This post covers two stories that do not intersect in subject. Yet they are similar in each being a tale of overreach that may have positive unintended consequences for those of us searching for silver linings wherever we can find them.
Let’s first discuss a small slice from a giant blob of legislation passed into law on June 20 with a chilling effect on our oil & gas industry.
In February’s post Decline of NDP into Self-Parody – I wrote of Charlie Angus’ farcical private members bill to make fossil fuels advertising illegal in Canada. The proposed bill set out how advertising by Canadian producers, retailers or individuals would be met with penalties including up to two years in jail and millions of dollars in fines, and I promised to update if it went anywhere.
Well it partly did, but the wolf got a new sheepskin coat.
In May a portion of that anti-fossil fuels legislation was slipped, last minute, into the giant omnibus Bill C-59, a catch basket of legislation driven by the Fall Economic Statement and March budget with other bits tucked in. It maintained the part of Angus’ bill that threatens the oil and gas industry for defending their record on the environment.
The relevant portion of Bill C-59 amends the Competition Act and while it does not name the oil & gas industry specifically, it speaks directly to them. The handful of key paragraphs amidst this 546-page behemoth (the better to hide from you, my dear) are targeted at protection against what is popularly called greenwashing.
The language is laid wide to interpretation while putting the legal onus completely on any company wishing to promote their environmental creds, threatening against, “representation to the public with respect to the benefits of a business or business activity for protecting or restoring the environment 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, the proof of which lies on the person making the representation.”
Please allow me to translate that into simpler language for you. It means anything a company says positively about their past record or future plans regarding environmental or climate matters will be subject to the following…
Prove it.
But you can’t really prove it because we don’t define clear standards by which to prove it, even though we use the term “internationally recognized methodology” which we kinda made up and is nowhere defined in the Act.
And even if you do prove it, you won’t really know what “causes or effects of climate change” means as this remains amorphous.
And even if you could figure that out, you have no benchmark by which to know the Competition Tribunal won’t still smack you down for not providing “adequate and proper substantiation”.
In other words, don’t even try telling us you are anything except evil for the environment and causing the earth to burn in a fiery cataclysm.
Gotcha!
If you get caught out on this impossible maze (including through a new mechanism called Private Rights of Action, which is a fancy way of allowing activists to tattle to the Competition Tribunal on anything threatening their sensibilities), you are subject to juicy new penalties. An administrative monetary penalty (AMP) can be assessed against a corporation for up to $10 million for the first offence and $15 million dollars for any subsequent offense, and 3% of the corporation's annual worldwide gross revenues.
It’s all a bit absurd.
If you can find a handful of global jurisdictions behaving more environmentally rigorously than Canada, please let me know. Our fossil fuels companies have been responsibly engaged partners in environmental mitigation, cleanup and forward planning. Relative to carbon this includes emissions reduction projects along with plans and investment into carbon capture and storage, considered a key tool in managing carbon output - though I won’t say more as I can’t afford a $10 million fine.
Gagging the companies from making statements about what they’re doing or how they are having a positive impact is likely to dissuade them from future investment and actions beyond the bare minimum. Bill C-59 effectively prevents them from leveraging their environmental credentials to bolster their brand, something critical for every business in these days of sanctified ESG (Environmental, Social and Governance).
This moves in completely the wrong direction with regard to tone and the need for cooperation between industry and environmental protection groups. And it all seems terribly counterproductive if the intended goal is truly environmental health and biodiversity as opposed to the seeming and virtue signaling of it all.
It also means all slings and arrows thrown at the fossil fuels industry no matter their inaccuracy or lack of context will be allowed to land - because they can’t defend against them. Just sit there and get punched repeatedly in the face for delivering a product that remains fundamental to humanity’s material existence and will be so for generations to come, while effectively under a gag order to not promote their related environmentalism. All stick and no carrot.
But maybe there’s a silver lining here - that it will inadvertently help break the constricting ESG pall that sits over industry and eats too many resources for measuring, reporting and communicating metrics that have little impact on productivity. Canada’s oil & gas industry has, in effect, been given a temporary get-out-of-jail-free card as they’ve suspended all environmental communication (though they continue compliance) for fear they may say something offside. And we’ll soon see how much the public and investors notice or care. Over the past years if you didn’t shout your ESG bona fides loudly enough you were at risk of corporate cancellation, yet now this huge industry has been effectively disallowed to even discuss the environmental portion of that.
You certainly won’t be seeing from this sector, the tiresome buzzwords everyone feels required to fling around - clean, sustainable, green, low-carbon, carbon neutral, climate friendly, net zero and more. That part won’t hurt my feelings, either.
Let’s move to a strange provincial story, smelling odorously of union self-interest. But one where I’m hoping the stench may eventually beget perfume.
Those of us living in Ontario just got hit with wild news recently. No, it wasn’t about much needed healthcare improvements, cancelling of the ill-conceived EV battery plants, or even the recent federal byelection in the Toronto St. Paul’s riding where Conservatives took the seat for the first time since 1984.
No, our big news was that 9000 employees of the Liquor Control Board of Ontario (LCBO), our anachronistic government booze retail monopoly, went on strike led by the Ontario Public Service Employees Union (OPSEU).
Mercifully (whew) store hours were expanded for the week prior to this telegraphed strike action to stockpile favorite imbibements, as the union sought yet higher pay for employees to fill shelves and work a cash register. Never mind that others doing similar work at non-unionized or non-government stores make up to 50% less money (average LCBO permanent salary employees earn ~$31/hour and average casual salary is ~$23/hour versus $16-18/hour average for grocery store cashiers). And let’s ignore that OPSUE has regularly bamboozled money from us for decades as they threaten strike action every few years knowing the government will cave in, with the power of monopoly and our thirstiness at their backs.
The trigger this time is the Ontario government’s expansion of alcohol sales to corner stores starting in September (which was unfortunately triggered by a $225 million payment to the Beer Store for early exit from an exclusivity agreement as addressed in Post 42). But it boils down to what it always does – demands for guaranteed jobs and yet higher pay on the taxpayer dime.
What really struck me about the story is that OPSEU has attempted to message this as protection of a critical public service. From an OPSEU statement prior to the strike, "LCBO workers don't want a dry summer, we love how busy it is and being a part of Ontarians' celebrations. But we can't stand by while Doug Ford gives away the LCBO's revenues to big box and convenience chain CEOs. It's on Premier Ford and the LCBO to make sure that public services and good jobs don't get left behind.”
Yup, apparently a government monopoly on selling alcohol in Canada (LCBO is a Crown Corporation established in 1927) is now considered a fundamental public service and not just a simple retail operation. Darkly, the fact that LCBO was open all through Covid while thousands of small and independent businesses of much greater importance were shuttered and many forced out of business, reinforces the idea that alcohol and specifically the government selling of it, is indeed treated as a public service.
And while it may be a good job to work at an LCBO, guaranteed job security and further wage escalation are out of step with the private sector once again as taxpayer rolls are pilfered to create unfair competition with private sector work.
For now I’ll mostly leave aside the dissonance of government promoting and running an industry that, on the whole, contributes to poorer health as we battle obesity, metabolic disease and overall terrible health in our society. It is not unlike the new marijuana industry or the Lottery Corporation that create more health and societal damage than good, except for the billions of desired revenues. I am no teetotaler and not making an argument against alcohol sales nor against basic regulation of the industry, but I simply don’t want government’s inefficient fingers running the operation and manning the cash registers.
The planned expansion of alcohol sales to more private sector outlets is projected to shave ~$150 million annually from the $2.5 billion in profits LCBO delivers to government coffers. But it will come back through the private sector channel at a lower cost to us, while taking a tiny bite out of public sector bulge.
Yet, the union shouts about how they are protecting a public service, and effectively argues that these jobs should not be subject to free market forces. This continues the arrogant presumption that a class of government jobs paid by taxpayer money should perpetually exist in a protected bubble, while the private sector and its workers must operate in the real world.
OPSEU may squeeze some concessions again from the government but I think they’ve mostly cooked their own goose - and this is where another silver lining may appear.
Ontarians are learning they are less inconvenienced than expected by the LCBO strike with 2300 alternate retail locations at their disposal. Perhaps they’ll shift to beer, wine and coolers from grocery stores (or from the other monopoly, The Beer Store) and forego the Rusty Nail or Margherita by the pool for a few weeks in favour of softer drinks. Or they can still visit any of the 400 LCBO outlets attached to small convenience stores and foodmarts. Meanwhile Doug Ford’s government put out online ads directing Ontarians to all the alternate spots to buy booze, including a pitch to purchase directly from hundreds of local breweries and wineries. Seems like Dougie may be turning lemons into lemonade.
LCBO maintains a trump card in that they are the importer of record for products coming from outside Ontario and could tangle the supply chain if they want, particularly for the restaurant industry. But that will turn even more sentiment against them if restaurants tell diners they can’t have their favorite Chianti to wash down their pasta - because of the LCBO. And if we mostly all just shrug about this strike, then maybe it’s the start of busting up the 100-year-old post-prohibition monopoly of government running booze in this country.
Sounds like another silver lining to me.
Stay tuned and stay pragmatic?
3200 signatures. Trudeau. It is time to arrest you. We are tired of being polite. We know you are guilty of treason, Demand his arrest. No bitching, no whining, demand it.
www.Trudeaufortreason.com
Well said on both topics.