VIII, succeeded him as king.’ (Wikipedia, Abandoned coronation of Edward VIII)’. By the time he graduated from Harvard that spring, David Rockefeller’s

father sent him up to Canada to visit Mackenzie King and get the benefit of the Prime Minister’s advice. Junior wrote to his old friend from Ludlow days about his youngest son: “He had a fine mind and a wide interest both in world affairs and in cultural subjects. Whether he will enter some form of business, whether he will ultimately be attracted to a political life or to the diplomatic service, only time will tell.”

King agreed that the sky was the limit as far as the Rockefeller son was concerned, but his feeling was that the decision should be delayed. With the world situation so unpredictable, the best thing David could do was to go to graduate school. David went to London that fall to enroll in the London School of Economics … Finishing his studies [A Master of Arts in the economics of conservation under Friedrich Hayek] in London, David returned to the University of Chicago to take a PhD in 1938.

(Collier & Horowitz 1976, pp. 222-23)8

What young David Rockefeller was studying were the economics of conserving oil, (Rockefeller 1941) which the North American industry had recently begun self-regulating (Ely 1938, pp. 1215-16, 1244n118). By the summer of 1936, the million-dollar job of transforming Ontario’s Fort Henry into a museum had begun (CP 21/7/36).

In July, President Roosevelt visited Quebec to meet with Governor-General Lord Tweedsmuir. It was the first time an American president met with a Canadian Governor-General on Canadian soil (FDR Day-by-Day, 31/7/36). In August 1936, President Roosevelt foreshadowed his more explicit 1938 speech: “our closest neighbors … know that we can and will … defend our neighborhood. … Let those who wish our friendship look us in the eye and take our hand” (Roosevelt 1936). But at the time Roosevelt’s ‘unilateral declaration received little attention, even in Canada’ (Beatty 1991, p. 4).

By March of 1937, Prime Minister Mackenzie King was enjoying an exclusive dinner as an overnight guest at Roosevelt’s White House (FDR Day-by-Day, 5/3/37) to discuss Atlantic and Pacific coast defence for the first time (Beatty 1991, p. 4).9

Governor General Tweedsmuir met with President Roosevelt again in March 1937 (FDR Day-by-Day, 31/3/37), and in May, Mackenzie King proposed the first ever British royal tour of Canada (Wikipedia, 1939 royal tour of Canada). In September 1937, Imperial Oil and the British American Oil Company simultaneously announced a sharp reduction in the price their refineries would pay for crude (Breen 1993, pp. 110-11).

Premier Aberhart’s ex-attorney general John Hugill observed in the Edmonton Bulletin that the premier’s political philosophy was predicated on the theory of “the divine right of Aberhart” (Schultz 1964, p. 193). Meanwhile, Roosevelt traveled to Victoria aboard destroyer USS Phelps for lunch at British Columbia’s Lieutenant-Governor’s mansion (FDR Day-by-Day, 30/9/37). Before Christmas 1937, Roosevelt’s Secretary of State was cabling FDR about military staff officers meeting their Canadian counterparts (Granatstein 1974, p. 16n2).10

On 4 January 1938, the president of Royalite Oil announced price of Montana crude had collapsed, that there was now no recognized posted price, and that distress prices were in effect; ten days later, minister Nathan Tanner announced conservation legislation would be introduced at the forthcoming session of the Alberta Legislature (Breen 1993, p. 116). And by the end of the month, the first meeting of both countries’ military brass took place, ‘arranged in secret and with the direct authorization of President Franklin Roosevelt and Prime Minister Mackenzie King’ (Granatstein 1974, p. 4).

In March of 1938, Alberta legislation created a new conservation board, (Breen 1993, pp. 118-29) ‘Hitler marched into Austria … the Push to the east had begun’, (Preparata 2005, p. 238) the US-born minister in charge of Alberta oil telegraphed the US Bureau of Mines to ask names of petroleum engineers prepared to come to Alberta, (Breen 1993, p. 118), Mexico expropriated the assets of nearly all foreign oil companies, (DoSOH 1937-45) and former Texas Railroad Commissioner William F. Knode arrived in Edmonton to lead the new Alberta ‘conservation’ authority (Breen 1993, p. 119).11

In April 1938, the Conservation Act was assented, but restricted by a clause stating that the Act would only come into force after Mackenzie King’s Parliament ratified the agreement (Breen 1993, p. 121); ‘General Keitel received orders from Hitler “to draft plans for invading Czechoslovakia.”’ (Preparata 2005, p. 238) In May, ‘Mr. King … sent Mr. H.L. Keenleyside of the Department of External Affairs with a personal message to Mr. Roosevelt … in … Washington three times … each time as a personal envoy of the Prime Minister to the President’ (Stacey 1954a, p. 110) and the ‘first ever … Pulitzer awards … ever made outside the realm of the United States press’ saw plagues awarded to the Edmonton Journal and dozens of local Alberta papers for their resistance to premier “Bible Bill” Aberhart’s pantomime against press freedom (CP 3/5/38).12

In June 1938, the Mexican national oil company (Pemex) was established and began operations (DoSOH 1937-45; ERCB 2013, p. 5) and Congress enacted the Natural Gas Act to protect consumers of natural gas against exploitation at the hands of natural-gas companies. The act’s declared policy was “that federal regulation … [was] necessary in the public interest”’ (Huard 1956, pp. 551-52).13 Comprador prime minister Mackenzie King delivered the ‘retaliatory’ salvos.

With the federal natural resource transfer act now ‘amended’ the Petroleum and Natural Gas Conservation Board’ was cheekily founded on Canada Day (ERCB 2013, pp. 160, 5). A month later, Canada’s only military defense against the US, Fort Henry was opened as a museum and historic site by the prime minister, who later wrote: “I shall recall it always as one of the greatest and most significant events of my life” (Mackenzie King 1938a).

Two days later, Mexico repudiated the Minimum Duty doctrine the US had been trying to impose since 1918 (Borchard 1940, p. 445). The following day, Alberta’s new regulator issued its first conservation order (Breen 1993, pp. 134-35).14

On 18 August 1938, prime minister King hosted President Roosevelt in Kingston to receive an honourary degree, and where President declared that Canada would now be guarded by the Monroe Doctrine (G&M 19/8/38a-f; NYT 19/8/38a-l). The hubris of the first imperial US President was foreshadowed in the gall of FDR pretending to warn his unsuspecting Canadian audience against the threat of foreign influence on the very day he asserted colonial control:

To put it bluntly, a group of American interests is here gradually putting itself in a position where, unless caution is exercised, they may in time be able to determine the economic fate of a large area, both in Canada and the United States.

(Roosevelt 1938a)15

With the world sinking towards war again in Europe, history moved fast. By October 18th, the US-run oil and gas regulator in Alberta had cut provincial production in half — a special session of the legislature was called and a Royal Commission was appointed to revise Conservation Act and investigate (Breen 1993, pp. 139-40).

On November 14th, ‘there had been a very large conference at the White House … with administrative, military and naval heads … the President says the policy of continental solidarity had been the dominant theme of discussions. … He was noticeably precise in stating that he had good reason to believe that Canada as well as republics to the south would cooperate in that policy’ (NYT 16/11/38, p. 6).

The next day, Roosevelt was forecast to win a 3rd term as president (AP 15/11/38) and the first ever royal tour of Canada was publicly announced at the opening of the legislature’s special session to revise the Conservation Act (CP 15/11/38b).16

At the conclusion of the special legislative session a week later, sections 44 and 46 were added to the Conservation Act, enshrining in black-letter legislation the fact that the US-run regulator in Alberta is above local law and that taxpayers will be ones funding any eventual cleanup (GoA 1938, pp. 13-14).

The next day, a second secret meeting of US and Canadian military brass took place (Granatstein 1974, p. 16n2).17

Whether or not anyone appreciated it yet, Standard Oil had successfully applied Minimum Duty to Alberta. Acquiring new territory, the Rockefeller princes joined the ranks of Benjamin Franklin’s “Fathers of their nation” (Franklin 1751) and the five brothers were whisked to the heights of power. By the end of 1939, ‘details of the organization, purpose, scope, and procedure’ of the Council of Foreign Relations/State Department’s Rockefeller Foundation-funded War & Peace Studies Project had been worked out (Shoup & Minter 1977, pp. 119-22).

In February 1940, Governor General Lord Tweedsmuir fainted while alone in his study, hit his head, and died (CP 6/2/40; CP 11/2/40). In March, with a wink towards Canada, the first few meetings of the War & Peace Studies project established the principle that extending the Monroe Doctrine would deter Nazi Germany from assuming control of defeated European powers’ colonial possessions in the western hemisphere (Shoup & Minter 1977, pp. 122-23) and a Yale University professor of law published a timely refresher on the US foreign policy doctrine of Minimum Duty (Borchard 1940).18

The Rockefeller-installed government in Alberta withheld the 1940 Royal Commission report on Alberta’s oil industry (McGillivray & Lipsett 1940) for months, (CH 8/5/40) finally releasing it only on June 14th (CH 14/6/40) — the same day Nelson Rockefeller was presenting his post-WWII hemispheric economic vision at the White House (Colby & Dennett 1995, pp. 94-96). The Chief Justice of the Alberta Supreme Court’s ‘untimely death … at 56 removed the one individual who might have reminded Albertans of the Commission’s findings’ (Breen 1993, p. 187).19

On August 16th 1940, President Roosevelt called up his American agent in Ottawa to invite him to military manoeuvres in New York the following day. ‘Mr. King accepted’ and came accompanied by no one except the new American Ambassador to Canada; President Roosevelt proposed permanent and unequal military arrangements between the two countries and ‘the Prime Minister accepted at once’ (Stacey 1954a, pp. 111-12).

No paper was signed, and the [110-word] release remained the basis of the new board. Canada published its text in her Treaty Series and included it in an order in council. The United States regarded it as an executive agreement not subject to ratification by the Senate, and it was never submitted to that body. No international arrangement of comparable importance has ever been concluded more informally.

Mr. King appears to have had no opportunity of consulting his ministerial colleagues before his interview with the President, and it seems likely that he did not know in advance precisely what proposal Roosevelt intended to lay before him.

(Stacey 1954a, pp. 112-13)

In retrospect, the creation of the Permanent Joint Board of Defence marked the “shift of Canada from a British Dominion to Canada as an American protectorate” (Granatstein 1974, p. 8).20

The same year (1931) Alberta had levied its first royalty (5%) on oil production, (ERCB 2013, p. 159) American social philosopher John Dewey warned that “politics in general is an echo, except when it is an accomplice, of the interests of big business” and that “As long as politics is the shadow cast on society by big business, the attenuation of the shadow will not change the substance. The only remedy is new political action based on social interests and realities” (Dewey 1931).21

The political economy of North America since World War II and much else have been the shadow cast by November 22nd 1938’s imposition of Minimum Duty on Alberta and Canada on August 18th 1940. The briefest review of Canadian challenges to that fact suffice to prove its truth beyond any shadow of a doubt.

Alberta’s US-controlled regulator had cut oil production on the eve of WWII and resisted the federal government’s efforts to increase production in service of the war effort. Ottawa’s first couple attempts to operationalize decades of bitumen research and development burned to the ground as the Abasand project in November 1941 and again June 1945 (Breen 1993, pp. 441-43).

And in October 1945, when the first actual Albertan to chair the regulator signed a smart deal with Shell to develop Canada’s biggest gas field at Jumping Pound, ‘Board Chairman Dr. Edward Boomer … died of a heart attack just four days after the agreement was announced’ (Breen 1993, pp. 228-29) and Shell decided to postpone the project (AB Culture & Tourism~Jumping Pound).

Shortly after Leduc #1 and Mackenzie King announced his retirement as Canada’s longest-serving prime minister, (NYT 21/1/48) Alberta tried to raise royalties. Then, we suffered the country’s worst onshore spill to date: Atlantic #3 blew out of control for six months, through an entire election campaign (Breen 1993, pp. 270, 285, 284; CH 13/2/97) — even after Ernest Manning’s comprador ‘government accepted to the [industry] request to set a royalty ceiling that it was bound not to exceed [16.7%]’ (Breen 1993, p. 280).22

One-sixth as the limit to Albertans’ share of their resources was the first hard edge of Minimum Duty to reveal itself. The second had been declared by David Rockefeller in 1941, (Rockefeller 1941, p. 8) but practical precedent had to wait for Atlantic #3 (Breen 1993, pp. 270-72, 276, 717-18n91) — the blowout also established the Rockefeller principle that the polluter will not be paying in Alberta (Breen 1993, pp. 276-77, 285-87).23

The full shape of the Minimum Duty doctrine in Alberta was thus revealed: a cap of 1/6 as the public’s share of resource revenue with cleanup as a cost not born by the firm, but by the community. Whatever their ambitions, surely the Rockefellers couldn’t have maintained such control over the place I grew up?

Only now do I appreciate how radical a break Lougheed was in the history of Alberta: Acting Like An Owner only survived for a decade and by the end of the second decade was replaced by a regulatory and a political coup in 1991 (Boychuk 2022a) and 1992 (Boychuk 2022b).

But what if you took the value of all the oil and gas produced in the years of the chart above and divided it by the royalties collected? Do you know what number you’d get? 16.7%. Spooky. And what if you looked at Albertans’ cumulative share of their oil and gas revenue? As if there were a higher power at play …

Minimum Duty in Alberta is now proven. History since — up to this very election — has merely been the shadow cast by November 22nd 1938. There can be no other explanation for the score of royalty cuts that have taken place since premier Klein retired in 2005. There can be no other explanation for why two Auditor General investigations of the regulator’s liability management programs just disappeared.

When I asked the AG about the first missing audit, they said not to worry, they were scheduled to start a new audit in February 2018. I met with their team its first week. But by the next summer the team had been pulled off the audit for a year, the work my colleagues and I contributed to went into the garbage, and the AG redid the audit on the AER’s terms over an additional few years before trying to bury it in the lead up to this month’s provincial election.

There is no other explanation for more than half a billion in unpaid property tax owed by Alberta’s oil and gas industry since the last election.26 There is no other explanation for the fact that not one of the companies which have not paid those taxes has so much as been named in the media. There is no other explanation for why the media have universally been misreporting the amount of unpaid tax in Alberta for more than a year, many even re-misreporting the same story a year after conceding the previous incarnation was slight of hand. The only explanation is Minimum Duty. That does not bode well for our collective future as colonial unpeople atop American treasure.

However disorienting and disconcerting a realization it may be, Minimum Duty in Alberta should come as relief in one sense: it proves Albertans are not so stupid or dysfunctional; for most of the last century, we were simply run by compradors. Mexico, which suffered much the same secret colonial relationship with the US, recently re-asserted its independence from American empire (as has Brazil).27

May 29th is Albertans last chance to do so. Vote like owners. Whoever you trust with your vote to steward the last of our natural inheritance, insist they represent you like the owners you are. True, both leading parties are compradors, committed to Minimum Duty and unwilling to discuss world’s lowest royalty rates. But that’s where Alberta’s first minority government could be the first step towards reclaiming our future. “The only remedy is new political action based on social interests and realities” (Dewey 1931).