Unfinished Business – A Retrospective On The Allan Inquiry Report

Contributed by Robert Lyman © 2022. This commentary presents the opinions of the author.

About the Author

Robert Lyman is an Ottawa energy policy consultant and former public servant of 27 years, a diplomat for 10 years prior to that. His complete biography can be read here.

The Report of the Public Inquiry into Anti-Alberta Energy Campaigns, led by Commissioner Steve Allan, was issued in October, 2021, about five months ago. Enough time has passed to allow at least an interim assessment of the conclusions of the report and of its recommendations.

The terms of reference for the inquiry were clearly influenced by the public controversy resulting from the research done by Vivian Krause. That research demonstrated that foreign foundations, based mostly in the United States, had collaborated in funding the work of several environmental organizations in Canada that were working to reduce investment in the Alberta oil industry, with the ultimate goal of halting all future oil sands development. The terms of reference included the instruction that the Commissioner inquire into:

• Anti-Alberta energy campaigns that are supported, in whole or in part, by foreign organizations.
• Whether any foreign organization that has evinced an intent harmful or injurious to the oil and gas industry has provided financial assistance to a Canadian organization that has disseminated mis-leading or false information about the Alberta oil and gas industry.
• Whether any Canadian organization that has evinced this harmful or injurious intent has also received grants or other discretionary funding from the government of Alberta or from other governments in Canada.
• Whether any Canadian organization that has evinced this harmful or injurious intent has a charitable status in Canada.

The terms of reference also instructed the Commissioner to make findings and recommendations to achieve the following:

• Make Albertans generally aware of whether foreign funds are being provided to harm the Alberta oil and gas industry or disseminate false or misleading information about it.
• Enable the Government of Alberta to respond effectively to anti-Alberta energy campaigns.
• Recommend to the Government of Alberta additional eligibility criteria that should be considered when issuing government grants.
• Recommend to the government of Alberta and other governments in Canada the interpretation of existing eligibility criteria or the creation of new eligibility criteria for attaining or maintaining charity status.

The key findings of the Commissioner, as stated in the summary published by the Province, were as follows:

• “After years of targeting oil and gas infrastructure projects and the financial and insurance companies which backed them, beginning in 2012, proponents claim these campaigns have achieved more that 1,000 divestments, representing $8 trillion; this includes seven campaigns specifically targeting divestment in the Alberta oil sands;
• There are large amounts of foreign funding flowing into Canada, which has the potential to influence matters of public interest to Albertans and Canadians.
• Total foreign funding of “Canadian-based” environmental initiatives was $1.28 billion between 2003 and 2019. These figures are likely significantly understated. This includes:
o $925 million in foreign funding reported by Canadian charities for “environmental initiatives”
o $325 million in foreign funding of “Canadian-based” environmental initiatives, such as anti-pipeline campaigns, that remained in the U.S.
o Of this funding, $54.1 million in funding that was provided through grants that were described as representing “anti-Alberta resource development activity”. This total is expected to be significantly underrepresented.”

The report included some important observations by the Commissioner. For example, it noted that there were important limitations on the inquiry’s ability to research the quantum of foreign funding to anti-Alberta energy campaigns, as this “was not the purpose of the inquiry and was beyond its limited resources”. The inquiry was “unable to determine whether any government funding went to fund anti-Alberta energy campaigns”. Most important, the Commissioner stated that “in no way does participation in an anti-Alberta energy campaign indicate that an organization has acted in a manner that is illegal, improper, or otherwise impugnable, nor does it mean that the organization is ‘against Alberta” in some manner”.

The report included five recommendations, only one of which bore directly on its mandate. The first recommendation was that (someone) “develop standards for not-for-profit organizations and public institutions that provide a level of consistency and a more level playing field with the corporate sector, in terms of transparency, accountability and governance”. One can only presume that this recommendation was directed towards the federal government which, through the Canada Revenue Agency’s administration of the provisions of the Income Tax Act that govern charities, has the authority to impose such standards. The other four recommendations concerned ways for the Alberta government and the energy industry to improve their relations with stakeholders and their image, including (bizarrely) one recommendation to better measure greenhouse gas emissions.

Commentary

The terms of reference for the Inquiry were cast very narrowly to focus on the role of foreign funding when it was clear from many other public reports at the time that much, if not most, of the funding for politically-active charities in Canada, in the environmental and other spheres, was from governments. One can only speculate on why this was so, but it appears to have been inspired by campaigns in the United States that claimed that foreign influences, largely from Russia and perhaps China, were having an inordinate impact on US politics and policy. In the event, the Alberta government seems not to have understood at the outset the magnitude of the funding available to environmental charities (ENGOs), or the extraordinarily complex network of interaction and strategic cooperation among them.

The commissioner interpreted the terms of reference as requiring him to inquire into the fact of foreign finding but not its quantum. This is a puzzling omission, as the quantum of both the funding and the impacts of the funding would seem to have been important to understanding its consequences. As a result, the Commissioner was essentially left dependent for information about funding levels on the statements of the ENGOs and the supplementary research performed by Deloitte Forensic Inc. One of the most useful contributions of the Deloitte report was its cataloguing of the long list of activities funded by the anti-Alberta energy campaign. However, with no authority to compel witnesses and without the finances to delve deeper into the magnitude and effects of the ENGOs’ efforts, the Commission was left with the broad conclusion that the figures it used were significant under-estimates. Yet, the report did not recommend any additional investigations to get at the truth.

The Commissioner’s observation that participation in the Anti-Alberta energy campaign was not “illegal, improper or otherwise impugnable” offered a “get out of jail free card” for the ENGOs and their associates in the “envirolegal” organizations. To be sure, there is no law in Canada against free speech or political activity. However, the ENGOs and their domestic and foreign funders sought to take credit for divestment of projects that would not just deprive Alberta of trillions of dollars in economic development spending and related spinoffs. It would constitute an immense body-blow to the province’s opportunity for resource-based prosperity for decades to come, and significantly reduce the incomes of generations of Albertans. By what strange standard can this not be considered improper and impugnable? It does not matter that most of the harm being done to Alberta’s economic development prospects arises from national climate policy, not solely the efforts of the ENGOs. The aid and assistance that the ENGOs give to anti-Alberta energy campaigns is substantive and harmful, or it would not have been funded. By implying this is acceptable, the Commissioner implicitly accepted the premises of climate campaigners that ending oil sands development is desirable, indeed that it is needed to reduce global GHG emissions and alter climate trends. This thesis has been soundly refuted many times.

The ENGOs seized upon the Commissioner’s observation in their post-inquiry public communications. They successfully influenced the media to make the legality of ENGOs’ opposition to Alberta energy development the central focus of the follow-up public commentary, ignoring the far more important findings about the coordination and funding of the ENGOs. They endeavored to portray the $54 million in funding of anti-Alberta energy as of minor importance. No one in the media pointed out that the foreign funding of anti-Alberta energy from 2003 to 2019 exceeded the total funding of the Conservative Party of Alberta over the 2000 to 2020 period, which was $51 million. Foreign funding of anti-Alberta energy over that period also exceeds to the $44.2 million received by the federal Green Party. It further exceeds by orders of magnitude the funding received by market-oriented organizations that support resource development.

The Alberta media also fell into the ENGO trap of criticizing the $3.5 million spent on the inquiry as “wasted money”. If anything, that was a pitifully small amount of money to spend investigating the activities of a coalition whose declared objective is the defunding of Alberta’s (and one of Canada’s) most important resource industries, an industry that yearly averages over $10 billion in tax and royalty revenues to governments. The national media similarly ignored most of the findings of the inquiry and of the damning Deloitte report, treating the issue as though it were a minor disagreement in Alberta over freedom of speech instead of an serious and long overdue investigation into a threat to Canada’s economy and appeal as an investment destination.

What about the Commission’s recommendation that the federal government develop standards that will increase the transparency, accountability and governance of not-for-profit organizations? Essentially, nothing has been done. In a recent article (Canadian Charities Need more Oversight, March 2022), I referred to a report by Blumberg Canadian Charity Law that the number of annual audits of charities in Canada fell from an average of 800 per year (out of 86,000) to about 200 per year under the Trudeau government. In a subsequent report dated March 31, 2022, Mark Blumberg listed the 524 charities that had actually had their status revoked for non-compliance over the last 30 years. Only four were environmental ENGOs. On the subject of guidance by CRA to encourage compliance, Blumberg noted:

“Unfortunately, the CRA has not provided the fulsome guidance that one might expect from a regulator on many topics. There are guidance’s such as religion and environment that are being held by the Minister. There are many important areas such as internal controls and administrative costs that are not prioritized… Unfortunately, when it comes to charities in Canada there is a tremendous lack of transparency and therefore often one feels like even obtaining the most basic information is like a dentist pulling teeth. Many Canadians are not going to become investigative journalists in order to find basic information about charities and they are simply going to write off the Canadian charity sector. This is unfortunate but as we have seen recently there has been a huge decline in public trust in charities and their leadership. Something definitely needs to be done about this and it doesn’t appear to me that the umbrella organizations in the charity sector are particularly interested in the topic. On the contrary, some of them seem to be very eager to push for further de-regulation of charities and less transparency.”

In other words, it is highly unlikely that anything will come out of the Allan Commission’s most important recommendation.

Conclusion

The Allan Inquiry was set up to “follow the money” but it was not given the breadth of mandate, legal authority or funds to do so. Notwithstanding the observations of the Commissioner in his report, it was not appointed to examine whether the law has been broken and it certainly was not qualified to judge whether Alberta’s best interests are served by developing its most important resource opportunity or by tolerating the misinformed beliefs of climate campaigners. As matters now stand, the ENGOs will continue unabated and unconstrained by CRA regulation their attacks on the Alberta energy industry. Perhaps it is time for Alberta to establish a new inquiry to finish the work that the last one started but failed to complete.

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