The upcoming review, coupled with the strong rhetoric against environmentalists, is "creating a culture of fear," [Todd] Paglia [executive director of the charity ForestEthics] said.

"Every nonprofit I talk to in Canada is worried about the next shoe dropping," he said. The government "is looking for ways to stifle dissent, and it's having a pretty serious impact on us."

Much of the debate has revolved around Paglia's organization. ForestEthics was founded in 2000 and has offices in Canada and the United States. The group employs 28 people and its total annual budget is $3 million. In 2011, it spent $1.4 million in Canada on a variety of issues, including clean energy, forest ecosystems and climate change. About 14 percent of that money went to tar sands campaigns.

ForestEthics has a history of working with industry and the Canadian government. In 2006, the group helped broker an internationally acclaimed conservation plan for British Columbia's Great Bear Rainforest, which balanced sustainable development with ecosystem protection.

Like other Canadian environmental groups, ForestEthics is organizing grassroots resistance to Northern Gateway. But what distinguishes ForestEthics is its simultaneous campaign to persuade U.S. companies—the primary consumers of Canada's oil—to turn away from tar sands crude oil. Since 2010, ForestEthics' efforts have led 15 U.S. corporations (including Walgreens) and the city of Bellingham, Wash. to reduce their use of tar sands-derived fuel. Canada's federal and Alberta governments responded by urging people to boycott the products those companies produce.

Paglia believes that its U.S.-based campaign is the real reason ForestEthics has become a target...