The Trudeau government's review of a major cross-Canada pipeline project came under fire on Thursday as the country's national energy regulator released stunning records about private meetings that prompted an apology for making false and misleading statements.
Critics insist the records prove the regulator can't be trusted to deal evenhandedly with the pipeline and oil industries. The records consist of emails and personal notes from meetings, and show that Jacques Gauthier, a member of the regulator, the National Energy Board (NEB), invited former premier Jean Charest to discuss TransCanada Corp's Energy East pipeline in December 2014. This came a few months after Gauthier and other NEB members were named on a three member panel to review the project.
Charest, who had retired from politics, was under contract at that time for TransCanada, a Calgary-based multinational energy company. And the NEB, which has the powers of a federal court, isn't allowed to privately discuss matters that are under review before the Board.
The Energy East pipeline is backed by major oil companies and business leaders who say it is the key to generating growth in Canada's oil and gas industry, hammered in recent years by plummeting global commodity prices. Environmentalists, First Nations leaders and dozens of other communities along the proposed route are fiercely opposed to the proposal, warning that it could lead to spills and push Canada's climate change targets out of reach.
Gauthier, who was appointed to the NEB by former prime minister Stephen Harper, invited Charest to discuss a range of issues with Board members and staff at a January 2015 meeting. Gauthier specifically highlighted the Energy East project - a proposed 4,500 kilometre pipeline between Alberta and New Brunswick with a capacity of more than a million barrels of oil per day - as one of the items on the agenda.
Emails contradict NEB's earlier statements
The emails contradict the NEB's earlier statements about the meeting, raising fresh questions about whether it can be trusted to lead impartial reviews of major projects. They also throw a curveball at the Liberal government’s pledge to restore public trust in federal oversight of industry.
The emails and notes were released through access to information legislation a few weeks after National Observer reported that Charest had met at the Montreal office of his law firm, McCarthy Tétrault, with two NEB staff members as well as three Board members, Chairman and CEO Peter Watson, Gauthier, and Lyne Mercier in January 2015. Mercier is also one of the NEB panelists who was selected to review the Energy East project.
Gauthier, who worked previously for environmental services and renewable energy companies, invited Charest through an email sent to an executive assistant at the Montreal office of Charest's law firm - McCarthy Tétrault.
“Regarding the subject, I want to introduce the new chairman of the Board and speak about the major oil industry issues that will affect Quebec (Energy East, etc) Overall it will be quite a general meeting,” Gauthier wrote in an email sent on Dec. 19, 2014.
The NEB has exceptional powers under Canadian law that make the regulator the equivalent of a federal court so that it can review major energy project applications. It also has extraordinary powers of a law enforcement agency that allow it to investigate pipeline safety issues within its federal jurisdiction. With these powers come responsibilities to be impartial and transparent, prohibiting any secret discussions of ongoing reviews or other matters before the Board.
Notes show Jean Charest and NEB discussed TransCanada
Notes taken from staff at the meeting show that NEB officials and Charest discussed TransCanada, as well as public relations and political strategies for promoting pipelines in Quebec. The notes show that the participants also discussed various stakeholders from civil society as well as other political leaders, including Montreal Mayor Denis Coderre and Quebec City Mayor Régis Labeaume.
TransCanada's chief executive Russ Girling has said he wasn't aware of Charest's meeting, but the company has declined to say whether any of its employees were informed about it.
However, TransCanada has confirmed that Charest was working for them as a consultant, but not as a lobbyist.
After National Observer shared the newly-released records with TransCanada, company spokesman Mark Cooper provided a short statement explaining that it had not attended the meeting or asked anyone to attend it on its behalf.
"Further questions about the purpose of the meeting and what was discussed should be directed to those who were there and who organized it. TransCanada had no role in either," Cooper said.
"Transparency and accountability are fundamental to building public confidence in all of TransCanada's projects and something this company takes very seriously."
NEB showing double standard, say environmentalists
Critics from environmental groups contacted on Thursday by National Observer say the emails show that the NEB has had a double standard on pipeline reviews. Some of them who attended meetings with NEB officials were told in emails in advance that they wouldn't be allowed to discuss ongoing reviews such as Energy East or the recent project approved to reverse the flow of Enbridge's Line 9B pipeline in Ontario and Quebec.
One day before the meeting with Charest, Gauthier exchanged additional emails with the former premier’s office, offering more details about the agenda.
“Looking ahead to our meeting tomorrow, I’m sending you some of the specific topics that we’ll be tackling. Aside from introducing a few members of the NEB management, we will update you on various files that are underway and that will notably affect the province of Quebec. Finally, we will discuss the upcoming hearing process that the Board will hold and engage in an open discussion with Mr. Charest on these topics,” Gauthier wrote in a note that was also shared with Charest’s counsel, Grégory Larroque.
Charest’s office and the NEB both denied earlier this month that they had discussed Energy East at the meeting. Larroque also had said that Charest would have been obliged to disclose his contract with TransCanada if anyone had raised the topic of Energy East during the meeting.
Jean Charest didn't respond to requests for comment
Charest and Larroque did not respond to requests for comment on Thursday.
But the regulator apologized for providing misleading information after reviewing notes and emails from the meeting that were released to National Observer through the Access to Information Act.
“The NEB sincerely apologizes to you and your readers that this material was not provided at the time of your media request,” said NEB director of communications, Craig Loewen. “While there was no ill-intent in our response, the Board deeply regrets that our search for records at that time was not comprehensive and that our response did not accurately reflect the meeting."
The NEB has maintained that it wasn't aware, at the time of the meeting, about Charest's contract with TransCanada.
Loewen also denied that NEB staff and board members acted inappropriately during any of their meetings with Charest, as well as business leaders they met with in Montreal during the same January 2015 trip.
“When an individual or group brings up an application during a meeting with Board Members, they are advised that we can’t discuss the substance of the application but we can speak to the process aspects of the application,” Loewen said. “While those we met with, at times, wanted to discuss pipeline projects that were being adjudicated upon by the Board, at no time did the NEB officials at the meetings permit any inappropriate discussion of those matters.”
NEB process losing credibility every day, says Carole Dupuis
Carole Dupuis, coordinator of a Quebec anti-fossil fuels group, the Regroupment Vigilance Hydrocarbure Québec, wasn't buying the NEB's explanation. She said the meeting notes “suggest that the discussion was more about promoting pipelines than about promoting the NEB in Quebec.”
“Why is the NEB denying what is plainly visible in the documents provided? Is it because what really happened is blameworthy? If so, is someone being held accountable? The more we know about what is being said publicly and what goes on behind closed doors, the less credible the NEB’s evaluation process of Energy East becomes.”
Loewen, the NEB spokesman, said that the regulator didn’t intend to provide misleading information about the meeting.
NDP calls on Liberals to clean up mess
NDP ethics critic Alexandre Boulerice said that the federal Liberal government, elected after the meetings took place, needs to take responsibility for the mess since the NEB provided incorrect information under the current government’s watch.
“They misled the public and gave false information about what was prepared and what happened during this meeting," Boulerice said in an interview.
He added that the NDP, which has already asked the federal lobbying commissioner to investigate what happened at the meeting, to also consider the new evidence uncovered by National Observer.
He said the emails also show that big oil companies appear to have privileged access to federal officials who are supposedly making decisions for the common good.
“I think it completely discredits the new process of the Liberal government (for the review of) Energy East,” Boulerice said in an interview on Thursday.
The office of federal lobbying commissioner, Karen Shepherd, told National Observer earlier this month that she takes all allegations seriously and that the federal lobbying law requires the office to conduct all investigations and reviews in private.
The office of Natural Resources Minister Jim Carr said it was proceeding with its plan to modernize the National Energy Board to help rebuild Canadians' trust in the review process for major projects.
"That’s why, in the coming weeks, the minister of natural resources will be appointing an expert panel on NEB modernization to hear from people face-to-face – and online regarding the role, mandate and structure of the NEB," said Alexandre Deslongchamps, a spokesman for Carr. "With respect to Energy East, Minister Carr will be appointing temporary NEB members to carry out additional engagement in relation to the project."
He also noted that the government had introduced additional measures to improve the review process for Energy East in 2016 and that it was prepared to take additional steps if needed, before making any final decision on the project.