Varcoe: Draconian law or overreaction? Federal, provincial energy ministers spar over truth in advertising rules

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Canada’s natural resources minister says it was an “unfortunate overreaction” by oil and gas producers to remove information from their websites in the wake of new federal legislation overseeing advertising and climate claims — but his Alberta counterpart disagrees.

However, Jonathan Wilkinson doesn’t believe that Bill C-59, which includes changes that require companies to back up environmental claims, is targeting the country’s oil and gas industry.

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After the bill was passed late last month, groups such as the Pathways Alliance and the Canadian Association of Petroleum Producers (CAPP) pulled some information from their websites, citing uncertainties in the new legislation.

“It was an overreaction. And I think it was an unfortunate overreaction because I think the message that it sent to folks, to the average citizen, was that what they had on their website was not something that they could stand behind,” the federal minister said in an interview Tuesday evening.

“And for those who say that somehow the oil and gas industry is being picked on, that’s just not true.

“The pharmaceutical industry, for example, has exactly the same requirement, which is you’ve got to have some basis on which to actually justify the claims that you make. That’s just a reasonable thing.”

But Alberta Energy Minister Brian Jean maintains the bill is bad legislation that panders to anti-oil and gas views within the federal Liberals and NDP. It is intended to stifle public debate — and the industry’s reaction was appropriate due to the vagueness of the new rules, he said.

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“I don’t think there’s an overreaction. I think it’s, frankly, a bit of fear and uncertainty (to) the federal government in how they’re going to actually enforce it,” Jean said Wednesday, the first day of meetings between federal and provincial energy and mining ministers in Calgary.

“It’s draconian.”

The issue has erupted into another full-scale donnybrook between the federal Liberal government on one side, and the Alberta government and energy industry on the other. It follows other high-profile battles, including the Trudeau government’s plans to introduce a cap on oil and gas sector emissions.

Bill C-59, which also contained the long-awaited federal investment tax credit for carbon capture, utilization and storage (CCUS) projects, included a provision surrounding changes to the Competition Act.

It says companies can’t represent the benefits of their business activity for protecting “or mitigating the environmental and ecological causes or effects of climate change that is not based on adequate and proper substantiation, in accordance with internationally recognized methodology.”

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And the proof of burden lies with the companies making the claims.

After it was passed, some industry groups removed information from their websites while criticizing the ambiguity around what constitutes internationally recognized methodology.

Pathways Alliance, a group of six oilsands operators who’ve agreed to work collaboratively to reach net-zero emissions by 2050, said the changes could subject it to significant financial penalties given the lack of clarity — but stressed it remains committed to taking environmental action.

“Creating a public disclosure standard that is so vague as to lack meaning and that relies on undefined ‘internationally recognized methodology’ opens the door for frivolous litigation,” said a joint statement from Pathways members, including the CEOs of Suncor Energy, Cenovus Energy and Imperial Oil.

The province and other business groups also lambasted the amendment, saying it will prevent companies from discussing action they’re planning to lower greenhouse gas emissions.

Environmental groups say it will simply ensure companies only make claims that they can back up.

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“Who is afraid of truth in advertising?” said Keith Stewart of Greenpeace Canada.

Many energy companies have adopted targets to reach net-zero emissions and have touted their efforts. Pathways Alliance has yet to give the green light to its proposed CCUS network planned for Alberta, but have filed initial regulatory applications for the project’s CO2 pipeline.

Wilkinson, who is in Calgary for the federal-provincial meetings this week, said he understands why Pathways Alliance wanted more clarity about the new rules.

“It’s totally legitimate for Pathways to say we want to ensure that we understand the guidance in terms of what the methodology is going to be,” Wilkinson said.

“They should have just waited for the Competition Bureau to give them the methodology. I think everybody would have been fine, in terms of people waiting until they understood how this was going to work . . . Simply pulling it all down, I actually think was counterproductive for them.”

However, is it reasonable for companies to roll the dice on uncertain legislation and evolving rules that could invite complaints without companies fully understanding what the Competition Bureau would assess?

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“It’s just too high a risk, given the lack of clarity,” Tristan Goodman, head of the Explorers and Producers Association of Canada, said Wednesday.

Margot Patterson, a lawyer at Dentons, noted it was always possible to make complaints to the Competition Bureau around environmental claims, but the new provision specifically targets greenwashing.

“Businesses will now know this is a clear enforcement priority for the bureau and they will need to take a hard look at what the new provisions are so that they can make a risk assessment,” said Patterson.

“The internationally recognized methodology may differ from field to field, and it does leave the door open to a lot of questions about what exactly would be acceptable.”

Jean said he’s still concerned about the bill.

“Just about anybody can challenge these companies for what they say and you can find an expert somewhere to, frankly, oppose just about any type of advertising on the energy sector,” he added.

“So I think it’s not an outrageous reaction at all.”

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com

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