The federal government formed a secretive working group with the country’s most powerful oil lobby during the coronavirus pandemic, discussing reducing regulations, strengthening “investor confidence,” and creating post-pandemic opportunities for the industry, documents obtained through Access to Information reveal.
The working group was initiated at the behest of the Canadian Association of Petroleum Producers (CAPP), which represents 150 oil and gas companies and has frequently lobbied the government to delay climate action.
The Market Crisis Joint Working Group was led by Natural Resources Canada and initially chaired by Minister Seamus O’Regan. At the pandemic’s outset weekly meetings included Deputy Ministers from Natural Resources, Environment, and Finance, and the CEOs of Petronas, Cenovus, Suncor, and Chevron.
According to a document outlining the group’s objectives, the priorities included “keeping industry active and viable, preserving jobs and encouraging investment” and a “reduction in operating costs and regulatory burden.” Those priorities later shifted to include supporting offshore, liquified natural gas, and tar sands projects as central to any economic recovery.
During the pandemic, the Liberal government has granted new pipeline and fossil projects essential status and vigorously promoted them, increased public hand-outs to oil companies by 200 percent, and agreed to delay a Clean Fuels Standard that would have required producers to reduce the carbon-intensity of liquid fuels.
“Level of access” of oil lobby unrivalled
Environmental organizations criticized the existence of a working group they say indicated a deepening relationship between the Trudeau government and oil corporations.
“I don’t know of any other ‘interest group’ that’s had this level of access to government during the pandemic,” said Bronwen Tucker, an analyst with Oil Change International who looked at the documents.
“At a time when the need to shift off fossil fuels is more obvious than ever, Canada’s oil lobby not only has the ears of top officials and politicians, but is literally being allowed to set the agenda,” she said.
The working group was created amidst a broader lobbying offensive undertaken by oil companies, who clocked more than three contacts a day with the Trudeau government through the pandemic, according to the federal lobby registry.
CAPP alone had 250 contacts with the government over the past year, the most lobbying it has done since 2011, when it had a notoriously close relationship with the Harper government.
Extracting and refining oil and gas is the largest and fastest growing source of emissions in Canada, according to a federal inventory released this week.
Industry used working group to ramp up pressure
Just before the formation of the Market Crisis Joint Working Group in spring of 2020, a letter from CAPP to Natural Resources Minister O’Regan—leaked to Global News—showed the lobby group was pushing for the government to suspend dozens of environmental regulations, delay the implementation of the UN Declaration on the Rights of Indigenous Peoples, and suspend requirements to report on lobbying activity.
The oil lobby continued to press Minister O’Regan through the working group, raising concerns about the Clean Fuel Standard and “market access” for the Trans Mountain and Keystone XL pipelines, both of which have faced enormous opposition from Indigenous and environmental movements.
Government briefing notes for O’Regan show CAPP asked for “interest free loans with a long payback period” for orphan wells and pushed for new public subsidies to “facilitate and advance new projects.”
“We understand industry’s view on the importance of both short-term and long-term federal support,” Minister O’Regan told CAPP in April, 2020, according to his talking points. “We continue to recognize the fundamental importance of the petroleum sector to the overall recovery of Canada.”
The Liberal government didn’t agree to all of CAPP’s demands, but later in the spring it delayed the Clean Fuel Standard and gave oil companies $1.7 billion in public money to restore abandoned oil wells in Alberta and Saskatchewan.
Oil lobby shifts focus to post-pandemic recovery and new “opportunities”
After the first wave of the pandemic, CAPP proposed continuing the government-industry committee, with meetings less frequent but over the longer term.
Starting at the end of the summer of 2020, senior officials from Natural Resources, Environment, and Finance were tasked with holding a series of discussions with CAPP and top officials from Canada’s largest oil companies.
Under a new name, “Create the Path Table,” the working group priorities shifted to issues related to the post-pandemic period for the oil and gas industry.
“The table is a forum to explore ways the natural gas and oil industry can support the federal government in achieving national objectives particularly around greenhouse gas emission reductions, indigenous [sic] prosperity and reconciliation as well as Canada’s economic recovery,” CAPP’s VP of Government Relations Shannon Joseph told The Breach.
“The Create the Path Table was formed to facilitate constructive conversations between industry and the federal government, inspired by a 2018 Joint Working Group,” she said.
That previous working group, never reported on by media, was also led by Natural Resources Canada, and brought together representatives from Alberta, Saskatchewan, federal ministries, and oil and gas companies to discuss government support for fossil fuels development.
The basis for the Create the Path Table was a memo drafted by CAPP in July, which was then only slightly altered after discussions between CAPP Vice-President Joseph and Assistant Deputy Minister of Natural Resources Canada Jay Khosla.
Themes for discussion included advancing offshore projects in Atlantic Canada and tar sands projects in Western Canada, “cooperation in building investor confidence,” and “government industry collaboration to strengthen energy trade” with the United States.
There was discussion of “emission reducing technologies,” hydrogen energy, and carbon capture and sequestration—several proposals promoted by oil companies that have been widely panned as false solutions perpetuating fossil fuel use.
“Canada’s LNG” is referred to as an “opportunity” for the country’s climate plans, even though scientists have concluded that liquified natural gas is in fact a carbon-intensive fuel that needs to be phased out.
CAPP “greatly appreciated” government engagement with industry
The oil lobby’s focus on Natural Resources Canada appears to have paid off.
In June, O’Regan announced that the government would exempt offshore drilling in Newfoundland and Labrador from federal environmental impact assessments.
In September, he announced a $320 million public handout with no strings attached to Newfoundland’s offshore oil industry.
That same month, O’Regan began echoing the CAPP’s talking points by touting LNG as the answer to the climate crisis and a key part of the Liberal’s “green recovery” agenda.
Soon after, he reassured CEOs from Husky and Suncor that the federal government “cannot achieve Net Zero without our oil and gas sector” and that any economic recovery would involve “continued exploration” for oil off the east coast, according to a memo obtained by Greenpeace.
Messages from CAPP to government officials expressed gratitude for O’Regan’s efforts.
“Natural Resources Minister Seamus O’Regan’s engagement with industry since the beginning of the COVID crisis has been greatly appreciated by CAPP and its members,” says a CAPP document sent to the government in July 2020.
“Continuation of this dialogue will be important as we continue to work toward Canada’s economic recovery.”
The federal government, when contacted by The Breach, initially denied the existence of any such working group.
“The department occasionally receives proposals from stakeholders to address policy issues in a more formalized manner,” a media spokesperson for Natural Resources Canada said. “While CAPP did propose creating a working group with federal officials mid-2020, we mutually agreed to continue collaborating through existing channels, rather than create a new body.”
However, after The Breach shared the oil lobby group’s response to Natural Resources Canada, the media spokesperson modified their initial response.
“Natural Resources Canada continues to engage bilaterally with CAPP and other natural resource sector industry associations on COVID-19’s impacts and economic recovery,” the spokesperson added.
Meanwhile, requests for memos and meeting minutes related to the Create the Path Table from the fall onward were met by the government taking lengthy extensions in the Access to Information process.
“150 days are required to comply with your request because the request is for a large number of records and meeting the original time limit would unreasonably interfere with the operations of the Department,” wrote an official at Natural Resources Canada.
The Breach was also told that Natural Resources Canada would need to consult with CAPP about the documents before their release.
Natural Resources Canada and CAPP declined to answer any questions about how frequently they currently meet.