COPENHAGEN CONFERENCE REVEALS QUEBEC OIL SANDS INTERESTS

C O N F I D E N T I A L MONTREAL 000001

NOFORN
SIPDIS
DEPARTMENT OF ENERGY FOR OFFICE OF POLICY AND INTERNATIONAL
DEPARTMENT OF STATE FOR EEB/EPC

E.O. 12958: DECL: DECLASSIFY UPON ARRIVAL
TAGS: ENRG CA PREL PGOV
SUBJECT: COPENHAGEN CONFERENCE REVEALS QUEBEC OIL SANDS INTERESTS

DERIVED FROM: DSCG 05-1 (B),(D)


1. (U/NF) Summary. Controversy over Quebec's aggressive position at
the Copenhagen environmental conference shed some surprising light
into the connections of powerful provincial interests in the
Alberta oil sands. Montreal's two major newspaper chains battled
back and forth over Quebec-based Power Corporation's (Power Corp)
financial ties and the corporation's alleged impact on Premier
Charest's actions in Copenhagen. Whether Charest was influenced by
Power Corp to tone down his criticism of the federal government is
unclear, but the corporation's provincial and federal influence is
undeniable. End Summary.



Charest's Strategy Under Scrutiny

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2. (U/NF) Arriving at the COP15 Conference in Copenhagen, Quebec
Premier Jean Charest, a strong federalist, openly and actively
pushed Canada to do more to reduce its greenhouse gas emissions and
signed a pact with 20 sub-national representatives who were
similarly unsatisfied with their national governments' positions.
Charest's public lobbying of his own federal government sparked
strong reaction across Canada, sometimes very critical of Quebec
for "undermining" federal environmental policy. Quebec won the
Globe and Mail's "Denigrate Your Own Country Award", along with
Ontario, for its performance in Copenhagen. The controversy
continues to simmer in the Montreal news this week.




3. (U/NF) In Quebec, most observers praised what they saw as
progressive, green policy by Charest. But Montreal's influential
La Presse excoriated Charest's "arrogant" strategy, branding him
"irresponsible" and disloyal to Ottawa. On December 17th, the
paper defended Prime Minister Harper's Copenhagen position,
insisting that the oil sands industry was vital for the economy of
Canada and Quebec. La Presse's stance raised eyebrows in Quebec;
the paper is federalist, but rarely so quick to jump to the federal
government's defense due to an alleged slight from Quebec. Further,
the paper's commentary is usually pro-environment.




4. (U/NF) Top circulation tabloid Journal de Montreal led several
commentators in charging that La Presse's stance had been dictated
by its ownership -- Power Corporation, a holding company with
substantial financial interests in the oil sands. [Comment: The
Ambassador met with Power Corporation officials on a recent visit
to Montreal discussing the general business and political climate
in Quebec in the period just before the controversy broke. The
diversified management and holding company based in Montreal ($37
billion USD revenue last year) is owned by the powerful Desmarais
family. Paul Sr. and his two sons are among the most influential of
Canadians and have strong political and family ties - primarily
with the federal Liberals in Canada and the French President
Sarkozy. End Comment]



Power Corporation and Oil Sands

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5. (U/NF) Although La Presse defended its impartiality, it was hard
to refute Power Corporation's fQancial interests in the oil sands.
Power Corp is the largest individual shareholder (4.5%) in the
French company Total S.A., and wields further influence with Paul
Desmarais, Jr. on Total's board of directors. Total S.A. has
invested $6 billion USD in Alberta's oil sands to date, and plans
to invest $20 billion USD more over the next two decades. It is
the fifth largest publicly-traded integrated international oil and
gas company in the world, operating in more than 130 countries,
with 96,950 employees.



Comment: Charest Tones Down Criticism

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5. (U/NF) It's difficult to say whether Charest was reacting to
La Presse, pressure from the Desmarais family, or another factor
entirely, but by the end of the conference he lay low, passing on
further media opportunities to criticize Harper. Since then, he has
avoided speaking about Canada's environmental policies, focusing
instead on his own plan to reduce automobile emissions in Quebec.
The province is the first in Canada to adopt stricter fuel
efficiency standards than the federal government. This legislation
takes effect Jan. 14, 2010. Meanwhile, the oil sands controversy
continues to play itself out in the media here, with the Desmarais
angle as a backdrop.
MCCLENNY