Time's running out!
Ron Wallace doesn't exactly fit the stereotype that now plagues high-ranking officials at Canada's National Energy Board when people call it a biased pipeline regulator that is too cozy with industry.
In the middle of the 1970s, when the Canadian government's Department of Fisheries and Oceans (DFO) was being pressed to address harm caused by acid rain in Alberta's oilsands region, Wallace caught the attention of renowned Alberta scientist David Schindler.
Schindler was trying to get DFO officials to set aside funds for a special research project to study the acid rain problem. But they balked at the idea.
"It is rather a funny story," Schindler told National Observer in an email. "I made a presentation to DFO officials making the case that acid rain was likely to be a much bigger problem than they recognized. They denied it, and refused to fund the work that I proposed."
That was the case at least until Wallace stepped in, Schindler said.
Wallace, a former Environment Canada regulatory enforcement biologist and DFO research manager, had just been appointed to run a joint federal-provincial oilsands program. And he persuaded other senior DFO officials to change their minds and invest in the research, Schindler explained.
"Ron convinced them to fund our work for three years, by which time DFO officials 'discovered' the problem and were very proud to claim that they were so foresighted as to have my group studying it for three years!"
Schindler, who helped co-found Canada's Experimental Lakes Area — a world famous research station in northern Ontario where scientists study how human activity is affecting the planet's freshwater — said that Wallace has himself done unique scientific research in the oilsands region on benthic invertebrates, which are organisms that live in or on the bottom of rivers, streams and lakes.
"Ron's own work in the oilsands is still today the best work done on benthic invertebrates, one of the few areas where there is some thorough background," Schindler continued in his email.
For reasons like these, Schindler described Wallace as the type of unbiased person that Canada needs to have on a regulator that is overseeing Canada's energy industry.
And yet, Wallace, who also worked as an oil industry executive, now is in court accusing the federal government of "age based discrimination" for forcing him into retirement from the regulator.
Wallace was forced to step down from his position as a member of the National Energy Board (NEB) in March 2016, when he turned 70, a mandatory retirement age. Parliament had adopted a law in 2015 repealing this retirement requirement, but the Trudeau government did not enact the change until a few months after Wallace lost his position.
The legal action adds a new twist to a high-stakes political saga as Prime Minister Justin Trudeau's government seeks to restore public trust in federal oversight of the energy industry in the face of fierce opposition to the expansion of major oil and gas projects.
Major new pipeline projects have been stalled due to concerns about bias and conflict of interest at the Calgary-based energy regulator, which the Liberal government promised to "modernize" as part of its mandate.
Wallace was appointed by the former Harper government in 2013 to a seven-year term. He said in the legal action that his forced retirement was part of a “highly charged political environment” — triggered in the early days of Trudeau’s government as it sought to annul nearly three dozen appointments made shortly before the 2015 federal election campaign.
The legal application indicated that Wallace expected his term to continue for the full seven years because of the legislative changes that were adopted by Parliament in 2015. The application also describes Wallace's dismissal as a violation of the Charter of Rights and Freedoms protection from age-based discrimination. It also says that the government's actions represented a threat to the judicial independence of the NEB, which has the powers of a federal court.
"These deliberate and focused actions directed at the independence of a Permanent Member of a quasi-judicial Board have been enacted by a government that has expressed a clear determination to eliminate appointees made by the previous government," says the legal application. "Furthermore, conflict of interest post-employment ban have resulted in ongoing loss of income."
'Clear motivation and intent by government to replace a permanent member' of NEB
Calgary Lawyer Clint Docken filed Wallace’s legal action in the Federal Court of Appeal last week, seeking damages for lost income and demanding that the government stop the selection process to replace Wallace on the nine-member NEB board.
“There was a clear motivation and intent by government to replace a permanent member with a new appointee that would not otherwise have been possible before 2020 had the applicant been allowed to continue his appointment,” said the 10-page court application, filed in Calgary on March 27.
Wallace's legal challenge alleged that the Trudeau government delayed enacting the law that repealed the mandatory retirement age because it wanted to get rid of him.
The court application also said that the NEB's chief executive, Peter Watson, made his own decision to keep the septuagenarian on the Board as a temporary member for the months that would follow his forced retirement.
The government has left Wallace's permanent spot on the Board vacant for more than a year, without any public announcement or explanation. It recently posted a notice for the job that was open until Feb. 8, 2017. But Wallace's court application seeks to prevent the Liberals from naming anyone else to replace him.
Wallace and Docken didn't respond to requests for comment from National Observer.
'I guess he was not naive enough for them,' says scientist David Schindler
The NEB has been plagued by allegations of bias and conflict of interest in recent years for being too close to the pipeline industry that it is supposed to regulate. Public opposition to major pipeline projects grew dramatically after the former Harper government introduced sweeping changes to Canada's environmental laws in 2012, scaling back federal oversight and public participation in reviews while giving new powers to the NEB, which has Calgary headquarters in close proximity to the office towers occupied by Canada's top oil and gas industry executives.
Trudeau's Liberals swept to power in 2015 making a suite of promises related to the energy sector and the environment, including pledges to modernize the NEB and restore public confidence in in industry oversight.
Schindler, a professor emeritus of biological sciences at the University of Alberta, expressed disappointment that the Liberals, once in power, failed to protect Wallace.
“Ron is not anti-industry, by any means. But he will not join those who wish to sweep environmental problems under the rug to let industry do as it pleases. In my view, he is the sort of person that should be on the NEB. I guess he was not naive enough for them,” Schindler wrote in his email to National Observer.
“He has done quite a bit of work in Russia, where he saw first hand what cavalier environmental rules for an oil industry can do for the environment. At 70, there is nothing wrong with his mind or body. Age as a criterion for dismissal is not a 21st century concept.”
Ron Wallace was 'highly qualified, award-winning scientist'
The court application described Wallace as a "highly qualified, award-winning scientist, manager and advisor with significant experience in environmental, aboriginal and regulatory matters concerning the Canadian and International pipeline industry."
The application also noted that Wallace had maintained "good behaviour" and compliance with the ethical requirements of his job throughout his appointment. He had also resigned corporate positions and placed his investments in a blind trust to take on the new position, which "constituted material personal costs," his application says.
Whether there were other political factors involved in his departure remains a mystery since the key players involved in the case declined to answer questions about it.
Carr’s spokesman Alexandre Deslongchamps told National Observer in an email that the minister would not respond to questions about the case because it was before the courts. He also declined to comment on a question about alleged age-based discrimination for the same reason.
The court application said Wallace discussed the issue of his age and the existing legislation with Watson, the NEB's chief executive, soon after the Liberals won the 2015 election. Wallace was then "told to write a letter to the minister" — which he did in December, shortly after Carr was sworn in as the federal natural resources minister.
At that time, then Liberal government house leader Dominic LeBlanc, now the fisheries minister, appeared to be embroiled in a power struggle with dozens of people who had been appointed by the Harper government shortly before the 2015 election campaign. LeBlanc wrote to 33 Harper appointees to step down from their jobs, triggering an outcry from opposition Conservatives in the House of Commons. Among the appointees were other tribunal members, one permanent NEB member and some members of the judiciary.
Although Wallace did not appear to be among those 33 appointees who had received the letters from LeBlanc, the retired NEB member's lawyer said his situation was tied to what was happening to the others.
"These issues have been exacerbated in a highly charged political environment...," said Wallace's legal application."This action raised questions in the House regarding alleged breaches by Government officials in accepted ethics and accountability guidelines whereby: ‘Ministers must not intervene, or appear to intervene, with tribunals on any matter requiring a decision in the quasi-judicial capacity, except as permitted by statute.'"
Jim Carr didn't respond to Ron Wallace's 2015 letter
Wallace said he received no response to his December 2015 letter, but wrote to Minister Carr again in November 2016. This time Wallace received a response from the federal department’s top lawyer on Feb. 27, 2017 who said that the government was declining to offer any compensation.
But Wallace's court application challenged that decision, arguing that Carr committed "errors of law" that caused him to suffer material losses.
"The Minister also fell into errors that attract review on the standard of reasonableness such as weighing of evidence, and failing to consider relevant factors," said the application. "By refusing to act in favour of the Applicant, the Minister permitted actions that effectively fettered the discretion and violated the basic principles of procedural independence of a quasi-judicial Member appointed to the NEB..."
Accusations of NEB bias were a common theme at consultations
There are nine permanent positions on the NEB, but the government may by law appoint additional temporary members. Since coming to power, the Liberal government has named seven temporary members to the Board, including three who took over the review of TransCanada's proposed Energy East pipeline after all three members of the review panel recused themselves due to the appearance of bias. These recusals were announced last September in response to evidence uncovered by National Observer that the previous panel members had participated in a private meeting with a consultant for the company, former Quebec premier Jean Charest.
Watson, the NEB's chief executive, has also recused himself from any dealings with the review of Energy East after admitting that he appeared to be biased on the file since he participated in the same private meeting with Charest.
One appointment the Harper government made a few days before the 2015 election campaign was Stephen Kelly, a former consultant for Kinder Morgan. He was appointed just just as the regulator was pursuing its review of the Kinder Morgan's Trans Mountain expansion. The appointment was widely criticized by environmentalists and opposition politicians who alleged that Harper was trying to stack boards and agencies with conservative-minded appointees to tie the hands of any newly-elected government. Kelly remains among the eight permanent members at the NEB, along with Watson and vice-chairwoman Lyne Mercier, who was also forced to recuse herself from dealings on Energy East.
The Trudeau government has appointed a five-member panel to consult Canadians and recommend improvements to the regulator's operations. The panel members have said that accusations of bias as well as concerns about transparency and accountability, have been a common theme at their sessions.
The panel has until May 15 to deliver its final report to the government, which could then use the recommendations to draft new legislation to modernize the NEB.