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On September 1, 1981 the Canadian government and the province of Alberta, the nation's principal producer of petroleum, ended their bitter controversy over oil when Prime Minister Pierre Elliott Trudeau and provincial premier Peter Lougheed signed a five-year agreement. The pact permits a series of price increases that must, however, keep the price of Alberta oil 25% below world market prices. The accord also established a new ratio for distributing oil revenues shared by oil companies, Alberta, and the federal government.

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