The creation and privatization of Petro-Canada provides an important lesson in state intervention and Canadian public policy. John Erik Fossum explores the reasons for the federal government's intervention in the energy industry between 1973 and 1984 and shows how its initial objectives failed, culminating in the privatization of Petro-Canada in 1990. In other countries, state oil policy unfolded along state-industry lines of conflict.

Fossum shows us how in Canada the conflict was deflected to focus on the jurisdictional and constitutional concerns of governmental actors. The dismantling of state intervention was associated with a reverse deflection and reduced conflict in both the state-industry and intergovernmental arenas. Oil, the State, and Federalism is a sophisticated analysis of statist and federalist theories of Canadian public policy-making that will spark debate among political scientists, analysts, and policy-makers.