October 15, 2015 / 12:15 AM / 2 years ago

REFILE-UPDATE 1-Canada Liberal campaign co-chair resigns over pipeline advice

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By Randall Palmer

AJAX, Ontario, Oct 14 (Reuters) - A co-chair of Canada's Liberal election campaign, Dan Gagnier, resigned his position on Wednesday after news emerged that he had advised TransCanada Corp on how to lobby the next government after the Oct. 19 election.

TransCanada is trying to win approval for its Energy East oil pipeline across the country, and The Canadian Press reported on Wednesday on a detailed email Gagnier sent on Monday to TransCanada officials on how to lobby a new government, possibly Liberal, on energy projects.

"In order to avoid becoming a distraction to the campaign, I have decided to take a step back from my responsibilities to the Liberal campaign," Gagnier said in a statement distributed by the Liberal campaign.

"I deeply regret that the campaign has been affected by these negative, personal attacks. I have always conducted my business openly and in full accordance with the rules. In the best interests of the party, I have taken this decision."

It was bad news for Liberal leader Justin Trudeau, currently campaigning in Ontario, as he tries to capitalize on a surge in support that has vaulted him into first place in the polls with less than a week before the election.

Gagnier is a political veteran, having served as chief of staff separately to the premiers of Ontario and Quebec over the last decades, and served as campaign co-chair on a volunteer basis. He had sometimes accompanied Trudeau.

TransCanada is one of his clients as a consultant, and the CP story said he advised it to target the right people in a new government quickly so they can help shape either Liberal or New Democratic Party (NDP) decisions on a national energy strategy.

The email said this would be needed to ensure the planned in-service dates of projects like Energy East were not put at risk, CP said.

The news of his email drew the scorn of NDP legislator Charlie Angus: "The Liberal Party usually waits until after an election is over to get involved in a scandal."

The Liberal campaign had earlier in the day defended Gagnier but by evening it said he was standing down.

"He made his decision in the best interests of the party and we respect his decision. Mr Gagnier has always operated within full accordance of the rules," it said in a statement.

Both the Liberals and New Democrats had at first supported the Energy East line, designed to ship oil from Alberta to Canada's East Coast for refining or exporting.

But as environmental opposition built, they both backed off, with Trudeau saying it needed more public support and the NDP saying the environmental approval process needed revamping before it could support it.

Conservative legislator Paul Calandra derided the Liberals: "A party run by elite insiders who sell their influence to the highest bidder to the detriment of taxpayers." (Reporting by Randall Palmer; Editing by Cynthia Osterman)

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