5 Canada’s Fossil-Capital Elite*A Tangled Web of Corporate Power
William K. Carroll
Fossil capital—indeed, capitalism overall in the early twenty-first century—is heavily networked. Our network mapping in chapter 4 showed how ownership of substantial share blocs by major personal, corporate, and institutional investors further concentrates corporate power (in its strategic modality) in the hands of those investors, who include financial institutions. Complementing the network of corporate ownership is an elite network of interlocking directorates. This chapter maps the network of elites in and around Canada’s fossil-capital sector.
Extensive research over the past decades has documented the tendency for large corporations to share the same directors (and sometimes the same executives: see Carroll and Sapinski 2018, chap. 5). These elite, extra-market relations among the largest companies create the basis for a “corporate community” (Domhoff 2006). The well-connected individuals at the network’s centre form what Useem (1984) termed an “inner circle,” further concentrating corporate power within the dominant stratum of the capitalist class. The elite social relations that underpin this community diverge sharply from the hegemonic “free enterprise” narrative of firms isolated from and in competition with one another. Directorate interlocks provide a structural basis for communication, coordination, and social cohesion, enabling the corporate community to define and pursue its common interests in maintaining the status quo of concentrated corporate power (Brownlee 2005; Sapinski and Carroll 2018).
In Canada, a research program mapping the corporate elite was inaugurated in the 1950s by John Porter (1956) and later advanced by his student Wallace Clement (1975). More recent work has used social network analysis (SNA) to situate the Canadian corporate power structure within a transnational context (Carroll 2004; Carroll and Klassen 2010; Klassen and Carroll 2014). These studies have opened a window on the social organization of Canadian capitalism in an era of globalizing capitalism, but they have not considered how fossil capital is positioned within the power structure.
The Fossil-Capital Elite
Corporate community, corporate elite, inner circle, and dominant stratum are terms that flag the enormous concentration of power in a relatively small group of business leaders—the result of a combination of economic concentration, concentration of share ownership (see chapter 4), and elite social networking. If fossil capital has become a leading industrial sector, it is worthwhile to map the organization of corporate power within the fossil-capital elite that directs and manages those corporations. In turn, the fossil-capital sector is integrated with the broader national and transnational economy. Besides supply chains that link carbon extraction into other economic sectors, there is a strong codependency between fossil fuel corporations and the financial sector. In an era of extreme oil (see chapter 1), extractive megaprojects require massive financing; thus, corporate power over carbon extraction and processing is closely tied to corporate power in financing those activities (Albo and Yap 2016). These initial reflections lead to three research questions:
- What is the fossil-capital elite’s accumulation base (Carroll 1986)? That is, what combination of carbon-extractive companies provides a basis for the streams of profit upon which the elite’s power ultimately depends?
- How is the fossil-capital elite internally structured as a network of interlocking directorates, which operates simultaneously at two levels: that of the corporation and that of the individual (Carroll 1984)?
- How is the elite linked to the financial sector and other segments of corporate capital, national and transnational?
Answers to these questions illuminate our understanding of Canada’s fossil-capital elite as a distinct grouping, or fraction, embedded within wider networks of corporate power.
Many studies of the corporate elite begin by identifying the largest companies within a geographical space. My interest in the fossil-capital elite suggested a different sampling method. I began with the list of 114 carbon-extractive corporations with assets of at least $50 million, developed by Lee and Ellis (2013). To that I added 124 corporations involved in carbon extraction, transport, and processing, identified through searches of online databases, resulting in a “core sample” of 238 fossil-capital companies based in Canada, each with assets of at least $50 million at year end 2014. The selection process then snowballed to include several thousand companies, as I selected direct neighbours (defined as other firms directly linked to the core sample by interlocking directorates) and then indirect neighbours (firms linked indirectly to core-sample firms via interlocks with direct neighbours), using the online ORBIS database, which covers several million companies worldwide. I then gathered data on the directors and executives of all core and neighbour firms (direct and indirect) as well as company-level variables such as size, industry, and location of head office. Snowballing enables us to analyze carbon-sector firms as embedded nodes in wider interlocking networks: to locate the fossil-capital elite within the neighbourhoods of the Canadian and foreign-based corporations that form a global power structure.
The snowballing procedure identified an initial list of 15,569 corporations, 1,547 of which were direct neighbours to core-sample firms. Since my research interest lay in mapping Canada’s fossil-capital sector within the network of the largest corporations, I introduced size criteria that excluded the smaller neighbours from the analysis. My sample thus comprises several top strata, which include the largest Canada-based neighbours (direct and indirect) to fossil-capital firms and the largest foreign-based neighbours (direct and indirect). The size criteria were geared to generating Canadian and foreign strata that would be analytically manageable. I selected Canadian-based direct and indirect neighbours with revenue of US$100 million or more (n = 155 and 244, respectively). This revenue floor is equal to that of the 130th ranked firm in my core sample; thus, the strata of Canada-based neighbours include very large firms as well as firms similar in size to mid-sized fossil-capital firms. I selected foreign-based direct neighbours with revenue of $1 billion or more (n = 258) and foreign-based indirect neighbours with revenue of $27 billion or more (n = 363). This stratification procedure yielded a sample of 1,258 top strata corporations, including 637 Canada-based companies and 621 foreign-based companies. With it, we can map the Canada-based carbon sector as it is embedded within the national and global formation of the largest corporations, but we need to remain aware of the size differences between strata that are built into this methodology.
Overall, the elite network is carried by a relatively small segment of corporate directors and executives. The 22,917 directors and executives of the 1,258 corporations generate over nine thousand interlocks, but most individuals (79.1 percent) are affiliated with single corporations, and most corporate networkers are affiliated with two firms, creating a single interlock. Yet most of the interlocks—three out of five—are carried by networkers who have three or more corporate affiliations. The 481 “big linkers” (each with four or more affiliations), a mere 1.7 percent of all directors and executives, account for nearly two in five interlocks. The network is largely the domain of an elite within the elite, an “inner circle” of well-connected individuals.
The Fossil-Capital Elite’s Accumulation Base
A fundamental structuring condition in corporate capitalism is extreme disparities in the distribution of capital. Generally, economic sectors, national economies, and the global economy are dominated by a relative few large companies, concentrating corporate power in the hands of their owners, directors, and executives. Within the carbon-extractive sector, this is the basis for distinguishing between the handful of “majors,” which claim most of the revenue generated in the sector, and the many mid-sized firms (see also chapter 1). The top fifteen revenue-earners, hereafter the “majors,” comprise only 6.3 percent of core-sample firms but claim 63.5 percent of total revenue. They include six of the eight integrated oil and gas companies based in Canada and five of eighteen pipeline companies. In these capital-intensive subsectors, value flows are extremely concentrated: among integrated fossil-capital companies, the majors account for 97.5 percent of revenue; among pipeline companies they account for 70.6 percent of revenue. Majors represent less than half of total revenue in other subsectors: non-integrated oil and gas extraction (30 percent), services to extraction (15.2 percent), and coal/bitumen mining (47.4 percent).1
The fossil-capital elite is shaped by a geography of accumulation. Fossil capital clusters spatially, in centres of strategic command. Four-fifths of companies are headquartered in Calgary, representing 87.3 percent of total sectoral revenue. Only Toronto (thirteen firms accounting for 4 percent of sectoral revenue) and Vancouver (fifteen firms accounting for 3.7 percent) host any substantial number of companies (five corporations based in Edmonton claim only 0.2 percent of revenue).
Complementing head office location is location of investments. I developed a typology that views this aspect of corporate geography from the standpoint of western Canada, noting whether firms have substantial investments in western Canada, in the rest of Canada (ROC), in the United States, or beyond. Two-fifths of companies are active solely in western Canada, including the four western provinces and the northern territories. Another 37.4 percent are active in western Canada but also elsewhere. Many of these are active in the United States (15.5 percent) or both in the US and beyond (16.8 percent). Very few firms that are not invested in western Canada are active elsewhere in Canada, and seven of these eleven are also invested in the United States (two firms) and beyond (five firms).
Clearly, many Canadian fossil-capital corporations centre their activities in western provinces, but some companies’ investments span the globe. A sizable stratum conducts activities entirely outside Canada, in the United States (seven firms) or more internationally (thirty-six).2 Yet in terms of the capital (revenue) they represent, firms active in western Canada dominate. Indeed, firms invested in western Canada make up 76.9 percent of the entire fossil fuel sector but account for 92.5 percent of revenue. The fifty-four firms not active in western Canada account for only 7.5 percent of total revenue. Among the majors, the western Canada base is especially evident. None restricts its activities to that region but all are squarely based there.3 Clearly, the western provinces are the centre of gravity of investments, complementing and reinforcing the dominance of Calgary as the command centre for most corporate head offices.
Foreign control of corporations concentrates corporate power transnationally, in the hands of owners located elsewhere. Since the publication of Kari Levitt’s Silent Surrender (1970), the significance and extent of foreign control of corporate Canada have been debated. Although at the time Levitt wrote, US-based transnational corporations seemed poised to conquer the world, ensuing decades witnessed a decline of American hegemony and a more multilateral pattern of international investment, leading to a cross-penetration of capital among the advanced capitalist countries (Klassen and Carroll 2014, 164; Kellogg 2015). It is therefore not surprising that core-sample firms are predominantly controlled by Canadian interests, accounting for 71 percent of firms and 67 percent of total revenue. Corporate interests based in the United States control 12 percent of firms and of revenue, followed by those based in China (including Hong Kong), which account for 4 percent of firms but 11 percent of revenue. Foreign control is concentrated within a few of the largest firms. Six of fifteen majors are foreign controlled: Imperial Oil (US), Gibson Energy (UK), Talisman Energy (Spain), Shell Canada (Netherlands), Husky Energy, and Nexen (China, including Hong Kong). These represent 75 percent of the total sectoral revenue under foreign control.4
To summarize, the accumulation base for Canada’s fossil-capital elite is bifurcated between a few majors and many mid-sized corporations. The elite’s centre of gravity is western Canada (specifically, Calgary) but the capital it manages is extensively transnationalized. Most of the sector’s revenue flows through companies whose investments reach beyond Canada’s borders. Although the fossil-capital elite directs and manages corporations controlled mainly in Canada, some firms (including several of the majors) are controlled by interests in the United States, China, and Europe. Although centred in western Canada and predominantly controlled by Canadian interests, Canada’s fossil-capital elite directs outward-bound international business activities while being penetrated by foreign interests. It participates in the cross-penetration of investment that is integral both to capitalist globalization and to the formation of a transnational capitalist class (Carroll 2018).
Social Organization of the Fossil-Capital Elite
Central to my second research question is whether elite interlocking within the fossil-capital sector provides a basis for a corporate community—whether the network is integrated or fragmented into many disconnected pieces. In this section I present a network analysis of the interlocks created by the multiple affiliations of directors and executives of fossil-capital firms.
Results of snowball sampling already showed that the fossil-capital elite is embedded in a national and transnational network. Its members interlock directly or at one remove with more than 15,000 corporations, nearly 2,000 of which are based in Canada.5 Yet the entire network could still be disjointed if companies formed cliques, interlocking with one another to the exclusion of outsiders. Here, the question is not simply whether firms interlock with other corporations but whether their neighbours interlock with each other—that is, whether the neighbourhoods of fossil-capital firms overlap. Focusing on the 1,258 top strata corporations, we find that 92.4 percent form a connected component in which all members are directly or indirectly linked. This means that the neighbourhoods of fossil-capital firms overlap, constituting a single network. Its density is 0.007; in other words, 0.7 percent of all pairs of companies are interlocked. Overall, the network is quite sparse (as large networks typically are), yet this does not preclude the possibility of relatively dense subnetworks, as we shall see.
Any network is composed of points (or nodes) and lines (or edges). The nodes are characteristically organized along a dimension of centrality: some are positioned at or near the network’s core; others are on its margins. The most basic index of centrality is degree, which in this case is simply the number of companies with which a given corporation is interlocked. Within my sample, the mean degree is 7.74. As with the distribution of capital, the distribution of interlocking is skewed (though not as severely): the most central 10 percent of corporations (each with a degree of at least 17) accounts for 31 percent of all interlocking.
In addition to simple degree, a measure of centrality that takes into account the centrality of one’s neighbours in the network is 2-step degree: the number of firms to which a given company is tied either directly or at one remove. Among the top strata corporations, the mean 2-step degree is 32.39. Degree and 2-step degree can illuminate whether and how Canada’s fossil-capital companies form a distinct corporate community. Considering only the interlocks that link the 238 fossil-capital firms to one another, we find that 193 companies participate in at least one interlock within the sector, the mean within-sector degree being 4.01. In addition, companies are linked at one remove to a mean of 7.34 other fossil-capital firms. All but six of the 193 firms form a connected component.
Concentration of Capital and Network Structure
Fossil capital is highly concentrated (see chapter 4), with the fifteen majors claiming nearly two-thirds of revenue. This bifurcation structures the elite network. As a metric, degree can be decomposed into internal and external components. Internal degree refers to the number of firms in the same sector with which a firm interlocks; external degree refers to the number of firms in other sectors with which the same firm interlocks. When we distinguish between “introverted” networking within Canada’s fossil-capital sector (internal degree) and “extraverted” networking beyond it (external degree), what stands out is the difference between majors and others (table 5.1). On average, majors interlock with three other fossil-capital firms but with eleven non-fossil neighbours: their networking reaches extensively beyond the fossil-capital sector, linking them at one remove to a mean of eighty-five companies beyond the core sample. Mid-sized core-sample companies interlock mainly with other fossil-capital firms, and their interlocks do not generate very many indirect ties beyond the Canadian fossil-capital sector.6 The E-I index, a measure of relative extraversion that has a theoretical maximum of 1 (complete extraversion) and minimum of –1 (complete introversion), summarizes the difference nicely: majors are extraverted (mean E-I = 0.522); smaller fossil-sector firms are introverted (E-I = –0.304).7 The fossil-capital network appears as a two-tiered formation, divided between majors and mid-sized firms. The latter form the backbone of a cohesive, if introverted, local elite; the former play a mediating role between mid-sized local firms and extra-local corporate communities.
Size of corporation
Degree in core sample
2-step degree in core sample
Degree in rest of network
2-step degree in rest of network
Within the fifteen majors, however, is a further division: four show no ties to the other Canadian fossil-capital firms, and three of those four have long been under foreign control (Husky Energy, Imperial Oil, Shell Canada, and coal giant Teck Resources, whose investments extend to non-carbon mining and smelting). On the other hand, majors invested in oil and gas and with deep roots in Canada’s capitalist class do participate in the fossil-capital subnetwork, though not to the exclusion of their broader networking. This pattern is evident for Canadian Natural Resources Limited (CNRL; internal degree = 8, external degree = 10), Encana (6, 15), Talisman Energy (5, 19), TransCanada Corporation (5, 20), Enbridge (4, 11), Nexen (4, 12), and Suncor (4, 14), suggesting that these firms (including two that recently fell under foreign control: Talisman and Nexen) play a mediating role in networking both within the local, Calgary-based community and beyond it.
The Core of the Fossil-Capital Corporate Community
Looking more closely within the subnetwork of fossil-capital firms, differences in internal degree between majors and smaller firms point to broader variation in centrality. On the one hand, a quarter of fossil-capital firms do not participate in any interlocks within the subnetwork, while 21.0 percent interlock with one fossil-capital firm and another quarter interlock with two such firms. On the other hand, 17.6 percent interlock with four or more other fossil-capital firms. This suggests that the fossil-capital community is organized around a dense core.
To explore this hypothesis, I dissected the connected component of 193 fossil-capital firms into successive k-cores. A k-core is a connected subnetwork whose members are directly linked to at least k other members (Seidman 1983). As k increases, the criterion for membership is ratcheted up, leaving a smaller subnetwork of densely connected members. The Canadian fossil-capital network does indeed contain a dense centre. Thirteen firms form a 12-core—a completely connected network. Fifty-one firms form a dense 4-core: 40 percent of these firms directly interlock with one another. The 4-core includes only 21.4 percent of fossil-capital firms, but interlocks among its members account for 54.1 percent of all core-sample interlocking.
We can see in table 5.2 that the 4-core is comprised mostly of non-integrated oil and gas producers with access to land (and thus resource rents), based in Calgary, invested primarily in western Canada (with some capital in the rest of Canada or in the United States), and controlled by Canadian interests. At the same time, integrated producers and coal companies, and companies that provide services to extraction but do not control land, are largely absent from the network’s core. On average, firms in the 4-core are smaller than other fossil-capital firms. Only one of the fifteen majors is located within the 4-core.
Non-integrated oil and gas extraction
Carbon holdings in land
Headquartered in Calgary
Invested in western Canada (+ ROC/US)
Controlled by Canadian interests
Mean revenue (2014)
Unpacking the Fossil-Capital Elite
A key property of corporate-interlock networks is their duality (Carroll 1984): they are composed of both corporations and the persons who actually “carry” the interlocks via their multiple corporate affiliations. Properly speaking, the “fossil-capital elite” refers not to corporations but to the key directors and executives in charge of them. Structurally, the networkers, whose multiple affiliations create the corporate-interlock network, play key integrative roles in the fossil-capital elite. A total of 834 individuals (including 105 presidents/CEOS and 79 board chairs of core-sample firms) create all the interlocks within Canada’s carbon-extractive sector and between it and the national and international network in which it is embedded. Nearly a third of them hold one position in a fossil-capital firm and one position in a neighbour of some sort; another quarter hold one fossil-capital affiliation but multiple affiliations with other corporations. These 458 individuals, comprising 54.9 percent of all networkers, link Canada’s carbon-extractive sector to the wider corporate elite, without themselves networking across fossil-capital firms. On the other hand, more than a quarter of all networkers (27.6 percent) are network specialists entirely within Canada’s carbon-extractive sector: their corporate affiliations do not extend to other industries. Another 16.5 percent are networkers within Canada’s carbon-extractive sector and have at least one corporate affiliation beyond it. Within that category, 63 individuals (7.6 percent of networkers) hold multiple affiliations with both Canadian fossil-capital companies and neighbouring companies.
Taking the 834 networkers as an operationalization of the fossil-capital elite, we find a sharp underrepresentation of women (87.8 percent are men), continuing a patriarchal tradition documented in the 1950s by Porter (1965) and modestly eroded in subsequent years (Carroll 2004). An important class distinction within corporate elites is between functioning capitalists in executive positions, who own or manage corporations, and advisors, or “organic intellectuals,” who serve as outside directors of multiple firms (Carroll 1984, 250). If the corporate network were carried mostly by advisors, it might amount to little more than “window dressing” (Helland and Sykuta 2004)—a side effect of firms retaining the same advisors. Alternatively, a network of interlocking directorates carried mainly by those in positions of authority comprises a structure of corporate power. I assigned each networker to a class category by determining his or her principal affiliation, as indicated by business databases at my disposal (primarily FP Infomart, secondarily Bloomberg and ORBIS). Overall, advisors (including fifteen legal advisors, six consultants, one academic, one state official, and three other advisors) comprise 3.1 percent of the elite. Retired capitalists (éminences grises) serving as outside directors—also advisors but recruited from within the class of business owners and executives—make up another 10.2 percent. But most elite networkers are functioning capitalists of one sort or another. The most common position held is that of non-presidential executive (vice president, CFO/treasurer, secretary) in a firm within my sample (44.5 percent of networkers), followed by executive and/or owner of a firm outside my sample (20.7 percent). Other networkers hold top positions in sample corporations, as presidents/CEOs (6.1 percent), presidents/CEOs and chairs (5.5 percent), chairs (5.2 percent), or leading shareholders (4.6 percent, twelve of whom are also presidents).
Although the entire elite is unwieldy to map as a network, we can depict as its inner circle the individuals and corporations that form the 4-core I have identified as the dense centre of the fossil-capital network. Figure 5.1 shows both the individuals and the corporations they direct or manage.8 If the 4-core provides a backbone for Calgary’s oil elite, who is doing the interlocking? The sixty-three individuals in the 4-core tend to be network specialists within the core sample—only 34.9 percent have any extraverted corporate affiliations. They tend to be functioning capitalists—only four are advisors or éminences grises. And they are overwhelmingly male—only four are women. The biggest linker in the network is J. A. Brussa, a corporate lawyer who chairs Crew Energy and directs eight other fossil-capital firms (all members of the 12-core). Besides Brussa, R. J. Zakresky, D. Shwed, D. R. Drall, M. D. Sandrelli, and E. Chwyl are the key individuals who co-constitute the 12-core through their multiple affiliations with its member firms. And of course, the 12-core is itself linked to other capitalist groups. In particular, Daryl H. Gilbert, managing director of JOG Capital and a key networker in a 6-core composed of eleven firms, sits on the board of Leucrotta Exploration, along with Brussa and Zakresky. It is through such cross-cutting affiliations that networkers like Gilbert, Zakresky, and Brussa knit the corporations into a fossil-capital community.
This subnetwork at the heart of the fossil elite is heavily linked to the less central corporations that surround it, which include most of the fossil-capital majors. Although only CNRL participates in the 4-core, eleven of the fifteen majors participate in the connected component, and seven are within its 3-core.
The Fossil-Capital Elite and Its Neighbours
Mapping the Fossil-Capital Subnetwork and Its Canadian Neighbours
In this section I turn to my third research question. How is fossil capital embedded within the national network? In particular, how is it linked to the financial sector, a key source of investment capital and hence a key site of allocative power? Previous research showed that the Canadian corporate network became centred in Toronto during the long postwar boom (from the late 1940s to early 1970s), but that in the later decades of the twentieth century Calgary and Vancouver emerged as corporate command centres, even aspiring to the status of beta-global cities (Carroll 2004). Calgary is the epicentre of fossil capital, but, as table 5.3 shows, it hosts rather few direct and indirect corporate neighbours to that sector. Instead, Canadian neighbours tend to be based in Toronto, Montréal, and Vancouver.
The national corporate network is structured by this geography. The sociogram in figure 5.2 comprises 525 corporations based in these seven key cities—core-sample firms, their neighbours, and neighbours of neighbours—all linked into a connected component. Once we cluster this corporate social space around Canada’s major cities, as in the sociogram, the differences become clear: Calgary’s highly integrated network is specialized in the fossil-capital sector (in black), with very few other industries represented. Vancouver hosts the second-largest complement of core-sample firms and also a variety of companies in other sectors, as direct and indirect neighbours to the carbon sector. Edmonton’s network is much smaller but resembles Vancouver’s as a centre for both core-sample firms and their neighbours. Toronto and Montréal show the obverse of Calgary’s mono-sectoral profile. Montréal hosts only one core-sample company but many neighbours. Local networks in Calgary, Vancouver, Montréal, and Toronto are internally well integrated, but other cities host firms whose interlocks are extraverted toward companies based in the four main metropoli. The elite traffic among those four is extensive and tends to converge upon Toronto, while elite relations between corporations based in Vancouver and those based in Montréal are quite sparse.
Figure 5.2 also codes corporations in terms of their main economic activity, mapping the distribution of economic sectors across the landscape of the network. I have adopted a fivefold carbon-centred categorization scheme here, consistent with an interest in how that sector links to others. Alongside the fossil-capital sector (black points) is a carbon-related sector, composed of industrial firms closely implicated in the fossil-capital sector, including petrochemicals, electricity, steel, transport, and the automobile industry—what Urry (2013) includes within his broad conception of “carbon capital” (dark grey points). Other industries, whose connections to carbon extraction are more mediated (including non-carbon resource extraction, pharmaceuticals, food and beverage production, equipment manufacture, software, communication, and media), make up a third category (grey). The other two categories distinguish commerce (light grey) from finance (white). I recognize that within fossil capitalism virtually all economic activities depend on carbon directly or indirectly.
In the Toronto-based segment, financial capital is strikingly predominant, but we also see a substantial complement of more mediated production activities. Montréal’s network likewise contains numerous financial institutions and a variety of industrial corporations, and to some extent this holds for Vancouver as well. Again, the mono-industrial character of Calgary’s network stands out.
Symbiotic ties between industry and finance, abundant in our mapping of the ownership network in chapter 4, have been integral in the organization of corporate power ever since corporations emerged and grew in tandem with the modern credit system (Harvey 2006). One way of exploring this relation as it pertains to fossil capital is by analyzing the neighbourhoods of corporations. Considering first the 238 fossil-capital firms, we find that sixty-five of them include at least one financial company in their neighbourhoods; twenty-six have two or more, and ten have three or more. Interestingly, seven of those ten are majors, and the other three are not based in Calgary. Moreover, seven of the sixteen firms linked to two financials are either majors (three) or based in the east (four). The Calgary-based backbone of the fossil-capital network has comparatively less-extensive elite ties to financial capital.
Given their enormous financing needs, it stands to reason that the majors tend to interlock with multiple financial institutions and to participate more profusely in the national network. Looked at from the other side, among the 126 Canadian financial, investment, and real estate corporations in my sample, forty-five are tied to at least one fossil-capital company; twenty-one have two or more such interlocks, while twelve have three or more. Thirteen of the twenty-one with links to multiple fossil-capital firms are based in Toronto; one is based in Calgary.
If we focus on the seam between these two key sectors, and the firms whose boards interlock extensively across that seam, we arrive at the connected component in figure 5.3, which consists of thirty-six firms: twenty fossil-capital companies (in blue) and sixteen financials (in pink).9 Here we see an intermingling of fossil capital predominantly based in Calgary (blue circles) and financial capital predominantly based in Toronto (pink diamonds). Ten of the fifteen fossil-capital majors participate; Imperial Oil, Teck Resources, CNRL, Enbridge, and TransCanada interlock with multiple financials—clarifying that their ties to major eastern-based financial corporations are a key aspect of the mediating role they play between Calgary’s corporate community and the broader national formation. Along this seam between fossil capital and finance, the most central financial institutions are the Royal Bank of Canada, Toronto-Dominion Bank, Sun Life, Manulife, Brookfield Asset Management, and Great-West Life. Such profuse ties are to be expected, in view of the extensive financing needs of the majors as they pursue megaprojects requiring massive fixed-capital investment.
Linking into the Transnational Corporate Network
Earlier we observed how corporate concentration shapes the fossil-capital elite, as the largest companies mediate between the local and the extra-local. This mediating role also appears in the composition of neighbourhoods around the fifteen majors. In figure 5.4, the neighbourhoods interpenetrate extensively, forming a connected network of the fifteen majors and 174 neighbours. Most of the majors (and particularly CNRL, Enbridge, Encana, TransCanada, and Nexen) link extensively to both the core network (in red) and the network of Canadian and foreign neighbours (in pink and green, respectively). Husky Energy (located in the lower right corner of the sociogram) is a noteworthy exception. Its neighbourhood reaches into the Canadian corporate network via a single interlock with Sun Life. Otherwise, Husky belongs to a corporate group organized around its Hong Kong–based controlling shareholder, Hutchison Holdings (and the family of mega-billionaire Li Ka-shing, who owns Hutchison).
Again, we find the majors playing a mediating role between the local scene and the extra-local formations of corporate power—distinct from the mid-sized fossil-capital companies that interlock with one another as a local corporate community. The demography of the fossil-capital sector weights the fossil-capital elite in a localist direction: most of the active carbon-sector capitalists are centred in Calgary and connected into a highly cohesive, somewhat introverted local network. But the largest concentrations of capital, and of corporate power, pull the network toward national and transnational scale.
However, transnationality is not simply a matter of scale. As argued elsewhere (Carroll 2018), the transnational corporate network is itself highly regionalized: most interlocking occurs in the same region, and the global network is organized around a North Atlantic core. When we consider the domicile of the foreign corporate neighbours to Canada’s fossil-capital elite, we find that 58.8 percent of direct foreign neighbours are based in North America (including the United States plus the three tax havens of Bermuda, Cayman Islands, and Curacao), 23.1 percent are based in western Europe, and 9.2 percent are based in the Asia-Pacific core of Japan, South Korea, Hong Kong, Australia, and New Zealand. That is, most of the foreign corporations whose directors and executives interlock with Canada’s fossil-capital community are based in the United States and the other core zones of the world economy. The same holds for foreign firms indirectly linked to Canada’s fossil-capital elite: 61.4 percent are based in the rest of North America, 22 percent are based in the core states of Europe, and 9.4 percent are based in the core Asia-Pacific region. Thus, foreign neighbours are based in the world economy’s core zones: the United States, Europe, and the affluent countries of the Asia-Pacific. Of the thirty-one direct and indirect neighbours based on the Asian semi-periphery, twenty-two are headquartered in mainland China, six in India, and three in Malaysia. Overwhelmingly, Canada’s fossil-capital elite is nested within the triad of North America, western Europe, and Japan/Australia, reflecting the well-established contours of the transnational capitalist class (Carroll 2018).
Region / country
Canada: core sample
Rest of North America
S-P Latin America
S-P Eastern Europe / Middle East
Canada: core sample
Rest of North America
S-P Latin America
S-P Eastern Europe/Middle East
Note: S-P = semi-peripheral; “Rest of North America” = United States, Bermuda, Cayman Islands, and Curaçao.
The actual elite relations among Canadian fossil-capital firms and the national and transnational corporate network are strongly shaped by this pattern of participation. My snowball sampling identifies the complete network of interlocks among Canada’s fossil-capital sector and all immediate neighbours. The percentages in table 5.4 break down the total volume of directorate interlocking in that transnational network, by each region of the world system. We see that firms based in Canada link predominantly to other Canada-based firms, whether core sample or neighbours. Interlocks among core-sample firms and their Canadian neighbours make up 56.11 percent of interlocks in the entire network, which is strongly clustered on a regional basis (only 18.96 percent of all interlocks link across the region/country categories in the table). The Canadian network is highly introverted—strongly integrated but more sparsely linked to the transnational network in which it is embedded. Indeed, its E-I score (–0.600) indicates far more introversion than found in the fossil-capital subnetwork it contains, thereby confirming the continuing cohesiveness of Canada’s corporate community. It also points to that community’s focal role vis-à-vis the fossil-capital elite nested within it. Beyond domestic interlocks, Canada’s fossil-capital sector links primarily to the core regions of the North Atlantic; indeed, 93.17 percent of the total volume of interlocking in the transnational network connects corporations based in the North Atlantic. Outside that zone, nearly all interlocks involve firms based in the core (5.14 percent) and semi-peripheral (1.59 percent) zones of south and east Asia. The elite connections of Canadian fossil capital do not as a rule extend to the Middle East, eastern Europe, Latin America, and Africa.
In figure 5.5, a view of the entire transnational network conveys another sense of the mediating role that the majors play, in this case between foreign and Canadian corporations. Nearly all top strata corporations I identified through snowball sampling form a connected component of 1,162 firms. In this sociogram, nodes are colour-coded according to sample stratum: red for the core sample, pink for direct neighbours based in Canada, light pink for indirect neighbours based in Canada, light green for foreign-based direct neighbours, and dark green for foreign-based indirect neighbours. As with the other sociograms in this chapter (with the exception of figure 5.2), nodes are positioned in concordance with their relative proximity to each other in the actual network (see note 8). The network’s topography has of course been conditioned by the snowball sampling: indirect neighbours connect with core-sample members at only one remove; thus, core-sample firms tend to be at one end of the network, with indirect neighbours at the other.
Where do the fifteen Canadian fossil-capital majors fit into this space? With some partial exceptions—four of the smaller majors: Gibson Energy and Pembina Pipeline, Parkland Fuel and Teck Corporation—they are positioned more on the side of the neighbouring strata, both Canadian and foreign. Suncor, Talisman, Imperial Oil, and Cenovus occupy a liminal zone between the predominantly Canadian network to the left and the predominantly foreign-based network to the right. In contrast, Husky and Shell, both controlled by foreign owners, are ensconced in the foreign-based network. The majors either are distant from the fossil-capital network (Shell and Husky) or tend to mediate between it and the wider world of transnational capital.
This chapter began with three research questions regarding the fossil-capital elite’s accumulation base, its internal relations, and its links to other fractions of capital. What has our mapping of its social organization revealed regarding those questions?
Regarding the elite’s accumulation base, pronounced economic concentration shapes the landscape of corporate power, lodging it in four major urban centres: pre-eminently (for fossil capital) Calgary, then Toronto, Vancouver, and Montréal. The majors dominate particularly in the capital-intensive sectors: integrated oil and gas production and pipelines. While majors claim the lion’s share of the sector’s revenue, most fossil-capital firms are mid-sized, and although western Canada is the primary production site, many companies are invested in other locales, national and international. Most firms—whether majors or mid-sized—are controlled by interests based in Canada, and this tendency has strengthened recently as global majors such as Shell and ConocoPhillips have sold their tar sands assets to Canadian majors (Pineault and Hussey 2017).
Economic concentration is amplified by the social organization of corporate power. A relatively few directors and executives are corporate networkers, and a small proportion of them account for most interlocking, both among fossil-capital firms and in the wider network of their neighbours. Most corporate interlocking among carbon-extractive firms occurs within a single city and among one-fifth of the companies. But despite the high level of cohesion among the boards of Calgary-based companies, the fossil-capital elite is not an entity unto itself; it is a fraction nested within the national corporate elite, with additional ties to the transnational network. The individuals who comprise the elite are overwhelmingly male and engaged in top-level management—not simply corporate window dressing. Corporate power’s spatial organization concentrates command over carbon resources largely in Calgary, while financial and other corporations are based in Toronto and, to a lesser extent, Montréal and Vancouver. Directorate interlocks stitch corporations into a cohesive national elite network. In its transnational connections (where the carbon majors are especially active), the network is concentrated largely within the North Atlantic zone of the global economy, the heartland for a transnational capitalist class.
The majors, several of which are controlled by foreign interests, link into the local network but are not at its centre. Instead, they play a multifaceted mediating role:
- between the tightly integrated, somewhat introverted Calgary-based network and corporations based elsewhere
- more specifically, between eastern-based financial capital (with which the majors have profuse ties) and western-based fossil capital
- between the Canadian corporate community and the wider world of transnational capital.
The top tier of Canada’s carbon-extractive sector, while somewhat marginal to the Calgary-centred network, integrates the fossil-capital elite with other segments of corporate power, both nationally and transnationally. But ancillary organizations also provide such integrative capacity. Notably, the sharply stratified character of fossil capital is recognized by its primary representative body, the Canadian Association of Petroleum Producers (CAPP). At the time the data for this chapter were gathered, CAPP’s board of governors was “balanced,” with ten governors selected from the twelve largest member firms, ten from the next twenty members, and ten from smaller companies. Subsequently, CAPP’s board was expanded to include “up to 78 volunteer governors,” each representing member companies at the chief executive level—effectively guaranteeing that smaller firms will be strongly represented.10 In presenting a single voice for the oil and gas sector, CAPP also mediates possible fractional divisions between big and mid-sized capital.
These mediating relations are important, both economically and politically. Although the local Calgary network is highly integrated, it is also highly specialized: the fossil-capital elite is spatially concentrated, setting up a symbiosis with sources of finance located elsewhere, but also the potential for political conflict between regionally inflected fossil-capital interests and other fractions within Canadian capitalism, such as eastern-based manufacturing—a dynamic evident since the National Energy Program of the early 1980s (Laxer 2015, 46–49). The sector over which the fossil-capital elite presides has been a strong motor of regional accumulation, with spread effects via commodity chains and fiscal/financial skim-off. Yet sharpening ecological concerns, both global and site-specific (as in local risks of carbon transport by land and water), portend intensified regional conflict over energy futures.
The architecture of corporate power in and around the fossil-capital sector reveals an organized minority of capitalists and their close advisors. Its oligarchic form embodies a key aspect of what is sometimes called “business-as-usual.” In corporate boardrooms, decisions affecting communities, workers, and ecologies are made by small, often interlocked groups of men, according to a criterion that privileges short-term private profit over public and ecological concerns. At least since Britain’s 2006 Stern Review (Stern 2006) business-as-usual has also referred to a climate scenario in which the current regime of largely unregulated corporate power is simply extended into the future. In the Stern Review and elsewhere, the projection is ecological and economic decline, in the current century, as catastrophic climate change erodes the basis for living systems, and thus for economic life.
In both senses of the term, business-as-usual—the oligarchic organization of corporate power within an energy sector increasingly recognized as ecologically disastrous—forms the core of Canada’s regime of obstruction.
- 1. Services to extraction mainly involve services to production (drilling, transport). Coal/bitumen includes primarily coal mining but also five firms that mine bitumen exclusively. Three coal firms also mine bitumen. Five of the seven integrated producers extract bitumen, along with nine of the 130 non-integrated oil and gas producers.
- 2. The locations of these Canadian-based foreign direct investments include Africa (Tunisia, Morocco, Libya, Nigeria, Madagascar, Ethiopia, Kenya, Somalia, South Africa), Latin America (Mexico, the Caribbean, including Cuba, Guatemala, Brazil, Argentina, Peru, Colombia, Ecuador, Guyana, Belize, Venezuela, Chile, Uruguay), Asia (Kazakhstan, Jordan, Syria, United Arab Emirates, Iraq, Oman, Bahrain, Dubai, Yemen, Saudi Arabia, Indonesia, Brunei, Malaysia, Thailand, Indonesia, Singapore, Bangladesh, Pakistan, India, China, Mongolia, Papua New Guinea), Europe (UK offshore, Greenland offshore, Iceland, Norway offshore, Ireland, Germany, Denmark, Sweden, the Netherlands, France, Spain, Italy, Cyprus, Poland, Albania, Romania, Hungary, Russia, Georgia, Ukraine, Turkey) and Australia and New Zealand.
- 3. Two (Imperial Oil and Shell Canada) have major refining operations in central Canada but not beyond, six are active in the United States, and seven are invested more internationally (four of which are also active in the US).
- 4. Data for the analysis of foreign control (as of late 2015) are from FP Infomart and ORBIS. We classified each fossil-capital corporation as to the country in which the owning interest is based. Revenue was not available for nine private corporations, including three controlled in Canada (Sprott Resource Corporation, Canada Energy Partners Inc., and Altex Energy Ltd.), four controlled in the United States (Murphy Oil Co. Ltd., Chevron Canada Resources, ExxonMobil Canada, and Prairie Mines and Royalty Ltd.), one controlled in France (Total E & P Canada), and one controlled in Japan (Grande Cache Coal Corporation). My estimates of revenue under foreign control are probably slightly conservative.
- 5. Note that my methodology constructs a view of the corporate power structure from a specific starting point in Canada’s fossil-capital sector. This purposefully highlights the prominence of that sector.
- 6. The simple contrast between fifteen majors and the rest accounts for 14.7 percent of the variance in overall degree and 21.3 percent of the variance in overall 2-step degree.
- 7. For present purposes, the E-I index subtracts the proportion of each firm’s total degree that is internal to the core sample from the proportion that is external. See Krackhardt and Stern (1988). Among the 238 core-sample members, the proportion of variance in E-I attributable to the distinction between majors and other firms (Eta2) is 0.081.
- 8. To simplify the diagram, we have excluded nine companies that are linked into the 4-core by means of a single individual; thus, the sociogram displays 42 corporations and 63 individuals. A spring-embedded algorithm was used to map the points in concordance with their relative proximity to each other in the actual network (Hanneman and Riddle 2005).
- 9. The sociogram excludes isolates from the connected component: six fossil-capital companies interlocked with multiple financials and five financials interlocked with multiple fossil-capital companies.
- 10. See “Board of Governors,” CAPP, 2020, https://www.capp.ca/about-us/our-organization/board-of-governors.
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- * This chapter first appeared in the Canadian Journal of Sociology 42, no. 3 (2017): 225–60, under the title “Canada’s Carbon-Capital Elite: A Tangled Web of Corporate Power.” It is reprinted here, with minor revisions, by permission of the journal.