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Federal Election 2011

Bruce Carson Scandal Greased by Harper's Oil Sands Agenda

Taxpayer millions set up PM advisor to push petro interests from U of Calgary. A special Tyee investigation.

Andrew Nikiforuk 27 Apr

Andrew Nikiforuk's "Energy and Equity" column runs (at least) once a week on The Tyee. Read his previous pieces for The Tyee here.

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Harper and Carson: Convicted fraudster carried big files for PM.

[Editor's note: On Nov. 17, 2015, Bruce Carson was found not guilty of the charge of influence peddling in relation to his attempts to promote the sale of H20 Pros' water purification systems. The charges related to EPIC and the University of Calgary are still making their way through the legal system.]

Everyone loves a good political scandal and the Bruce Carson affair squarely fits the bill.

A 66-year-old former senior policy advisor to Prime Minister Stephen Harper seemingly lobbies the government on behalf of his 22-year fiancée, a former sex worker.

She dresses in sexy lingerie. Newspapers publish lurid photos.

Ottawa talks, yet its busy gossipers recognize Carson as your average political fixer with an active sex life and a couple of criminal convictions.

Everyone that is, except the Prime Minister. Harper, a tough guy on crime, acts appalled and abruptly refers the whole matter to the RCMP.

The scandal seemingly ends.

But that's not the full truth, let alone the real scandal.

In fact, the Bruce Carson affair is a much darker tale about the character of the Harper government and its abuse of the public trust.

And it goes like this: Harper's key political troubleshooter and problem fixer gets lobbied for money for a new university think tank.

He then leaves the Prime Minister's Office and becomes executive director of that same think tank: the Canada School of Energy and the Environment.

It's mostly funded by a $15-million grant from the Harper government.

The former senior advisor alters the school's mandate to permit government lobbying and policy development on the oil sands.

He then lobbies for more federal money, $25 million, and gets it.

He also works for several of his former associates (three cabinet ministers) and directs a joint industry and government campaign to improve the image of the oil sands industry.

With taxpayer dollars he openly runs a partisan Tory energy think tank. He even gives partisan Tory speeches to Tory audiences.

In the end, the school becomes a clearinghouse for industrial energy lobbyists working hand in hand with the federal and Alberta Tory government.

In sum, the PMO's senior advisor appears to have never surrendered his previous political files or his role as a Harper's troubleshooter.

And then the Aboriginal People's Television Network (APTN) runs a sexy story about Carson's fiancée and polluted water and influence peddling (see sidebar).

*But big ethical questions about Harper's role in the larger scandal remain unanswered, including these:

To what degree was Harper or members of his office involved in setting up Carson with a comfortable university job entirely funded by taxpayers' dollars?

Why did the Harper government not begin a conflict-of-interest investigation two years ago when his close friend lobbied the government for more money?

And why was a former government staffer allowed to take advantage of his former high profile position and freely mix and mingle with government officials and cabinet ministers within a year of his leaving office and before "the cooling off" period had ended?

Today The Tyee learned that the conflict of interest and ethics commissioner, Mary Dawson, has commenced an investigation of Carson under the Conflict of Interest Act. In addition to an RCMP investigation, that makes three separate federal inquiries on the activities of Harper's former advisor and confidant. The latest one focuses on matters revealed in this story -- the highly questionable way Carson came to head the Canada School of Energy and the Environment and how he apparently violated ethics rules by actively working with government officials during a so-called "cooling off period."

While various aspects of Carson's dealings have emerged over past weeks in bits and pieces, this in-depth report includes fresh information and perspectives. What surfaces is a tale of industry and government duplicity, conflict of interest, arrogance, breach of public trust, and systemic ethical lapses in the Conservative government.

Carson, concludes Duff Conacher, director of Democracy Watch, is a figure of rich, if oil black, irony. "He exploited the whole political cronyism system that Harper originally attacked and disparaged before forming a government."

A mechanic on campus

Carson, a disbarred lawyer who looks like a pugilist, often described himself as "mechanic," a political fixer who got things done in the messy corridors of power.

As senior policy advisor to Primer Minister Stephen Harper, he oversaw the government's most difficult and contentious files, including climate change, the oil sands and the war in Afghanistan. Associates alternately describe the well-known political fixer as charismatic, paranoid and competent.

"Carson really had the skills of an old political boss. He was the guy who made things happen under the radar and the guy who knows everything," says a former university associate.

According to annual reports for the Canada School of Energy and Environment (CSEE) and Carson's own speeches (many of which have disappeared from the web), the federal government conveniently set aside $15 million for a university think tank dedicated to smart energy research in 2007. It did so after then University of Calgary president Harvey Weingarten and climate change scientist David Keith pitched the idea for an innovative energy think tank directly to Harper's senior policy advisor -- Bruce Carson. (At the time, Carson had been seconded from the PMO to Environment Canada to help put out political fires started by then environment minister Rona Ambrose, a climate change skeptic.)

"Harvey and I went to Ottawa to lobby for the CSEE funding, and you can guess who the key guy to talk to was. It's hard to escape the conclusion that Carson was building himself a soft landing from government," Keith told The Tyee.

A year later, Carson left the Prime Minister's Office. After allegedly conducting an international recruitment search, the University of Calgary appointed Carson as executive director of the school in August 2008. Months later he took two separate leaves of absence to help with the federal election campaign and another to work in the PMO during the so-called prorogation crisis in 2009.

Yet Carson's appointment seemed odd. He was a constitutional expert with no academic credentials in energy or the environment. But he did, however, have a checkered legal career and lengthy criminal record including five convictions in total. When the Calgary Herald asked questions about Carson's criminal record in 2008, a University of Calgary spokesperson refused to talk about "second or third hand information."

The record is unequivocal. In the 1980s, the Law Society of Upper Canada disbarred Carson for defrauding clients for tens of thousands of dollars. And in 1990, Carson pleaded guilty to defrauding Budget Car and Truck Rental as well as the Bank of Montreal and Toronto Dominion Bank of thousands of dollars. The crimes appear related to extravagant living and later, a messy divorce.

Prime Minister Stephen Harper, who dropped his good friend and political confidant faster than a hot potato earlier this year, says he knew about the first set of criminal charges but not the later. But everyone else in Ottawa knew differently: Carson was no shrinking violet.

Changing the mandate

In any case, the fortuitous academic appointment pleased Carson. "It's just one of those opportunities that doesn't come along very often," Carson told the University of Calgary newspaper, On Campus. He said the primary goal was to make Canada and North America the go-to-place for "both the development of clean energy and the protection of the environment."

Carson also made it known that one of his jobs was to contest the dirty character of bitumen, an asphalt-like hydrocarbon that even industry calls an "extreme" and "difficult" resource. "One of the things that really upset me is the slag on the oil sands that it's the production of dirty oil."

The school was a largely an unabashed partisan Tory operation from the get-go. Carson's deputy director, Zoe Addington, previously served two cabinet ministers that Carson dealt with on a regular basis: Tony Clement and Jim Prentice.

Brian Heidecker, the former vice president of the Alberta Progressive Conservative Party, also chaired the school's board of directors, which included the presidents of the University of Alberta, University of Calgary and University of Lethbridge.

"We don't know how much of Carson's appointment to the school was pre-arranged or whether it was a payment for services rendered as advisor to the PMO," says Conacher of Democracy Watch.

Carson even posted partisan speeches on the school's website. One March 2010 talk to the Tory-friendly Manning Centre admonished Conservatives to keep "faith in leader" and to "Be careful when responding to criticism or bad stories -- will a response kill it, will a response prolong it."

But associates and a variety of sources now charge that what was supposed to be "a centre of excellence for Canada research, policy and advice" became a front for industry lobbying and government propaganda at taxpayer's expense. Moreover the majority of the money for the school never went to energy research.

In fact, one of Carson's first decisions as executive director was to completely change the school's mandate to include working with government on "sound legislation, informed policy, appropriate regulations and public understanding."

The school's 2010 report even states that under Carson's leadership, "the CSEE mandate was re-energized to include a crucial role in the elaboration of public policy on energy and environment as well as informing the climate change debate in Canada and internationally."

Yet the University of Calgary already had two think tanks devoted to public policy including the Imperial Oil funded School of Public Policy headed by Jack Mintz, an economist who sits on Imperial's board. (Carson was also cross-appointed to the Mintz school.)

The university also had the much older and well-respected Institute for Sustainability, Energy, Environment and Economy, a policy driven research think tank. ISEEE's website says it seeks to become "Canada's leading source of valuable insights and critical analysis on how to best transform North American's energy systems."

"The original mandate for CSEE was energy technology not policy," says David Keith, named a Time magazine hero of the environment in 2009 and an ISEE founder and member.

But with Carson at the helm, CSEE became the University's dominant centre for energy policy, and its goals increasingly became focused on shielding the industry from the "dirty oil" label.

Keith also says that Carson may have had some genuine interest in the environment but he really held "an industry driven point of view…. He was working for the PMO and here at the same time. It was pretty outrageous."

(In contrast to Carson's think tank, ISEEE published peer-reviewed studies calling for public transparency and full cost accounting on all oil sands pollution.)

Carson's "re-energized" vehicle didn't invest much in real energy research either. According to the school's corporate plan, only $6.5 million of Ottawa's $15 million for the program actually has been allotted for real research. "Useful work got done, but management was weak and the funding program unimaginative," explains Keith. "It did little to drive clean energy innovation across universities."

In fact, the majority of the federal grant ($9 million) has been slated for Carson's salary, operating expenses and multi-million dollar university site costs.

Lobbying former employers

After changing the school's mandate, Carson immediately resumed contact with the government of Stephen Harper by lobbying for funding for a Carbon Management Canada, a new nationwide research network that would develop "game-changing technologies" and "decarbonize" fossil fuels.

While a temporary employee of the PMO while on temporary unpaid leave from the school in January of 2009, Carson even sent an email to the Oil Sands Leadership Initiative headed by Cassie Doyle, then deputy minister for Natural Resources Canada, applying for funding for Carbon Management Canada on behalf of the Canada School of Energy.

Recent government documents released by Guy Giorno, then Harper's chief of staff, say that the Carson request was improperly dated and therefore no conflict existed. Giorno also says that Carson was carefully subject to something called a "Bruce Carson Conflict of Interest Screen," which effectively prevented Carson from breaking lobbying rules.

Conacher, however, says there is no such thing as an ethics screen under the Conflict of Interest Act. "I think what he (Carson) was doing was illegal." Gerard Kennedy, a Liberal MP and environment critic, has called for a full investigation: "Every Canadian knows this is a conflict of interest."

Shortly afterwards, the Tory politico eventually secured a total of $50 million in taxpayer dollars for the carbon group from Natural Resources Canada and the government of Alberta. Carson then chaired the group until the McPherson lobbying scandal broke.

Meanwhile Carson also worked on the same files that preoccupied the mechanic while serving as senior policy advisor to the prime minister.

In April 28, 2009, for example, Carson accompanied Environment Minister Jim Prentice at the first preparatory meeting of the Major Economies Forum (MEF) on Energy in Washington, D.C. The MEF is composed of the world's 16 worst greenhouse gas polluters. (Canada ranks in the top 10.) Carson was the only non-government employee there. He also attended later MEF meetings.

In fact, Carson showed up by Prentice's side routinely. "I'd arrange a meeting with Prentice and Bruce Carson would always be there," says a senior Carson associate who cannot be named. "I don't know in what capacity. But he was continually working for Prentice. Carson never left his previous role."

Towards the end of his so-called cooling off period, Carson's school also partnered with Natural Resources Canada and Minister Lisa Raitt to hold a roundtable on clean energy research and development in November 2009.

582px version of Bruce Carson with Jim Prentice
Environment Canada webpage shows Environment Minister Jim Prentice next to Bruce Carson at high-level meeting with U.S. Secretary of Energy Steven Chu in April of 2009, just eight months after Carson left government, despite required one-year "cooling off period."

Contrary to popular definitions of "clean energy," companies representing wind, solar and geothermal developments weren't invited to the roundtable. In fact, the Carson agenda was clearly dominated by oil-sand producers including Shell, Imperial, EnCana, Nexen and Enbridge as well as Canadian Association of Petroleum Producers.

The roundtable concluded that "the fossil fuel industry in Canada suffers from reputational challenges due to poor communication." And that "energy literacy among the Canadian public is very low." It also noted that: "Governments must create a policy environment that is supportive of R&D in fossil fuels." The school later hosted Christian Paradis, minister of natural resources, for a dinner to discuss "a national clean energy strategy for Canada."

'A blanket rule'

To recap, then, the Carson saga up to this point:

Under the guise of a non-profit education and research facility, Carson, Stephen Harper's former chief policy advisor, used millions of taxpayer dollars to actively champion fossil fuels as "clean energy," deflect criticism on the extreme carbon and environmental footprint of the oil sands, and advocate for an industry-designed "Pan Canadian energy policy."

At the same time, the manically busy Carson accompanied Environment Minister Jim Prentice on sensitive bilateral meetings and advised two natural resource ministers, including Lisa Raitt and current minister Christian Paradis, on so-called "clean energy" matters.

As the coach of a concerted industry and government oil-sands campaign, Carson also advised oil sands executives on how to clean up the industry's "dirty oil" brand.

But under the federal Conflict of Interest Act, a former government officials must undergo a one-year "cooling-off" period that strictly forbids them from communicating with their former political masters.

Although Bruce Carson was clearly required by the Conflict of Interest Act to inform ethics commissioner Mary Dawson that he had communicated and worked with three different cabinet ministers during his "cooling off" period, it's not clear he did so.

"The one year cooling off period is a blanket rule," says Conacher of Democracy Watch, a non-partisan watchdog that has doggedly criticized Liberal patronage scandals. "It appears that Carson wasn't careful enough and crossed the line as we can see from other aspects of his life. He exploited the whole political cronyism system that Harper originally attacked and disparaged before forming a government."

As noted at the top of this story, ethics commissioner Mary Dawson today let it be known that she has launched an investigation of Carson -- a probe begun by request of the Prime Minister's Office.

Ex-prostitute pal ran oil sands confabs

Towards the end of 2009, Carson organized a conference dedicated to another of his PMO responsibilities, the US/Canada Clean Energy Dialogue. He also attended the Copenhagen Climate Change Conference "in the capacity of Senior Advisor to the Deputy Minister of the Environment." The school's 2009 corporate plan also says that Carson coordinated "a team of special advisors" for the environment minister.

In April 2010, Carson's school sponsored a clean energy "dialogue" in Banff that according to participants was "largely a platform for Environment Minister Jim Prentice." Carson even admitted such: "I thought, if we could bring together the right group of people for a few days, we could help our federal Environment Minister, Honorable Jim Prentice put flesh on the bones" of a proposed US/Canada Clean Energy Dialogue that to date has made no real progress on reducing GHG emissions.

Many of these conferences, such as the three-day Banff meeting, were hosted by Barbara Lynn Khan, a former prostitute from North Carolina. After being convicted of running a bawdy house ("the Sugar Shack") and money laundering in the United States, Kahn, the 45-year-old native of Ontario was deported to Canada in 2005. She met Carson in Ottawa in 2006. But Banff attendees simply knew the well-dressed woman as "Kat."

"Kat ran the conference for us and for free. She was marvelous. That woman is super competent," said one associate.

Shortly afterwards, Carson's relationship with Barbara Lynn Kahn ended. He then hooked up with a former Ottawa sex worker, 22-year-old Michelle McPherson.

"I've got a new girlfriend. She's real young. She's 28." Carson told friends. She's really something, a real go-getter."

In 2010 Carson actively coordinated a joint industry and government lobbying effort to improve the oil sands environmental image then the subject of international environmental and First Nations' campaigns.

According to documents obtained by Mike De Souza at Postmedia News, Carson sat down with David Collyer, president of the Canadian Association of Petroleum Producers (CAPP) and the deputy minister of natural resources, Cassie J. Doyle (the same government official Carson lobbied for federal funding), as well as several Alberta deputy ministers at a March meeting of the "Alberta Government On Oil Sands Outreach and Communications." It was held at CAPP's headquarters. Alberta Environment Minister Rob Renner later joined the meeting.

The subject was a new industry strategy for oil sands executives on "upping their game" on the embattled project and its growing carbon and environmental liabilities. One deputy minister noted that "industry needs to pay now or pay later in other ways if the issue is not addressed."

Polishing the oil sands pitch

After the meeting, which concluded that industry and the federal and provincial governments should work together on CAPP's lobbying effort, the industry group contracted Carson's school to work on the Oil Sands Dialogues.

Carson then prepared a background paper (Engaging Canadians: National Oil Sands Dialogues) for the private discussions that were to be led by oil sands CEO's. The paper proposed to "expand Canada's international reach in energy trade" and recommended that the United States should resist attempts "to use US environmental regulations to block permitting of oil sands-related pipelines or refineries on climate grounds."

Incredibly, Carson's narrow paper makes no mention of some of the project's social, fiscal or national implications other than jobs. Carson, for example, doesn't address low royalty and tax rates, which even the US Council On Foreign Relations, a non-partisan think tank, noted in its 2009 oil sands report.

Carson also didn't flag the pace and scale of the project as an important issue either. Nor is there any mention of sovereign funds, $20-billion pollution liabilities, elevated cancer rates in Fort Chipewyan or documented pollution of the Athabasca River by peer-reviewed science journals.

Carson's report, a rewrite of industry propaganda, also didn't acknowledge the glaring need for socio-economic studies or cumulative impact assessments as strongly recommended by the Parliament of Canada in 2007. The Harper government has yet to honor these recommendations.

After penning the one-sided document, Carson moderated eight invitation-only "dialogues" for 160 influential attendees. Carson as well as one or two of oil sands industry CEOS such as Imperial's Bruce March or Enbridge's Patrick Daniel attended each session.

The carefully scripted affairs took place in Vancouver, Edmonton, Toronto, Ottawa, Montreal, New York City, Chicago and Washington, D.C. Not surprisingly, the sessions included several Alberta deputy ministers and representatives from Natural Resources Canada and Environment Canada.

"Bruce's attention got captured by CAPP," says one university associate. "Why was the university getting in bed with a consortium of oil companies? But that's where the school swung off too."

Another participant described the events as a PR scam. "They weren't trying to get a dialogue going. They were testing messages to sell to the public. They were large focus groups."

Carson was supposed to write a follow-up paper on the dialogues but the scandal intervened and his involvement ended. CAPP director David Collyer says the final paper was completely "a CAPP product."

Unlike Carson's efforts, the final CAPP paper recognizes the pace and scale of the project as legitimate concerns even among the dialogue's selected audiences. Added the report: "Most believe that future development should proceed only as long as it is carefully planned to achieve responsible environmental and social outcomes."

While hobnobbing with the nation's most powerful executives, Carson also jumped aboard another industry lobby group. In 2010 Carson served as vice chair to a new corporate initiative called the Energy Policy Institute of Canada (EPIC).

This business group seeks to write a new national energy plan but one designed by three dozen of the country's largest energy companies such as Shell, Suncor, Enbridge, EnCana, Imperial Oil, Cenovus, ConoccoPhillips and Canadian Natural Resources.

The institute's goals include ensuring "that energy and environmental imperatives go hand in hand"; advancing "the primacy of the Canada-United States energy relationship"; and designing regulations that "aid, rather than impede responsible energy development" or business as usual for the nation's most powerful corporations.

Ignoring the negatives

David Keith, a world-renowned climate change scientist at University of Calgary, regards EPIC's agenda as a smoke screen to bury national action on climate change. "We don't have an energy shortage in this country. What we need is a strategy that drives clean innovation in Canada's energy sector combined with a hard-nosed plan to cut carbon emissions."

Carson also joined the board of the Alberta government-funded Oil Sands Research and Information Network at the University of Alberta. However, the mechanic did not publicly highlight or disclose any of the group's damning findings on the oil sands.

One recent report on the project's huge lakes of mining waste (six billion barrels or enough to fill a 10-by-10 metre canal the breadth of the country) described the mining waste as an intractable problem "with no unique or acceptable solution yet in sight."

Another report highlighted the project's haphazard regulatory regimes. (Alberta and Ottawa's record of regulatory neglect has been pilloried now by six separate federal, scientific and provincial investigations.)

Even ORSIN warned in 2010 that the oil sands industry could lose its social license to operate if didn't seriously upgrade environmental monitoring: "improvements in the current monitoring and reporting system are urgently required."

Last January, the Alberta government, which invited Carson along on a lobbying delegation to Washington, D.C. in 2010, appointed Carson to Alberta's Provincial Environmental Monitoring Panel with the goal of creating a world class system. But Helen Ingram, a U.S. water scientist immediately resigned from the panel, due its lack of transparency. Carson has since been removed from the list.

'Carson was the hub'

Although the Harper government has said little about the scandal other than referring the matter to the RCMP, the whole affair has shaken up the oil patch and many Tory insiders.

Even if deemed legal by the country's ethics and lobby commissioners, Carson's partisan activities with public money constitute a breach of public trust and a misuse of public funds. The school's partisan character also represents an outright case of intellectual dishonesty for the three Alberta universities that sponsored and profited from the think tank.

Concludes ethics watchdog Conacher: "Carson was doing political work and the Harper government created a home for his activities outside of government but with government funds and it's all aimed at supporting an industry in ways that doesn't show how blatant the government support is."

"His mandate was to defend the oil sands," explains one Carson associate. "His school made a mockery of the lobbying rules."

As we've seen, while director of the Canada School for Energy and Environment, Carson either collaborated with or performed contracted work for the country's most powerful industrial lobbyists including the CAPP as well as the Energy Policy Institute of Canada (EPIC), a business lobby group advocating for a top-down national energy plan crafted by energy companies.

From his academic perch, Carson also insinuated himself into nearly a dozen industry, bilateral or Tory-linked organizations designed to improve the image of the oil sands or paint fictions about the country as "an evolving green energy superpower."

These groups included the Winnipeg Consensus (a collection of a dozen think-tanks), the Oil Sands Research and Information Network (OSRIN), the Federal Provincial Oil and Gas Industry Working Group, and Alberta's Oil Sands Monitoring Panel. He also got federal funding for, and chaired, Carbon Management Canada in order to develop "game changing technologies" to clean up the country's increasing bitumen exports.

"Carson was the hub of everything related to energy strategy in this country," says one senior Carson associate. "But it was never clear where a Carson pet project ended and where a Tory strategy development think tank began. The lack of integrity was sickening."

Another Carson associate, who characterized the political operative as a hardened industry supporter with a furious temper, says his obfuscating work on behalf of industry and government has seriously forestalled any real debate on critical energy issues.

"At the policy level he was a thug, and at a personal level we now know that he was a thief," a university associate told The Tyee. "It says a lot about how the PMO treats energy and climate issues. As a result we have not had an honest debate about the real energy issues in this country."

New Democratic MP and environment critic, Linda Duncan, a highly respected environmental lawyer, says that Carson's political hijinks have seriously damaged the nation's reputation.

"Harper attacked the Liberals saying they were corrupt and that he would run an open and transparent government but Harper's done the opposite. He employs a convicted fraudster in his inner circle and then gives the man $15 million in public funds. Is this the real face of the Harper government?"

The political web weaved by the former Harper advisor sheds a disturbing light not just on Tory political cronyism but the apparent abuse of the neutrality and charity status of three prominent universities: the University of Alberta, University of Calgary and University of Lethbridge.

"In my opinion Carson was set up as a front man using the stamp of the legitimacy of a think tank, but he was a front man for an extensive industrial lobbying effort," concludes Conacher of Democracy Watch. "It's corporate cronyism disguised as policy development."

Rick Hyndman, a registered lobbyist with the Canadian Association of Petroleum Producers, has now replaced Carson as the Canada School's interim director.

Certainly Canadians never got value for their money when it was Carson's school. "It was originally designed to explore questions about what sustainable energy systems look like, and a sustainable system, by definition, looks beyond extraction at social issues," says Michel Moore, an energy expert at the ISEEE school at the University of Calgary and a former chief economist at the U.S. National Renewable Laboratory in Golden Colorado. "That mission was never accomplished."

Adds Gerard Kennedy, the Liberal Party environmental critic and Ontario MP: "Carson was given a sinecure where he exercised a lot of influence and was in a position of significant conflict of interest. He was clearly working for industry. The real question is what did Canadian taxpayers get from their dollars?

The answer, say critics, is one imposing political scandal, and an open window on the Harper government.

*Story updated at 1:20 p.m. on April 28, 2011.  [Tyee]

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