Purchasing Credibility: Industry and Academy Align Forces Through The Calgary School of Public Policy

During her recent election campaign, Alberta NDP leader Rachel Notley pledged to raise Alberta’s minimum wage from $10.20 an hour to $15 by 2018, which would make the province’s minimum wage the highest in the country — by far.

Not so fast, objects economist Ron Kneebone. In a National Post commentary a week after the election, Kneebone argues that raising the minimum wage will do little to fight poverty. He suggests other, less achievable, policies.

Notley’s platform also included a pledge to raise corporate tax rates, review oil and gas royalties and cut greenhouse gas emissions.

Not so fast, objects economist Jack Mintz. In a National Post article published the day after Kneebone, Mintz asks, “how many times can you skin the cat?” If Notley raises corporates taxes, capital will take flight, he predicts. “Some companies are planning to shift profits out of Alberta if the rate goes up to 12 per cent,” he says, as if profits don’t already leave the province because the energy sector is mainly foreign owned.

A third promise Notley made was to promote the upgrading and refining of Alberta’s natural resources within the province to deliver better value to Albertans.

Not so fast, objects economist Trevor Tombe. In a National Post commentary six days after Mintz, Tombe calculates that oil and gas extraction adds more value per job than refining. But the real comparison should be refining in Alberta compared with refining — and adding value — elsewhere.

Aside from being economists, having serious problems with NDP proposals and getting major play in the National Post, Kneebone, Mintz and Tombe share something else: they are associated with the University of Calgary’s School of Public Policy (SPP). Mintz is school director, Kneebone director of the tax and economic growth program, and Tombe an economics department academic who publishes frequently through the SPP.

In just one month, the SPP had taken three swipes at Notley’s platform.[view:in_this_series=block_1]

And there will be more to come because the SPP isn’t just a degree-granting academic institution, it’s also an industry-supported think tank embedded within the university.

Like all industry-backed think tanks, the SPP’s purpose is to produce research that supports the industry and the free market. If Notley strays too far afield from industry consensus, rest assured the SPP will be on her case.

Industry’s Big (Reputational) Problem

Canada’s oil and gas industry has had a big problem: it’s the least trusted source of information about energy issues.

This was a key finding of a survey commissioned in February 2015 by Alberta Oil, a magazine, as DeSmog’s Emma Gilchrist points out, “destined for the desks of the energy sector’s senior executives and decision-makers.”

These energy sector executives may oppose minimum-wage and corporate-tax hikes and increased oil sands refining in Alberta, but it’s futile for them to fulminate publicly about Notley’s plans, if the Alberta Oil survey is to be believed.

Only 14 per cent of survey respondents found energy company executives to be a credible source of information on oilsands development, and just 11 per cent trusted industry information about carbon emissions.

Perhaps the tens of millions of dollars Enbridge was spending to promote its pipelines and the millions more spent by the Canadian Association of Petroleum Producers to persuade Canadians about the amazing benefits of oil sands development were well and truly wasted.

But Alberta Oil’s survey did reveal a ray of hope for the industry. At 53 per cent, respondents regarded the academic community as the most trusted and credible source of information. So if industry executives can’t speak for the industry, perhaps academics can.

The School of Public Policy, Born of Oil Money 

The School of Public Policy was established in 2008 with a donation of $4 million from James Palmer, one of Canada’s leading oil and gas lawyers, Palmer perhaps recognizing industry’s credibility problems. At the time, all three major Alberta political parties were calling for higher royalties.

Who would speak for the industry?

With Palmer’s money the university hired tax specialist Jack Mintz, CEO of the corporate-sponsored C.D. Howe Institute, to head the SPP. Like C.D. Howe, corporate influence in the SPP is heavy. The connections to one company in particular — Imperial Oil — are extensive. (This is not to suggest that industry money can buy supportive academic research, but that academics sympathetic to business and conservative viewpoints are recruited for such positions.)

Mintz himself is an Imperial Oil director and a director of the Imperial Oil Foundation, that doles out $6-to-$7 million a year to organizations in communities where Imperial Oil operates, to build good will. Like all directors, Mintz is obligated to advance the best interests of the company, as former Alberta Liberal leader Kevin Taft points out. “The directors, in exercising their powers and discharging their duties, shall act honestly and in good faith with a view to the best interests of the corporation,” says Imperial Oil’s 2014 Management Proxy Circular. As head of SPP, Mintz’s loyalties seem murky.

Palmer was one of Canada’s most celebrated energy lawyers (he died in 2013), specializing in corporate mergers and acquisitions. He was on the boards of numerous oil and gas companies and for a few years lobbied the federal government for Imperial Oil and its parent company, ExxonMobil, promoting their oil pipeline proposals.

Imperial Oil CEO Tim Hearn had just retired and joined the SPP’s advisory council; his company donated $1 million to the school and another $200,000 several years later. Hearn’s successor, Bruce Marsh, was a featured speaker at SPP’s kick-off conference. Jean-Sébastien Rioux, recruited to lead the SPP’s Master’s program, had previously headed Imperial Oil’s lobbying and public relations efforts.

The school seems a marriage of business, ideology and politics. A decade before it was established, a group of political scientists, historians, and economists at the university emerged as the intellectual backup for neoliberal and social-conservative causes.

Advancing the Conservative Agenda

Dubbed the Calgary School, these academics coalesced around arguments to slash social programs, downsize government, promote business, deregulate the economy, and cut taxes. Led by political scientist Tom Flanagan, the Calgary School had enormous influence on federal policy and politics.

It helped shape the direction of the Reform Party and Canadian Alliance and dominated the thinking of Stephen Harper, who studied under Calgary School professors, selected one — Flanagan — as a close adviser, and picked the student of another — Ian Brodie, who studied under political scientist Ted Morton — as his first chief of staff.

After the school was up and running, the entire Calgary School migrated into its ranks. Brodie became director of research, Flanagan a distinguished fellow and Morton an executive in residence. Economist Robert Mansell, a Calgary School associate who had been one of Harper’s professors, became the SPP’s academic director.

Four SPP program directors, including Kneebone, are, or were, Fraser Institute fellows. SPP receives about $200,000 a year from Peter Munk’s Aurea Foundation, which has emerged in recent years as paymaster to the right through its funding of the Fraser Institute and other neoliberal think tanks.

And there are the political connections. Flanagan is well-known as a mentor to former Wildrose leader Danielle Smith; Morton was a minister of Energy in the Ed Stelmach government; and Jean-Sébastien Rioux was chief of staff to Jim Prentice when he was federal minister of Indian Affairs and Industry.

Given the funding and the lineup of personnel, it’s not surprising that SPP’s research is hostile to Notley’s program.

They’ll be carefully monitoring the NDP’s moves on the energy and environment files. SPP authors have already sounded the alarm that Alberta must get its bitumen to markets in the Pacific Rim as quickly as possible, or risk losing out to competitors. Canada needs to get on with the Northern Gateway and Trans Mountain expansion projects as quickly as possible, the authors urge.

A paper by Trevor Tombe about “the facts” on Canada’s energy trade presents as one fact the claim that promoting energy trade “requires lowering investment barriers and creating a predictable and stable investment climate for foreign direct investment,” certainly not the capital flight that Jack Mintz threatens.

Notley will be looking across the legislative aisle for clues to opposition strategies. She should also be looking over her shoulder to the School of Public Policy for the “research” and policy that will provide the real opposition to her government.

Image: Industry Minister James Moore speaks at a Calgary School event via Flickr