A luxury fishing lodge vacation, flights on a private jet and the close relationship between a premier, town councillors and a billionaire angling to build a hydrogen plant

Jan. 10, 2023

Allegations of patronage and a cozy relationship between a billionaire and a Canadian premier are threatening to upend a multibillion-dollar green energy project.

John Risley is a billionaire who chairs World Energy GH2, the company currently awaiting provincial approval to build a green hydrogen plant in Stephenville on the west coast of Newfoundland. He is also a personal friend of Newfoundland and Labrador Premier Andrew Furey. A recent series of revelations exposing the cozy relationship between the two men is now jeopardizing public support of the deal.

The first blow came in October, when business news outlet allNewfoundlandLabrador reported on Furey’s 2021 vacation to Rifflin Hitch Lodge, a luxury fishing lodge equipped with helipads and owned by Risley, who also attended. Furey brought his father, Senate Speaker George Furey, on the getaway and later found himself facing conflict-of-interest accusations. He denied any wrongdoing.

"Everybody's been critical of me from Day 1," Furey told reporters in October. "We need to have some respect for public figures here in their own personal time. It's my time, my dime, and what I do with it, frankly, is my business."

Furey has so far refused to cough up receipts that would prove who paid for the vacation or offer insight into whether any part of his stay was a gift. Politicians are allowed to accept small gifts as a thank you, like a pen or a mug at an event, but are not allowed to accept gifts from people looking to do business with the government. Any gift worth more than $500 must be disclosed to the Commissioner for Legislative Standards.

Furey denies it was a gift and in November told opposition MHAs that an “ethical wall” he’d put in place was enough to assure the public he did nothing wrong, but it’s not clear when that wall was established or how porous it may be.

When asked by Canada’s National Observer about these “ethical walls” and who is now in charge of overseeing the hydrogen project, the province’s Minister of Industry, Energy and Technology Andrew Parsons said: “I'll be honest, that's a tough one for me to answer.

“I mean, the long and short is no, I don't really discuss these issues with [the premier], per se,” he added. “I'm all for talking but I'm also all for not disclosing cabinet confidence and getting myself kicked out of cabinet.”

Despite the optics, Parsons maintains the province’s regulatory process will stand up to scrutiny.

“I don't lose any sleep over it because I know every night that we're doing what's right and I truly do believe that nobody’s going to be able to show that there was a compromise here that allowed somebody to do something,” he said.

In October, when Furey’s summer vacation was first revealed, Progressive Conservative MHA Barry Petten, Opposition leader in the province, asked the premier to explain the apparent conflict of interest in the legislature.

“I feel very fortunate that my dad and I share the same passion of salmon fishing, as many people do across the province, very fortunate to be able to fish with him on the river,” Furey said. “I fished with him on the river before this job. I plan to fish on the river with him during this job and after this job.”

Petten fired back, questioning the province's decision to lift a long-standing moratorium on wind power, an energy source Risley plans to use to run his hydrogen project. The ban was lifted in April.

Petten noted that removing the wind moratorium was first discussed by provincial public servants shortly after Furey’s vacation at Risley’s cabin and asked: “Was this where the deal was struck or is this the biggest coincidence in Newfoundland and Labrador history?”

The next blow to the World Energy project came weeks later, when CBC reported Stephenville town councillors hitched a ride home from an energy conference in Germany on Risley’s private jet. A hydrogen plant of this size takes tremendous amounts of resources, from the land it requires, to the workforce needed to operate it, to the use of Stephenville’s port. As such, support from the town is vital to bringing the project over the finish line.

Stephenville Mayor Tom Rose said the councillors didn’t do anything wrong because it saved the town money while giving them an opportunity to talk business. Meanwhile, Risley implied town councillors aren’t real politicians.

“Generally speaking, politicians would not accept an offer from me to fly on my airplane and I generally wouldn't make it," Risley told CBC. "I don't see these folks as being sort of politicians in the general sense of things. These are people who are giving their time to their community. These positions are largely volunteer in nature."

Stephenville town councillors earn nearly $12,000 a year.

“The idea that they're taking gifts, valuable gifts in the form of rides on private planes, is … explicitly a conflict of interest,” Memorial University political science professor Russell Williams told Canada’s National Observer. “They've admitted to taking the gifts and they've admitted they conducted public business with Mr. Risley. That's not allowed under conflict-of-interest rules.”

“The mayor's attitude is cavalier, I don't really understand it, but if you're familiar with the political scene in Newfoundland and Labrador, our institutions aren't well developed for holding people to account for these kinds of close and inappropriate relationships,” he said.

The province’s Municipal Conduct Act, which governs conflict-of-interest rules for municipalities, received royal assent in November 2021 and came into force in September 2022, requiring municipalities to adopt their own codes of conduct by March. Stephenville hasn’t yet adopted its own code of conduct, but it is still subject to conflict-of-interest rules.

“It does feel a little like there's just a basic attitude that (conflict-of-interest rules) don't mean much and that they don't apply even though, I can tell you, I've been in discussion with officials out in Stephenville and with officials here in St. John's, and they tell me unquestionably this is a violation of conflict-of-interest rules,” Williams said.

Rose, the Stephenville mayor, told Canada’s National Observer the town council agrees the private flight from Germany was an allowable business decision.

“I believe the decision to travel with Mr. Risley and team was warranted as we have an MOU (memorandum of understanding) signed in place to work together to further this important World Energy (GH2) File,” he said.

World Energy GH2 did not make Risley available for an interview and did not return a request for comment.

Political support

The World Energy GH2 hydrogen project seems to have political support well outside Stephenville. The town of 6,600 was where Prime Minister Justin Trudeau and German Chancellor Olaf Scholz chose to launch a hydrogen alliance between the two countries in August. Details of the alliance are thin, but the goal is to build a hydrogen market with exports from Canada to Germany starting in 2025.

“Unlocking the potential of hydrogen is an essential part of our government’s plan for a sustainable economic future — not just for the domestic opportunities for emissions reductions but also for its potential as an export opportunity: to provide clean energy to countries around the globe,” Natural Resources Minister Jonathan Wilkinson said in a statement at the time.

A memo prepared for Wilkinson ahead of the launch of the alliance, which Canada’s National Observer received through a federal access-to-information request, calls closer collaboration between Canada and Germany on hydrogen strategically important.

By signing a memorandum of understanding for the alliance in Stephenville, the “objective is to send a strong signal to private-sector and sub-national leaders in both countries that their respective federal governments are committed to working together to create a policy and regulatory environment that will enable the flow of investment into hydrogen projects, support the build out of hydrogen supply chains, and aim to establish a hydrogen export economy by 2025,” the memo reads.

The memo also explains the alliance means governments “facilitating and supporting industry to industry cooperation on Canadian-German hydrogen flagship projects.”

Newfoundland and Labrador’s economy is in rough shape with an estimated $16 billion worth of debt. With an aging population limiting how much it can slash health-care costs, the province wants to add major new sources of revenue. At the same time, Risley is publicly warning that the market for hydrogen could vanish if governments fail to move quickly — an opportunity he claims could see $100 billion worth of projects built in Atlantic Canada by 2030.

[Top photo: (L-R) Liberal MP Gudie Hutchings, Newfoundland and Labrador Premier Andrew Furey, Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Scholz speak as they arrive on Tuesday, Aug. 23, 2022 in Stephenville, N.L. THE CANADIAN PRESS/Adrian Wyld]