Opinion

Canada's Real Problem with Intrusive Foreign Interests

With key Harperites so tied to US conservative institutions, who's in control of our vast natural wealth?

By Mitchell Anderson 24 Feb 2014 | TheTyee.ca

Mitchell Anderson is a freelance writer based in Vancouver and a frequent contributor to The Tyee. Find his previous Tyee stories here.

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Former US President George Bush at a 2007 meeting with the American Enterprise Institute. AEI was a training ground for the top Harper adviser who took time out to found Ethical Oil.

How much is Canada worth? About $33 trillion according to one recent reckoning, based only on our oil and timber resources. Those two commodities alone make Canada the fourth richest country on Earth, and number two on a per capita basis -- just behind Saudi Arabia. Divided between 35 million Canadians, every one of us is close to being a millionaire. Like the TV commercial says, you're richer than you think.

That $33 trillion does not include any of Canada's natural gas, wheat, fish, gold, potash or diamonds. Yet according to some bean counters, Alberta's oil sands and conventional oil reserves are worth more than all other Canadian resources put together -- a staggering $21 trillion.

That's serious money, and perhaps helps explain why sleepy and polite Canada has become home to some world-class hardball politics. We're playing with the big boys now -- or they are playing with us?

Canadians are being told that powerful outside interests are manipulating our public debate around oil sands development. Seven major environmental organizations are now under investigation by the Canada Revenue Agency (CRA) for political activities beyond what are allowed as charitable organizations.

Apparently CRA is responding to complaints filed by a group called Ethical Oil. However, Ethical Oil is no run of the mill non-profit. According to their website, it was started by a former staffer in the Harper Government named Alykhan Velshi, who formerly worked for the American Enterprise Institute (AEI).

Less than a year later, Velshi returned from his brief break in the non-profit sector and is currently director of issues management in the PMO.

It's not the Canadian Enterprise Institute

The AEI is one of the most powerful and influential conservative think-tanks in the U.S. They have a remarkable record of seeing their alumni hired into positions of public influence stating, "many AEI scholars and fellows are or have been directly engaged in practical politics and policymaking as government officials, advisers or members of official commissions."

They have also been accused of some rather unethical behavior. In 2008, AEI offered $10,000 to scientists and economists who would author studies critical of the UN Intergovernmental Panel on Climate Change (IPCC). The letter from the AEI to scientists accused the IPCC of being "resistant to reasonable criticism and dissent and prone to summary conclusions that are poorly supported by the analytical work."

Many leading climate scientists were outraged by the offer. David Viner of the Climatic Research Unit at the University of East Anglia fumed "It's a desperate attempt by an organization who wants to distort science for their own political aims."

Why would the AEI care about fossil fuels? The organization has reportedly received $1.6 million in funding from ExxonMobil and Former ExxonMobil CEO Lee Raymond sat on their board of trustees. David Koch is currently co-chair of the AEI National Council. Greenpeace alleges that the Koch brothers have contributed more than $67 million to climate denying organizations since 1997.

With a staff of 185 and a budget of $44 million, the AEI dwarfs any Canadian environmental organization. They also boast a formidable media machine. Last year AEI spokespeople gave 2,739 interviews on broadcast media and published 66 opinion pieces in the New York Times, Washington Post and Wall Street Journal.

Outsiders with their own agendas

Having a former staffer of the AEI holding a senior position in the Canadian Prime Minister's office raises some interesting questions. The policy positions of the Harper Government seem to bear a closer resemblance to those articulated by AEI spokespeople than to those held by the elected leader of our largest trading partner -- including skepticism on climate science, unconditional support for Israel, and hostility towards bargaining with Iran.

Other questions arise from the odd origins of Ethical Oil. A spontaneous grassroots effort? Hardly. The two founding directors of the Ethical Oil Foundation were Thomas Ross, a senior partner at an Alberta law firm specializing in oil sands issues, and Ezra Levant -- formerly an intern at two charitable right wing think-tanks -- the Fraser Institute and the Charles Koch Foundation.

So where does Ethical Oil get their funding? In a painful display of obfuscation, Ethical Oil spokesperson Kathryn Marshall squirmed to avoid answering this simple question during a CBC interview. They have since clarified that in the unlikely event that a Canadian corporation did offer them money they wouldn't turn it down.

To recap, Ethical Oil was started three short years ago by individuals previously employed by U.S.-based right-wing think-tanks.

The seven environmental organizations currently being reviewed by CRA, by contrast, collectively have over 250 years of history operating in this country.

Their targeting seems to be supported by our federal government, which allocated $8 million in the 2012 budget for CRA to investigate "concerns... raised that some charities may not be respecting the rules regarding political activities" and "the extent to which they may be funded by foreign sources."

Prime Minister Harper specifically alleges that U.S. interests are funding Canadian environmental groups to block the Enbridge Northern Gateway pipeline. Former environment minister Peter Kent claimed that American foundations were engaged in "money laundering" to fund Canadian environmental groups.

With trillions of dollars on the table, it is little wonder that Canada is starting to see organizations like Ethical Oil that have been characterized as American-style astroturf efforts.

The difference is the blurry line between Ethical Oil, the PMO and the enforcement powers of the state. This is astroturf with roots that intertwine with the highest echelons of government.

Other people's polite patsies

Would this politicization of the tax enforcer's priorities be acceptable in the U.S? Not a chance. When the Obama administration was accused in 2011 of directing the Internal Revenue Service (IRS) to target charities associated with the Tea Party, the attorney general directed the FBI to conduct a special criminal investigation. There were two congressional committees looking into the allegations, an audit by the treasury inspector general and a public statement of outrage from the president. Three senior IRS officials were forced to resign.

While the FBI found no evidence of criminal wrongdoing, the American public remained enflamed. Public opinion polls showed that three quarters of American voters and almost two thirds of Democrats wanted a special prosecutor appointed to further dig into the possibility that the IRS was being used for political purposes.

Where is our outrage? Or even symmetry? No one is suggesting that the privilege of charitable status be misused, or that potential abuses be ignored by regulators. Yet while many environmental charities in Canada have endured annual audits from the CRA even before the public jihad launched by the Harper Government, how many times has the CRA scrutinized the books of the Fraser Institute, itself a registered charity?

While the PMO and their erstwhile employees in Ethical Oil bray about foreign funded interests manipulating our public process, where does our largest right-wing think-tank get their funding? The Fraser Institute is famously circumspect about their donors, however they have reportedly enjoyed $625,500 in support from the Charles G. Koch Foundation, $120,000 from ExxonMobil and $4.3 million in foreign funding between 2000 and 2012.

How does an organization that seems 100 per cent political skirt the same restrictions now being used to attack charitable environmental groups? Apparently their staff and spokespeople exist in a quantum state.

When bragging about their reach to their supporters, the Fraser Institute appears proud to claim credit for their remarkable media profile. But when referring to their "Purpose, Funding and Independence," we are expected to believe that "the opinions expressed by staff or author(s) are those of the individuals themselves, and should not be interpreted to reflect those of the institute, its board of trustees, or its donors and supporters."

Canada's wealth siphoned by foreign interests

Ultimately the rhetoric about environmental funding or even the political process in this country may be little more than a tactical distraction as far as some global interests are concerned. What really matters is that $21 trillion in Canadian petro resources and who gets to keep it. By that yardstick Canada is doing very poorly. Over 70 per cent of our oil and gas production is foreign owned and the majority of operating profits go to interests outside Canada -- almost double the national average for the rest of our economy.

This is about to get worse if some powerful forces get their way. Canada keeps only 35 per cent of the resource value when we ship raw bitumen -- something that is ironically being sold as an economic imperative. According to Alberta's own analysis, constructing jobs destroying pipelines like Northern Gateway would collapse our domestic upgrading to as little as 23 per cent. Who might benefit from that?

We are the only country in the top 10 oil producing nations (with the exception of the U.S.) that lacks a state-owned oil company. Alberta with all its oil wealth is almost $8 billion in debt and remains culturally hostile to the very concept of taxation. Why? Perhaps because of decades of concerted effort from organizations like the Fraser Institute and their formidable funders. Their influence and access to power in Canada has never been greater.

As long as we are cleverly diverted from talking about Canada's vast wealth and who gets to keep it, we will remain the second richest country in the world that for some reason cannot afford postal delivery.  [Tyee]

Read more: Energy, Federal Politics

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