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Editor’s note: Mark Carney and the Liberals have won the federal election. Go here to read our story on what the results mean for the natural world in Canada.

Montrealers lined up around the block on a chilly March evening as they waited to enter one of the final Liberal leadership campaign events of then-Liberal leadership contender Mark Carney.

It just so happened to be held at a venue in downtown Montreal, in the riding of then-environment minister Steven Guilbeault.

Guilbeault warmed up the crowd and endorsed Carney before he turned the podium over to Foreign Affairs Minister Mélanie Joly, who formally introduced their preferred leadership candidate.

Moments later, the crowd roared in approval as Carney pledged to promote sustainable growth and turn Canada into a clean energy superpower.

Little did they know, by the following week, Carney would be Canada’s 24th prime minister and Guilbeault would no longer be the environment minister.

Apart from hinting at some larger themes, Carney has not yet talked about his environmental policies in detail. He has certainly not yet spelled out clear plans to address emissions from the oil and gas industry, which is described by the federal government as the country’s largest source of climate-warming carbon pollution.

Despite the lack of details, Alberta Premier Danielle Smith has said she believes Carney is on a “warpath” against the energy industry and sees him as an adversary — not an ally.

On Friday, Guilbeault was shuffled from his position in cabinet, taking on a new role as minister of Canadian culture and identity. Guilbeault’s position also includes oversight of Parks Canada.

His removal from the environment portfolio could be perceived as an olive branch to an oil and gas industry that sees Guilbeault’s history as an environmental activist as a lightning rod.

It comes on the eve of an anticipated election campaign showdown with Conservative Leader Pierre Poilievre, Bloc Québécois Leader Yves-François Blanchet, NDP Leader Jagmeet Singh and Green Party co-leaders Jonathan Pedneault and Elizabeth May.

Poilievre has already described Guilbeault’s appointment as Carney’s Quebec lieutenant as a “promotion.” The opposition leader says it means the former environment minister has a new platform to “push carbon taxes, block resource projects and road building.”

Newly minted Environment Minister Terry Duguid is from the Prairies, representing Winnipeg South. Duguid also served as minister of sport in former prime minister Justin Trudeau’s cabinet and was parliamentary secretary to Guilbeault. Prior to entering politics, Duguid founded an environmental services management firm.

Carney made very few comments about the environment in his first hours on the job, apart from confirming at his first cabinet meeting that his government will quickly eliminate Canada’s price on carbon pollution for consumers. He also indicated one of his goals is to “make Canada an energy superpower in both conventional and clean energy.”

But during the Liberal Party of Canada leadership campaign, there were a few additional hints about where a Carney government is headed in terms of energy and the environment.

Here’s what we know so far.

Will Carney replace the carbon tax with a climate border tax?

It remains to be seen whether Carney will find the sweet spot in balancing policies to respond to U.S. President Donald Trump’s tariffs while also tackling climate change.

During the Liberal leadership campaign, Carney — previously an international deal maker on climate action as a United Nations special envoy on global warming — proposed a plan to impose penalties on imported products that don’t meet Canada’s climate standards.

He said these penalties — commonly referred to as a “carbon border adjustment mechanism” — would be introduced after consulting with “key stakeholders and international partners” to ensure Canadian industries would be treated fairly, while protecting jobs.

Such a policy could be key for sectors such as steel and aluminium, which are targets of Trump’s tariffs. It could also impact fossil fuels, providing an advantage to Canadian oil producers by making imports from places like the Middle East or Venezuela more expensive. In terms of the emerging trade war, a border adjustment policy could help target the economy and jobs in the U.S. regions that propelled Trump to power and tend to be skeptical about introducing strong policies to address climate change. The Republican-controlled regions with the weakest climate policies could be the hardest hit in terms of the price they would pay to sell their products to consumers in Canada.

Carney’s proposal would follow in the footsteps of the European Commission, which has already introduced similar penalties at the border.

Carney allowed the media to witness the first moments of his cabinet meeting on Friday, where he announced the government would cancel the carbon tax “immediately.”

Although the measure is officially known as a price on carbon, and the Supreme Court of Canada ruled it was not a tax because it does not raise government revenue, Conservative politicians — most prominently his election rival, Poilievre — have derided it as a “carbon tax.”

This is what fuel distributors pay and charge to consumers. (Canadians were refunded through a government rebate.) In most of the country, Poilievre has successfully stoked anger by linking carbon pricing to inflation — despite research suggesting this is not true — and saying he could make life more affordable by fulfilling his promise to “axe the tax.”

Carney said Canadians who previously received rebates under the policy would still receive a rebate cheque in April.

“This will make a difference to hard pressed Canadians but it is part of a much bigger set of measures that this government is taking to ensure that we fight against climate change, that our companies are competitive, and the country moves forward,” he said.

The removal of federal carbon pricing may not be popular for the majority of consumers in Quebec, where nearly two-thirds of households use hydroelectricity — not fossil fuels — to heat their homes. In addition, Quebec has its own carbon pricing regime, which is not expected to change.

What industrial standards is Carney proposing for oil and gas?

Canada already has some rules that require oil and gas companies to slash emissions of methane during production — a feat that can be accomplished with existing technologies and improved practices.

The federal government has also proposed to impose a new cap on oil and gas emissions, but this proposal was never finalized.

During the campaign, Carney said he would “explore” the strengthening of existing standards by working with provincial and territorial governments.

But it’s not clear how far he would go. The federal government currently has a proposal to strengthen standards on the table.

Carney also proposed to “improve and tighten” a current system that sets a price on pollution from large industrial emitters.

His campaign noted the existing system gives industry some certainty about how much they will pay for their carbon pollution, but it does not offer the same level of certainty when it comes to how they could financially benefit by reducing their pollution.

Carney said this approach would drive investments to “the lowest-carbon opportunity.” Part of his plan also proposes to extend the existing system by a few years, until 2035, to “help foster Canada’s clean industrial competitive advantage.”

Does Mark Carney support new oil and gas pipelines?

Carney’s leadership campaign said Canada has a number of “major investment imperatives” and one of those is to expand and modernize the country’s energy infrastructure “so that we are less dependent both on foreign suppliers and the United States as our main customer.”

His campaign policy documents don’t go further into detail, so it’s not clear whether this means he would support new subsidies — such as the billions of public dollars that went towards building the Trans Mountain expansion pipeline from Alberta to the west coast of British Columbia.

Where does the new prime minister stand when it comes to net-zero goals?

Carney’s campaign said Canada “must invest to become a clean energy superpower in nuclear, hydro power, wind, hydrogen, battery storage and carbon capture.”

Most of those categories include companies competing with the oil and gas industry, with the exception of carbon capture investments, which could help the oil and gas industry lower its emissions. The federal government has already offered some tax breaks and incentives to support new investments in this area, and major Canadian oil producers have asked for more to move forward.

While Alberta’s premier has criticized Carney for being a key figure in an international net-zero banking initiative, it is worth noting the large Canadian oil producers that want subsidies have also made some net-zero pledges of their own — albeit not without generating some controversy.

Where does Mark Carney stand on environmental assessment?

Aside from questions about subsidies, many of the major clean energy sectors he has promoted could also lobby for the government to loosen environmental oversight and reviews of major projects.

Canada’s Impact Assessment Act, a major piece of environmental legislation adopted in 2019, has become a flashpoint in an acrimonious debate between Liberal and Conservative politicians over whether it was designed to stifle the oil and gas industry.

But a number of businesses, including in the clean energy sector, may also want to see the legislation watered down, to speed up development of new major projects.

In his campaign, Carney pledged a “one window” approach to approval of major projects. He said this would allow businesses to “navigate regulations faster and with fewer redundancies across federal departments.”

For most projects, he said his plan would recognize provincial environmental reviews, to speed up decisions and permitting under federal laws such as the Fisheries Act.

Any such changes could also benefit the oil and gas industry. It remains to be seen how far Carney would go.

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At least 16 fossil fuel companies operating in Canada’s oilsands allegedly broke rules requiring them to pay for environmental monitoring by independent scientists, according to newly released data from the Alberta government.

Alberta’s Environment and Protected Areas Ministry released the data to The Narwhal in November, about a month after the government lost a three-year battle to keep the names of 16 oilsands companies secret.

The companies paid financial penalties for allegedly flouting rules surrounding a joint Canada-Alberta scientific monitoring program, according to the newly released data. Federal and provincial officials introduced the program in 2012 to measure the cumulative effects of oilsands development on air, water, land and biodiversity.

The names of companies with late or unpaid fees include firms that wound up under bankruptcy protection or had their operations shut down for serious environmental infractions, such as Everest Canadian Resources and Sunshine Oilsands. They also include some larger multinational companies, including Koch, Imperial Oil, ConocoPhillips and MEG Energy, which faced fines for paying fees late.

For some critics, the late and unpaid fees cast doubt on how seriously Premier Danielle Smith’s government is taking its responsibility to manage the monitoring program.

Shannon Phillips was the environment minister in the former NDP government during a period when some of the fees went unpaid. She said she asked public servants to use all the tools of the government to collect the money after they informed her about the problem.

But she noted there was an internal government culture to cut the industry some slack.

“The default setting was to lay down and die in the face of corporate whining and tantrums,” she said. “But the public service knew that might not be the response if they brought me a problem to solve.”

Oilsands companies ‘rip us off’: former Alberta environment minister

The government has written off debts owed by companies like Everest, which went into bankruptcy protection. Sunshine Oilsands, Koch, ConocoPhillips and MEG Energy did not respond to requests for comment.

Alberta’s Environment Ministry also did not respond to a request for comment.

Environment and Climate Change Canada, which is a partner in the program, told The Narwhal in a statement that it was not engaged in the collection of fees since Alberta is responsible for enforcing its regulations. The federal department also noted that while Alberta had failed to release annual reports for the program for five years, the province had just published the missing reports on Dec. 6, 2024, with support from its federal counterparts. 

Imperial Oil confirmed in an email to The Narwhal that it made a 2018 payment that “was delayed briefly due to a system problem,” but the company denied being assessed a penalty. According to the government data, the company was late making a $2.15-million payment that year and faced a $64,567 penalty.

Phillips said she believes the current provincial government is cowering in the face of pressure from oil and gas companies and failing to ensure they follow the rules like everyone else.

“If I don’t pay my mortgage, which is the condition of the approval of me living in my house, the bank takes away my house,” she said in an interview. “If oil companies don’t pay their monitoring fees, which are a condition of their approval to extract the resources that belong to Albertans, nothing happens.” 

“Alberta allows oil and gas companies to rip us off on our fair share of the revenues while leaving us holding the bag on the costs,” Phillips said.

While there were more than 30 companies operating in the oilsands 10 years ago, the data released by the government indicates there are now only 24 that collectively pay for the monitoring program’s $50-million annual budget. Koch is reportedly among the companies that sold or abandoned oilsands leases.

Government’s refusal to release data triggered inquiry

The federal and provincial governments launched the program in response to international criticism and environmental campaigns accusing fossil fuel companies of producing “dirty oil” in the region. A panel appointed by the federal government recommended the framework for the program in a report released in 2010, proposing a “scientifically rigorous” approach to monitoring that is also “transparent and accessible.”

The Narwhal previously reported in 2021 on a redacted version of the data, released in response to a freedom of information request. At the time, the numbers confirmed some oilsands monitoring bills were going unpaid, but lacked specifics.

Subsequently, The Narwhal complained about the redactions, triggering an inquiry by the office of Alberta’s information watchdog. Although the government argued it would have more trouble enforcing the regulations if it released the data, an adjudicator rejected those arguments and ordered the ministry to release its spreadsheets tracking invoices and bill payments between 2015 and 2021 for the monitoring program.

The provincial government has refused to release additional numbers it tracked from 2021 to 2024, but a staffer responsible for responding to freedom of information requests told The Narwhal it is considering whether to release them, in light of the inquiry.

Critics see a ‘pattern’ of lenient rule enforcement in the oilsands

Jeff Brook, a former Environment and Climate Change Canada scientist who has been involved with research as part of the program, said the program is essential to ensure the best regulations are in place to mitigate harm caused by industry.

“Regulations will tell you to look under the light post,” Brook, a faculty member at the University of Toronto’s Dalla Lana School of Public Health, said in an interview. “But there’s a lot that’s not underneath the light post.”

But the apparent secrecy surrounding the fees contrasts with Alberta regulations requiring all the information it gathers in relation to the monitoring program to be public.

Some researchers say they believe the industry is sometimes playing games to block progress in improving the monitoring system.

David Spink, an environmental consultant whose work includes air quality monitoring near Fort McKay First Nation in northern Alberta, accuses industry stakeholders of trying to block some proposed research with claims that there is not enough money available to proceed.

“Overall, there’s no doubt industry wants to keep the costs of this program down so that there’s not pressure on them to increase their contributions to the fund,” Spink said in an interview.

The other companies fined for late or unpaid fees were Pengrowth Energy Corporation, Value Creation, Southern Pacific Resource Corp., Surmont Energy, Birchwood Resources, Connacher Oil and Gas Limited, Ivanhoe Energy, Grizzly Oil Sands, Greenfire Resources and Prosper Petroleum. Some of the companies no longer appear to be operating or active. In a few cases, their assets were sold following insolvency.

Aliénor Rougeot, senior program manager for climate and energy at Toronto-based Environmental Defence Canada, said she believes it’s part of a pattern of behaviour when it comes to enforcing rules for Canada’s oil and gas industry.

“Of course, one-off mistakes happen, and you wouldn’t want to be drawing a conclusion if there was a one-off administrative mistake,” she told The Narwhal. “The reality though is when it comes to the oilsands, we see a pattern of either a lack of enforcement of rules or very lenient enforcement, which is what we’re seeing here.”

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Three out of seven members of a provincial board that backed Premier Danielle Smith’s 2023 decision to pause approvals of renewable energy projects were previously executives at fossil fuel giant, TC Energy.

It’s a coincidence that prompts some experts to question whether the provincial government stacked the board with oil and gas industry insiders to support its agenda — and whether ties to the oilpatch are preventing board members from acting independently.

The board governs the Alberta Electric System Operator — a provincial organization that manages and operates the province’s electric grid, ensuring the power generated by energy companies flows into households and other buildings that consume electricity.

While one of the seven board members was appointed by the NDP government of former premier Rachel Notley, the other six were appointed by the United Conservative Party governments of Premier Danielle Smith and her predecessor, Jason Kenney. Those six appointments include three who were previously vice-presidents at TC Energy.

“When a government uses its power of appointment to stack the ostensibly impartial members of a regulatory board in one particular direction then the public will inevitably draw the conclusion that the board’s independence is a sham,” Arthur Schafer, a philosophy professor who founded the Centre for Professional and Applied Ethics at the University of Manitoba, told The Narwhal in an email.

A spokesperson for the operator referred questions from The Narwhal about the board appointments to the provincial government. In response to questions about whether board members had declared potential conflicts, the spokesperson for the operator referred The Narwhal to its code of conduct, stating that board members must follow it, “including completing annual training and attestation of compliance.”

The office of Affordability and Utilities Minister Nathan Neudorf did not respond to a list of questions from The Narwhal about board appointments and his interactions with the board.

AESO board is ‘captured’ by an incumbent industry: lawyer

The operator, commonly known in Alberta as AESO, found itself at the centre of controversy in August 2023 after Smith’s government announced a suspension of provincial approvals of new renewable energy projects. Smith said the operator had asked for the pause, although internal correspondence released at that time indicated it was a “government directed” pause.

An investigation by The Narwhal later revealed how the operator’s then-chief executive officer, Mike Law, was critical of Neudorf’s planned suspension of approvals. Law warned the moratorium on new projects would deter investors and send the renewable energy industry into a “tailspin.”

Internal emails obtained by The Narwhal also revealed that the board’s chair, Karl Johannson, met with the minister before telling Law to “support the minister without reservation.” Johannson did this despite staff at the operator expressing concerns the government was asking them to “lie” about what was happening.

It is not clear whether the operator has retained all of the correspondence sent and received by Johannson and other board members. The emails released by the operator show the board members used personal email accounts for their jobs. 

Law has since left the organization. He did not respond to a request for comment.

The operator did not give any explanation for his departure and appointed board member Aaron Engen as Law’s successor. Engen has a background working in investment banking with a focus on energy infrastructure, including small modular reactors, hydrogen, carbon capture and storage and natural gas. The board did not publicly advertise for the position prior to appointing Engen and announced his appointment in July 2024, on the same day it announced Law’s departure.

Schafer, from the University of Manitoba, is among four experts who told The Narwhal the instructions from Johannson suggest the board could be favouring oil and gas companies, to the detriment of the renewable energy industry.

“This is a [board] captured by an incumbent industry,” Drew Yewchuk, a lawyer who works with the University of Calgary’s public interest law clinic, said. “Their board is stacked with people who are in favour of the gas industry and are very familiar with the gas industry, and it has a competing industry in renewables. That is a problem for the fairness of the [operator].”

Three out of seven AESO board members were vice-presidents at TC Energy

Johannson is one of the three former executives from TC Energy who now serve on the Alberta Electric System Operator’s board. He was appointed to the board in February 2020, one year after retiring as an executive vice-president at the energy company, where he oversaw gas pipelines and energy in Canada and Mexico. The other two former TC Energy executives on the board are Stephen Clark, a former senior vice-president responsible for Canadian and U.S. gas pipelines, and Alex Federucci, who was vice-president of people at TC Energy.

Clark’s biography on the system operator’s website also notes he is the principal at an energy transportation consulting firm called Energy Advisory.

While Johannson has been a board member at the operator since 2020, Federucci and Clark were both appointed by the Smith government and began their terms in April 2023, a few weeks before her United Conservative Party won a general election.

Johannson, Federucci and Clark did not respond to a list of questions sent by The Narwhal to their LinkedIn accounts.

Of the other four board members, one has experience working with sustainable technology companies, one served on the board of the provincial and federal energy regulators, one is an executive at a recruitment services firm and the other is a former executive at the Calgary airport.

Experts generally agree it is good to have industry experience on boards since it gives them more insight and background, but not necessarily when that experience is coming from a single corporation.

“It’s not unusual for there to be appointments from the relevant sectors. To have three people from the same company who have a direct interest in the matters dealt by the board, does start to look a little bit funny,” Mark Winfield, a professor of environmental and urban change at York University said in an interview. “The whole thing is just bizarre.”

According to a TC Energy corporate document, reviewed by The Narwhal, Johannson was required to own at least $1.77 million worth of company shares during his last year on the job, which ended in February 2019. He also received stock options as part of his pay, including options to buy TC Energy shares at a fixed price as late as February 2025.

In addition to his previous role at TC Energy, Johannson is also a director on the board of an energy and utilities service company called Flint. He was re-appointed to serve another term on the board of Flint in June, according to a second quarter update from Flint, which is a publicly traded company.

AESO facing ‘ethical crisis’ over Danielle Smith renewables pause, expert says

The Alberta Electric System Operator requires employees, executives and board members to avoid all conflicts of interest, whether real or apparent. More specifically, its policy states employees should avoid any situation in which a “reasonable person” might suspect they are in a conflict, and take steps to mitigate the conflict.

But it doesn’t publish information about which conflicts were declared and whether any steps were taken to avoid those conflicts.

The Narwhal was unable to confirm whether Johannson or other board members have declared having any investments or other potential sources of conflicts to the operator.

If any board member owned shares in TC Energy, experts consulted by The Narwhal agreed it was possible they might stand to benefit from supporting a policy that would harm the company’s competitors in the renewable energy sector. But they were divided on whether this might apply to Johannson.

Schafer at the University of Manitoba, cast doubt on whether Johannson could perform any of his duties without bias, due to him potentially owning shares in TC Energy and his role at Flint.

“His vested interest in the oil and gas industry puts him in a pervasive conflict of interest position when the interests of oil and gas conflict with those of the renewable energy industry,” Schafer said in an email to The Narwhal. “Almost every decision made by [the Alberta Electric System Operator] will impact, beneficially or harmfully, on the oil and gas industry. So, because of his actual [or] real conflicts of interest, he cannot perform his duties as chair of the board ‘with integrity and impartiality.’ ”

Schafer also questioned whether the public should trust the operator’s board is acting independently.

“When one member of an ‘independent’ board is in a serious conflict of interest situation, that’s a problem,” Arthur Schafer, a philosophy professor who founded the Centre for Professional and Applied Ethics at the University of Manitoba, wrote in an email. “When three members of a board — out of seven — are conflicted, that’s an ethical crisis.”

The Narwhal also asked Shoeb Mohammad, an assistant professor at Ontario Tech University who has expertise in corporate unethical conduct, for his analysis of the role played by the board and whether any members may have been in a conflict of interest.

Mohammad said he believes the government could be criticized for failing to ensure enough diversity on the board by appointing three people who recently worked at the same company. However, he said this doesn’t necessarily mean those board members are in a conflict of interest, since there isn’t a direct link between their actions and any changes in a stock price or their personal wealth.

“Some degree of conflict of interest may be possible in this situation, as pure independence and objectivity is a difficult bar when considering prominent former executives of an industry that is interdependent with the industry they now advise,” Mohammad said. “From a corporate governance standpoint, it is unlikely to raise alarm bells since the connection between the advice given and direct implications to TC energy’s stock price is not strong.”

TC Energy executive discussed placing people on boards in leaked recording

Yewchuk, from the University of Calgary’s public interest law clinic, suggested the operator could address any potential public concerns about its objectivity by updating its policies on conflicts of interest to address how it is regulating conflicting or competing energy sources.

While it is not clear what prompted the provincial government to recruit the three former TC Energy executives, the company has previously discussed a strategy of placing people on boards during an internal call.

Audio of the call was leaked to The Narwhal and National Post in June.

“We place our staff on boards of third parties — make certain they are involved in shaping bylaws, shaping messaging ensuring that our objectives are remaining aligned,” then-executive Liam Iliffe said on the call from March 2024.

Mohammad said it can be a common rationale for industry to want to use board seats to create a dialogue with government actors in order to influence them.

“That itself is not illegal or necessarily wrong,” he said. “But the government should take a close look at the actors they interface with. … Is it primarily firms or individuals from one sector? This might be a cause for issue.”

Iliffe resigned after The Narwhal sent him questions in June about the contents of the recordings. At the time, he said some of his comments were about events that did not actually happen, but did not specify which.

TC Energy said at the time Iliffe’s comments did not reflect how it did business and it publicly apologized to other stakeholders in communities and governments about what he had said on the call.

When asked to comment about the board appointments and whether it had any discussions with the board or with the Alberta government about its decision to pause approvals on renewable energy projects, TC Energy referred questions to the provincial operator.

“As a North American energy company, we regularly interact with our customers, local distribution companies and electric grid operators to deliver the energy the continent needs,” the Alberta-based company said in an email to The Narwhal.

TC Energy employs over 7,000 people, operating a range of energy infrastructure, including natural gas pipelines and nuclear, solar and wind generation. On Oct. 1, it spun off some liquid pipeline assets, including the Keystone pipeline system, into a new company called South Bow.

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A Canadian government-owned energy company is defending paying over $32 million to a controversial global consulting firm to help it save money on the Trans Mountain pipeline expansion project, which was already billions of dollars over budget.

U.S.-based McKinsey & Company won the hefty contract — singled out in a recent federal audit — without any competition in October 2022. A spokesperson for the Trans Mountain company told The Narwhal it paid McKinsey the money to reduce costs and improve productivity.

McKinsey accepted the contract despite also doing consulting work for at least three oil companies that pay tolls to ship fuels on Trans Mountain infrastructure and are currently involved in a legal dispute with the pipeline operator over its proposal to increase rates.

The cost of the Trans Mountain pipeline expansion project — which ballooned from $5.4 billion to $34 billion between 2013 and 2024 — has generated significant criticism. Environmental groups have framed the project as a massive subsidy for the fossil fuel industry that runs counter to Canada’s international climate change goals and commitments.

Meanwhile, a group of oil companies have demanded more information about the escalating costs and objected to proposed toll increases meant to cover some of the overruns. 

If producers don’t pay substantially higher tolls to use the pipeline, it could leave Canadian taxpayers holding the bag — for as much as $18.8 billion, according to recent research by the Winnipeg-based International Institute for Sustainable Development.

Suncor, Cenovus and Canadian Natural Resources Limited are among the companies protesting the prospect of higher tolls. All three are on a list of McKinsey clients disclosed by the firm in unrelated court proceedings in the U.S. None responded to The Narwhal’s requests for comment.

Negar Haghighat, a consultant who advises clients about ethics and governance, said she believes Trans Mountain should have sought advice from another firm to avoid any appearance of a conflict of interest.

“There’s no reason why [McKinsey consultants] were the only option to help them with their cost reduction efforts and ideas,” she told The Narwhal in an interview. “They could have easily gone to someone who didn’t have any conflicts, perceived or otherwise.”

She added that it wasn’t a sound business practice to award the contract without any competition.

“Whether you’re buying printer paper or whether you’re looking at a multimillion-dollar consulting agreement, one way or another, you don’t want it to go out without a proper evaluation of who could do the best job for the best price,” she said.

Auditor General said Trans Mountain skipped open competition with McKinsey contract

Trans Mountain’s 2022 contract with McKinsey was among hundreds of millions of dollars worth of deals between Canada and the consulting firm that came under scrutiny in a June federal audit, which noted how public servants often failed to screen for conflicts of interest. The audit also questioned whether some of the contracts were actually needed or delivered value for money.

Canada’s auditor general said Trans Mountain skipped an open competition on the contract without clear justification, contrary to its own procurement policies.

A McKinsey spokesperson said the firm has a policy of disclosing conflicts of interest, but did not directly answer when asked if the company had disclosed any conflicts prior to accepting the Trans Mountain contract. 

“McKinsey & Company, consistent with our policies, proactively discloses both perceived and actual conflicts and follows strict protocols and have these policies to ensure we have followed the law,” spokesperson Alley Adams told The Narwhal in an email. The consulting firm previously told The Narwhal it disclosed conflicts in relation to another contract highlighted in the audit — $1.35 million to give the federal government advice about clean technology policies. That contract was awarded by the Canada Development Investment Corporation, a Crown corporation that owns Trans Mountain.

“With respect to your other questions, we would direct you to Trans Mountain for further comment,” McKinsey said about the pipeline consulting contract.

Trans Mountain declined to comment on whether McKinsey disclosed any potential conflicts or whether it was aware the firm was also representing fossil fuel clients disputing its proposed toll increases.

“Trans Mountain cannot comment on McKinsey business,” its email reply to The Narwhal said. “Please reach out to McKinsey directly for questions.”

In regards to its own staff, the pipeline operator said it was unaware of conflicts between any Trans Mountain director or officer and McKinsey.

But Trans Mountain said it agreed with the auditor general’s recommendation that it needed to improve its procurement policies to proactively search for potential conflicts.

Trans Mountain said McKinsey helped save hundreds of millions of dollars

The Canadian government purchased the existing Trans Mountain pipeline and other assets from Texas-based energy company Kinder Morgan for $4.5 billion in 2017. At the time, Kinder Morgan was threatening to cancel the project due to public opposition. Prime Minister Justin Trudeau’s government said it needed to buy the assets to ensure the completion of the pipeline expansion, which started operations earlier this year and allows oil producers in Western Canada to export more crude oil to the Pacific Coast and markets in Asia.

Trans Mountain was under fire over the mounting costs of its pipeline expansion project in 2022 shortly before it brought in McKinsey to help. A few months earlier, CBC News reported costs had ballooned to $21.4 billion, up from the previous estimate of $12.6 billion.

Although the final price tag is likely above $34 billion, Trans Mountain told The Narwhal advice from McKinsey helped save hundreds of millions of dollars, including in specific segments of the pipeline going through mountainous terrain such as Spread 3/4A in the Rocky Mountains and North Thompson region of B.C.

McKinsey has operated in Canada and globally for decades, offering advice to businesses and governments alike. It has also found itself in the middle of scandals, such as one over its role advising Purdue Pharma about its OxyContin painkiller. McKinsey reached a US$573-million settlement with attorneys general from across the U.S. as a result of its actions. At the time, the company said it deeply regretted not adequately acknowledging the tragic consequences of the epidemic, saying it was hoping to be part of the solution to the crisis going forward.

After this article was published, Adams emailed The Narwhal to say that the Trans Mountain contract was signed with McKinsey & Company Canada, which has headquarters in Toronto.

When asked whether its own staff and executives could have recommended ways to reduce project costs, Trans Mountain said its own employees initiated some of the measures that led to cost savings. The external consultants, it said, helped save significantly more than three times what Trans Mountain spent on the McKinsey contract.

“McKinsey advised of hundreds of cost and productivity initiatives that were logged over the course of the program,” Trans Mountain said in a statement to The Narwhal. “Executives and managers could have, and did, devise many of the cost savings, however, facilitation and analysis by a consultant allowed us to maximize our benefits.”

Every Canadian household on the hook for up to $1,225 to cover Trans Mountain costs: report

Research published this month by the International Institute for Sustainable Development notes that even Trans Mountain’s current proposal to hike tolls won’t ensure oil companies, instead of taxpayers, are paying for the pipeline. 

The report was written by Thomas Gunton, a professor of resource and environmental planning at Simon Fraser University and a former senior official in the B.C. and Manitoba governments. He told The Narwhal the current hike proposal still isn’t high enough to cover the true costs of shipping oil. 

“Burdening Canadian taxpayers with the cost of providing a large subsidy to the oil sector to cover transportation costs is … contrary to basic principles of public equity,” his report reads. 

Unless Trans Mountain significantly increases the tolls charged to oil companies, the report says, cost overruns on the pipeline could result in Canadian taxpayers shelling out up to $18.8 billion in fossil fuel subsidies. This would be equivalent to every Canadian household paying up to $1,255 to subsidize pipeline use for oil companies that earn billions of dollars in profits.

Updated Sept. 25, 2024, at 4:10 p.m. ET: This article was updated to add a new comment from McKinsey about how its Canadian operations have headquarters in Toronto.

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The Canadian government says it will unveil a draft of new rules to cap heat-trapping pollution from the oil and gas industry within a matter of weeks.

“We’re finalizing [it],” federal Environment and Climate Change Minister Steven Guilbeault said at a news conference on Parliament Hill on Tuesday. “It’s a matter of weeks before we’ll be able to present draft regulations on the cap for the emissions of the oil and gas sector.”

Successive Liberal and Conservative governments have been promising to crack down on carbon pollution from the sector for decades, but none have imposed any binding regulations. If adopted, these would be the first-ever national rules in Canada to put a limit on the industry’s carbon emissions, which are a significant driver of climate change.

Canada has the world’s third largest proven oil reserves, most of which is in Northern Alberta in what is commonly known as the oilsands region. Because that oil is buried in tar-like deposits, it requires large amounts of energy and water to extract, leaving a larger environmental footprint than other crude oil operations and many other forms of energy.

Oil and gas companies have successfully lobbied governments to hold off on cracking down on their pollution, arguing that more stringent environmental rules would harm their business and lead to job losses in a sector that employs tens of thousands of Canadians.

Environmentalists say the economic costs of not acting — such as the need for evacuations and rebuilding as wildfires, floods and other extreme weather events become more common — would be far greater than the cost of reducing pollution from oil and gas companies.

Guilbeault’s comments come as the Liberal government faces a confidence motion launched by Opposition Leader Pierre Poilievre’s Conservatives over Canada’s price on carbon pollution. Poilievre has said he believes Canada can tackle climate change with new technologies, but has not provided any details of an alternative plan.

If the Conservative motion succeeds, it would trigger an election. So far, the other two opposition parties, the Bloc Québécois and the New Democrats, have said they will not support the motion, although NDP Leader Jagmeet Singh has also recently criticized the federal carbon pricing scheme, saying he would rather “an approach to fighting the climate crisis where it doesn’t put the burden on the backs of working people.” Prime Minister Justin Trudeau’s government maintains that the federal rebate program means eight in 10 households receive more money back than they pay in carbon levies on consumer goods. 

Trudeau introduced carbon pricing in 2019 as one tool to achieve promised reductions in Canada’s carbon emissions. The federal government has also reached agreements with the provinces to require reductions in oil and gas emissions of methane, which is another greenhouse gas that contributes to climate change.

Canada would need to significantly reduce pollution from the country’s oil and gas sector in order to meet its international commitments under the Paris climate treaty. To stay under the treaty’s lower limit of 1.5 C of global warming, the world’s emissions need to be cut by roughly 50 per cent by 2030.

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The federal government paid $1.35 million for advice on how to beef up Canada’s clean technology policies to a prestigious global consulting firm that was also advising some of North America’s largest oil and gas companies, according to court documents reviewed by The Narwhal.

A federal Crown corporation paid the firm, McKinsey & Company, to provide the advice to the Finance Department a few months before Finance Minister Chrystia Freeland tabled her 2023 budget. 

McKinsey was tasked with recommending fiscal policies to help Canada’s clean energy sector compete with massive tax breaks and other incentives the United States introduced in the Biden-Harris White House’s climate change-focused 2022 Inflation Reduction Act.

The Narwhal reviewed court filings from unrelated proceedings against McKinsey & Company in the U.S., which indicate the firm’s extensive global client portfolio already included energy companies in the Canadian oilpatch, many of which profit from fossil fuel extraction and processing.

The court filings consist of affidavits signed by a McKinsey partner in the U.S. who listed the firm’s clients. The records include hundreds of pages listing international offices where many of McKinsey’s 35,000 staff advise prominent multinational clients from a range of areas, including the financial sector, technology and other governments.

McKinsey & Company says it disclosed ‘both perceived and actual conflicts’

In a statement sent to The Narwhal, a spokesperson for McKinsey confirmed it identified conflicts before it accepted the 2022 contract from the Canada Development Investment Corporation, but noted it followed procurement rules. The statement said the company was awarded the contract based on “extensive industry expertise.”

“We disclosed what was required of us, including both perceived and actual conflicts,” Alley Adams, a McKinsey spokesperson, wrote in an email to The Narwhal. “Any suggestion that we have not disclosed actual or potential conflicts, not followed the law and not acted as a responsible supplier to the Government of Canada, is false.”

Adams did not answer questions about when and how it informed federal officials of actual and perceived conflicts, and what those conflicts were.

The federal Finance Department is defending the contract. In a statement, it told The Narwhal that federal officials followed procurement rules while getting advice about how Canada could remain competitive with the U.S..

But Negar Haghighat, a Montreal-based consultant who advises clients on governance and ethical issues, said the federal government needs to explain why it offered the contract to McKinsey, despite being informed about conflicts.

“The question here is, ‘How do you go forward with a partner that tells you they are in conflict?’ It goes against your responsibilities toward the Canadian people,” she told The Narwhal in an interview. “You don’t do that, unless you say why you did it. This is not something that is okay. This is not how we use public funds.”

The same $1.35 million contract was highlighted in a June report by the federal auditor general, which said Canada’s Finance Department may have used the Crown corporation in order to skirt tougher procurement rules. The audit also concluded that the federal government needs to do more to proactively identify conflicts prior to awarding contracts. 

Haghighat said the existence of any conflicts casts a cloud over the quality of advice McKinsey provided to the government and how federal officials used that advice.

“As the public, we will never know whether McKinsey’s interests were better served by advising the federal government or advising the oil and gas companies,” she said.

McKinsey clients include members of Pathways Alliance group of oilsands companies

McKinsey has operated in Canada for over six decades and employs over 650 consultants in the country, according to its website.

Among the firm’s clients listed on the court documents are Canadian Natural Resources Limited, Suncor Energy, Cenovus and ConocoPhillips Canada, all members of the Pathways Alliance of oilsands companies. The alliance has lobbied the federal government to weaken or delay climate change policies. At the same time, the Pathways Alliance was running a marketing campaign claiming the industry was taking action to slash its carbon pollution. 

McKinsey’s other oil and gas clients with Canadian operations named in the documents include Shell Canada, the North American division of the China National Offshore Oil Corporation, Repsol Oil and Gas, Murphy Oil Company and LNG Canada. 

Canadian oil and gas companies have been lobbying for tax breaks and subsidies, including for carbon capture, utilization and storage. Industry advocates say this technology would reduce heat-trapping carbon pollution by capturing it and storing it underground, while critics have questioned whether it can be successfully deployed on a large enough scale to make a significant dent in fossil fuel pollution. The clean technology section of the 2023 budget increased tax breaks for carbon capture projects by $520 million over five years.

“McKinsey. Spoke with the [deputy minister] and he is comfortable with this. No need for any further calls. Grateful for confirmation when approved by the Board tomorrow. Thanks.”

Email from former Finance Canada assistant deputy minister Glenn Purves to Elizabeth Wademan, president of the Canada Development Investment Corporation, on Dec. 6, 2022

The Narwhal sent questions to more than a dozen of McKinsey’s clients, including those named above and major financial institutions, to ask what type of work McKinsey did for them and whether they were aware of the advice the firm provided to the Canadian government. Shell Canada was the only oil and gas company to respond, saying it was trying to track down details of a contract it had with McKinsey.

McKinsey did not directly answer questions about whether any consultants who worked with oilpatch clients were involved in providing clean energy advice to the federal government. It told The Narwhal it follows strict policies to avoid conflicts of interest and is proud of its work for the Canadian government.

In 2021, a group of more than 1,110 McKinsey employees released a letter calling on the firm to disclose more information about its fossil fuel clients. According to the New York Times, the firm had advised 43 of the world’s 100 largest polluters, earning hundreds of millions of dollars.

At the time, the firm said it was committed to protecting the planet and was working with clients to help improve their environmental performance.

The firm has also been struck by other serious controversies over the years, including over its alleged role in the deadly opioid epidemic.

In 2021, McKinsey & Company reached a US$573 million settlement with attorneys general from across the United States over the work it did to boost Purdue Pharma’s OxyContin painkiller, linked to the opioid crisis and hundreds of thousands of deaths.

At the time, the company said it deeply regretted not adequately acknowledging the tragic consequences of the epidemic, saying it was hoping to be part of the solution to the crisis going forward.

Adams, from McKinsey, told The Narwhal the firm complies with government requirements when it takes on contracts. Adams said it also sometimes discloses information, even when it is not required.

“One of the reasons so many organizations choose to work with McKinsey & Company is they can be confident we consistently provide impartial and unbiased service,” Adams told The Narwhal.

Michael Sabia, the former deputy minister of finance, had ‘keen interest’ in file: email

Finance Canada declined an interview request about the McKinsey & Company contract, which was awarded by the Canada Development Investment Corporation, a Crown corporation often referred to as CDEV. Neither the department nor the corporation directly responded to questions about which conflicts were disclosed by McKinsey or whether any federal officials were aware of the work McKinsey did for oil and gas companies.

They also did not respond to questions asking whether officials awarded the contract to McKinsey before or after the firm had disclosed its conflicts.

“The contract was approved through a competitive process in accordance with [the Crown corporation’s] procurement policy,” a Finance Department spokesperson said in a statement. “Ensuring Canada’s continued competitiveness in light of the U.S. Inflation Reduction Act was and is a priority for the federal government.”

Internal emails obtained by The Narwhal indicate the federal department’s then-deputy minister, Michael Sabia, was aware Finance Canada officials participated in the procurement process and approved awarding the contract to McKinsey before they had negotiated a price.

“McKinsey. Spoke with [Sabia] and he is comfortable with this,” Glen Purves, an assistant deputy minister at Finance Canada, wrote in an email to the president of the corporation, Elizabeth Wademan, in late 2022. “No need for any further calls. Grateful for confirmation when approved by the board tomorrow. Thanks.”

Wademan responded the next day.

”Board has approved and we are good to go. Al and I are calling McKinsey tonight,” she said, referring to her vice president, Al Hamdani. “We are going to look to get engagement letter signed forthwith and will do what we can to negotiate on fees.”

“I expect Michael [Sabia] may wish to be on this given his keen interest in his file, and will defer to you on this.”

Auditor general found public servants provided poor oversight of McKinsey contracts

Wademan and Hamdani did not respond to emails requesting an interview. Purves is no longer at Finance Canada and told The Narwhal he would let his former employer respond to questions on his behalf. Sabia is now the CEO of Hydro-Québec, which said questions about the contract should be directed to Finance Canada.

In response to questions from The Narwhal, Finance Minister Freeland’s office said it was aware public servants were seeking private sector advice and denied “running or directing” the procurement process.

But in June, Canada’s auditor general criticized the government over the contract, as part of a scathing audit that detailed how public servants broke rules and provided poor oversight as various federal departments and agencies issued about $200 million in contracts to McKinsey between 2011 and 2023. The audit criticized federal agencies over their “frequent disregard” of contracting policies and failing to prove that some contracts were even needed or delivering value.

Regarding the 2022 contract for advice about clean technology policies, the audit said Finance Canada “limited competition and transparency” and appeared to use the Crown corporation as a “proxy” to avoid tougher procurement rules and fast-track the deal.

The audit also recommended the government introduce more proactive policies to identify conflicts of interest.

Canada Development Investment Corporation only gave firms four days to bid on contract

Haghighat also questioned whether federal officials had limited a fair competition on the contract, by not giving potential bidders enough time to submit proposals.

When pressed for details about the corporation’s internal review, Thomas Chanzy, vice president and head of communications and public affairs at the Canada Development Investment Corporation, said in a written statement that officials gave bidders only four days to submit proposals after publicly posting the call for tenders.

Chanzy said the corporation had no precise explanation for shortening the deadline from a previous internal plan to give bidders up to 11 days to submit their proposals.

“There is no specific reason as to why the timeline was shortened except for the fact that it was an urgent request,” Chanzy told The Narwhal in an email.

He also confirmed that Finance Department officials were part of the team reviewing bids with the corporation and that the team unanimously agreed McKinsey was the best option.

But Chanzy said the corporation agreed with the auditor general’s recommendation that it needed to improve how it identifies conflicts of interest.

“We committed to reviewing our policies and practices … with a view to ensuring that a proactive process is in place to identify actual or perceived conflicts of interest,” Chanzy wrote in an email to The Narwhal. “This review process was completed, and an updated procurement policy was approved by our board this summer.”

Chanzy did not respond to follow-up questions asking for details about the new policy and whether it was public.

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The phone call to the B.C. premier’s office came on a Saturday in May 2023, one day after a scathing inspection report detailed multiple environmental infractions along the route of a major gas pipeline under construction in the province.

The report, issued by the B.C. Environmental Assessment Office, outlined damage to sensitive wetlands and other ecosystems on Wet’suwet’en territory in northwest B.C. It detailed howTC Energy allegedly failed to protect areas around its Coastal GasLink pipeline project from environmental impacts associated with construction and spring snowmelt.

As a result, the assessment office said in its report that it would keep stop-work orders on pipeline construction in place, potentially triggering delays and driving up costs on a multibillion dollar project already facing significant cost overruns. 

B.C. Premier David Eby’s office told The Narwhal it believes this report triggered the Saturday phone call it accepted from TC Energy executive Liam Illife, who recently resigned over comments he made during an internal call in March about the company’s outsized influence over governments.

Eby’s office said it didn’t keep records of what was discussed and declined to explain exactly what happened during that weekend phone call.

“The premier’s office would not discuss the enforcement activities or approach of the [B.C. Environmental Assessment Office], but companies will sometimes flag to government what their intended public response may be to such an event,” Eby’s spokesperson Bhinder Sajan told The Narwhal in an email.

“To be clear, we don’t have a specific record of the call, but given the timing you provided, we believe it may have been related to this event,” Sajan said, referring to the release of the report outlining Coastal GasLink’s environmental infractions and the assessment office’s decision to maintain stop-work orders on pipeline construction.

‘Call up the premier’s office on a Saturday’

Illife, a former BC NDP staffer, worked for various ministries in former B.C. premier John Horgan’s government between July 2017 and June 2022. Iliffe began lobbying the Eby government in April 2023, less than a year after leaving his government job.

The provincial lobbyist registry indicates Illife lobbied Don Bain, Eby’s deputy chief of staff, five times over 13 months. The filings also indicate Illife lobbied Eby’s office on the weekend immediately following the release of the inspection report about various pipeline infrastructure, including the Coastal GasLink project — considered by the oil and gas industry to be an important part of a plan to ramp up exports of fossil fuels and grow the Canadian economy.

The Coastal GasLink pipeline will supply natural gas for the new LNG Canada and Cedar LNG export projects on B.C.’s coast. Natural gas is a fossil fuel mostly composed of methane, which is 80 times more powerful than carbon dioxide over a 20-year period in terms of heating the planet. It is extracted mainly by hydraulic fracturing, or fracking, a process that uses massive amounts of fresh water. Fracking activity in northeast B.C. is poised to escalate as the export projects get underway.

Calgary-based TC Energy described the phone call as lobbying activity, according to filings in a provincial registry.  

The B.C. government’s vague description of Illife’s weekend lobbying of the premier’s office leaves several stakeholders questioning whether fossil fuel executives have privileged access to government, including possible influence on the outcome of environmental inspections and enforcement activity.

“The fact that the company could call up the premier’s office on a Saturday and have a discussion about it is rather infuriating,” Shannon McPhail, executive director of Skeena Watershed Conservation Coalition, told The Narwhal. “I wish I had [had] that kind of access when I filed concerns with the various regulators, managers, agencies [and] ministries at both the provincial government and federal government level.”

Iliffe lobbied the government 12 times in total from the spring of 2023 to the spring of 2024 when he left his job, according to the provincial lobbyist registry. This includes lobbying Eby’s office five times.

The filing in the registry indicates one of the intended outcomes of Iliffe’s lobbying was the “development, establishment, amendment or termination of any program, policy, directive or guideline of the government of British Columbia or a provincial entity.”

While the registry doesn’t require lobbyists to disclose exactly what they discuss during their interactions with government officials, Iliffe and other TC Energy officials suggested on their internal call they succeeded in persuading different government officials to weaken some environmental policies and loosen regulations that may cut into the company’s profits.

Iliffe, the company and the B.C. government have all said some of the former TC Energy executive’s claims on the internal company call were not true, but they did not elaborate or specify which claims were unfounded. 

The Narwhal first approached the B.C. government in June with questions about Iliffe’s claims on the company recording. The premier’s office subsequently said it conducted an internal review of Iliffe’s claims about how the company had influenced the province and concluded they were false. The province’s attorney general subsequently asked a provincial watchdog to conduct its own review of lobbying activity by TC Energy.

Companies are allowed to lobby governments about public policy and decisions in Canada and governments generally keep track of the activity by requiring companies to report each interaction on public registries. In B.C., the registrar of lobbying is a watchdog empowered to enforce a lobbying transparency law and ensure lobbyists and public servants comply with the legislation.

Environmental assessment office inspections and regulatory orders are normally carried out and implemented without any involvement of elected officials. However, B.C. regulatory agencies charged with enforcement activities, including the environmental assessment office, are accountable to cabinet ministers who have some decision-making powers on regulatory matters.

Wet’suwet’en Hereditary Chief Na’moks said he doesn’t see why TC Energy would talk to the premier’s office about an inspection conducted by compliance and enforcement officers with the environmental assessment office.

“Absolutely it’s improper … because that is an independent enforcement arm,” he said in an interview.

The premier’s office noted that Bain’s job required him to engage with representatives from industry, environmental groups, local governments and First Nations. Based on the deputy chief of staff’s “recollection, Mr. Iliffe would at times relay his company’s commitment to fully respond to issues raised by regulatory agencies,” Eby’s office said.

In an emailed response to questions, the B.C. Environment Ministry also said it is not uncommon for industry to update government officials about how companies are responding to inspections.

Eby’s office did not respond to questions about why it didn’t keep records of Bain’s weekend discussion with Illife. Bain declined an interview request about the lobbying, but the premier’s office emailed a statement on Bain’s behalf.

“I make recommendations about further engagement and all other recommendations based on the priorities of Premier Eby which are focused on the best interest of British Columbians,” Bain said in response to The Narwhal’s questions about his conversations with Iliffe.

In 2018, Bain was among at least five B.C. government staffers who allegedly engaged in the improper deletion of government records under former premier Horgan. The story came to light when requests made under freedom of information legislation revealed Bain and other senior staff had been deleting their sent emails for months, according to a report in Victoria’s Times Colonist newspaper.

At the time, the government said new staffers had been learning their roles and responsibilities, and had subsequently received training and would take a “more cautious approach to the management of email,” the newspaper reported.

Bain did not directly comment about his weekend phone call with Iliffe, which followed the inspection report.

“Throughout his time at TC Energy, I did not have any private meetings with Mr. Iliffe,” Bain said in the statement sent by the premier’s office. “On a few occasions, Mr. Iliffe and I spoke on the phone on issues relevant to TC Energy and my role as lead on various energy-related files including the sale of the Prince Rupert Gas Transmission line from TC [Energy] to the Nisga’a Nation.”

In March, TC Energy announced it was selling the transmission project, an approved gas pipeline, to the Nisga’a Nation. Construction of the pipeline, which will supply the proposed Ksi Lisims LNG project co-owned by the Nisga’a, is set to start in August.

‘A small class of political insiders who move back and forth between industry and government’

The absence of any records about Illife’s communications with the premier’s office leaves some stakeholders questioning whether the company was trying to circumvent the regulator.

“That could have been an email,” McPhail said. “And why would you need to keep the premier’s office updated when you have all these regulatory and management agencies whose responsibility it is to do that? We’re supposed to have this system in place to deal with this stuff — but what was very clear with Coastal GasLink is the system was broken at every single level.”

McPhail said she still hasn’t received answers to questions she put to officials with Fisheries and Oceans Canada, the BC Energy Regulator and the BC Environmental Assessment Office in 2022 regarding potential impacts of pipeline construction on fish habitat.

B.C. Environment and Climate Change Strategy Minister George Heyman and the environmental assessment office both declined interview requests from The Narwhal about TC Energy’s lobbying activity.

In a statement, the ministry said the office operates independently from government and neither the office nor Heyman were aware of any of Illife’s phone calls to the premier’s office.

The environmental assessment office said it has conducted nearly 100 inspections along the Coastal GasLink pipeline route by air and ground since construction began in 2019, leading to multiple fines, more than 50 warnings and 30 orders, including 13 stop-work orders.

Drew Yewchuk, a former staff lawyer at the University of Calgary’s Public Interest Law Clinic, said he was not surprised TC Energy was able to access the B.C. premier’s office so readily. 

“Is having a lobbyist contact the executive branch to have an unrecorded discussion probably asking for special treatment good governance? No — but you don’t need a legal expert to tell you that,” he told The Narwhal. “It reflects the Canadian tradition of a powerful and secretive executive branch, and decision-making involving a small class of political insiders who move back and forth between industry and government.”

TC Energy did not directly respond to The Narwhal’s questions about the lobbying activity. Previously, the company told The Narwhal its role is to advocate for the changes needed to ensure energy security, job creation, affordability and sustainability and that the leaked calls included comments that portrayed a “false impression” of how it does business.

“We continue to engage policy makers and the public in an ethical and compliant manner while meeting our regulatory obligations, including lobbying registrations across various jurisdictions in Canada and the U.S.,” TC Energy senior vice-president of external relations Patrick Muttart said in a statement on June 26.

“We are proud of our company and the work that thousands of employees do each day to safely move, generate and store the energy that our families, neighbours and businesses rely on. We are driven by our purpose: delivering the energy people need, every day.”

When pressed for more details, the company said it had nothing further to add to its previous response.

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Last week, explosive claims made behind closed doors by a fossil fuel industry executive were made public. The claims — about how oil and gas giant TC Energy conducts its business — were made during an insider call at the company, which builds and operates crude oil and natural gas pipelines across North America.

The 42-minute spiel from Liam Iliffe, then a TC Energy executive, was part of a March “lunch and learn” session for 150 external relations employees across the continent. While the company said some of his claims were inaccurate and didn’t reflect how it operates, the leaked recordings have since made international headlines, sparked a probe from the B.C. government into his tactics and prompted harsh rebuke from politicians.

There was a lot to unpack. 

Iliffe’s statements were on one of two leaked recordings reviewed by The Narwhal — the other of a separate staff meeting in February. Taken together, they spelled out a multi-pronged strategy TC Energy executives said they used to promote the company’s interests. 

On both leaked recordings, staffers made a number of claims about their outsized pro-oil and gas influence over everyone from premiers to Canada’s spy agency to the Wall Street Journal.

The company, Iliffe said, drafted proposed government policies and persuaded “underpaid and overworked” public servants to use them verbatim. It tried to meet politicians in casual settings, chatting in a way that blurs “personal and professional, that advances our initiatives.”

The claims didn’t stop there: Iliffe said the company used Indigenous leaders as “validators.” He said it leveraged relationships with ambassadors to influence Canadian politicians. Staffers also said TC Energy supplied content for the Wall Street Journal, published as though written by its editorial board.

After The Narwhal reached out to TC Energy with questions, Iliffe resigned and said some of the claims he had made were untrue but did not specify which. The company said the recordings “included inaccurate comments from an employee that portray a false impression of how we do business” and were released without authorization. Both the B.C. and federal governments vehemently denied Iliffe’s claims were anything more than bluster.

But overall, the behind-closed-door comments appear to outline at least seven key tactics TC executives claimed to use to influence government and sway public opinion — with “remarkable results.” Read on — and listen! — for seven key strategies, in the words of oil and gas executives.

Claim 1: Ghostwriting briefing notes and policy for ‘underpaid and overworked’ public servants 

“A really interesting thing about government is that you’ve got a lot of people, public servants, who are overworked and underpaid. And sometimes they just want the job done for them,” Iliffe said.

“We’ve been given opportunities to write entire briefing notes for ministers and premiers and prime ministers and it gets stuck on government letterhead and put into an envelope and into a briefing package that goes to that elected figure,” Iliffe added. 

“There’s nothing more powerful than that.”

That’s something denied by both the B.C. government and Natural Resources Canada. The federal department said briefing notes for high-level political and public officials are “developed by public servants. … External stakeholders have no role in drafting briefing notes, and are not privy to them.”

Iliffe, nevertheless, claimed his strategy had been successful, saying, “We’ve had some really remarkable results in terms of our message being repeated back to us by key decision makers in government.”

Claim 2: Trying to meet politicians casually for conversations that flow between ‘personal and professional, that advances our initiatives’

You never know which senior government officials you might run into at the produce section at Costco.

That’s an insight Iliffe shared during the internal call.

“You’d be surprised how much work I actually get done in the cooler at Costco because I bump into a significant minister or bureaucrat that I really want to spend some time with and I can do that next to the strawberries or the romaine lettuce,” he said.

“We spend time with influential bureaucrats,” Iliffe said. “They’re the ones who ultimately advise the premier and cabinet and if we can spend time with them and make certain that our messaging and our advice is landing on their letterhead, we have extra more solid validation of the message that we’re sending.”

A senior TC Energy vice president, Patrick Muttart, dismissed claims about Costco lobbying, telling the National Post it “doesn’t happen in the real world” and that the company has a “robust” framework to oversee lobbying, which is governed by laws at both the provincial and federal levels. 

Claim 3: Spending ‘a lot of time influencing the media landscape’ to ‘shape stories, place stories, develop positive stories’

“We were able to … mute opposition voices because we have an extraordinary and growing team that really focuses on opposition research,” Iliffe said in March. “They’re based in Washington, D.C. They’re watching over the entire company and can highlight to us what’s in the news, what are opposition folks saying online and give us opportunities to blunt, mute and sometimes even reverse opposition voices.”

“We spend a lot of time influencing the media landscape,” he added. “We have had opportunities to shape stories, place stories, develop positive stories that in some instances as a corporation, try to stop negative stories that either were not true or really, really harmed us in some way that was irreparable.”

A month before Iliffe’s statement, on the other leaked recording, a Washington D.C.-based TC Energy executives took credit for a Wall Street Journal editorial published on Feb. 15, 2024. Titled “Biden’s LNG ‘Gift’ to Vladimir Putin” and signed by the newspaper’s editorial board, it criticized President Joe Biden for announcing a pause on liquefied natural gas exports (that move was blocked by a Republican-appointed federal judge earlier this week).

“I wouldn’t say this much outside the walls of the TC tower, but this editorial wouldn’t have happened without our involvement,” Edward Burrier, a former White House staffer who is now TC Energy’s director of public policy, said on the call. “Our communications team packaged that for the Journal editorial page and they went with it … so some really impactful teamwork there.”

A spokesperson for the Wall Street Journal said the paper does “not comment on sourcing and/or editorial processes.” TC Energy did not respond to questions about the editorial or the opposition research group.

Claim 4: ‘Leveraging’ relationships with Canadian diplomats to have them ‘deliver a pro-LNG message’ to politicians

Iliffe claimed TC Energy staffers reached out to “international thought leaders and diplomats” to influence B.C. Premier David Eby when he was first elected. “We know that premiers, when they go to countries, have dinners with ambassadors,” he said. “That’s a one-on-one period of time that an ambassador can deliver our message.” 

“Leveraging our relationships allowed us to have Canadian ambassadors abroad deliver a pro-LNG message to a premier who was skeptical at the time.”

He said when Eby and some of his cabinet ministers went to Asia on a trade mission in 2023, TC Energy reached out to ambassadors ahead of time to brief them on desired messaging. 

The result, Iliffe said, was “a marked shift in language when [Eby] came home.” 

“We have a shift in government position, a clear shift. We have public comments and policy development that are positive for TC Energy’s initiatives being made daily by the British Columbia government. We didn’t find ourselves there a year ago.” Iliffe said the company has worked to shift Eby’s views since October 2022, when he said expanding fossil fuel infrastructure would make climate goals impossible to reach. 

A spokesperson for Eby denied Iliffe’s claims, saying they were “self-aggrandizing” with “no basis in reality.” Whether or not TC Energy’s efforts were the cause, Eby released a video last month endorsing the partially Indigenous-owned Cedar LNG project as a “shining example of how natural resource development should work with our province, in full partnership with First Nations, in line with our commitments to fight climate change.”

Global Affairs Canada said Canada’s Trade Commissioner Service – a network of diplomats who promote Canadian businesses from embassies and consulates in more than 160 cities abroad – helps Canadian oil and gas companies “sell their products and services outside Canada.”

Muttart, the senior vice-president at TC Energy, confirmed to the National Post that the company is “informing, educating and engaging with not just Canadian diplomats but other diplomats representing other countries.” 

Claim 5: Using Indigenous leaders as ‘validators’ to sway government decisions

As politicians, cabinets and decision makers come and go, Iliffe said, “we always have to make certain that we’re shoring that up and bringing validators through our relationships — from communities, Indigenous people, Indigenous leaders and the general public — to government.”

The strategy, Iliffe said, would help politicians be “confident that they can make the positive decisions without affecting their voter base which drives a lot of decision making.”

On the February leaked internal call Burrier was asked for advice from a speaker in B.C. who said “we’re really having … problems getting traction with [First Nations]” for the Prince Rupert natural gas transmission pipeline. While TC Energy secured agreements with some First Nations governments along the route of the pipeline when it first sought — and received — approval from B.C. in 2014, not all communities remain supportive. 

In response to the question, Burrier characterized Indigenous involvement in fossil fuel development as a competitive edge. As an example, he referred to the Cedar LNG project co-owned by Haisla Nation, and the presence of the nation’s Chief Crystal Smith at a 2023 liquefied natural gas conference in Vancouver as an example.

“Every CEO sits up there and talks about these LNG projects around the world and they all sound the same,” Burrier said. “But then Chief Crystal got up and said, ‘I’m with Haisla Nation and we used to have to manage poverty, now we have to figure out how to manage wealth.’ ” 

“That’s the force multiplier, to use one of the words of the hour, that we have on our side.”

Chief Smith did not respond to The Narwhal’s requests for comment. 

Claim 6: ‘Shaping media outcomes’ with targeted ad campaigns during protests and land defence

“We spend a lot of time in that ecosystem shaping media outcomes,” Iliffe said in March. 

Iliffe claimed media-influencing tactics had been useful when Wet’suwet’en Hereditary Chiefs were in Toronto in 2023 to protest natural gas development. Iliffe said that because protestors were targeting sources of pipeline financing, TC Energy had to do so as well.

“So we redeployed with a geofence social media campaign to make certain that our financiers were aware that we were aware of it — that they knew we were doing what we were trying to do — and the media covering the event during saw our ads while they opened social media or any news coverage.”

Geofencing is a marketing tactic that consists of targeting ads on devices located within specific geographic boundaries.

His efforts, he said, were “remarkably effective.” 

“It really actually did drive some more positive news stories or at least it added balance and in a lot of the times, balance is a win.”

Claim 7: Doing ‘the government’s homework for them’

Burrier said one example of “successful shots fired” in Canada was how the company lobbied the federal government around the Impact Assessment Act, through which decision makers consider environmental impacts when approving or rejecting major industrial development projects. 

The Trudeau government is amending the act after the Supreme Court of Canada found it to be unconstitutional last fall, but Burrier suggested TC Energy was behind the openness to changes that benefit industry. 

“As many on this call will remember, early last year the Canadian government had two sentences in their proposal saying that they wanted to make improvements on its permitting process,” he said in the recording. “We used that as our opening. We produced for government a deliberate, thoughtful, 20-plus-page paper with recommendations.” 

“We literally did the government’s homework for them,” he added.

A spokesperson with the Impact Assessment Agency said the agency “did not receive any submissions from TC Energy on amendments to the Impact Assessment Act.”

When asked by The Narwhal about the claims, federal Environment Minister Steven Guilbeault said Burrier’s statement is “an outrageous claim and it’s so preposterous.”

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The Wall Street Journal is staying mum about an allegation it ran an editorial criticizing U.S. President Joe Biden using “really good content” supplied by a Canadian fossil fuel company.

The editorial, published in February, criticized a major climate policy announcement by the White House to pause permits for liquefied natural gas (LNG) exports.

A few days later, a U.S. executive from Calgary-based TC Energy told colleagues during a “lunch and learn” call that the firm was involved in getting the editorial published. The call was internal, but The Narwhal reviewed a leaked recording.

On the call, Edward Burrier, TC Energy’s director of public policy, discussed how Biden’s announcement prompted the company to spring into action by reaching out to the newspaper.

“I wouldn’t say this much outside the walls of the TC tower, but this editorial wouldn’t have happened without our involvement,” Burrier said on the call. “Our communications team packaged that for the Journal editorial page and they went with it, … so some really impactful teamwork there.”

The editorial argued Russian media were “thrilled” about the pause, which it said would force Germany and other European countries to lift sanctions on Russian oil and gas. On the call, Burrier said an analyst working for the multinational fossil fuel company “dug through Russian-language media, got a sense of their reaction, worked to validate [and] bolster the research through a native Russian speaker and then our communications team packaged that for the Journal editorial page and they went with it.”

Later on the call, the analyst, Michael Oberman, told his TC Energy colleagues the editorial is “a great example of how you can kind of really change discussions across the continent if you have really good content.”

“Incidentally it took a lot of time to review many, many dozens of Russian-state propaganda media sources,” he added. “It was an interesting pastime. We have great people on the U.S., Canada and Mexico side who can kind of interact with key decision makers and say, ‘Look at this story.’ ”

Caitlyn Reuss, a spokesperson for the newspaper, which is published by Dow Jones, a unit of NewsCorp, said in an email, “We do not comment on sourcing and/or editorial processes.”

TC Energy did not respond to questions about the remarks made by Burrier and Oberman, but said in a statement the company engages with all levels of government and across every community where it operates in order to achieve its mission of delivering “secure, affordable and sustainable energy.”

TC Energy also said that some comments — made by at least one employee who is no longer with the company — were inaccurate and “portray a false impression of how we do business.”

Wall Street Journal editorial board speaks ‘for free markets and free people’

The Wall Street Journal says on its website its opinion pages are independent from its news department. “We speak for free markets and free people,” the newspaper’s website says of its editorial board.

“Our analyses represent our best independent judgments rather than our preferences, or those of our sources, advertisers or information providers,” reads the code of conduct the Wall Street Journal adheres to, adding, “Our opinions represent only our own editorial philosophies.” 

The members of the editorial board aren’t named on the Journal’s website: at many major newspapers, the board is a group of senior journalists who take turns writing opinions individually and together, which are published without individual bylines. This means there is no way for non-board members to know who exactly wrote a specific editorial and what their connections to sources or subjects might be.

The editorial TC Energy employees appeared to take credit for was titled “Biden’s LNG ‘Gift’ to Vladimir Putin.” It was signed by the newspaper’s editorial board on Feb. 15, 2024, 20 days after Biden’s LNG pause was announced. Citing several Russian media sources, it outlines an argument that frames the decision as a major political blunder and a boon to Russian oligarchs.

“President Biden is trying to strike a contrast with Donald Trump by promising to stick by America’s European allies. Perhaps he hasn’t heard Vladimir Putin’s media organs crowing that his administration has double-crossed Europe by halting permits for new liquefied natural gas (LNG) export projects,” the editorial said. 

“Mr. Biden’s LNG export ban increases Mr. Putin’s economic leverage and it undermines the credibility of the U.S. as a reliable ally.”

Trump, Biden have presented vastly different visions for oil and climate

Russia’s invasion of Ukraine in 2022 dramatically affected global energy security and supply chains. 

An International Energy Agency report on the war said it plunged the European Union into an energy crisis, with countries including the United States increasing LNG exports to replace Russian supplies. 

For his part, Trump described oil and gas as “the liquid gold under our feet” during the June 28 presidential debate against Biden.

In January, the Biden administration said in a press release it was halting LNG exports because “climate change is the existential threat of our time — and we must act with the urgency it demands to protect the future for generations to come.” Natural gas is about 95 per cent methane, an extremely potent greenhouse gas that is the second biggest contributor to global warming after carbon emissions.

“The U.S. is already the number one exporter of LNG worldwide — with U.S. LNG exports expected to double by the end of this decade,” the White House press release noted. “At the same time, the U.S. remains unwavering in our commitment to supporting our allies around the world. Today’s announcement will not impact our ability to continue supplying LNG to our allies in the near-term.”

This week, a Louisiana judge granted a preliminary injunction to put Biden’s decision on hold, in response to legal challenges launched by 16 Republican-led states, the Associated Press reported.

Biden’s stance on LNG exports has major implications for TC Energy projects — and the natural gas sector at large — according to executives heard on the leaked recording. Burrier and one other executive on the call said Biden’s pause had become an election campaign issue and they expected Trump would reverse it.

“It 100 per cent is an election campaign issue,” Burrier said. “The weekend when the pause was announced, Trump … was saying, ‘On day one I’m going to overturn that.’ ”

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In 2017, Michael Evanoff was tapped by former U.S. president Donald Trump to serve as assistant secretary of state for diplomatic security. In his testimony to the Senate foreign state committee, he detailed his previous experience in the foreign service, noting he had completed eight overseas postings, four of which were designated high threat. 

“Among other things, I established the first [diplomatic security] liaison position with a U.S. military regional command, managed the largest Russian spy case and damage assessment in NATO history and designed a post-9/11 informant ‘walk-in’ program at our Islamabad embassy that contributed to the capture of Khalid Sheik Muhammad,” he said at the time.

Evanoff now works for TC Energy, a Calgary-based multinational fossil fuel company with offices in Houston and Mexico City. His official title is director of national security policy, geopolitical intelligence and research. From his home in Washington, D.C., the former Trump appointee uses his extensive geopolitical and military background to protect the company’s interests: crude oil and natural gas pipelines in Canada, the United States and Mexico, which earned TC Energy $11 billion in 2023.

A leaked recording of a February TC Energy “lunch and learn” session featuring Evanoff and his colleagues is now pulling back the curtain on internal company discussions, including its apparent strategies about how to influence governments, benefit from geopolitical crises and leverage existing relationships with a range of senior government officials — including the head of Canada’s spy agency.

The conversations, reviewed by The Narwhal, provide fresh insight into how some senior officials at the company believe they are locked in an existential battle as governments around the world move away from fossil fuels in an effort to address the climate crisis. They cover a wide range of discussions about international events that could seriously affect the business of TC Energy and other fossil fuel companies, such as President Joe Biden’s recent decision to pause new permits for liquefied natural gas exports.

“Our focus as a team is to look at what exposes us to hostile complex threats such as nation-states using asymmetric tactics, cyber-threats exploiting vulnerabilities, geopolitical uncertainties impacting global markets and supply chains and evolving regulatory challenges,” Evanoff said on the recording.  

While there is nothing unusual about a large multinational company recruiting top politically connected talent and prioritizing robust security measures to protect its assets, most details about their strategies are often tightly guarded secrets.

TC Energy did not directly respond to questions sent by The Narwhal about its team in Washington, D.C., and its influence in Canada. 

In an emailed statement, Patrick Muttart, TC Energy’s senior vice-president of external relations, said TC Energy was “disappointed” that recordings of its recent “lunch and learn” sessions “were released externally without authorization.” 

Muttart added TC Energy’s operations include providing energy to customers “in North America and around the globe” but did not elaborate on how the company gathers intelligence about geopolitical issues. 

‘On the battlefield trying to … protect the TC tower’

The recording appears to be from a presentation that took place on or around February 22, 2024. On the call, several TC Energy staffers based in Washington, D.C., spoke about how they support TC Energy’s external relations work across North America.

Julia Nesheiwat, a former U.S. military intelligence officer and homeland security advisor to Trump, said she and her colleagues are “on the battlefield trying to work every day to protect the TC tower.”

“Sometimes of course we’re on the defense and doing damage control and … making the best of those situations,” Nesheiwat, who is now TC Energy’s vice-president of policy and insights, said on the call. She added the company’s goal is to be proactive and stay “on the offense, when we’re taking it to our opponents.” 

Evanoff struck a similar tone. Opening with a military term, he described the team as a “force multiplier.” 

“We’re in challenging times here, we all know that,” he said. “The geopolitical intelligence and research team — the GIR team — is vital, and I would say paramount, in safeguarding … TC’s North American energy division.”

In response to The Narwhal’s questions, Muttart, the company’s senior vice-president,  explained the company’s mission was to deliver secure, affordable and sustainable energy that powers homes and businesses around the world.

“To achieve our mission, we engage with all levels of government and across every community where we operate,” Muttart said. “With governments, opinion leaders and policy-makers across jurisdictions, our role is to advocate for the changes needed to ensure energy security, job creation, affordability and sustainability. We do so for our colleagues, for our customers and for the communities where we operate. We do so with solid, robust and compliant practices and policies for engagement, while always looking for ways to improve.”

TC Energy executive discusses conversations with spy agency

On the February call, Evanoff said the company is actively working to influence global intelligence sharing. 

On the recording, he gave details of a meeting he said happened between company CEO François Poirier and Canadian Security Intelligence Service (CSIS) director David Vigneault at an intelligence summit in Palo Alto, Calif., in October 2023. The summit, hosted by U.S. Federal Bureau of Investigation director Christopher Wray, brought together leaders of the Five Eyes intelligence partnership, a bloc made up of senior officials from the United States, United Kingdom, Canada, Australia and New Zealand.

“The [detection of] political threats that come out of [Five Eyes intelligence] are shared and … four countries are actually sharing that with the business community,” Evanoff said. “The fifth one, Canada, is unfortunately hamstrung with the CSIS Act law that stops CSIS from sharing actual security intelligence to Canadian companies. This is a miss, a huge miss, that’s been going on since 1984 — way before the internet.”

He said Poirier witnessed discussions between Vigneault and Wray in California that revealed “the sharing of information, especially with [the People’s Republic of China] and Russian threats, [is] not getting to our companies in Canada.” 

Evanoff said Poirier was “pretty charged” about finding a way to change this. According to the leaked audio, a conversation between the TC Energy CEO and the CSIS director ensued.

“The director of CSIS, David Vigneault, basically said, ‘I have a plan, will you work with me?’ ” Evanoff recounted. “And so [Poirier] absolutely said, ‘Yes, what can we do?’ ”

Evanoff alleged TC Energy analysts then supplied the CSIS director with a document supporting amendments to the Canadian Security Intelligence Service Act that would pave the way for the federal government to share classified security intelligence with industry. He said the approach was consistent with methods used in the United States in the 1980s, with a government department called the Overseas Security Advisory Council.

“We wanted to convey that to the Canadians, to the director. So he’s taken that advice from us to start this,” Evanoff said.

Evanoff said after meetings with the CSIS director and other intelligence officials, Poirier joined a Business Council of Canada committee on national security, and is now in regular contact with Vigneault. 

“Our CEO … co-chairs that with Mastercard CEO Canada and it’s something that we’re very proud of and we’ll continue to feed the information to him twice a year,” Evanoff said. “We believe this is great for TC. It’s also great for us to … be top of mind with the Canadian intelligence service and even with the National Security Justice Department and also with RCMP.”

Evanoff did not respond to questions from The Narwhal about his recorded comments.

Eric Balsam, a spokesperson with CSIS, declined an interview request, but confirmed in a statement that Vigneault and Poirier met in Palo Alto. Balsam said discussions between the two men occurred “in the context of strategic-level engagements with the Business Council of Canada” and its national security group co-chaired by TC Energy’s Poirier. Balsam said the security agency will continue to engage with the business community.

“CSIS works with its partners across the private sector to ensure they are aware of the threat environment and that they have the tools and information they need to protect their interests,” he noted.  

He also said the federal government launched public consultations on possible amendments to the legislation in November 2023 to ensure the spy agency has more tools to defend Canada against security threats including foreign interference.

Public consultations about updating the CSIS Act concluded in February, with a majority of participants agreeing the agency should have more tools to share information about threats with industry, universities, local governments and law enforcement as well as other potential targets. A report summarizing the consultations also said a minority of participants expressed concerns about whether any proposed changes would increase threats to privacy. Some also expressed “the need for strong oversight and accountability.”

President Biden and the ‘the battle to define natural gas’

On the February recording, former White House staffer Edward Burrier, now TC Energy’s director of public policy, told his colleagues Biden’s pause on liquefied natural gas (LNG) exports, announced Jan. 26, 2024, is making waves across the industry. (On July 1, a Trump-appointed federal judge blocked Biden’s pause.)

He suggested the Biden administration implemented the pause as a response to worries about the upcoming election and explained how innovative techniques in extracting gas from underground shale reserves pushed companies like TC Energy into the spotlight.

“Thanks to the shale revolution, in just a few short years the U.S. went from importer to exporter of natural gas, becoming the number one last year, surpassing Qatar and Australia,” he said. “The success of [the] industry has definitely put it in the crosshairs of activists.” 

“President Biden has really struggled with key demographics: war in the Middle East, student loans, environmental activism,” he continued. “In some ways we’re kind of laughing but it is an eye opener: the White House had top officials meeting with 25-year-old TikTok influencers that were producing LNG videos. It’s through this prism that it’s clear this was entirely a political decision by the White House.”

He added he believes the decision was “facilitated by a group of activists and academics” and said the impact isn’t limited to the United States. 

“This decision isn’t just important to us but it’s reverberating around the world. Our allies are worried about U.S. leadership and our adversaries are doing a victory lap.”

Burrier noted on the call that Biden’s fossil fuel policies had become an election issue, and predicted  Trump, if elected, would overturn the pause on liquefied natural gas exports on day one of a new mandate.

He said he’s paying close attention to messaging from opponents of fossil fuel development, noting “the battle to define natural gas is on.”

Natural gas is a fossil fuel mostly composed of methane. According to the United Nations Economic Commission for Europe, over a 20-year period, methane is 80 times more powerful than carbon dioxide in terms of heating the planet.

In B.C., TC Energy recently completed the Coastal GasLink pipeline project which will transport the fossil fuel to the Pacific coast, to be converted into liquefied natural gas and shipped overseas. The oil and gas industry has proposed a number of LNG facilities along the coast to support more production and exports.

Proponents say the gas can help countries like China, Japan and Korea reduce reliance on other fossil fuels, such as coal. That argument is contested by climate scientists who maintain emissions and leaks during extraction, processing and transport make liquefied natural gas worse for the climate than coal.

Burrier isn’t buying it.

“I often wake up and kind of wonder if I’m on a different planet — reading studies that LNG is dirtier than coal is one of those moments,” he said on the internal call, referring to a study by a Cornell University professor who he described as “a long time anti-natural gas advocate.” He noted the paper wasn’t peer-reviewed.

“I grew up as a young staffer on Capitol Hill and the debate was about drilling in the Alaska National Wildlife Refuge,” he continued. “It was a major kind of fight. [There’s] not one Democrat who says that they’re for that. Keystone XL — these guys don’t even have to think about it. They said they’re instinctively against it. We are at this spot where we cannot let that happen for natural gas exports.”

‘Success of environmental activism’ in U.S. could inspire action in B.C., TC Energy exec worries

Canada’s first major liquefied natural gas export project is nearing completion. LNG Canada, which will be supplied by TC Energy’s Coastal GasLink pipeline, will start shipping the fossil fuel to Asia next year. 

“In the short term, in Canada, I think we’ll see some renewed interest in LNG Canada as Asian partners look to diversify,” Burrier said of the impact of the U.S. pause. “But I think if we’re talking about a real opportunity, we’d really have to see the Canadians — the federal government [and] the province — really ready to push through the next set of projects. And I think, to be honest, the Canadian government really doesn’t do competitive policy like that all that well.”

He cautioned the impacts of Biden’s pause could be more subtle.

“We do have to be worried that the success of environmental activism in the United States could be a jolt for their brethren in B.C.,” he said. “I know again that they’ve called for a pause of Canadian exports, which I always laugh to myself, since they’re still at zero right now.”

“I think we often have to remember that Canada’s aggressive climate policies can themselves present reliability of supply questions to our partners,” he added. 

Nesheiwat, the former Homeland Security advisor and now TC Energy vice president, said that’s one of the challenges her team helps to address.

In January, The Narwhal reported how TC Energy lobbied the federal government to exempt liquefied natural gas facilities from a proposed cap on heat-trapping pollution from oil and gas activities. At that time, a federal spokesperson said the government would not grant any exemptions, noting the LNG sector was expected to grow.

“In Canada, our team is dealing with stringent and evolving climate policies or regulatory inefficiencies,” Nesheiwat said on the leaked recording. “The fact is, as a company we’re often navigating these public perceptions and again across multiple countries and cultures.”

Burrier, Nesheiwat and other TC Energy executives spent much of their careers developing and influencing policy in the U.S. TC Energy did not respond to questions about why it hired a Washington D.C.-based team to influence Canadian policies.

‘We literally did the government’s homework for them’

Burrier said one example of “successful shots fired” in Canada was how the company lobbied the federal government around the Impact Assessment Act, legislation that gives decision-makers the means to consider environmental impacts when approving or rejecting major industrial development projects. The government is amending the act after the Supreme Court of Canada found it to be unconstitutional last fall, but Burrier suggested TC Energy was behind the government’s openness to changes that benefit industry. 

“As many on this call will remember, early last year the Canadian government had two sentences in their proposal saying that they wanted to make improvements on its permitting process,” he said in the recording. “We used that as our opening. We produced for government a deliberate, thoughtful, 20-plus-page paper with recommendations.” 

He explained TC Energy staffers based in the U.S. capital developed a case study for Canadian government officials that dissected how Germany “built three LNG import terminals in less than a year” by enacting special legislation.   

“We literally did the government’s homework for them,” he added.

Dixie Quintanilla, a spokesperson with the Impact Assessment Agency, said the federal government met with numerous stakeholders, including TC Energy, as part of the process to develop proposed amendments. 

She said the agency “did not receive any submissions from TC Energy on amendments to the Impact Assessment Act.”

When asked by The Narwhal about the claims, federal Environment Minister Steven Guilbeault said Burrier’s statement is “an outrageous claim and it’s so preposterous.” At an interview during a conference organized by the Toronto Region Board of Trade on June 27, Guilbeault said TC Energy was one of 30 stakeholders and 60 Indigenous organizations consulted over the changes and that he didn’t believe the company had put its thoughts in writing. 

A spokesperson said the minister’s office “relied on the best available science and on the unbiased, high-quality advice of the Impact Assessment Agency” for amendments to the legislation. 

The Supreme Court ruling was “the only reason we made changes,” Guilbeault said. “To think that I would take my orders from a company on something like that? I think it’s someone who is grossly overestimating their importance and the role they played … It’s ridiculous.” 

Burrier also said he and his colleagues helped with efforts to weaken a “climate scheme that British Columbia was advancing.”

“I won’t bore you with the details here because it does get pretty technical but we helped … the team in B.C. with assessing the proposals and providing recommendations and, lo and behold, it worked,” he said. “The final recommendations came out and in the next few years we’ll see savings of hundreds of millions of dollars in compliance costs and it factors up to billions if you look out at 25 years from now.”

It appears he was referring to provincial regulations that restrict emissions from the oil and gas sector. On another leaked recording, a TC Energy executive who resigned after The Narwhal began its reporting said the company was successful in excluding “midstream” infrastructure — namely, pipelines — from the new rules. 

A spokesperson with the Office of the Premier in B.C. did not directly respond to the claim, saying only that the premier maintains a “clear and persistent commitment to B.C.’s climate plan,” which includes an emissions cap for the oil and gas industry.

— With files from Fatima Syed

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The call starts as a run-of-the-mill internal corporate presentation. 

With a cheerful preamble, Liam Iliffe, a B.C.-based political staffer turned industry executive, introduces himself to his colleagues at TC Energy, a major North American energy company that builds and operates crude oil and natural gas pipelines and other energy infrastructure. He summarizes his background working for the BC New Democrats as a senior advisor under former premier John Horgan. He talks about how his work there included ensuring cross-party support for legislative changes needed to push through the Coastal GasLink pipeline and LNG Canada. The call is a “lunch and learn” session for the company’s external relations employees across North America.

Eight minutes in, things get interesting.

Warming to his task, Iliffe starts to outline strategies he says the multinational fossil fuel company uses to influence provincial, federal and state governments in Canada, the United States and Mexico. The corporation employs lobbyists and analysts in key political centres including Ottawa and Washington D.C. In 2023, TC Energy posted earnings of $11 billion.  

Speaking for 42 minutes, Iliffe goes on to claim TC Energy has surreptitiously influenced many major policy decisions. 

“We’ve had some really remarkable results in terms of our message being repeated back to us by key decision makers in government,” he says, adding “we’ve been given opportunities to write entire briefing notes for ministers and premiers and prime ministers and it gets stuck on government letterhead.”

He says TC Energy played a pivotal role in excluding pipelines from key climate regulations in British Columbia, saving the company billions in revenue. He claims TC Energy leverages relationships with Canadian ambassadors, Indigenous leaders and senior government officials to sway government decisions. He suggests the company conducts impromptu lobbying of elected officials by placing its staffers in positions where they can “bump into” prominent decision makers in informal settings. 

Notably, he claims these tactics were successful in persuading B.C. Premier David Eby to change his mind about taking action to address the climate crisis.

“This is a remarkable achievement over the year,” Iliffe tells his TC Energy colleagues.

The Narwhal obtained two hours of leaked recordings from the call on March 28, 2024, that appeared to implicate TC Energy in a concerted effort to influence premiers, ambassadors, cabinet ministers, the media and more. As part of the reporting, the leaked recordings were analyzed for authenticity and The Narwhal reached out to each party that could be implicated, asking dozens of questions. The recording reveals several key tactics allegedly used to influence government and sway public opinion.

• Cultivating relationships with influential bureaucrats to gain political support for corporate initiatives
• Encouraging TC Energy staff to seek out opportunities to meet politicians in casual settings, with the goal of having conversations that flow between “personal and professional, that advances our initiatives”
• Drafting proposed government policies and persuading “underpaid and overworked” public servants to use these and other TC Energy messaging on official government briefing notes for top politicians and decision makers
• Deliberately placing staff at public events to ask scripted questions to politicians and press them to talk about the company’s priorities in front of an audience
• Leveraging relationships with Canadian diplomats to have them “deliver a pro-LNG message” to prominent politicians
• Using “validators” such as “Indigenous people, Indigenous leaders and the general public” to sway government decisions
• Forming partnerships with third parties “who are happy to work with and take direction from TC on shifting government policy”
• Influencing the media to suppress stories that could be harmful to the company’s reputation

Four days after The Narwhal sent questions to TC Energy about the recording, Iliffe responded with an email on June 17 saying that some events he described did not actually occur and that he had resigned from the company.

“My intent was to emphasize the importance of local relationships TC Energy built in support of projects and operations,” he wrote in an email. “It would be remiss of me to suggest that anyone other than our elected representatives make decisions on behalf of British Columbians.” 

“I respect and treasure my relationships with past and present colleagues, partners and elected officials,” the email continued. “Out of respect for those relationships, I have resigned from TC Energy effective immediately to avoid further distractions.”

Two days later, TC Energy said it had reviewed a recording of an internal presentation made by a “former employee.”

“This individual is no longer with the company,” an unnamed spokesperson with TC Energy’s media relations team wrote in an email. “We apologize to the Government of British Columbia, Premier David Eby and all our partners, stakeholders and rights holders for any impact on our valued, trusted and longstanding relationships.” 

The spokesperson did not answer specific questions about the contents of the recording and did not specify whether any of the claims made on the recording were true or not.

In response to follow-up questions, TC Energy provided a second statement on June 26 from its senior vice-president of external relations, Patrick Muttart, who said some statements made on the call were untrue. Muttart also said he was disappointed someone had released recordings “which included inaccurate comments from an employee that portray a false impression of how we do business” and that they were released without authorization.

Muttart later provided additional comments to the National Post about the recording.

“The moment I found out about his comments, he took accountability, we took accountability, he is no longer with the company,” Muttart, a former senior political advisor to ex-prime minister Stephen Harper, told the newspaper.

‘We place people so they can bump into folks’: TC Energy exec

TC Energy has stakes in two pipelines that will supply B.C.’s new liquefied natural gas (LNG) export industry. The recently completed 670-kilometre Coastal GasLink pipeline will send gas from B.C.’s northeast to the LNG Canada project, which was granted billions of dollars of tax breaks and other subsidies by the BC NDP government. The 800-kilometre Prince Rupert Gas Transmission project, set to start construction in August, will supply the Ksi Lisims LNG project currently undergoing environmental assessment. Iliffe noted TC Energy’s natural gas interests are directly linked to expansion of the LNG sector.

“The growth of LNG off the west coast benefits TC Energy: if more gas is coming out of the basin, that benefits us,” Iliffe said on the call.

During his presentation, Iliffe repeatedly emphasized the importance of developing and maintaining relationships with politicians and public servants. He claimed the company regularly engages in lobbying  — activities meant to influence public policy, a common practice governed by both federal and provincial laws — outside of business hours. 

“You’d be surprised how much work I actually get done in the cooler at Costco because I bump into a significant minister or bureaucrat that I really want to spend some time with and I can do that next to the strawberries or the romaine lettuce,” he said, prompting laughter from some of his colleagues on the call.

According to the recording, this approach reflects TC Energy’s corporate strategy.

“We place people so they can bump into folks at the airport terminal or at the Costco cooler and on a Saturday have a remarkable conversation that flows between personal and professional, that advances our initiatives,” Iliffe said.

Speaking to the National Post, Muttart said the company doesn’t lobby at Costco and that TC Energy has a “robust” lobbying framework.

As The Narwhal reported on Wednesday, B.C.’s attorney general, Niki Sharma, wrote to the provincial registrar of lobbying asking it to review some of the claims made by Iliffe after the government learned about them through questions sent by The Narwhal to the premier’s office. Sharma’s letter noted Iliffe’s registration as a lobbyist did not identify him as a former public office holder, which may have been an oversight.

While Iliffe told The Narwhal that TC Energy was responsible for submitting his lobbying registration, the company did not respond to a question about whether it had made an error in its submission.

Sharma’s letter also noted that her office had conducted its own review of Iliffe’s comments and believed his statements were “untrue.”

TC Energy exec takes credits for B.C. premier’s evolving views on LNG and climate goals

On the recording, Iliffe spoke at length of how TC Energy had zeroed in on Eby in what he said were successful efforts to sway the premier’s climate policy — efforts he said intensified shortly after Eby took office in late 2022. 

“We had a new premier with a new mandate and that mandate was described on his very first day in office as ‘we cannot continue to expand the fossil fuel infrastructure and hit our climate goals,’ ” Iliffe said. “This set off alarm bells, of course, across industry.”

B.C.’s climate ambitions have long been at odds with its stance on liquefied natural gas (LNG) exports. Natural gas is about 95 per cent methane, an extremely potent greenhouse gas that is the second biggest contributor to global warming after carbon emissions.

The province approved LNG Canada — a joint venture by Shell, Petronas, PetroChina, Korea Gas and Mitsubishi — in 2015. When its first phase comes online around 2025, it plans to power its energy-intensive operations by burning some of the natural gas it would receive daily from the Coastal GasLink pipeline, according to LNG Canada’s project plans filed with the B.C. government. LNG Canada said a second phase would double production. While this could also double the amount of gas it burns domestically, LNG Canada has previously told The Narwhal it has a team exploring options to reduce emissions through electrification.  

Meanwhile, B.C.’s 2018 climate plan set targets to reduce emissions across the province from all sources to 40 per cent below 2007 levels by 2030, scaling up to 80 per cent by 2050. It also set a 2030 sectoral target of 33 to 38 per cent reductions from oil and gas activities in the province. Iliffe said Premier Eby faced tough conversations around natural gas and opposition to the sector “needed to be quelled” when he took office.

“So we made efforts to do that,” he said.

Those efforts, Iliffe said, had clear results. “We [find] ourselves now in a position where we have a premier who says that LNG is part of our future.”

Jimmy Smith, Premier David Eby’s press secretary, disputed Iliffe’s claims.

“Since the premier was sworn into office in 2022, B.C. has made significant policy changes in relation to the energy sector,” Smith wrote in an email. He said Eby’s “comments and actions” since taking office show a “clear and persistent commitment to B.C.’s climate plan” that included implementing an emissions cap for the oil and gas industry. 

“Premier Eby highlights that these climate commitments are not a hindrance to our economy but rather represent a significant opportunity for growth and prosperity because of how B.C. is positioned,” Smith said.

The premier’s deputy chief of staff, Don Bain, who was lobbied by Iliffe at least four times since 2023 according to provincial lobbying filings, also denied Iliffe’s claims. 

“On a few occasions, Mr. Iliffe and I spoke on the phone on issues relevant to TC Energy and my role as lead on various energy-related files including the sale of the Prince Rupert Gas Transmission line from TC to the Nisg̱a’a Nation,” Bain told The Narwhal in a statement. “Mr. Iliffe’s self-aggrandizing claims have no basis in reality.”

‘Leveraging our relationships allowed us to have Canadian ambassadors abroad deliver a pro-LNG message …’ 

Iliffe claimed TC Energy staffers reached out to “international thought leaders and diplomats” to influence the new premier. He said when Eby and some of his cabinet ministers went to Japan, South Korea and Singapore on a trade mission in 2023, TC Energy’s Ottawa bureau reached out to Canadian ambassadors to brief them on desired messaging to give to British Columbia officials about the natural gas sector. 

“We know that premiers, when they go to countries, have dinners with ambassadors,” he said. “That’s a one-on-one period of time that an ambassador can deliver our message. Leveraging our relationships allowed us to have Canadian ambassadors abroad deliver a pro-LNG message to a premier who was skeptical at the time.”

The result, Iliffe said, was “a marked shift in language when he came home.”

“We have a shift in government position, a clear shift. We have public comments and policy development that are positive for TC Energy’s initiatives being made daily by the British Columbia government. We didn’t find ourselves there a year ago.”

The Narwhal sent a request on June 17 for interviews with Canadian ambassadors who met with Eby on his trade mission in Asia. Global Affairs Canada declined interview requests, but confirmed Canada’s ambassador to Japan, Ian McKay, visited an oil and gas conference hosted in Vancouver in July 2023 and attended a reception hosted by TC Energy.

This occurred after Eby’s trade mission to Asia, a spokesperson with Global Affairs said in an emailed statement. The federal department added McKay did not meet “directly” with any company officials, but did not explain what it meant by that.

The federal department confirmed McKay and Eby discussed the LNG industry and other sectors during the premier’s visit to Japan. 

The federal department also said that Canada’s Trade Commissioner Service helps Canadian oil and gas companies “sell their products and services outside Canada.” 

“Promoting Canadian oil and gas solutions to enable the energy transition is a priority for the [Trade Commissioner Service], which leverages its global network of trade commissioners in over 160 cities worldwide to advance commercial interests,” the statement said.

Muttart, the senior vice-president at TC Energy, confirmed to the National Post that the company is “informing, educating and engaging with not just Canadian diplomats but other diplomats representing other countries.” 

TC Energy exec claims company saved billions after lobbying to be excluded from new climate rules

Saying the company achieved “remarkable results” in exerting its influence over the premier, Iliffe applauded a decision by the B.C. government to approve Cedar LNG, an Indigenous-owned gas liquefaction and export facility that will receive its supply from Coastal GasLink. He also referenced the government’s favourable statements about the proposed Ksi Lisims LNG facility, a Nisg̱a’a-led project currently undergoing environmental assessment.

“All of this effort is for naught if there isn’t Indigenous support or at least Indigenous non-objection,” he said. “A government of any stripe, in British Columbia particularly, is not going to push projects forward unless there’s Indigenous support.”

The NDP government’s endorsement of natural gas had already taken a significant step forward last year, when Premier Eby announced the decision to approve the Haisla-led Cedar LNG project. One the same day, the government said new regulations would require all new proposed LNG projects to have a credible path to achieve net-zero emissions by 2030. The rules would target facilities that liquefy methane-heavy natural gas, but pipelines — including those operated by TC Energy — were exempt. 

Smith said the new regulations were brought in “to ensure oil and gas sector projects fit within B.C.’s climate commitments and create new opportunities for people in clean energy and technology.” 

“This framework ensures some development can occur, while also ensuring we meet our climate goals,” Smith wrote in an emailed statement.

“We were able to cut ourselves out of that,” Iliffe claimed, saying the regulations’ exclusion of pipelines more than halved operating costs, which “saves TC and our partners and our customers billions of dollars over the operational lifetime of their projects.”

It wouldn’t be the first time TC Energy lobbied the government to water down emissions regulations. As The Narwhal previously reported, the fossil fuel company asked the federal government to exclude methane from its emissions cap.

But Iliffe said the company’s tactics go beyond lobbying elected officials. He claimed the company also works with “influential bureaucrats,” internal ministry staff who tend to keep their jobs when an elected government changes, to “make certain that our messaging and our advice is landing on their letterhead.”

“A really interesting thing about government is that you’ve got a lot of people, public servants, who are overworked and underpaid and sometimes they just want the job done for them,” he said. “We’ve had instances where we’ve been given opportunities to write entire briefing notes for ministers and premiers and prime ministers and it gets stuck on government letterhead and put into an envelope and into a briefing package that goes to that elected figure. There’s nothing more powerful than that.”

Robin Librach, a spokesperson with Natural Resources Canada, denied the allegations.

“Briefing notes for high-level political and public officials are developed by public servants,” Librach wrote in an emailed statement. “External stakeholders have no role in drafting briefing notes, and are not privy to them.”

Smith, with Premier Eby’s office, said the B.C. government reviewed Iliffe’s comments and “found no evidence that support his claims.” Smith called them “complete fabrications.”

“In fact, lengthy internal energy and climate policy development processes, cabinet decisions records and briefing note drafting protocols contradict his claims directly,” Smith wrote in an emailed statement.

Smith said public servants draft briefing notes from “extensive consultative work” that involves a wide variety of stakeholders. “This is done to provide the widest range and most accurate advice on the subject under consideration,” he wrote, adding senior government officials review drafts before briefing notes are shared with cabinet.

However, there are cases when industry views make it directly into government briefing notes. For example, in 2022, The Narwhal obtained documents through freedom of information legislation that showed how natural gas lobbyists discussed a landmark Supreme Court decision around Indigenous Rights with provincial public servants. After the court found B.C. guilty of infringing on Blueberry River First Nations Treaty Rights, lobbyists’ warnings about specific economic impacts were passed on to senior B.C. government officials, including the deputy minister of Energy, Mines and Low Carbon Innovation, without analysis or counter arguments.  

‘We’re not going anywhere’: TC Energy exec

After concluding his presentation, Iliffe opened up the call to questions and discussion. 

An unknown speaker asked Iliffe about the recently announced sale of the Prince Rupert Gas Transmission pipeline, noting some politicians and public servants in Ottawa are interpreting the deal as “TC Energy’s retreat from LNG.”

Iliffe responded by saying the response in British Columbia has been different.

“We have an advantage in B.C. in that we are pursuing aggressively CGL phase two and Cedar LNG,” he said, referring to Coastal GasLink’s approved expansion which would double the amount of gas it plans to start shipping this year.

“We have delivered a message that we aren’t going anywhere. We’re not going anywhere.”

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