Sylvain Charlebois

With the hype caused by the scandal at Hockey Canada, few noticed last week that Ottawa decided to investigate food prices and the alleged abuse by large grocery chains. The Parliamentary Standing Committee on Agriculture and the members of the Committee will examine the problem in the coming weeks.

We must first welcome Ottawa’s decision. Even though Canada currently has the third lowest food inflation rate among the G7 countries, after Japan and France, the rate of food inflation in Canada has exceeded general inflation for 13 consecutive months now. Every trip to the grocery store gets more financially painful, almost daily.

But to solely investigate retail would be short-sighted, and the committee seems to recognize that. The scope of the study will be the entire chain, as Canadians deserve to have the government study the state of the whole food industry. Food distribution is complex and involves several companies at once, from farm to table. Many accuse grocers such as Metro, Loblaws, and Sobeys of abusing the system and unjustifiably inflating prices. But based on publicly available data, this is far from the case.

A very simple evaluation comparing the profit margins of the three major retailers, Loblaws, Sobeys and Metro, for the last five years shows that their financial results are relatively modest. Thus, at the end of their respective fiscal years in 2021, profit margins for these retailers were 3.7 per cent for Loblaws, 2.7 per cent for Empire-Sobeys and 4.5 per cent for Metro. Returns were about the same for the last five financial years. Yields were usually below or at the same level as the rate of food inflation for most of the five years. In other words, the performance of these chains was flat when compared to the increase in the cost of living. And the year 2022, so far, doesn’t seem all that different.

Of course, the accusations of the last few months are buoyed by the claim of “record profits.” Certainly, a two per cent or three per cent monetary gain today does not look like a two per cent or three per cent gain of five years ago. Numbers are greater. Simple math. Incomes are higher, but so are costs. Although the amounts increase, the percentages remain the same.

Despite this, perceptions persist. Almost 80 per cent of Canadians claim that there is abuse in the system, and they are not entirely wrong to have these doubts. The industry has disappointed in recent years, especially with the “bread cartel” story. The current accusations, although without any real basis, are fully deserved.

Since the scope of Ottawa’s investigation will include the entire chain, from production to retail, as well as wages, this won’t be easy. Expectations remain realistically low for the committee to uncover anything at all. The food industry is filled with family businesses and companies which guard competitive data with extreme caution. Some companies buy and sell products without ever seeing or touching food. Getting to that data will be challenging.

But the committee needs to go beyond the grocer-gouging rhetoric. If there is abuse, it may be upstream in the chain. Part of the inflation of prices is objectively explained by certain macroeconomic factors, such as the shaky supply chains due to the pandemic, the labour shortages in the sector, and the invasion of Ukraine. But some portions of the price increases we see at the grocery store are hard to explain, especially at the meat counter, in the dairy section, and the fish and seafood section. There are also price hikes in the bakery aisle these days.

In short, during the investigation, the Parliamentary Committee must maintain a sober and virtuous logic without falling into the imaginary and the superlative. Selling a product at an exorbitant price does not necessarily constitute a scam if consumers have a choice and companies do not attempt to control market conditions. Rising costs are not the only factor contributing to price increases, either. Fluctuations in price and demand are also important elements in food distribution. Competition and markets will influence price. This is something the Committee also needs to look at.

Individualizing the differences between certain abusive behaviours and acceptable business practices will not be easy for the Committee. But it is worth the exercise so that more Canadians can understand how our food supply chains work.Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Robert Merasty

If First Nations are to have a chance at seeing real self-determination, equity deals in natural resource development must be part of the conversation. Having ownership of the projects taking place on our land not only gives us own-source revenue but also gives us the ability to have a seat at the table and be part of the conversation with industry.

On September 22, Hydro One announced a new equity partnership with First Nation leaders across Ontario. This announcement offers our people in Ontario a 50 per cent equity stake in all future large-scale capital transmission line projects exceeding $100 million in value.

This agreement, signed with eight First Nations represented by the Gwayakocchigewin Limited Partnership (GLP) for the Waasigan Transmission Line project, shows that the appetite for industry to work with First Nations is there. In total, nine First Nations will have the opportunity to invest in a 50 per cent stake in the Waasigan Transmission Line project, putting those Nations that invest in a financially independent position.

This partnership is a step in the right direction. As Indigenous people, we sometimes see development and projects take place without receiving any benefits. Industry working with First Nations is a step forward in reconciliation.

This is not the first time an equity agreement has happened between industry and First Nations. In March this year, Coastal Gaslink signed a 10 per cent equity option with First Nations along the pipeline corridor.

Chief Justin Napoleon of Saulteau First Nations said of that agreement: “We want to be partners; we want to be involved in the lifecycle of the project from ground-breaking to reclamation. Having the option to get involved in equity opens up the opportunity to have long-term economic benefit from a project that will be there for years.”

Having this long-term economic benefit provides opportunities for our First Nations that we could not have considered 10 years ago.

Our communities can no longer rely on the federal government to provide Indigenous with quality and culturally-centred education and health care services. Often at times, federal funding agreements come with strings attached, forcing First Nations to spend more on administration and professional services. Generating our own revenue with ownership in projects gives us control and allows us to spend our revenue how we see fit. That is what real self-determination looks like.

Additionally, equity ownership in projects allows us to have control of the projects on our land, allowing our people to determine the trajectory of a project by giving us a seat at the table with industry. Not only will First Nations be partners in the project we will also be environmental regulators.

Our people know best when it comes to taking care of the land. What the Creator has provided us is sacred to our people and our culture. It is essential for our people that when we develop our natural resources, we do so responsibly and ensure the project meets our high environmental standards. We are keepers of the land, and we have a responsibility to ensure that the projects we engage in are reliable and sustainable.

This equity deal with Hydro One is just the beginning for our First Nations in Ontario. There will be more opportunities like this as long as the government gets out of the way and lets First Nations and industry work together.

However, some Nations have a hard time raising the capital to invest in projects. Having a National Indigenous Guaranteed Loan Program will help Nations raise the capital necessary to invest in projects taking place on their land.

If we want to see First Nations truly thrive and experience genuine self-determination, we must allow for equity agreements to happen and invest in tools that facilitate growth and access to capital. Early last year, the Indigenous Resource Network announced its ‘ownership changes everything’ campaign. This campaign advocated for a National Indigenous Guaranteed Loan Program, a tool the government can implement right now to offer more Nations access to capital to invest in resource development. A guaranteed loan program can be a very helpful tool for Nations as they raise the capital necessary to invest in projects.

Our people are faced with a choice between development and poverty. We are looking for solutions for our people, and this one is staring us in the face. We hope other Canadians and Indigenous can come together to support Indigenous ownership in these projects. We believe it is a real win-win for industry and our Indigenous communities.

Robert Merasty has been the executive director for the Indigenous Resource Network since February 2022. He served as Chief of his home community of Flying Dust Cree Nation and also held the political office as Second Vice Chief for the Federation of Sovereign Indigenous Nations for the 74 First Nations of Saskatchewan. A former board member of SaskPower’s First Nations Power Authority and Saskatchewan’s Corporate Procurement Committee, he has also served in a variety of business and economic development roles at the Saskatchewan Research Council, the Crown Investments Corporation of Saskatchewan, and the FSIN Corporate Circle.

Sylvain Charlebois

Did you know that there is a global food security index? The well-known magazine The Economist has just published its 11th edition.

The Global Food Security Index comprises a set of indices from more than 120 different countries. Since 2012, the index has been based on four main pillars: food access, safety, sustainable development, and affordability.

The approach is quite comprehensive and robust. Index indicators include nutritional standards, urban absorptive capacity, food consumption as a percentage of household expenditure, food loss and waste, protein quality, agricultural import tariffs, dietary diversification, agricultural infrastructure, volatility of agricultural production, public spending on agricultural resource and development, corruption, risk of political stability, and even the sufficiency of supply. In short, anything goes.

Finland ranks first this year, followed by Ireland and Norway. Canada is well-positioned compared to other countries around the world since we are ranked seventh globally, the same as last year. Not bad. The United States is 13th.

In terms of food access – which measures agricultural production, farm capacities, and the risk of supply disruption – Canada ranks sixth, which is not too surprising. Despite our recent episodes of empty shelves and stockouts, Canada can boast about its food abundance. We produce a lot and are part of a fluid North American economy focused on cross-border trade, which allows for better food access.

Another pillar focuses on sustainable development, the environment, and climate adaptability. This pillar assesses a country’s exposure to the impacts of climate change, its sensitivity to risks related to natural resources, food waste management, and how the country adapts to these risks. In this regard, Canada is ranked 29th, far behind Norway and Finland, who are first and second in this category. Food waste remains Canada’s Achilles’ heel, as we waste more than just about anyone else on the planet. But with higher food prices, more than 40 per cent of Canadians, according to a recent study, are wasting less than they were 12 months ago.

 When it comes to food safety and quality, Canada ranks first in the world. Canada is ahead of everyone, even Denmark and the United States, both renowned for their proactive approaches to food safety. Food safety in Canada is perhaps the facet most underappreciated by consumers.

Despite a few momentary failures and periodic reminders, sanitation practices in the country are exemplary. Canada has consistently ranked well for years, except perhaps when traceability is measured. We have a long way to go, but the industry and public safety regulators are performing relatively well.

But the area where Canada’s performance is of some concern is food affordability. This measure is dedicated to consumers’ ability to purchase food, their vulnerability to price shocks, and the presence of programs and policies to support consumers when shocks occur.

Canada fell one spot again this year and sits at 25th in the world. Australia, Singapore, and Holland top the list for affordability. Given the resources and food access we have, Canada should do better. Since July 2021, food inflation has always exceeded general inflation in the country, and everything is already costing more these days. Higher food prices at the grocery store over the past year have been difficult for many of us to accept. Canada needs a food autonomy policy, a more robust food processing sector, and better logistics domestically.

And with winter coming and our dollar visibly weakening against the U.S. dollar, we could see significant price jumps again, especially in the produce and non-perishables sections. As wages stagnate and food prices rise, it’s hard to predict when Canada will do better in terms of affordability. Specific fiscal measures such as tax reductions to help consumers would be more than timely.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Sylvain Charlebois

While inflation is showing signs of dissipating, food inflation appears to be on a totally different path. Food inflation has outpaced our general inflation rate for over 12 months now.

Statistics Canada just announced that the food inflation rate for retail was 10.8 per cent and 7.4 per cent in food service. Canada ranks third amongst the G7 countries, after Japan at 4.7 per cent and France at 7.7 per cent. Canada’s rate remains below that of Italy (10.6 per cent), the United States (11.8 per cent), the United Kingdom (13.1 per cent) and Germany (16.6 per cent). Still, food inflation is hurting Canadian consumers, and the nightmare won’t end any time soon.

Canadians have been trying to cope with higher food and menu prices in many ways. The Agri-Food Analytics Lab, in partnership with Caddle, investigated what Canadian consumers have been doing to deal with higher food prices in the last year and are releasing the results of the study.

Some have opted to grow their own food. A total of 15.5 per cent of Canadians have started growing their own food just in the last year. Ontario is where the highest percentage of people started to grow their own food, at 17.4 per cent, followed by British Columbia at 16.2 per cent. The Atlantic (15.2 per cent), Quebec (13.7 per cent), and the Prairies (13.1 per cent) were next. While a total of 6.2 per cent of Canadians use hydroponics at home to grow food, 4.5 per cent claim they have livestock at home now, and didn’t 12 months ago.

Others are just trying to navigate through by using new options. The most popular grocery shopping habit change we measured was that many Canadians have used loyalty program points. A total of 33.7 per cent have been using loyalty program points to pay for groceries in the last 12 months. The second option is weekly flyers (32.1 per cent), followed by coupons, at 23.9 per cent.

While 19.1 per cent of Canadians have visited discount stores in the last 12 months, 11.5 per cent of Canadians have visited dollar stores more often to purchase food. A total of 8.0 per cent are visiting farmers’ markets more often, and 7.1 per cent of consumers visited roadside stands to buy directly from farmers in the last year.

Interestingly, 40.6 per cent of Canadians are trying to waste less food now, a much higher rate than 12 months ago. Going for privately labelled food products is also getting more popular. A total of 21.0 per cent of Canadians are opting for store labels, which are less expensive most of the time. The Atlantic region is where the highest percentage of consumers are now opting for privately labelled products, at 27.8 per cent, followed by Quebec at 22.5 per cent. Also, 19.7 per cent of Canadians are buying more food that is about to expire. The Atlantic has the highest percentage of consumers buying food that is about to expire at 29.1 per cent, followed by the Prairies at 19.5 per cent.

The hidden darker side of food inflation is worrisome. Almost 24 per cent of Canadians are now cutting back on the amount of food they purchase due to higher food inflation, and almost 70 per cent of them are women. Dietary changes have been made by 8.2 per cent just to save money. While 7.1 per cent are skipping meals now, 6.6 per cent of Canadians are paying for their groceries with a credit card without knowing when they will be able to pay it back.

Coping with food inflation is not a simple matter of finding new strategies. For many, higher food prices have pushed them toward desperation.

Many Canadians are really battling it out there. In Europe, where food inflation in some regions is even higher than here, grocers are guaranteeing some prices for certain staples for a month or two to help low-income families get through this. They are freezing prices on a limited number of essential staples. These campaigns are all initiated by industry, not government.

Perhaps it’s time for Canadian grocers to sympathize with struggling consumers in meaningful ways. Maybe, just maybe, if they took steps to support consumers, the baseless accusations of “greedflation” would go away, if only for a while.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Robert Merasty

On July 18, the federal government announced a plan to reduce emissions from the oil and gas sector by 42 per cent in just eight years. To meet such targets, this policy would effectively stop all new projects in the oil and gas sector, as well as curtail existing ones.

This would dramatically affect global energy security and hamstring one of Canada’s biggest economic sectors and a huge source of public revenues.

But my biggest concern is its economic impact on First Nations and Métis communities, businesses and workers across Canada. Tens of billions of dollars in wages, contracts and own source revenues are at risk. And yet almost no consultation – let alone informed consent – has been pursued.

Here is one example of why this proposed cap is so worrisome. There is a booming LNG industry being developed that will provide significant equity and other economic benefits to Indigenous peoples. It includes four separate pipeline projects, two LNG terminals under construction, two proposed Indigenous-led LNG terminals (Cedar and Ksi Lisims) and upstream production in the Treaty 8 region. Not only is the world desperate for more LNG exports, which we can provide, but it would displace the burning of coal in Asia and elsewhere, lowering global GHG emissions.

However, under the proposed policy, it’s hard to see how any of those can go ahead. In the worst-case scenario, they will be cancelled. In the best-case scenario, these projects will be subjected to unknown carbon taxes or forced to buy expensive allowances that will have to be drawn from the profits Indigenous nations who have equity stakes would otherwise earn for themselves.

When resource companies plan a project, they are required to consult with affected Indigenous nations and negotiate economic benefits in return for developing the resources on our territories. Through the federal government’s Impact Assessment Act, those companies must also identify all the ways – positive and negative – that their project will change “the health, social or economic conditions of the Indigenous peoples of Canada.”

And yet this emissions cap proposal has been introduced by the federal government without any assessment of the economic losses that Indigenous peoples will face from the policy – from jobs to training to revenues to infrastructure – and without any meaningful consultation of those nations, businesses and workers most likely to be affected. Before any decisions are made, shouldn’t we be given a calculation of what the costs to our communities will be?

Given that the government just passed legislation to ensure the laws of Canada are consistent with the United Nations Declaration on the Rights of Indigenous Peoples, one would hope that the emissions cap would respect its principles. But I don’t believe that it is, or can be, compatible with our rights as affirmed in UNDRIP:

· To own, use, develop and control our lands, territories and resources.

· To freely pursue our economic, social and cultural development.

· To be secure in the enjoyment of our own means of subsistence and development, and to engage freely in all our traditional and other economic activities.

The choice the federal government is offering is not whether to have an emissions cap or not, but between two narrow policy options – a cap and trade system or carbon pricing – identified without our peoples’ input. None of this is compatible with the standard the government set for itself of free, prior and informed consent.

If some nations choose not to engage in oil and natural gas production, that is their right. If some nations choose to engage, that is also their right. The federal government should not and cannot be the one to determine for Indigenous nations what that choice should be. Yet that is exactly what the proposed emissions cap does.

Respecting our self-determination is one of the most important steps toward achieving some form of reconciliation for the harms done to our people in the past. That means allowing Indigenous communities to develop their natural resources how they see fit. It is hard to see how this emissions cap respects our rights, or how it will obtain our consent to go ahead. Perhaps that is why we were not asked.Robert Merasty has been the executive director for the Indigenous Resource Network since February 2022. He served as Chief of his home community of Flying Dust Cree Nation and also held the political office as Second Vice Chief for the Federation of Sovereign Indigenous Nations for the 74 First Nations of Saskatchewan.

Sylvain Charlebois

After a slew of confinements and closures, restaurants are still not out of the woods. Far from it. Over the past year in Canada, restaurant closures outpaced openings by a whopping 43 per cent. The industry is still shrinking.

Inflation-adjusted food service sales will be around 11 per cent below 2019 levels by the time we’re done with 2022, according to the latest report from Restaurants Canada. Traffic in full-service outlets is down nine percent, and for quick service, it’s down five per cent. But sales could still surpass the $100 billion mark, according to the report, and that is an encouraging number.

The annual report is, of course, imbued with the optimism and resilience characteristic of the sector. But with both a possible recession and higher interest rates on the horizon, consumers will have to make choices and change habits. With a tighter budget, many consumers will eat in restaurants less often.

I estimate that, on average, 27 per cent of our current food budget is spent on food consumed outside the home, at some type of restaurant. Before the pandemic, the percentage was over 35 per cent, and getting back to that percentage will take time, perhaps even a few years.

But the report is a bit surprising in many aspects. For one, there’s not a single word about the work-from-home phenomenon. We estimate that by 2025, nearly 40 per cent of the Canadian workforce will work at least one day a week or more at home. A more domestic, sedentary market does not have the same relationship with food as a consumer market that commutes daily.

The Shake Shack chain in the United States, which operates more than 6,000 restaurants worldwide, including a few in Canada, has become a model case for strategic pivoting during the pandemic. The chain’s revenue is around $500 million annually. In March 2020, its online sales were practically zero. Today, 43 per cent of their sales are online, through phone apps. In fast food, only 16.5 per cent of consumers will eat their meals on site. Before the pandemic, that percentage was 33.9 per cent. Ordering online for delivery or pick-up is almost the norm for many consumers now.

It’s not surprising, then, to see other chains, like Subway, copying Shake Shack and relying heavily on their own app. SKIP, which just laid off 350 employees, knows this all too well. This e-commerce platform, as well as UBER EATS, Doordash, and others which offer meal delivery from partner restaurants, are seeing their turnover affected by competitors that recognize the potential of a virtual market.

Even grocers are improving their service and relying on online shopping, and they are getting better at it. Before the pandemic, the food service sector had almost a monopoly on delivery and counter service. This is no longer the case.

Of course, some major headwinds affecting the sector include inflation and labour issues. As prices on the menus increase with inflation, the number of food choices decreases. Less waste, less cost. We may see more and more restaurants with service that offers only one or two dishes on any given day because this provides more predictability for the back-of-house staff. Several European restaurants are already doing this. The demand becomes more manageable, and so do the costs.

As to labour issues, Restaurants Canada estimates that the sector has had between 150,000 and 170,000 vacant positions for some time. The sector currently employs 271,000 fewer people than in 2019, before the pandemic hit. The difference is enormous. Several establishments will close earlier or will open less often. Operators will rely more and more on robotics, which we already see in several businesses, both in the kitchen and dining room.

The sector is clearly redefining itself, but the bleeding continues. As it emerges from a tumultuous period with a firm desire to adapt to a market that is difficult to predict, many establishments won’t survive. Interestingly, the report notes a few trends to watch for, including increased demand for local food, comfort food, and globally inspired foods and flavours. Talk about paradoxes.Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

During the current campaign in Quebec, one political party recently proposed a protein shift in the public cafeterias and institutions by offering a menu made up of 50 per cent plant-based protein meals.
In the same vein, the party also suggested that 70 per cent of food products served in public institutions be local. Local is certainly a desirable policy for most, if access and affordability aren’t compromised of course, as it is one of the best ways for a government to stimulate the local economy.
But politicizing proteins is certainly another story.
Whether we like it or not, animal proteins play a very important role in our food culture, especially in Canada. Just think of turkey at Christmas or barbecues with a piece of meat or two. Animal proteins have always brought us together, building communities along the way. Beef, pork, chicken, seafood, cheeses and other dairy products – these products are part of our country’s food heritage.
With the massive arrival of vegetable protein-based products in recent years, veganism and vegetarianism continue to fuel debate. As a result, consumers have really emerged as winners in some ways.
First, we have more choice. Before the Beyond Meat ‘invasion,’ the trifecta of meats, beef, chicken, and pork, had gotten boring. Our protein literacy has improved over the past few years with more excitement, more debates, and more options. We have a better appreciation of the nutritional values of each of the available sources. The vegan movement that was completely marginalized a few years ago is now socially normalized. This is an important gain for our society.
But for some time now, proteins have been politicized and pushed by certain political and non-political groups to encourage citizens to adopt a diet with less or no meat to save the planet. Some groups are even sanctioning research to support a certain anti-animal protein narrative.
Some studies even blame men for climate change because they tend to eat more meat. It’s just getting silly. In short, protein is increasingly being used as a political weapon to fight climate change, not just for nutrition.
Case in point: the Climate Institute of Canada, a centre that received $20 million from Ottawa to conduct research on climate change, released a report this past August on protein. The report suggested a shift from a meat-heavy diet to a more plant-based diet to help Canada meet its 2030 and 2050 climate goals. This partially or fully federally funded study is one of many others of late.
That said, one must admit that the science is clear. The production of animal protein generally emits far more greenhouse gases. Milk, beef, pork, chicken – the findings in recent years are abundantly obvious. But these sectors are also adjusting and expect to reach ambitious emission reduction targets by 2030 or 2040. Some even plan to become carbon neutral. Maple Leaf Foods, the country’s largest pork processor, is already operating as a carbon-neutral enterprise.
The industry recognizes that there is work to be done. But it’s a safe bet that our animal choices will be more ecological in 10 or 20 years. We must give them time to adjust.
Eating involves very personal and cultural choices. To see a political party or other organizations using protein – in short, food – as a tool to fight against climate change creates unease among many. Currently, more than 90 per cent of Canadians eat meat regularly. Humans have been eating meat for millennia.
Over the last few decades, we have adopted new diets with less of this or more of that, bringing more variety and dietary inclusiveness through immigration and our collective curiosity. It’s been wonderful to watch Canadians explore new culinary frontiers. But as a society, we have never pushed public institutions to ban the consumption of any food, especially meat. The approach has always been quite inclusive. Playing with our culinary mores is an extremely dangerous game.
Food remains an inherently personal choice. In 1967, Pierre Trudeau declared that there was no place for the state in the bedrooms of the nation. History would give some merit to his claim, but his words should also apply to our nation’s kitchens. The state has the right to guide us in our food choices through education and awareness campaigns.
Nevertheless, food must be prioritized and not politicized. Imposing choices, regardless of motives, goes beyond the limits of a democracy that respects its people.
Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Michel Kelly-Gagnon
Troy Media

The anti-energy left has weaponized consumer protection laws in the United States to punish oil and gas companies simply for carrying out their core business. If their lawfare succeeds, there will be serious repercussions for the energy security of North America and the West.

According to a recent PBS story, at least 20 cities and states across the U.S. have filed lawsuits against energy industry companies over a variety of alleged infractions relating to climate change. Defendants include usual suspects like Exxon Mobil, Chevron, and BP, but also the American Petroleum Institute, a trade association that represents oil companies.

These lawsuits are, as the story notes, a “relatively new legal tactic,” one favoured by left-leaning prosecutors and attorneys-general to inflict pain on perceived villains – and, one would imagine, stir up their own political base. The trend started (unsurprisingly) with a handful of California cities, followed by reliably left-leaning attorneys-general in Rhode Island, Massachusetts, Connecticut and Minnesota, among others.

Though each suit is slightly different, analysts note that they are broadly modelled after common-law torts and statutes used in lawsuits against tobacco and pharmaceutical companies for allegedly misrepresenting the effects of some of their products to consumers.

In this case, the plaintiffs’ theory seems to be that energy companies had secret knowledge about the relationship between fossil fuels and climate change that they knowingly and maliciously hid from the public. The companies, for their part, sensibly point out that they have no special monopoly on climate science – quite the contrary! Furthermore, they point out that they sell their products within the confines of extensive and ever-tightening regulations set by various levels of government.

But this type of “climate justice” legal activism is picking up speed, both in the U.S. (the number one export destination for Canadian energy) and here in Canada. For example, Vancouver’s city council recently voted to fund a 2023 class-action lawsuit against so-called “Big Oil.”

Almost none of these cases has yet reached trial, and the one that did was – correctly, in my view – dismissed. But given the importance of the issues at stake and the political incentives involved, I don’t expect the plaintiffs to quit any time soon, especially since the structure of the court system in the United States gives them a potentially decisive advantage. In particular, U.S. plaintiffs are arguing that these trials should happen in state and local courts, where they can shop around and cherry-pick more favourable jurisdictions.

American oil companies have countered that these cases need to be tried in federal, not state, courts. As Phil Goldberg, special counsel for Manufacturers’ Accountability Project, told Pew in April 2022: “Climate policy is federal and regulatory in nature – not (something) that can be decided by state courts.”

I think Goldberg has it right and the anti-energy crusaders have it wrong. As a former U.S. Department of Justice official put it in a Legal Newsline piece, trying these cases in regional courts “would create a patchwork of legal standards that would directly impact national energy policy, which impacts not only domestic energy production but also foreign policy decisions.”

As if to underscore the obvious truth that energy policy is national (and international) policy, U.S. President Joseph Biden has spent the past year both promising to “decarbonize” the U.S. economy and chastising U.S. producers for not pumping more oil and gas to relieve rising prices that he blames on global events.

Indeed, at a time when energy costs are soaring, we need this type of legal activism like we need a hole in the head. Should any of the enormous damages sought by plaintiffs in these lawsuits ultimately be awarded, the costs will almost certainly be passed on to consumers. And since the production and/or transportation costs of the price of fossil fuels are embedded in the price of a lot of the other things we consume, this would inevitably create even more inflation.

Furthermore, increasing costs for Canadian and American oil producers in such a discriminatory manner might also very well provide an unfair competitive advantage to oil producers from such genteel and human-rights-respecting countries as Saudi Arabia, Venezuela, and Russia.

North American governments should not create a policy environment that disadvantages domestic producers in favour of foreign ones, so let us hope that this lawfare against energy companies fails. Policy-makers need to create an energy policy framework that is both comprehensive and predictable, as opposed to a grab-bag of different standards brought into being by ambitious prosecutors and attorneys-general who care more about pleasing their activist base than about energy security and economic vitality.

Michel Kelly-Gagnon is President and CEO of the Montreal Economic Institute.