07/06/2014 12:48 EDT | Updated 07/06/2014 12:59 EDT

TransCanada's Contract With Mattawa Requires Town To Stay Silent About Company

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The mayor of a small northern Ontario town along the route of the planned Energy East pipeline is defending a contract with pipeline builder TransCanada that critics say amounts to a “gag order” in exchange for a $30,000 gift.

The town of Mattawa has negotiated a deal that will see TransCanada, builder of Energy East and the Keystone XL pipeline, pay for a $30,000 emergency vehicle for its fire department.

The catch? In exchange, the town will agree to “not publicly comment on TransCanada’s operations or business projects,” according to a proposed bylaw authorizing the agreement.

The contract also states the town will stencil the TransCanada logo onto its emergency vehicles, and “will write and send one news release when the agreement is finalized, which shall be approved by TransCanada.”

This is a gag order,” Andrea Harden-Donahue, an energy and climate campaigner with the Council of Canadians, told Bloomberg.

“These sorts of dirty tricks impede public debate on Energy East, a pipeline that comes with significant risks for communities along the route.”

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At no time have we been put [under] a gag order,” Mattawa Mayor Dean Backer told the Toronto Star.

Backer said TransCanada has a pipeline station 60 kilometres east of Mattawa, and offered the town $30,000 back in 2012 if the town agreed to provide fire services to the station.

The condition not to comment “has nothing to do with Energy East,” Backer said.

Mattawa is located about 300 km northwest of Ottawa along the TransCanada Highway and the Ottawa River, near an existing pipeline that will become part of Energy East.

A TransCanada spokesperson told Bloomberg if the city had objected to the clause because it felt it would stifle debate, “we would have removed it.”

Davis Sheremata said the contract clause “was designed to prevent municipalities from feeling obligated to make public comments on our behalf about projects that did not impact them and about which they had no experience or knowledge.”

He added the company is considering avoiding this sort of language in future contracts.

TransCanada’s Energy East pipeline would carry Alberta oil 4,400 kilometres across Canada to a terminal in Saint John, N.B., giving Alberta oil access to overseas markets. About 70 per cent of the pipeline would consist of an already existing, converted gas pipeline, while 30 per cent would have to be built from scratch.

TransCanada says the $12-billion project will create some 11,000 jobs during the construction phase.

But environmental groups say the company is overplaying the economic value of the project. They say the pipeline will offer little benefit to communities along the route and Canadian refineries because the oil will mostly be shipped abroad.