A picture of a red maple leaf with most of it covered in dropping black liquid

REPORT: How Big Foreign Oil captures energy and climate policy (Part 1)

Gordon Laxer
1 month ago

This is the first instalment in a series of excerpts from Gordon Laxer's new report, "Posing as Canadian: How Big Foreign Oil captures energy and climate policy"  co-published by the Council of Canadians, CCPA BC, and CCPA Saskatchewan

Alberta’s recent public inquiry into “anti-Alberta energy campaigns” targeted a molehill and missed the Rockies.

Tasked with investigating the vast sums that allegedly flowed from U.S. foundations to Canadian environmental groups, inquiry commissioner Steve Allan followed the trail of money and found a pittance. Allan’s report identified between $2.21 to $3.46 million a year in “foreign funding directed to Alberta resource development opposition” – a drop in the bucket for the dozens of groups concerned.

If, as Alberta Energy Minister Sonya Savage stated, the aim of the inquiry was to expose the influence of foreign actors over domestic policy, it missed the mark badly. Right under its nose was a far larger source of outside money influencing Albertan and Canadian politics: Big Foreign Oil.

Oil corporations in Alberta and Canada are overwhelmingly foreign-owned. This report examines how Big Foreign Oil (BFO) hinders climate action in Canada by capturing and controlling the lion’s share of the industry, policy-making, and profits.

BFO maintains and asserts much of its power through control over the apex oil and gas lobby group, the Canadian Association of Petroleum Producers (CAPP). Through partially successful PR campaigns, CAPP has wrapped itself in the Maple Leaf and claimed to speak for Canada’s national interest. 

But as this report reveals, the Canadian-ness of Calgary’s oil patch is an inch deep:

  • Of the 48 corporations on CAPP’s board, 30 were confirmed to be fully or majority foreign-owned, while seven more are very likely majority foreign-owned. Combined, that makes up 77 per cent of CAPP’s board.
     
  • The overwhelming majority – about 97 per cent – of the oil produced by corporations on CAPP’s board in 2018 came from fully or majority foreign-owned corporations. Majority Canadian-owned corporations were responsible for less than three per cent of all oil production by corporations on CAPP’s board.
     
  • Most of CAPP’s revenue comes from foreign-owned corporations because CAPP corporate membership fees are based on each member’s oil production. The greater the production, the higher the fees. Since 97 per cent of the oil produced by CAPP’s corporate board members comes from fully or majority foreign-owned corporations, their fees must account for about 97 per cent of CAPP’s revenue.

For all its bravado as an independent, Canadian centre of oil and gas in the world, Calgary is in fact subordinate to Big Foreign Oil.

BFO’s playbook for maintaining power and influencing policymaking in Canada and Alberta goes something like this:

  • Demonize your opponents as un-Canadian
    During the Conservative government of Stephen Harper, BFO and its political supporters in office began to accuse Canadian environmentalists of using funding from foreign groups to shut down the Canadian oil and gas industry. The demonization of oil industry critics as ‘anti-Canadian’ has gone hand-in-hand with an aggressive form of petro-nationalism: the attempt to portray resource extraction and the oil industry as a part of what makes us Canadian.
     
  • Summon an army of ‘grassroots’ supporters
    To accrue social licence, BFO and its supporters go to great pains to deepen the notion that the identity and economic well-being of Albertans – and Canadians at large – is inextricably linked to oil. One of their main strategies in gaining social legitimacy is through astroturfing: funding front groups that masquerade as “grassroots” citizen support for oil and gas extraction.
     
  • Get out the ‘Energy Vote’
    CAPP has influenced individual voters in provincial and federal elections through micro-targeting, surveys, and massive advertising spending. Despite being dominated by BFO, the lobby group has benefited from a loophole that allows it to circumvent rules preventing foreign money interference in Canadian elections. As a well-funded, registered third party, it has been able to command the attention of voters and political leaders during election campaigns. And, the executives of oil corporations on CAPP’s board of governors have used various techniques to circumvent bans on corporate donations, to make sizable contributions to politicians favourable to their agenda.
     
  • Lobby and influence governments to defang regulation
    CAPP’s 36 full-time lobbyists are in perpetual contact with politicians and high-ranking bureaucrats in the federal and Alberta governments – and they have often gotten the results they want. In Alberta, whether the Conservatives or NDP held office, BFO has had great sway over policies. The province acts as chief champion of oil and gas corporations within the Canadian federation.

The accusations by Jason Kenney about the foreign funding of Canadian environmentalists assume that who pays the piper calls the tune. If that assumption has validity, then the power and influence of foreign-owned petro corporations in Canada is enormous, because the scale of their financial and organizational resources is vast.

That power has served as the single greatest barrier to effective climate action in Canada. As BFO’s advocate in Calgary, CAPP is the main obstacle to Canada’s ability to cut carbon pollution from the country’s greatest and fastest growing source of emissions: the production of oil and gas.

If the Alberta government is truly concerned about how foreign money is unduly influencing our domestic affairs, it ought to shine a spotlight on wealthy foreign-owned oil corporations instead of portraying Canadian environmentalists as traitors.

To curtail BFO’s power, this report makes the following recommendations:

  1. Governments in Canada should prohibit foreign-influenced corporations from intervening in Canadian elections as third party advertisers and in all other ways. To determine if a corporation is foreign-influenced, the following thresholds should be used: five per cent for a foreign government shareholder; 20 per cent for a single non-governmental foreign shareholder; and 50 per cent aggregate foreign ownership of total equity, outstanding voting shares, membership units or other applicable ownership interests of the corporation.
     
  2. Prohibit foreign-influenced corporations from funding, through membership dues or in other ways, the political interventions and lobbying of corporate fossil fuel advocacy groups such as the Canadian Association of Petroleum Producers, the Canadian Gas Association, and the Petroleum Services Association.
     
  3. Further restrict the maximum allowable individual political donations to both federal and provincial candidates and parties, to close the loophole of individual corporate executives making large political donations and thereby bypassing bans on corporate donations.
     
  4. Pass legislation that empowers Elections Canada to prohibit groups from making deceptive representations for the purpose of promoting a political party. Enable the public to notify Elections Canada if they believe that a group or entity is making false representations.
     
  5. Immediately end all direct and indirect subsidies to oil, gas, and other fossil fuel corporations.
     
  6. Enact just transition legislation that reduces emissions by at least 60 per cent below the 2005 level by 2030, winds down the fossil fuel industry and related infrastructure, and provides generous supports for all impacted workers and communities.

This is the first in a series of excerpts from Gordon Laxer's latest report: Posing as Canadian: How Big Foreign Oil captures Canadian energy and climate policy