THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
ST. JOHN’S, Tuesday, April 23, 2019
The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts, met this day at 8:58 a.m. to give consideration to the bill.
Senator Rosa Galvez (Chair) in the chair.
[English]
The Chair: Welcome to the meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. My name is Rosa Galvez, and I’m a senator from Quebec. I’m the chair of this committee. I will now ask senators around the table to introduce themselves, starting at my left.
Senator Massicotte: Senator Massicotte from Quebec.
Senator Neufeld: Richard Neufeld, British Columbia.
Senator Woo: Yuen Pau Woo, British Columbia.
Senator Patterson: Dennis Patterson, Nunavut.
Senator Simons: Paula Simons, Alberta.
Senator Manning: Fabian Manning, Newfoundland and Labrador.
Senator Ravalia: Mohamed Ravalia, Twillingate, Newfoundland and Labrador.
Senator McCallum: Mary Jane McCallum, Treaty 10, Manitoba region.
The Chair: I would like to also thank the analysts, Mr. Jesse Good and Sam Banks, and the clerk of our committee, Maxime Fortin. Also, thank you to the stenographers and the translators that come with us and do the splendid work and make our debate possible.
Colleagues, today we are continuing our study of Bill C-69, An act to enact the impact assessment act and the Canadian energy regulator act, to amend the Navigation Protection Act and to make consequential amendments to other acts.
For our first panel, we welcome, from Husky Energy, Adam Sparkes, Director, Government Relations; and David Pinsent, Senior Environmental Advisor. From Newfoundland and Labrador Oil and Gas Industry Association, we have Charlene Johnson, Chief Executive Officer. From the Canadian Association of Petroleum Producers, we welcome Paul Barnes, Director, Atlantic Canada and Arctic. And from the St. John’s Board of Trade, we have Brandon Ellis, Policy and Advocacy Specialist.
Each of the four groups will have five minutes each, to be followed with some questions and answers.
Mr. Sparkes.
Adam Sparkes, Director, Government Relations, Husky Energy: Thanks for the opportunity to appear before the committee this morning. Husky’s approach is to be a constructive participant in the review of Bill C-69 and for us that means explaining our specific concerns and sharing our specific amendments to address those concerns, while at the same time addressing the bill’s strengths, acknowledging them and also that the status quo is currently not working.
You have a copy of Husky’s written submission dated March 12. While our submission deals with many issues, today we’ll be focusing on three concerns relating specifically to oil and gas activities offshore Newfoundland and Labrador. I think you’ll see that running through those concerns is a common thread and that’s respect for the Atlantic Accord and the joint management regime that it established.
The accord was signed between the federal and provincial governments to put a jurisdictional dispute behind them and replace it with joint management of the offshore, and the main expression of joint management is the Canada-Newfoundland and Labrador Offshore Petroleum Board. Key provisions of the proposed act, in our opinion, place the board in the backseat of impact assessments and do not respect the Atlantic Accord’s promise of joint management.
Our first concern: Exploration wells in the Newfoundland and Labrador offshore area do not belong on the project list. And I won’t belabour this point because I know you’ve heard it before and we share this concern. We call on the federal government to release a draft project list as soon as possible so that it may be considered by the standing committee during your study of Bill C-69. We have been encouraged by statements from senior federal officials who’ve appeared before you that the project list is intended to capture major projects. Our view is that well-understood projects with established mitigation measures and which are assessed by experienced and expert life-cycle regulators shouldn’t be on the project list. In addition to having these characteristics, offshore exploration wells are short duration activities, a couple of months. They are not major projects, and they don’t belong on the project list.
Our second concern: A panel review should not be the only assessment option for designated offshore oil and gas activities. As currently drafted, the proposed act requires a full panel review for designated offshore oil and gas activities. In so doing, it blocks other assessment options, such as agency reviews, substitutions and joint review panels. And that’s problematic for two reasons. First, it runs contrary to a fundamental principle of any assessment regime, and that is that the scale and nature of assessment should be aligned to the scale and nature of the project to be assessed. It’s worth remembering that there hasn’t been a panel review of a development offshore Newfoundland and Labrador since Terra Nova in the 1990s. The flexibility to choose an assessment option appropriate to the project being assessed currently exists. It has existed under previous federal environmental assessment legislation. In fact, the proposed act provides this flexibility for land-based oil and gas activities and it should continue to be there for designated offshore activities.
Second, it makes the promise of one project-one review unattainable for the offshore. The board must review a proposed project as per the requirements of the accord acts, irrespective of what is required under the proposed impact assessment act. The development application under the accord acts covers a broad range of issues from the mode of development, to environment, to safety, to benefits. This review process often involves a public review, conducted by the commissioner or a review panel under the accord acts. Now CEAA and the board have worked in the past to integrate these two review processes to avoid overlap and duplication as much as possible and that’s expressly allowed for in the accord acts themselves. In its current form, the proposed impact assessment act makes integration of impact assessments and accord act reviews more difficult, not easier.
Again, I turn to the example of Terra Nova. In that case, a joint review panel was determined to be the most effective and efficient way to satisfy the requirements of CEAA, the accord acts and in fact, also the provincial environmental assessment legislation. Under the proposed act, this sensible path forward would actually be prohibited. CAPP has proposed amendments that would retain flexibility as to assessment options and ensure continued collaboration between the agency and the board. The CAPP amendments are practical. They would enable the most streamlined review possible and that’s key to enhancing Canada’s global competitiveness, an express objective of the bill you’re studying. As important, the amendments better respect joint management and the Atlantic Accord.
The third and final concern that we would raise this morning is that life-cycle regulators have experience, expertise and credibility and should be leveraged in panel reviews. If a panel review is required, the proposed impact assessment act marginalized the role of the C-NLOPB by stating the persons selected from the board’s roster cannot constitute a majority of panel members. This doesn’t acknowledge the experience and expertise of the board with respect to the offshore. The best place person, those with relevant expertise, should be selected for panels. The cap on the board’s participation should be removed. We also encourage you to build in more flexibility as to whom the board can nominate for rosters and to be more precise, what I mean by that is the board should be able to nominate any person with relevant expertise, not be limited to selecting from board members only.
Thank you again for the opportunity to appear before the standing committee and we look forward to any questions you might have.
The Chair: Thank you.
Ms. Johnson.
Charlene Johnson, Chief Executive Officer, Newfoundland and Labrador Oil & Gas Industries Association: Good morning, honourable chair and members of the committee. On behalf of NOIA’s almost 600 members, thank you for coming to our province and providing time to NOIA to address some of our concerns with Bill C-69.
Our offshore is vast. An independent assessment by Beicip-Franlab based in Paris determined there are over 49 billion barrels of oil off our shores and only 7 per cent of our offshore has been assessed yet.
To quantify the impact of our industry, NOIA engaged an economist to determine the value of our offshore. The full report is online at imaginethepotential. ca and I have submitted copies, but I’ll provide you with some highlights today. In 2003, the offshore oil and gas industry accounted for 36 per cent of the Province’s GDP and for several years contributed to that level. In 2017, it remained high at 23 per cent. In 2017, the industry accounted for nearly 24,000 jobs in Newfoundland and Labrador, resulting in $2 billion dollars’ worth of labour income and $1.4 billion consumer spending. There were also over 10,000 jobs in the rest of Canada due to the Newfoundland and Labrador offshore industry. Using data from reliable sources, such as Statistics Canada, a conservative number of 2.2 billion barrels was used to forecast future benefits. Should such development occur, by 2045 Newfoundland and Labrador has the potential to receive over $100 billion dollars in royalties and taxes. That is game changing for a province of 525,000 people.
In 2033, the model indicates wages and consumer spending can double to $4.6 billion and $3.5 billion respectively. All this from 56,000 jobs. The model also predicts $3.3 billion of tax revenue to other provinces and Ottawa in the year 2033 alone. However, we do face impediments to achieving this potential.
Specific concerns for NOIA members regarding Bill C-69 are the ambiguity in the legislation pertaining to the power of the Minister and the Governor-in-Council with respect to establishing timelines and suspending the time limit. Provisions within the legislation that permit an ability to “extend the time limit extended” do not provide clarity and certainty that investors seek and expect. The Canada Newfoundland and Labrador Offshore Petroleum Board is the regulator closest to the resource and NOIA members insist that there be a legislated role for offshore boards in the review process. As well, exploration drilling programs, typically a 30 to 90-day activity, should not be on the designated project list. Exploration wells offshore Newfoundland and Labrador have well-defined mitigation measures from decades of activity and involvement of the regulator, the C-NLOPB.
NOIA recently engaged international consulting firm, Wood MacKenzie to compare the environmental approval process for exploration wells in Newfoundland and Labrador to international jurisdictions such as Norway, the U.K. and Australia. These are considered leading jurisdictions for environmental protection and are also some of the jurisdictions that Canada is competing with for global investment. You are receiving this information for the first time today as we will be releasing it later. You’ll see in the slide that we provided, in Nova Scotia the average time for environmental assessment for an exploration well is 698 days. In Newfoundland and Labrador, the average is 905 days under CEAA 2012 and there are another five projects currently under review ranging from 124 days to 907 days.
Now, the results from Wood MacKenzie. In Australia, the average is 144 days; U.S. Gulf of Mexico, 96 days; Norway, 79 days; and the U.K., 18 days. Do these comparisons illustrate that we are competitive? NOIA members suggest not. The data speaks for itself.
To attract and retain investment to achieve our potential that 100 billion in royalties and revenues, we need efficiency and we need to be competitive. We have an opportunity to use Canadian offshore oil, which is 30 per cent below the average for greenhouse gas emissions at extraction, to help meet the energy needs of the world. Let’s get this legislation right so we can use Canada’s natural resources developed in a safe and environmentally conscious manner to meet the world’s energy demand.
I thank you again for your time and consideration today and I’m happy to take any questions and we look forward to you helping us reach our potential here in Newfoundland and Labrador. Thank you.
The Chair: Thank you.
Mr. Barnes.
Paul Barnes, Director, Atlantic Canada and Arctic, Canadian Association of Petroleum Producers: Good morning, honourable chair and members of the committee and welcome to Newfoundland and Labrador. I am Paul Barnes, Director of Atlantic Canada and the Arctic for the Canadian Association of Petroleum Producers, which is often referred to by the acronym CAPP, and I’m based here in St. John’s, Newfoundland. CAPP appreciates the opportunity to provide feedback to help inform the committee’s review. As you know, Tim McMillan, President of CAPP, presented to this committee in Ottawa in February and highlighted concerns from a broad industry perspective with Bill C-69. My presentation today will focus specifically on concerns related to the offshore side of the industry.
First a bit about who we are. CAPP members produce 80 per cent of Canada’s natural gas and oil resources. The Atlantic Canada offshore contributes significantly to Canada’s oil and gas industry and provides many benefits to Atlantic Canadians. I won’t go into a variety of different statistics regarding the employment and the associated additional statistics associated with our industry as Charlene referenced a lot of it in her opening remarks. I do want to emphasize, however, that CAPP members want to stress the importance of establishing and maintaining regulatory processes that provide certainty and consistency. Regulatory processes must have a predictable outcome, costs, timelines and a well-defined scope. Without these elements, investment in Canada’s offshore will diminish and it is vital that Canada’s offshore remain competitive with other jurisdictions while continuing to develop our resources in a safe and responsible manner.
CAPP has five areas of concern with respect to Bill C-69 from an offshore perspective. Our first concern relates to the automatic referral of all offshore activities to a mandatory panel review, as per clause 21 of the bill. As currently written, the bill has no provisions that permit the substitution of other processes other than a panel review. CAPP proposes removing the mandatory panel review in clause 21 of the bill and opening up all existing process options in the act to offshore oil and gas activities, for example, the independent assessment agency review, a panel review, other substitutions and joint panel reviews. This will allow the scale of the assessment to be aligned with the scale of the potential impacts.
Our second concern relates to timelines. In an amendment for Bill C-69 proposed by the parliamentary Standing Committee on Environment and Sustainable Development, the timelines for offshore review panel were proposed to be reduced to 300 days from 600 days, but it may be increased up to 600 days by the Minister. Even with the proposed reduction of the regulatory timeline from 600 to 300 days, with the addition of the early planning phase which is 180 days, and the potential for extensions by the minister, it is anticipated that the impact assessment regulatory process will continue to be longer than other comparable jurisdictions, as Charlene had mentioned. In fact, it could result in a three-and-a-half-year approval process for every project. Extensions to offshore review panel timelines by the Minister should only be granted under extraordinary circumstances.
CAPP therefore suggests removing provisions that allow the minister to establish a timeline that is longer than the 300 days specified as per clause 37.1 of Bill C-69. I also reiterate here the timeline recommendations in CAPP’s overall submission which was made back on February 15, including the call for a legislative maximum timeframe.
An additional concern is the diminished role of the life-cycle regulator, or the offshore petroleum board, in this bill. In keeping with the intent of the accord acts, the offshore petroleum boards must be designated as responsible authorities for all environmental assessment processes in their respective jurisdictions. Not granting this authority goes against the joint management principles of the accord acts. Including the life-cycle regulators with minority representation on the review panel, as proposed, does not fully incorporate the expertise of the offshore boards in the process, nor does it respect the provisions of the Atlantic Accord and the joint management of the offshore. CAPP therefore recommends that the impact assessment act set out clear provisions in clause 21 of the bill that addresses these issues and recognize the offshore petroleum boards as life-cycle regulators.
Another area of concern for industry relates to regional assessments. Regional assessment can be beneficial if developed and used appropriately. But a more structured model of how regional assessments are to be considered in early planning to reduce duplication of efforts must be applied. CAPP therefore suggests that provisions should be established that constitute the desired outcome, assessment timelines and role of the life-cycle regulator. Legislation should also provide clear requirements of operators once the regional assessment is complete.
The final area of concern I’d like to highlight today relates to exploration. As was mentioned by both Adam and Charlene, exploration drilling and geophysical programs do not belong on the federal designated project list. Emphasis must be placed on those physical activities with the greatest potential to cause adverse environmental effects. Offshore exploration is a short duration activity and the risks and mitigations are well documented and well understood. Canada needs to be aligned with other reputable jurisdiction worldwide in its approach to exploration assessment. CAPP therefore urges government to exclude exploration drilling, and geophysical programs from future designated project lists.
The consultation paper on the designated project list has not been released. This is unacceptable in our view, given that the automatic deferral of all offshore activities on the designated project list to a review panel would impose a significant burden on industry. It is our view that the committee has been put in a challenging position to review the bill without transparency as to what it actually applies to. We would suggest that a fulsome review of the consultation paper on the designated project list alongside the review of the bill is a necessary precondition to the committee being able to complete its work.
So to summarize, CAPP urges the committee to consider the proposed amendments in its entirety in order to restore investor confidence and to continue investor confidence in Canada’s offshore industry. Thank you for the opportunity to present and look forward to any questions you may have.
The Chair: Thank you.
Mr. Ellis.
Brandon Ellis, Policy and Advocacy Specialist, St. John’s Board of Trade: Good morning, honourable chair and all committee members. It’s a pleasure to be with you here today. My name is Brandon Ellis and I am a policy and advocacy specialist for the St. John’s Board of Trade. The St. John’s Board of Trade represents nearly 800 businesses in the St. John’s and surrounding area. Many of those businesses benefit greatly from our oil and gas industry.
As our friends at NOIA note, the potential of 56,000 jobs in our oil and gas industry by 2033 — I am going to reiterate those numbers because I think they’re very important to our province — and $100 billion dollars in tax and royalty revenue by 2045. Our province has taken steps to ensure that Newfoundland and Labrador reach those levels of projected economic prosperity and our members in the business community are very supportive of this. We want to see consumer confidence bolstered in our province. We want to attract newcomers while encouraging our people to stay. But to do that, we need jobs here in our province. We need investment. We need economic security and all of those things come along with significant oil and gas investments.
Bill C-69 creates significant issues for our oil and gas sector. Our Board of Trade has analyzed the views of CAPP, NOIA, the Canadian Chamber of Commerce, the Government of Newfoundland and Labrador and the Atlantic Chamber of Commerce on Bill C-69, all while paying attention to what our federal government is doing as well.
When reviewing materials for this presentation, one crucial point that we found was in Premier Ball’s testimony to this committee not too long ago. He mentioned the word “certainty” several times when referring to investors coming to our province. Have certainty in our province and in our country is pivotal when positioning ourselves to be competitive, a competitive jurisdiction on a world stage. In our analysis, there are many issues with Bill C-69 which hamper that.
Policy issues that are beyond the scope of evidence-based policy are now included in the review process and this has the potential to politicize that very process. The review process is now further clouded by the uncertainty of climate change objectives, gender-based analysis, Indigenous reconciliation and Indigenous knowledge. How these objectives will be interpreted and the weight that they will be given in the review process is unclear. The timeframes for consultation, review and preplanning stages offer greater opportunities to disrupt the review process and could create delays and added costs to projects.
The power and discretion afforded to the Minister of Environment and Climate Change to pause, suspend or even cancel a project throughout the project life cycle is cause for concern. The minister’s power creates the potential for the further politicization of our regulatory process in our resource projects and increases the uncertainty for project proponents that their project will, in fact, be completed.
In addition to what Premier Ball had noted in his testimony, Minister Coady had also raised concerns in her testimony about Canada’s competitiveness with Norway and the United Kingdom and how unclear timelines in Bill C-69 could hurt us.
Our board stands shoulder to shoulder with our partners in the oil and gas industry. The Senate has the opportunity to hit the pause button and get things right. We are very pleased that you have taken the time to come here today in order to hear from the experts around me. We’re the experts in business. The people to my left are the experts in oil and gas. The St. John’s Board of Trade’s expertise, as I mentioned, is business and the vast majority of our members are small businesses. Upon reflection of how much the oil and gas industry has meant to our province and how much it has supported our members, it is our duty to return that support. Please consider what you hear from CAPP, Husky Energy and NOIA, as well as other partners today. Their interests are our interests. We all want to see a thriving economy in our province.
To end my opening statement, I would like to leave you with a few things to consider. The government’s 2015 election promise was to change how major energy projects get reviewed for their environmental, social and economic benefits. Much of this is unclear and uncertain with C-69. There is no direct mandate or manifesto other than to change for the sake of change. Therefore, the Salisbury Convention of the House of Lords should not bind senators into endorsing a government bill that does not have a clear mandate from the citizens of Canada. There is room for amendments. Our friends here are proposing solutions today which we endorse. Let’s take the time to get this right.
In closing, we recommend that the Senate minimize duplication in regulations, clarify the role of the C-NLOPB in environmental assessment, expedite review timelines, limit consultations to those directly impacted, respect the principles of the Atlantic Accord, clarify the process around Indigenous consultation, gender analysis and climate change objectives, ensure regulators are independent from political influence and implement recommendations, as I have mentioned, from NOIA, CAPP and Husky Energy. Thank you.
The Chair: Thank you very much.
I remind my colleagues that there is three minutes per senator. Please keep your statements short and maybe there will be room for a second round. We will start with Senator Simons.
Senator Simons: Thank you very much, Madame Chair, and thank you all very much for your presentations. I’m delighted to be in Newfoundland. It’s my first time here.
I wanted to ask more about the role of the offshore boards. Many of you have spoken highly of your faith in the offshore boards and so I have a two-part question. What would you say to convince Canadians that an offshore board review would be as robust and as environmentally wary as a review under the new assessment act? And if the reviews are already taking up to 900 days, as seems fairly typical, that doesn’t sound like a great system to me. So, what is it about the offshore boards that is taking up to 900 days for a simple assessment of a project?
The Chair: Two answers. Mr. Barnes?
Mr. Barnes: Maybe I can start. Welcome to St. John’s.
Let me address the 900-day question first. The 900 days and the other statistics that were referenced has to do with the current CEAA 2012 process, a process that is led by the current Canadian Environmental Assessment Agency and the petroleum board has a limited role in that process. So, it’s led by the agency. If the petroleum board were doing the assessment solely by themselves, the length of time would be considerably shorter under the board’s legislation that they would have to adhere to. So the statistics are related to CEAA 2012 as opposed –
Senator Simons: And those are like a joint assessment that happens then?
Mr. Barnes: No. The assessment is done solely by the agency, with some support by the offshore petroleum board.
Ms. Johnson: In the report that we will be releasing today, 905 days is the average under CEAA 2012. The report also looks at pre-CEAA 2012, which was a time when the offshore boards were doing the assessments, and that average is 386 days, so significantly less, still very much stringent when it comes to environment and safety. The C-NLOPB has been around for decades. They are the closest to the resource. They have upwards of one hundred people there working, expertise in environmental effects monitoring and things of that nature. So, even the 386-day pre-CEAA 2012 is still much longer than the other jurisdictions that I spoke of, but it certainly would be a step in the right direction if it could be one third of the time.
Mr. Sparkes: Yes, I just agree with both those comments. It does illustrate what I said in terms of the status quo not working. The timelines that have been referred to reflect under CEAA 2012 where the board was put — and I use a familiar phrase — in the backseat. This was a change where the agency took over the lead in the assessment. Whereas the NEB and the Nuclear Safety Commission were allowed to continue as the responsible authority, the boards were not. Prior to that, before CEAA 2012, the board was a responsible authority for the conduct of reviews under that piece of legislation and it was more efficient. I agree with Charlene in terms of not good enough, but certainly better.
You talked about why Canadians and probably most importantly, Newfoundlanders and Labradorians, should have faith in the board. I do think it’s grounded in expertise and experience, and just as important is the special role of the board that sometimes it’s — people mistake it for a federal agency. It is not. It’s a creature of both federal and provincial legislation. Its genesis is from the Atlantic Accord, which was the deal struck for joint management, and that role should be respected, in our opinion.
Senator Woo: Thank you for your testimony. Let me pick up on the C-NLOPB question. I think all of you are recommending that all of the options for a review be opened up so that there is no mandatory panel review and that it could be done by the agency itself, or there could be a substitution. I’m just wondering why you prefer that an agency review be the preferred choice, if in fact, some problems have been detected in the old system where the old agency took a long time to review the process.
It would seem to me that a review panel which mandates input from the C-NLOPB working in conjunction with the agency may be a better process for selecting experts on the roster and so on. It seems to me, that would be more aligned with your interests and is less risky than leaving open the option that the agency does a review entirely on its own.
Mr. Barnes: It’s a good question and it largely depends on the kind of the project that you are reviewing. The way the bill is currently drafted, there are no other options for an offshore project to only be reviewed by a joint panel review, but depending on the project, for example, we talked about exploration wells, which is a very short-term activity project. To go through a panel review could be quite lengthy. Where an agency review or some other type of assessment can be done much more quickly to align itself with the actual activity that’s trying to be assessed.
Senator Woo: Right.
The secondary question, then, is how to deal with these exploratory wells and whether it’ll be counted as a project list question, but it could also be a regional or strategy assessment question whereby a regional assessment of exploratory wells in a certain area is deemed to be safe because a regional assessment has made the study. So, what I’m trying to say is that there seem to be different ways around the problem you’ve identified and the particular solution that you’re offering us, to my mind carries some risk for you as well. The fact that you open up an assessment of offshore projects to all the options, including agency level review, might actually put you in a worse position. Whereas the mandatory review will guarantee that there’s substantial input from the C-NLOPB. That’s a comment more than a question, but I would welcome any feedback as well.
Mr. Barnes: Sure, and I would agree with you. There is certainly some risk but there is greater risk now in limiting it to one type of assessment and not having the options that other assessments can provide. A regional assessment, as you mentioned, could be a very good and workable solution. Our challenge with that, of course, with respect to the bill, is that it is not well defined within the bill as well as, for example, the length of time and who undertakes it. If these are well defined, then that may be the most preferred option.
Senator Woo: Okay, thank you.
Mr. Sparkes: I’d like to add that we support other assessment options being available. The board and the agency as it is now, CEAA, have a long history of working together. It has worked better at different times in history. Also, I would point that there are strengths in Bill C-69 that give me some faith that collaboration between the board, if it was allowed, could really have good effect. What I’m primarily thinking about is the early planning stage that would allow for collaboration between the board and the agency in planning for a review. As I noted, the accord acts themselves allow for this kind of formalization of cooperation through MOUs and in the CAPP proposed amendments you’d see that in addition to treating the offshore like other parts under the act in allowing for assessment options. It also reaffirms that requirement to have MOUs to ensure that collaboration.
Ms. Johnson: I would add that the offshore board has been doing these assessments from 1997 to 2010 when the RA was removed and these assessments went to Ottawa. I don’t want the impression to be left that they were doing them solely on their own. If you look at previous environmental assessments, the Department of Transportation, Department of Natural Resources, Department of Environment, Department of Fisheries, all of those federal agencies were involved in the environmental assessment. But what happened was when Ottawa then took control of the assessments, the timelines increased, they tripled, but there was no added protection. So, added process and added timeline, does not equate to added protection and I think I don’t want that to get lost on people. I don’t want it to get lost that they were not doing these assessments on their own. There was a lot of involvement with the federal government and other agencies.
Senator Manning: Under the 1985 accord we set up the C-NLOPB on joint management. I know that we have concerns with some of the review process, but what do we see now? Because one of the anchors of our offshore industry is that we have the C-NLOPB because in Alberta, as an example, they have total jurisdiction over their oil industry. Here, we don’t own it, but we have a joint management process. In your view, what will be the role of the C-NLOPB if Bill C-69 passes as it is now? Where do we have a say in what happens off our shore? That’s my concern.
Mr. Barnes: Maybe I can start. That would be our concern as well, senator. The only provisions for the life-cycle regulator, which is the case of Newfoundland as the Canada Newfoundland Offshore Petroleum Board, is they can be part of the joint panel review. They cannot share the panel review, and they will have a minority number of seats available to them on any joint panel. The petroleum board wouldn’t have a large influencing role on the panel because they will have a minority position there. Also, when it comes to the regional assessment, there are no provisions within the current wording of Bill C-69 that allows any role for the petroleum board.
Mr. Sparkes: Yes, I’d agree in terms of the limited participation that the petroleum board would have on panel reviews if that were to hold and be required for the project.
I think the other concern is that the impact assessment act is different. It moves beyond what we’ve traditionally understood in terms of environmental assessments and introduces new factors, some of which, to my ear, sounds a lot like what the board was designed to assess in the development application. As a company you are mainly focused on efficiency. But when you look at this, the concern is that this would be the federal only process in assessing and a federal minister of the federal cabinet making a determining decision. Whereas the accord acts sets up a joint decision process. When it comes to a development application, most critically the development plan, it is the provincial minister that actually holds the hammer on that decision. So, there is the concern that the whole notion of joint management and the role of the province, not just the board, would be diminished in this setup as it’s currently proposed.
Ms. Johnson: Let’s not forget, it’s the Canada Newfoundland and Labrador Offshore Petroleum Board, so Canada is already at that table for joint management. I think sometimes people think “oh, you want this assessment to be made down there on your own,” but it isn’t on our own. It has been a joint review ever since the Atlantic Accord.
Senator Manning: For my colleagues who may not be aware, the board is set up with half the members being appointed by the Feds, half being appointed by the province and the chair being jointly appointed on agreement of both governments.
I’m concerned about investment, Mr. Sparkes, compared to other jurisdictions that Ms. Johnson touched on. If Bill C-69 becomes law, what do you see as potential concerns with investment in the industry here off Newfoundland and Labrador?
Mr. Sparkes: From a company’s perspective, we’re concerned. I am personally as well. I’m from here. I live in Calgary. I live in Calgary now.
I’ll start with the positive; I’ve always viewed Newfoundland and Labrador as being in a special position in this country. In the west, we’re struggling with market access, a lack of pipeline capacity, leading to a discount in what we produce and an ability to move, and the knock-on effect in terms of things like curtailment. Newfoundland and Labrador represents a real opportunity for this country. It is not constrained in the same fashion. There is no problem in terms of moving the production. We’re on water. It can move by tanker. Industry sees uncertainty, generally, with pipeline projects being slowed, delayed or scuttled. Also, uncertainty in terms of the timelines that Charlene had pointed out for exploratory wells, has an impact on investment. There is no doubt that you will see an impact if Canada, and more particularly Newfoundland and Labrador, are not able to be competitive in terms of timelines and offering companies certainty that when you go through a process that the process is going to hold and give a result that you can count on.
Senator Neufeld: Mr. Sparkes, CAPP and CEPA have come forward with a set of amendments to the legislation. Are you in favour of those amendments? Do these amendments address what desires you have for change to this legislation?
Mr. Sparkes: I can make that one quick. The answer is yes. We participated in the formulation of the CAPP amendments. I’ve noticed in your proceedings that there does seem to be a coalescing around themes of concerns. But to the point, yes, we do support those amendments.
Senator Neufeld: Ms. Johnson, it surprises me that Norway is 79 days for an exploration well. Norway is well-known around the world as very environmentally sensitive and yet, we are, in Newfoundland and Labrador, 905 days. If this legislation goes through the way it is today, will it reduce the 905 days down? If so, what is your estimation?
Ms. Johnson: I think that is the question. Our understanding is that it could be longer and it’s the uncertainty, and as I mentioned in my remarks, it’s the extensions to the extensions. These are not words that investors want to see. I do want to start on the positive as well. Canada’s mandate is to attract foreign direct investment and over the last three years, Newfoundland and Labrador has attracted eight new companies. We’re very fortunate to have our mainstays like Husky and Exxon and others, but eight new companies have come to this province and purchased land in the bid sales: Israeli companies, Chinese companies, Australian companies. You have about 25 to 30 of these bid rounds annually throughout the world. It’s very competitive. I think the potential is there to have many more than eight companies and what we heard from companies that didn’t bid or are very reluctant to bid were concerns, particularly, the regulations and the timelines for environmental assessment.
As you said, if you want to look to see who’s doing what, when it comes to environmental initiatives, who’s the environmental champion? It’s Norway. When you look at our offshore, a lot of these parcels are very close to each other. They’re adjacent. Some of them in fact overlap. So, I don’t want to diminish it, but really, it’s like changing the cover of a report of environmental assessments each time because they are so close together and we’ve been there for decades. This area is well studied. The mitigations are well known.
But to get back to your question, our fear is that it’s going to increase it even further. Now, a regional assessment agreement was signed last Monday and name of the panel members have been released. We’re happy to see that process happen and I think that this could be an opportunity to get to where Norway is. Once you have a regional assessment done, which also includes the social and economic, which Adam referred to, is positive to see in this bill. That could be potential to get those numbers down. But again, we’re being told this is being done. We’re being told it’s in the regulations. We want to see that enshrined in legislation.
Senator Neufeld: Thank you.
The Chair: Can I ask you to send a copy of the signed regional assessment? I think it will be important for us to read about that.
Ms. Johnson: The regional assessment that was signed last Monday?
The Chair: Yes.
Ms. Johnson: That was a joint agreement between the federal and provincial government.
The Chair: Yes.
Ms. Johnson: We can certainly get that for you.
The Chair: Thank you very much.
Senator Patterson: Thanks to all the presenters. I think the presentations were excellent and an indictment of the negative impacts of this bill on certainty, timelines and the jurisdiction of provinces established in the Atlantic Accord, which I know was not easily achieved at the time. The bill also marginalizes the offshore board, particularly by disallowing substitutions. I’d like to zero in on that with Mr. Barnes.
When this committee started studying this behemoth of a bill in January, we heard from senior officials in the Department of Environment and Climate Change Canada and the subject of the project list came up then. This is in January, almost six months ago. At that time, we got two stories from the officials. The first story was that there’s a discussion paper being circulated on the guidelines for the project list, a discussion paper. Then another more senior official answered the question and said, “No, it’s not a discussion paper. There are draft regulations being circulated.” Now we hear from you, Mr. Barnes. As I understood you, that the consultation paper has not been released. You called it a consultation paper. What on earth is going on? We’re six months into the process. The official said, “Oh well, there’ll be guidelines soon; we’re consulting with industry.” And now you say you’re in the dark. Can you elaborate?
Mr. Barnes: Yes, and thank you, Senator Patterson. We are in the dark, quite simply because we have yet to see the discussion paper, which we were told will be coming with both timelines and a designated project list. I think wording around what the discussion paper is led to some confusion. Some government officials called it draft regulations, which in essence it probably is, but until see the paper and know if it’s actually worded like regulations are, then to us it will be, simply a discussion paper. We haven’t seen it and the concern we have is that we don’t know what particular projects could be on the so-called designated project list. Offshore exploration activity or offshore exploration projects are short-term in duration and have limited impacts. Over the years, Newfoundland has had quite a number of drilled offshore projects. To have that particular activity on a designated project list — to have it assessed like a major project such as, for example, an offshore development project like Hebron — just doesn’t make a whole lot of sense. It doesn’t put it into the right scale.
Another concern is that exploration wells shouldn’t be on the list. But our major concern is that we need to see the list and compare it to the wording within the bill.
Ms. Johnson: And just to point out as well, exploration wells were not always on that designated project list. They were added I believe in 2010, maybe 2012? 2010. So, for decades, exploration wells were not on the designated project list. That’s where we want to go back to.
Senator Patterson: Hear, hear.
Ms. Johnson: It makes absolutely no sense to have a 45-day activity assessed at the same time as it does to put in a pipeline.
Senator Patterson: Thank you.
Senator Ravalia: Thank you for your very compelling testimony. The area of focus for me is with respect to environmental, gender and Indigenous issues. How is each of your organizations proposed plans to recognize these parameters on a go-forward basis?
Ms. Johnson: I think it’s critical that we have the feedback and the involvement of Indigenous communities. I was recently in Labrador. The bid round was scheduled for Labrador in 2019 and that has now been extended to 2021 to ensure that the Aboriginal consultation takes place in a timely and meaningful manner. The feedback we’re hearing from Aboriginal people is, “We wish it hadn’t been delayed. Why are we delaying this?” I can’t speak for all, but I can only speak for the ones that I spoke to. It is critical that they are a part of this, no question.
In terms of the gender aspects, again, there are positives in this bill. I personally like seeing that there. I just would like some more clarity around it. I don’t think there was much explanation as to what it involves, but certainly a step in the right direction.
Mr. Sparkes: Yes, I guess there are two buckets. One is we probably have been calling the policy issues within Bill C-69 the intersection of sex, gender and other identity factors: climate change and sustainability. We’re not part of a group that has suggested that these be removed from the bill. What we are asking for is that greater clarity is put around them and the amendments proposed by CAPP provide some ideas about that.
With respect to consultation and engagement with Indigenous peoples, that is something that any responsible developer company in this country understands is critically important to project planning and execution. We do it across our business and in some ways, I don’t even know if our opinion is that important because it’s the Constitution, irrespective of what Bill C-69 might say. These are rights that are to be respected and certainly it’s incumbent on both proponents and governments and regulators to discharge those obligations.
Ms. Johnson: Absolutely, fully agree. Having said that though, there is concern when we see consultation being done as far away as Maine for offshore Newfoundland and Labrador. I don’t see companies from the U.S. coming to us asking us our opinion on their oil projects. So, certainly there’s been vast consultation done and that’s something we really support, but there has to be a limit, a cut-off, and it has to make sense. I’m not sure the distance off the top of my head, but I’m not sure how aboriginal organizations in Maine would be impacted by the offshore here.
Mr. Sparkes: Just one supplementary point to this. Again, I’d like to look at the light as well as the dark. I think this is where Bill C-69 could actually help, and I go back to those early planning provisions. If done well, and if it holds, the notice of commencement narrows down the assessment and says this is the path that we’re on, this is the project that we’re assessing, these are the factors that are the most important. Critical to your question, this is the path forward in terms of how we’re going to engage with the public generally and engage with Indigenous peoples specifically. If done right, I think that can really give some greater clarity than what we see today.
Mr. Barnes: I support Adam and Charlene there. We’re looking for clarity in both. We support both gender and Indigenous consultation as being important in any impact assessment, but we seek further clarity in the legislation, as to how that can be discharged.
On Indigenous community consultation, I was recently in Senator Patterson’s territory, Nunavut, because there’s a strategic environmental assessment underway there for offshore oil and gas activity. I was part of a process where several of the Indigenous communities throughout Nunavut Territory presented to the panel, talking about their communities’ thoughts on oil and gas activity and bringing in traditional knowledge and other aspects. You can see the importance of engaging Indigenous communities in a process like impact assessment.
The Chair: Mr. Ellis.
Mr. Ellis: Senator, I’ll be unequivocal. The St. John’s Board of Trade is adamantly in support of Indigenous consultation. We think it’s extraordinarily important to have with any projects moving forward in the future. Like our colleagues here, one thing that we’d like to see is clarity around the terms and how everything is weighted with respect to the review process. Regarding climate change, Newfoundland and Labrador is a remarkably green province. Our greenhouse gas emissions are virtually on par with 1990 levels, as is Atlantic Canada’s. It’s sustained or gone down. What we are seeking is clarity.
Senator Ravalia: This follow-up is with respect to environmental issues. I come from a fishing community. There’s a general acceptance that the percentage of marine protected areas needs to be increased to the globally acceptable 10 per cent. There’s a lot of talk. The current catch phrase is “ the blue economy.” Historically and on a go-forward basis, the fishery will continue to be extremely important to Newfoundland and Labrador. Do you see potential clashes between marine protection and oil exploration and ways of dealing with these in a non-combustible manner?
Mr. Barnes: Anytime you have two large industries like the fishing industry and the oil and gas industry working in the same ocean space, there is the potential for conflict. We’ve been able to avoid a lot of that in Newfoundland and Labrador. Several years ago we set up an entity called One Ocean, which is an initiative between the oil and gas industry and the fishing industry in Newfoundland. We formed a board or a committee made up of representation from the fishing industry — both the union and the processing side — and the oil and gas industry. We talk about issues of mutual concern, such as seismic activity, where that activity is taking place, drilling activity and where that activity is taking place, and any issues that may arise. We try to avoid conflict on the ocean. We try to address these issues around the meeting room table before they become larger issues. That’s worked out extremely successfully here in Newfoundland. We will always have the potential of having conflict because we share the same ocean space, but if we do a good job in communicating with each other, we can avoid a lot of that conflict.
Ms. Johnson: Offshore Newfoundland and Labrador is vast. We are about 70 per cent larger than Norway’s basin and one and a half times the size of the Gulf of Mexico. One thing we have is a lot of ocean. The 49 billion barrels of oil that have been assessed by Beicip-Franlab in Paris, that’s only in 7 per cent of our offshore that’s been assessed. Virtually 93 per cent has not even been assessed yet. There are a lot of areas out there where Newfoundland and Labrador can do its part and we have done our part. The nearly 8 per cent so far, the target that’s been reached, a lot of that has come from Newfoundland and Labrador.
It’s important to talk, communication is key, and when the marine protected area conversation was happening last year — when the panel came — it was evident early on that the Department of Fisheries and Nalcor, which sets out these areas for exploration as well as the board that sets out the land sales, had to be in the same room talking early on. When that finally happened, things did improve. The other thing I would say here is that our current operators are very conscious. When there was exploration happening, I’m not sure the particular area, but they go through great lengths to put down ROVs to look for where there are sea urchins and coral and so on. I know one company, in particular, spent a significant amount of money to move anchors to make sure that the environment was protected. So again, it’s about communication and doing your part.
One Ocean is a great success story that I would encourage you to have a look at that. That communication has been going on for decades. Newfoundland and Labrador certainly has a lot of space to help and through communication, I think that we can both achieve our objectives equally.
Senator McCallum: Senator Ravalia actually asked part of the question that I was going to ask. What holds the special place in my heart is the biodiversity of this planet and environmental assessment, it is done to look at the degree of injury or damage to the environment, be it land, air, water or by extension, any of its inhabitants.
As senators, we have been partly interested with the task of finding how this bill may mitigate the past and future damages of resource extraction, whether it’s land-based or offshore. The dialogue we have today centres around economy through resource extraction versus life on this planet for humans, as well as future generations, and that there must be a recognition that there’s an environmental crisis that’s here now. When I look at the areas of concerns that you have, the timelines, the review, the life cycle, the assessments, the exploration, those all have an impact on what we do in all of our areas. To me, all those are important and that this bill is very critical to life on this planet and there’s no other way we can say that. The reason that I bring it up is that people will , “Well, we have partnerships with Indigenous peoples and we are looking after the land.” But you look at Alberta and look at the hydro dams in Manitoba; they have devastated lives and devastated the land. None of it has been reclaimed.
Is there anything we should know about concerns or damage to the biodiversity of oceans? Do you have concrete examples about what happened around your sites or whether you did it through consultations with Indigenous peoples or fisher people or people that work with other areas of biodiversity? Do you know anything about this matter? Is there anything you can tell us?
Mr. Sparkes: Thank you for the question. I’m going to hand that over to David actually in one second. One thing we often forget is that environmental assessment is only one part of the process. It’s far from the complete picture. Once an assessment is completed, it is handed over to the life-cycle regulator for continuing oversight and management of a program. What we don’t talk a lot about, probably to our discredit, is the continuing environmental effects monitoring. When you do an assessment, you’re forecasting what you believe the impacts might be based on sound science, but that is backed up by now decades of environmental effects monitoring in the offshore. This is some of the work that David does, and maybe David, if you could just give a sketch of what that looks like.
David Pinsent, Senior Environmental Advisor, Husky Oil: I’ll elaborate on that. In order to validate the impact predictions that are presented in the environmental assessment, environmental effects monitoring is required and each one of the operational facilities offshore has been conducting environmental effects monitoring for more than 20 years.
A part of that monitoring includes benthic diversity about whatever invertebrates are living within the sediment where we are operating. There’s an impact around the facility that we’re drilling, but it’s measured in hundreds of metres, like three to five hundred metres we can detect a change in the benthic community. There’s also a recovery of that change once the drilling has stopped. Once the hydrocarbons are decomposed by the bacteria that are naturally occurring, those hydrocarbon levels go back down, there is a restoration of an exploration well after we’re done on the order of a few years.
Other parts of our environmental effects monitoring include fish chemistry to see if there’s any tainting of the fish tissue. We actually assess fish health, which is at the biochemical level and the hormonal level to see if there’s any indication of stress. Look at water sediment chemistry and several other physical parameters to really validate the EA predictions. When the Minister of Environment comes out to say that they are confident that there are no likely significant environmental effects, like they just have for two projects, then it turns over to our job to monitor and validate that prediction. We’ve been able to do that in all of our projects offshore.
Ms. Johnson: I don’t want to put words into the mouths of DFO, but I can get you a quote. DFO presented before a panel, and they have told me personally, that over the last number of decades that oil and gas has been operating here there are no known significant environmental impacts in our offshore. That is a quote that I can get you from DFO, who are monitoring environmental effects.
Senator McCallum: I don’t know very much about offshore, but then you’ve finished with the wells, what do you do with them? I’m looking at Alberta where they have 15 abandoned orphan wells that haven’t been reclaimed. What happens to your wells when you’re completed with them or after exploration?
Mr. Pinsent: During an exploration program, it’s generally 30 to 90 days. The well, if unsuccessful, is permanently decommissioned and abandoned. Cement plugs are put in the hole to prevent any seepage of hydrocarbons from then on in. If there is some potential there, a well can be suspended with the intention of going back in to drill another well, maybe from the same location. There is monitoring around that to see if there’s seepage of hydrocarbons before we return to that site.
Senator McCallum: You’re comfortable with how you leave the wells?
Mr. Sparkes: Yes. The other thing I would note, just as a difference with Western Canada, is that the number of wells is so fundamentally different. There are a significant number of wells offshore Newfoundland, but nowhere near as many as in Western Canada where there it is a challenge to get the inventory of abandoned wells down.
The other point to stress in terms of the protection of the public interest, financial responsibility requirements are required by the regulator and by the board, to ensure that companies have the financial wherewithal to abandon and reclaim both wells and facilities. Again, to protect the public so that this does not fall on people, as opposed to the companies.
Senator McCallum: Thank you.
The Chair: I just have a short question. It’s true that in Bill C-69 projects will be required to have in consideration climate change. But I’m sure you have been seeing changes in the water, in the ocean and in the storms, in the ice, in the number of icebergs that are coming down. Is there any consideration on the maintenance of the platforms and the wells and the extra consideration? Are you worried about that?
Mr. Pinsent: The infrastructure that’s there is certified by international regulatory authority to operate in those environmental conditions and forecasted out to withstand one in hundreds of years’ storm. So those considerations are taken into the design of facilities that are there now.
Ms. Johnson: There is a lot of local expertise on the ground here for that. C-Core has some fascinating infrastructure, if you get the time to visit that, and they look at ice and ice studies. On a broader scale, in terms of climate change, Carnegie Mellon made a study of around 80 production facilities around the world and Hibernia is noted as having the second-lowest impact in terms of their carbon footprint in the entire world. Number one being Ekofisk in Norway as having the lowest carbon footprint.
Hibernia has the second-lowest carbon footprint in the world and the light sweet crude that is offshore is 30 per cent below greenhouse gas emissions on a global average perspective. When you look at carbon dioxide, it goes into the atmosphere. It doesn’t discriminate where it goes. I believe we are doing our part for climate change when the oil comes from Newfoundland and Labrador, as opposed to places where it has a heavier footprint. The world needs oil. If we turned off the switch to offshore tomorrow that oil will be displaced and brought in from somewhere else that has a heavier carbon footprint. In terms of climate change, it’s important to note, and it’s been well studied, that oil produced in Hibernia has a much lesser carbon impact than other jurisdictions in the world.
The Chair: Okay, thank you.
Senator Patterson: Madame Chair, could we ask for that report?
Ms. Johnson: The Carnegie Mellon?
Senator Patterson: The Carnegie Mellon.
Ms. Johnson: Sure.
The Chair: Yes, sure.
Senator Manning.
Senator Manning: Thank you, Madam Chair.
When I look out my kitchen window in my hometown of St. Bride’s, I see many fishing vessels and tankers travelling back and forth. I live within 15 minutes of Cape St. Mary’s Ecological Reserve, the second-largest bird colony, gannet colony in the world. Only one accessible by land by the way, if you want to visit. But you know, and we have addressed – there’s nothing, no industry that’s going to be risk-free. We had major concerns in 365 islands in Placentia Bay. The Brander-Smith report in 1990 suggested it was the most likely place in Canada for an oil spill, but many efforts have been made by companies and others to address and, you know, fishing itself is the riskiest occupation in the world.
The oil and gas industry has worked side by side with the fishing industry over the years to address concerns, and I think that One Ocean, which I was involved in earlier, is absolutely something that we all should learn more about.
One of the concerns I have with the bill — something that we’ve touched on several times and I just want to get some explanation from Mr. Sparkes or anybody, for that matter — is in relation to the offshore exploration projects, the wells, and I think Mr. Pinsent just touched on a 30 to 90-day span of time.
If Bill C-69 comes in as it is now and they go through the review panel, which could take an immense amount of time, what does that do from an oil industry point of view in relation to exploring for new wells? We all understand that we have to keep exploring and hopefully find new wells, but what does that particular piece do to the opportunity for a company, such as yourselves or others, to be able to explore more wells? Ms. Johnson may want to touch on that also.
Mr. Sparkes: Yes, it is a significant concern.
David and I were having coffee yesterday afternoon getting ready to appear before you. David summed it up very well that surely we can avoid a situation where a 30-day activity would be subject to the same assessment as a 30 years project. So, a panel for development, panel for an exploratory well. There has to be somewhere in between that we can go to.
You’re right in terms of the experience that companies have with the regulatory process, whether it be the timeline, efficiency, cost and the certainty that one can expect. This does impact investment decisions. Once you go through a call for bids and you bid on it, you’re pretty much committed because there’s financial consequence if you don’t. Depending on what your experience might be with a round in the regulatory system, it will certainly impact.
We always talk about kind of global competitiveness. Husky is not a massive company. It’s big, but it’s not massive. Newfoundland and Labrador has to compete for capital within our company with the other areas in which we operate, opportunities that we have in Saskatchewan, in Alberta, in the Asia Pacific, and as a company, we are very mindful of the regulatory situation in the areas in which we operate.
Ms. Johnson: Simply put, capital will go where capital is wanted. We had Fraser Institute present at NOIA conference last year and the year before and in 2017 the report had Newfoundland and Labrador ranked as fourth in the world to do business, primarily because of our “prospectivity.” They warned us then that we will use our ranking if we do not do something about regulation. The latest report that came out from them now has us ranked twenty-first, and it’s solely due to regulation and timelines specifically with exploration wells.
Newfoundland and Labrador has some of the best prospectivity in the world. We have the longest continuous seismic program in the entire world. We just had record land sales, one of the largest amounts ever purchased on a bid by BHP, which is a new entrant as well. In terms of prospectivity, all eyes are on Newfoundland and Labrador. I can tell you the companies that we talk to, the companies that lost the bids on some of these, they are watching very closely when they do the exploration because they feel it’s one of the ones that they missed in the world. We have 650 leads and prospects offshore. One of these is rated to have 12 billion barrels of oil, of which five to six billion barrels would be recoverable. That’s one of the largest prospects in the world right now, which will be drilled next year. The plan is to drill next year. What we’re hearing around the world, and I go to OTC in Houston, Norway, I’ll be in Scotland soon, London, Aberdeen, all eyes are on Newfoundland and Labrador. We have been fortunate in attracting foreign direct investment. But imagine the potential if we didn’t have these barriers to entry, how much more we would have here. So, prospectivity, the prospectivity is not an issue. We’ve done a lot. This province has done a lot. Nalcor has done a lot in terms of de-risking below the water. Now all the risks are above the water.
Mr. Barnes: I talked to obviously a number of members who are not active in the offshore here and a number of global players who are not active in Canada. While this bill obviously is a concern to us, other legislative activities happening in Canada also have an impact on international investment. If you’re an oil and gas company sitting in Houston, London or other places of the world, and you want to invest in oil and gas and look at Canada, you see all kinds of regulatory uncertainty. Not only with this bill, but the ability to get Western Canadian oil to market via pipeline and tanker bans on the West Coast. All issues causing degrees of uncertainty, and with that investment starts to not flow into Canada; it goes elsewhere. So, it is a concern.
The Chair: Last question, Senator Neufeld.
Senator Neufeld: I have a couple of questions.
Mr. Sparkes, if this bill were to go through as it is, what would that do to Husky’s investment in the future? I know you would be tied to the things that you’ve already bid on, those kinds of processes, but what would Husky’s view be on investing in Canada?
And to Ms. Johnson, when you talk about how low the greenhouse gas emissions are from oil from Newfoundland and Labrador, I mean, that’s great. I’ve read that before. But it’s good to put it on the record. Where does that oil go to? Is it used in Canada? If it is, where and how much of the production?
Ms. Johnson: I’ll answer the second part first. Last month the oil from here was sold to 14 different countries.
Senator Neufeld: Not Canada?
Ms. Johnson: Oh, yes, Canada very much so as well, the United States, but also 12 other countries.
Senator Neufeld: How much is used in Canada?
Ms. Johnson: I can get the chart for you. Nalcor does have that. I’ve seen them presented at different events. The amount to Canada is quite significant.
Mr. Barnes: Eighty per cent.
Ms. Johnson: Eighty per cent to Canada.
Senator Neufeld: Okay.
Ms. Johnson: But there is a chart, and we will make sure you get that.
Mr. Sparkes: To your question on the impact that it might have on Husky, I’ll answer it quickly in two different ways. We’ve been clear that the amendments that have been proposed in CAPP’s amendments can make the current situation better. If there were to be no amendments, we would see Canada as a bad situation being made worse. I think it’s important that we’re clear on that. We try to be positive. We try to be constructive, but we also need to be straight on that point.
The other is what impact it has. Obviously, investment decisions are impacted by a number of different factors. Sometimes, you get the sense that regulatory issues are really impacting investment decisions. Unfortunately, our company, Husky, made a bid for a rival in Western Canada late last year and later determined to back off on that bid. One of the reasons that our board made that decision was the regulatory situation in the country, specifically Canada’s inability to get pipelines built and expand market access. Sometimes it sounds like we’re talking in an academic or a theoretical fashion, but these matters — and I know because you’ve been studying it so closely over the last number of months — really do translate into real decisions and lost opportunity, not just for companies but for people.
Senator Neufeld: Thank you.
The Chair: Thank you very much, witnesses, for your testimony and thank you, colleagues for your questions.
We now welcome, for panel two, from Grand River Keeper Labrador Inc., Mrs. Roberta Frampton Benefiel, Riverkeeper and member of Labrador Land Protectors; from Shared Value Solutions Limited, Erin Stapleton, Senior Impact Assessment Specialist; and from Total E&P Canada, Christine Healy, President and Chief Executive Officer.
Each of you will have five minutes for your opening remarks, after which we will follow with a question period.
Madame Frampton Benefiel, if you want to start.
Roberta Frampton Benefiel, Riverkeeper and member of Labrador Land Protectors, Grand Riverkeeper Labrador Inc.: Thank you for making it possible for us to be here today. We welcomed the Prime Minister’s campaign promise that we will make environmental assessments credible again and, of course, this was after the CEAA 2012 came into effect. He also said that success depends on regaining public trust, and that’s where we want to focus most of our attention. Canadians must be able to trust that government will engage in appropriate regulatory oversight, including credible environmental assessments, and that it will respect the rights of the most affected, such as Indigenous communities. I would add remote northern communities and we represent both in our area in Goose Bay, Labrador.
While governments grant permits for resource development, and I love this one, only communities can grant permission. I’m sorry to say that that hasn’t really happened a lot in environmental assessment. Members of grassroots organizations like ours, that have come through a massive environmental assessment like the Lower Churchill Project, that eventually became the single project, Muskrat Falls, now unabashedly known as the boondoggle. There were so many hurdles for our small group that the campaign rhetoric almost sounded too good to be true, and maybe it was. That we here in Newfoundland and Labrador are smack in the middle of a two-year-long expensive public inquiry into Muskrat Falls, speaks volumes about bad environmental assessment and what it can lead to. Unfortunately, it doesn’t stop with Muskrat Falls. We had a presentation in Goose Bay about a couple of months ago from experts that looked at the Site C Project in British Columbia and explained to the government there that this project was going to be over schedule and over cost and explained that it was now time to stop that project and economical to stop the project. But the new government went ahead with it anyway. I’m sure you’re well aware of the media reports on Site C and the Muskrat Falls Project.
From the get-go, let me say that we strongly, strongly support Bill C-69 becoming law because there are benefits over CEAA 2012 that absolutely must be enacted in order to begin to regain public trust. We can’t stress enough that with regards to clause 392 of the new act — which says the act will be reviewed after ten years — that ten years is way too long. Because of the many negative issues with a new act, we must strongly recommend that this legislation be reviewed not less than two years down the road to see if it works, to see if it doesn’t work. Otherwise, ten years down the road, things could be really looking bad.
Since the Muskrat Falls Project was not assessed under CEAA 2012, because we were already in progress, we’re pleased to say that we didn’t have to deal with CEAA 2012. This new act, IAA, is better in some respects and we’re hopeful that CEAA 2012 will be discarded because we’re convinced that it was influenced more by industry than any concern for the environment. However, we are more than a little concerned that in the new act, the minister has even more discretion than in any of the past acts, meaning that concerned citizen groups and local communities’ voices could be ignored in favour of the greater good. The greater good is often jobs and economic benefits that help politicians get elected and re-elected. It’s the proverbial election pavement that wins the day, not the effects a project has on the environment. That’s an opinion from a truly grassroots group.
None of our members are paid anything, especially me, and I’ve been working at this for 20 years. We are here because we’re concerned with what is happening on our river, in our communities and across this nation. The climate change issue is looming and if we don’t fix environmental assessment in this country, the one below us and across the world, we are not going to do anything about climate change.
There’s a section I’ve put in my brief. During the inquiry for the Muskrat Falls Project, the very first presentation was by a Dr. Bent Flyvbjerg, and this is a quote I took from one of his articles. “Some years ago, I was threatened by a high-ranking government official as I was beginning to research on cost overrun in large public works projects. The official told me in no uncertain terms that if I would come up with results that reflected badly on his government and its projects, he would personally make sure my research funds dried up. I replied he had just demonstrated the research must be done and was likely to produce interesting results. The results are now being published and if the official walks his talk, I assume I will never receive another research grant.”
His presentation to the commission spoke of optimism bias, which is a name we were not aware of when we started into this process, but that we now understand is exactly what we felt when we first began reading the environmental impact statement for the Lower Churchill Project. We were looking at a statement written and viewed through rose-coloured glasses, as the old saying goes. Dr. Flyvbjerg explains optimism bias as “the demonstrated systematic tendency for people to be overly optimistic about the outcome of planned actions and this includes over estimating the likelihood of positive events and underestimating the likelihood of negative events.” We are convinced that major projects in this country have done exactly that; optimistic bias.
We were unsure how we could possibly show that this EIS was totally manufactured and had very little bearing on the reality of the negative effects of this massive project. We find the title of the article listed above very apropos, Design by Deception: the Politics of Megaproject Approval. Please, I am happy to provide any links to this information, if any of you are willing to take the time to review that. It opened our eyes at the inquiry. We knew this was happening, but we had no idea what it was called. We just knew. We had these gut feelings that this impact assessment was just too rosy; that it couldn’t possibly be as rosy as that.
Dr. Flyvbjerg looked at over 200 projects worldwide and he talks about hydroelectric dams as being outliers, sometimes called black swans, and these are projects with very high overruns. He describes the causes and root causes of these black swans as scope changes, complexity, delays, inflation, geology, weather, bad data and models, and the root causes as, optimism bias and strategic misrepresentation. He divides these causes and root causes into three specific areas called: technical, which is errors in data; psychological, which is the optimism bias; political, which is economic. GRK and LLP, our land protectors, believe that all three are at play at Muskrat Falls.
The assessment act, the new assessment act, must have legislation and legislate ways and means to prevent these kinds of problems for future projects. There’s no way that the public – they may not know what to call what they’re reading. They may not know that this is “optimism bias” but they know when they’re reading these documents that something is very, very wrong. They are on the ground. They live in the area. They know what this river is about. They know what this mine is about. They just don’t know the technical wording for it all.
There are many negative issues with the IAA. There’s no way to get into all of them in the short amount of time that we have, but we have two areas that we’re really concerned about and I want to bring those out. One of them is enhanced and better funded public participation. As a small group, Grand Riverkeeper Labrador got, I think it was $64,000, to work through the environmental assessment. We actually spent one full month in hearing rooms, most of us, seven or eight of us every day. We presented 18 different papers and we hired 12 different experts who did most of their work for free because we couldn’t afford to pay them. But we did it with $64,000 and we balanced to the penny when we took it back to the CEAA.
The second thing that’s really important to us is the independent peer reviews of all proponent studies. I am a member of the environmental assessment and planning caucus. I got involved with them shortly after we looked at the guidelines for the project, just to learn what environmental assessment was all about. We had such optimism about how this was all going to turn out. I can’t tell you how unoptimistic I was at the end of the hearings when the panel report came out and the minister said “we’re going to do it anyway” and the panel recommended they didn’t go ahead.
So, Dr. Flyvbjerg talks about outside views. He talks about improving viability and risk assessments to de-bias projects upfront and during project delivery. Plan projects with an outside view, he says. Use full distributional information in planning costs and schedule. Set targets according to risk appetites. Use reference class forecasting to symptomatically take an outside view. Let me say that loud and clear, outside view to grassroots people means independent peer review of all the studies that a proponent does.
A proponent has optimism bias. They are going to do the studies, and we actually have an example of a study that was done showing that Nalcor hired these people, showed them and said right in the very first three paragraphs that there would be effects beyond the mouth of the river out into Lake Melville of the methylmercury and other effects. That document was provided to us under the table by the company who made the report and it was hidden. It was never ever brought forward by Nalcor during the environmental assessment. I want to ask how the public can have a trust in what happens in environmental assessment when these kinds of things are taking place.
There are just a few examples of the things that went wrong with Muskrat Falls, and I know I’m way over, I’m way over time. I’ll just run through them briefly because I think they need to be on the record. During the inquiry and during our report to the inquiry, we brought out a few of the environmental problems or the problems with the EA. There were cumulative effects not properly studied. The threshold of significance was way too high. The methylmercury contamination was not properly assessed. Dam failure was assessed using outdated methods and I have to tell you that that Muskrat Falls dam is 36 kilometres from a community of 50 people who have one hour or less to get the hell out of town if that — and they have no way to go out of town. There’s no road. The only way to get them out would be to airlift them. They can’t make it. We have had expert studies done for free from the lead fellow — I think he came here in St. John’s and they called him the rock star of quick clay, Dr. Stig Bernander, and he said, “You haven’t done the proper risk assessment studies. Do them. Make sure.” And they’ve ignored them; the government has ignored us. Nalcor has ignored us and we are still looking to find out whether or not when they fill that reservoir whether that north spur with quick clay layers is going to fail.
The Chair: Thank you so much.
Ms. Healy?
Christine Healy, President and Chief Executive Officer, Total E&P Canada: Good morning, senators, ladies and gentlemen, and thank you for the opportunity to speak to you today and provide feedback on behalf of Total E&P Canada.
I grew up here in Newfoundland and Labrador, not far from where we sit right now, here in St. John’s, and I watched this place be transformed by the discovery and development of oil. The positive social impacts of responsible resource development, that’s something that I have lived personally and it’s a part of the fabric of this place and indeed of Canada.
I’m now the CEO of Total E&P Canada which is the Canadian arm of Total. Total is one of the world’s largest energy companies, fourth largest in oil and gas, number two in solar, the world’s second largest in LNG, liquefied natural gas. We’re a globally integrated company. We have activities in more than 130 countries. We’re a global leader in low-carbon energy, and we aspire to be the world’s responsible energy major. In Canada, we have an interest in an exploration licence in offshore Newfoundland and Labrador and we’re the sixth-largest bitumen producer in Alberta, producing over 100,000 barrels a day from two oil sands projects.
In many ways, Canada’s opportunity and challenge is similar to our own; to responsibly develop resources. Canada is a country blessed with abundant natural resources that can be developed to meet the world’s needs and strengthen the Canadian economy. That development can happen responsibly. Large-scale oil and gas developments require investment of tens of billions of dollars and achieving capital investment on that scale is, frankly, not easy and very competitive.
Canada could and should be winning that competition for capital. We are a country rich in natural resources. We have the fourth-best subsurface resource on the planet. We are rich in skilled people. We have a world-class education system coupled with people with an unbelievably strong work ethic. We have one of the world’s most stable democracies. We have a court system that’s the envy of the world. Yet, we are not winning the competition for global investment.
So, what’s happening? The full answer to that will take longer than the time I have available here this morning, but the bill in front of you, Bill C-69 has huge impact. If done right, Bill C-69 could be a strong signal to investors and to the world that Canada is a transparent, efficient, responsible place to develop natural resources. But in the bill’s current form, it’s our view that it has missed the mark. In the interest of time, I’ll highlight two specific areas, but I’m happy to take questions on any part of our submission or the bill generally.
Firstly, timelines. The impact assessment timelines are a critical factor for Canada’s overall competitiveness. In our submission to this panel, we took a notional offshore development and we compared the timelines for that development in Canada under the existing system, the U.S., the U.K. and what we think would happen in our reading of Bill C-69. We compared with two OECD jurisdictions which are not necessarily the fastest jurisdictions, but we thought they were two reasonable comparators to take here.
Under the existing process, Canada was already the slowest of the three, in some cases by a fairly large margin. While Bill C-69 has an ambition to be quicker, it introduces numerous opportunities to stop the clock or extend timelines and this creates significant uncertainty. In our view this can extend the assessment timeline for Canada by one to two years beyond what we see right now. So, it takes a slow system and makes it potentially slower. Keep in mind that in a competition for global capital, a delay of one year can decrease a project’s comparative value by nearly 10 per cent. This is significant. We strongly recommend that the panel consider Canada’s timelines in an internal context to understand and learn from other jurisdictions who are achieving responsible resource development in much shorter and more certain timeframes than those that exist in Canada at present and those proposed under Bill C-69.
I turn then to project assessment parameters. It’s our view that it is imperative that there is a vigorous review to ensure that developments are carried out in an environmentally and socially acceptable manner. We are fully aligned on that goal. The proposed legislation though contains 20 factors to be considered as part of the impact assessment, and my reflection is that many of these factors are described using the language of social policy instead of the language of legislation. This introduces ambiguity and uncertainty, both for project proponents and for communities who understandably wish to have full information through this process.
We recommend that the factors considered in the impact assessment be specific, measurable and limited to project specific considerations. I do want to pause for a moment on the project specific considerations because you sit at the nexus right now of one of the largest challenges facing our world at this time. We have a world that needs, demands energy, and we want that energy to be reliable. We have seen across the world that people want that energy to be affordable and we also want that energy to be as responsible and clean as possible. The challenge to deliver on that is something that I work on every day; that my company is focused on every day. Right now, it is not something that we know how to solve easily. We have to be very vigilant that the impact assessment of a single project is not inadvertently politicized into a proxy for solving this large critically important global problem. Fundamentally, the impact assessment of a single project cannot and should not be used for that.
As the responsible energy major, Total strongly supports the Government of Canada’s desire to implement a robust project assessment regime based on world class and timely standards. Fundamentally, Bill C-69 has a significant impact on where Canada will fit in the world’s energy future. Canadian energy resources can and should be a part of the world’s responsible energy supply and wise policies and clear legislation are a critical part of making that happen.
I invite senators to consider our recommendations that we’ve made in writing and I’m happy to take your questions. Thank you.
The Chair: Ms. Stapleton.
Erin Stapleton, Senior Impact Assessment Specialist, Shared Value Solutions Ltd.: Thank you for inviting me here today. I respectfully acknowledge the territory in which we gather as the ancestral, unceded homelands of the Beothuk and the island of Newfoundland as the ancestral, unceded homelands of the Mi’kmaq and Beothuk. I would also like to recognize the Inuit of Nunatsiavut and NunatuKavut and the Innu of Nitassinan and their ancestors as the original people of Labrador. We strive for respectful partnerships with all peoples of this province as we search for collective healing and true reconciliation and honour this beautiful land together.
I have been an impact assessment practitioner for 11 years and have worked on federal and provincial environmental assessments for natural resource and energy projects from British Columbia to right here in my home of Newfoundland and Labrador.
Shared Value Solutions, SVS, is an environmental consulting firm with a team of 40 staff who work with First Nation, Metis and Inuit governments across Canada. We assist our clients with impact benefit agreements, negotiation, environmental assessment processes, traditional knowledge studies, land-use planning and environmental monitoring. Much of our work focuses on supporting our clients as they engage in federal and provincial environmental assessment processes.
Over the last 10 years, we have worked with our clients on many of the major development projects across Canada, including mines, hydroelectric facilities, transmission lines, highway expansions, oil and natural gas pipelines, nuclear power facilities and offshore oil drilling.
We have been following the federal review of environmental and regulatory processes and have supported our clients in preparing submissions to the expert panels on environmental assessment and National Energy Board modernization and to the Canadian Environmental Assessment Agency and Transport Canada. The comments I provide today focus on the proposed impact assessment act and reflect the opinions of SVS as impact assessment practitioners with the unique privilege of serving First Nation, Metis and Inuit governments. I am not speaking to you today for these Indigenous governing bodies. I am sharing our insights on Bill C-69 from the perspective of serving these clients with respect to numerous federal impact assessment processes.
SVS believes that the proposed act is a significant improvement over the Canadian Environmental Assessment Act of 2012. Positive changes include: the provision in the new act for cooperation with certain jurisdictions, including Indigenous governing bodies, through the delegation of any part of an impact assessment, the joint establishment of a review panel or the substitution of another process for the impact assessment; the requirement in the new act that when making a decision under the act, the minister must consider any adverse affects the decision may have on the rights of the Indigenous peoples of Canada; the mandatory early planning and engagement phase included in the new act which includes Indigenous engagement and participation plan developed in collaboration with Indigenous peoples that would outline how the proponent will work with communities throughout the assessment; the addition of any change occurring in Canada to the health, social or economic conditions of Indigenous people of Canada as an effect under the new act; and the requirement that impact assessment reports describe how Indigenous knowledge was considered.
SVS also has recommendations for additions to the act. For example, while the preamble of the act references the United Nations Declaration on the Rights of Indigenous Peoples, UNDRIP, the act does not reference nor define free, prior and informed consent. Free, prior and informed consent is a specific right that pertains to Indigenous peoples and is recognized in the UNDRIP. It allows Indigenous peoples to give or withhold consent to a project that may affect them or their territories. Furthermore, free, prior and informed consent enables them to negotiate the conditions under which the project will be designed, implemented, monitored and evaluated. The act needs to make an explicit commitment to free, prior and informed consent as defined by the UNDRIP.
The act does not contain any provisions for ensuring that affected Indigenous individuals and communities are empowered to have an influence in decision-making with respect to conditions of approval, follow-up programs and adaptive management. Further, the act requires an adaptive management plan only if the minister considers it appropriate. Post approval adaptive management planning is the professional norm for significant undertakings and should be a critical element of federally mandated follow-up programs so that deviations from the assumptions on which the impact assessment decision was based are adequately addressed.
While the list of factors to be considered in impact assessment includes consideration of the extent to which the designated project contributes to sustainability, that’s in paragraph 22(1)(h), the act provides no further detail on how to apply this sustainability lens. The legislative framework for assessing sustainability should be described in the act and should be inclusive of Indigenous perspectives and interests.
And lastly, culturally important species should be added to paragraph 7(1)(c). Subsequently, proposed projects with the potential to cause adverse impacts to any culturally important species should prompt an assessment. Culturally important species should only be identified by Indigenous communities and during the collection of Indigenous knowledge data and should be included because of the connection to section 35, Constitutional Rights and Cultural Heritage, of the Constitution Act, 1982.
We are also concerned with the testimony from other parties in the past months that prioritize economic development and disregard the Government of Canada’s commitment to implementing the UNDRIP respecting the rights of Indigenous peoples and fostering reconciliation. For example, we have heard witnesses from across the country state that the duration of impact assessment must be shorter. As I mentioned above, we believe the mandatory early planning and engagement phase is a critical element of the new act. While this phase may add up to 180 days to the beginning of an impact assessment process, it is a necessary addition of time to meaningfully engage with Indigenous governments and to build trust between communities and proponents. We believe this required early planning and engagement phase will ultimately create a more efficient process, improve project design and give proponents greater certainty.
We have also heard witnesses state that offshore exploratory drilling should not be subject to impact assessment and that the current regional assessment of the Newfoundland and Labrador offshore area will adequately assess the potential impacts of these activities. Regional assessment can be an opportunity for early engagement and collection of Indigenous knowledge and an effective means of addressing concerns regarding cumulative effects. However, based on our experience to date, the regional assessment process has been lacking consultation, particularly around providing adequate participant capacity funding for Indigenous communities to meaningfully engage. Not only should offshore exploratory drilling remain subject to impact assessment, but the sections of the act addressing regional and strategic assessment must be revised to include requirements around consultation and accommodation of Indigenous peoples who hold established and asserted rights in the area of assessment and sufficient capacity support for their participation in these processes.
Thank you for allowing me to share the opinions of SVS as impact assessment practitioners who serve First Nation, Metis and Inuit governments. We will continue to follow the federal review of environmental and regulatory processes and we will be supporting our clients as they engage with the Government of Canada to provide input on the regulations, policies and guidance that will assist with the implementation of the new legislation. Thank you.
The Chair: Thank you very much for your testimony.
We’re going to start with questions from Senator Simons.
Senator Simons: Thank you all very much for three great presentations. I have to say, Ms. Frampton Benefiel, somebody in my previous life where I was a journalist and I covered LRT construction, hockey arena construction, megaprojects on that level, optimism bias is a very real thing. I had a question for you and also a question for Ms. Stapleton. I’m going to get them both in quickly.
We’ve heard from a lot of proponents of projects who are opposed to the idea of ministerial decision-making because they’re worried that it could prejudice their projects, but you raise a really important point. A different government may be able to push ahead projects over the objections of the regulator. How do you strike the balance between putting the decision in the hands of somebody who’s accountable to the voters and leaving some room for the expert regulation? Then my question for Ms. Stapleton is, could you tell us more about adaptive management planning, what it is and what it looks like when it’s done well.
Ms. Frampton Benefiel: We understand that it’s important that the minister make a final decision. He’s the elected person. But the minister needs to be accountable. We did recommend, when the committee went around asking questions about what to do about environmental assessment, that there be a set of rules that a minister has to check off as he goes through the assessment and that the minister cannot make a decision unless he has checked every single rule and explained why he made a decision here, what his decision was there and what data he used to make that decision. I’m pretty sure that our recommendation was that all decisions had to be science-based.
Senator Simons: Thank you. I think there might be an agreement for proponents too with that, so it’s not arbitrary and political.
Ms. Frampton Benefiel: Yes, exactly.
Ms. Stapleton: Regarding your question around adaptive management planning, I can undertake to provide you some specific examples of where that has been put into place and done well from our perspective as practitioners in this area. But, generally, the concern that we’re hearing from many clients of ours is that they would prefer adaptive management be just as much a part of required actions from the proponent as the impact assessment, as environmental monitoring.
Adaptive management planning in this particular context is a commitment to keep an eye on the effects that are being noticed out there over the duration of a particular project and to have parameters in place whereby you’re constantly checking that the assumptions that you made in the assessment, the assumptions that you made to secure your approval of your project are remaining true. We heard from the panel earlier this morning, there were conversations around climate change and the effects that we’re seeing there. If you have a project that is a multi-year project and is operating, for example, offshore here for decades, adaptive management is critical to assure our clients that environmental impacts are being mitigated. Also, when mitigation has proven to be ineffective — for example a rise in sea level or more extreme weather event — there’s a mechanism in place for the proponent to have the conversation with the public, and with the impacted Indigenous communities, to reassess and think about what else can be done to mitigate a new impact that has, perhaps, arisen over time.
The Chair: Senator Manning.
Senator Manning: Thank you very much.
Ms. Stapleton, could you expand your sustainability lens and tell us what that encompasses, the details on that.
I ask this question for anybody to feel free to answer. We’ve heard presentations, even this morning, about Norway and their turnaround time on an environmental assessment process; 79 days. Anybody who’s familiar with Norway would lean to believe that they are very environmentally friendly, one of the leading countries in the world, from what I understand. Then in Newfoundland and Labrador, we heard this morning that the average is 905 days. How do we find a middle ground on that and give the people that are concerned about the environment and development, an opportunity to have their say?
On top of that, regardless of which political party is in power at the time, having the buck stop with the minister. I understand the final decision rests with him. I understand earlier talking about the check boxes, but we’ve been through that process many times before and it moves it into a political zone. I’m just wondering if we are comfortable with that?
There are a number of questions there. Feel free, but I’m on a time limit here. Being from Newfoundland and Labrador, I like to talk, so I try to get it all out. But I just throw those out.
Ms. Stapleton: I’ll respond to your question regarding the sustainability lens.
As I mentioned in my opening statement, we at SVS believe that we need more definition around what sustainability means. In terms of serving the clients that we work with, we would like work to be done around defining sustainability further to be inclusive of the views of Indigenous peoples. I am a descendent of settlers, so my view of sustainability is very much different than someone who has lived their life in Rigolet. It’s important, generally, that we give more definition around what it means to carry out an assessment with a sustainability lens. I think proponents, the public and otherwise would all agree that we’re looking for more definition around what sustainability is in the context of this act. In terms of who I am representing here today, we would like any definition of sustainability to absolutely be inclusive of Indigenous perspectives and interests.
Ms. Healy: Senator, I’ll attempt to address the issue that I think was inherent in the question around timelines and that was an area that we focused on actually in our submission. I will start by saying that, fundamentally, I was very happy when I first heard that the government was considering updating the environmental assessment process because I think there are flaws within the existing process and there are lots of ways that it could be improved. Unfortunately, the changes proposed now are, in my view, moving in the wrong direction.
You mentioned Norway with a timeframe. We use the U.K. and the U.S. as an example, just for comparison. If my company discovers oil in the Gulf of Mexico offshore the U.S., which has quite high and strong environmental and regulatory standards, at the moment of discovery proponents like us are on a 180-day clock to establish that we intend to bring forward investment; that we are making investments to bring that project forward. If we don’t establish that to the regulator’s satisfaction, the licence can be taken from us and be put up for bid for other companies to take advantage of what we have discovered. So, it’s just quite a different mindset in terms of development of the resource.
You mentioned trying to find a middle ground. I think it’s an admirable goal, but it may fundamentally be insufficient. We, as a country, need to decide fundamentally where these developments fit into our future.
For Total, we accept climate change as a critical component and a critical challenge for humanity. We are aspiring to meet the Paris commitments. We are aspiring to meet the two-degree scenario. Even in the two-degree scenario, the world continues to use oil and gas and Canada has a lot of oil and gas. We have the ability to produce it efficiently and responsibly and supply it to the world. Fundamentally, those investments have, in fact, moved away from Canada in favour of other jurisdictions with inferior subsurface resources, and where there is a greater cost to the environment to get those resources out of the ground. This is the product of a set of choices Canada makes.
So the timelines are critically important. Where Canada’s timeline fits from an international perspective is very important. You used Norway as an example. The United States, the United Kingdom, the U.K. aims for one year to be the environmental timeline. Sometimes it slips over. Sometimes it’s less. There’s a different goal or standard in terms of trying to strike the balance between the needs of the communities, plural, and the needs of the investors.
The Chair: I have a couple of follow-up questions to those of Senator Manning.
We heard from the previous witness that petroleum from the platforms here is exported to 40 countries. I would like to know if China is among those countries.
My second question. You said that the regulations and exploration controls are very strong in the United States and the Gulf of Mexico. But what happened with Deep Water Horizon?
My third question. How old are the platforms in the U.K. and Norway compared to those in our industry?
Ms. Healy: Senator, a number of things tied up in that. First of all, on the U.S. side, there’s no question that the significant Deep Water Horizon event resulted in great change in regulation in the United States. When I speak of the regulatory frame, I speak of the post Deep Water Horizon regulatory frame that has quite high standards, but also a very timely approach.
The questions built into that, in terms of where oil produced offshore Newfoundland is sold, I think I would have to leave that for producers offshore Newfoundland. At this point, my company is not one of the producers in offshore Newfoundland. Generally, oil on tankers, it’s a global market, so oil can go anywhere. There are projects happening globally that my company is involved in. For instance, developing natural gas in Russia to export to China to displace coal-fired generation in China. Those projects are ongoing. It’s called Yamal LNG. It’s one of the largest LNG projects in the world, and Total is a proponent of that project. There are ongoing efforts to address what is fundamentally a global problem. If a Canadian resource can displace other more carbon-intensive energy sources globally, then Canada has a net benefit for the world. Even though it could have for Canada an increase in GHG emissions, globally it results in a reduction. So I think that’s maybe where that question was going. I could be wrong on that.
I think you had a question on the timelines; is that correct?
The Chair: How old is the industry in Norway and the U.K. compared to our industry?
Ms. Healy: There are varying levels of maturity. I guess it depends. The U.K. is a maturing area, so they have been in production longer than offshore Canada. Norway has been in production longer, but is also opening up new areas all the time.
I will say that one of the key metrics in our business is the timeframe from discovery to first oil and that’s different if you’re onshore in an existing basin, versus offshore in shallow water or offshore in deep water. But offshore in deep water, the timeline from discovery to first oil really, depending on jurisdiction, should be eight years. That’s inclusive of all of the processes to take to get you there. Offshore Canada, we’ve never had a project proceed on that timeframe or even within a range of that timeframe. In some cases, in the early days, it was because there was a technology gap for the efficient delivery of those resources. Now there is no technology gap, but we still do see significant time lags for Canada, compared to other jurisdictions around the world.
The Chair: Thank you.
Senator Woo.
Senator Woo: Thank you, chair.
My first question is for Ms. Healy, and it’s about the issue of clock-stopping. There are really three parts to it. The clock, of course, can be stopped by the government and that’s a concern that you have. The clock can also be stopped by the proponent. Presumably you’re not as concerned about clock stopping on the part of the proponent because it gives you some flexibility. But even to the extent that it’s stopped by the government, there’s a subsequent question of whether it’s the minister stopping the clock or whether it’s the agency. Will it mollify some of your concerns if the clock-stopping authority were given to the agency rather than to the minister?
Ms. Healy: Thank you, senator. By comparison, and the table in our submission, for the U.K. the regulatory approval timeline is approximately two years, inclusive of exploration. For the U.S. Gulf Coast, the regulatory approval process can be as little as nine months. Under the existing process in Canada, it’s approximately four and a half years. With delays or stopping the clock under C-69, we see that could expand up to, conservatively, six years. Stopping the clock is something that we don’t see as attractive from anyone.
Senator Woo: At all, whether it’s the agency’s prerogative or the minister’s prerogative?
Ms. Healy: The language in the bill — the number of times it appears that parties can stop the clock and the unlimited ability for the cabinet to stop the clock — raises additional concerns, not only on the timeliness of the process, but also the types of considerations that can lead to that. There’s a requirement for reasons, but in our read of the bill, the parameters for what the proper exercise of that discretion are not clear and ministerial discretion is by law in Canada quite broad. That also introduces additional uncertainty in the timeline. We take limited comfort from who is able to stop the clock. We are concerned by the fact that so many parties can stop the clock and can stop the clock so often.
Senator Woo: I understand, but even though I also hear from industry and other proponents that there’s a desire for some independence in the decision-making around clock stopping and the extent to which the agency is seen as an independent body capable of making decisions around when more information is needed, giving them the ability to stop the clock could be seen as preferable to giving the minister that authority.
Let me turn to Ms. Stapleton. I want to pick up on the issue around post approval adaptive management plans. Could you say a little bit more about how these plans are put into practice? I’m wondering if they belong in the bill because they seem more appropriate for a benefit agreements, or part of the role of the life-cycle regulator in monitoring the project progress. I’m trying to understand if this is an issue that is outside the scope of Bill C-69. An important issue because, as you point out, things change and the affected parties need to have a way of seeking redress or seeking a change in the management plan. But surely this is better left to the life-cycle regulator or to the benefit agreement that’s been reached between the proponent and the affected community.
Ms. Stapleton: Thank you. There is reference to adaptive management planning in the act as it stands right now with the caveat that it is up to the minister to decide if adaptive management is required. We are asking that adaptive management always be required. Then through the implementation piece, through consultation between the proponent, potentially affected parties, Indigenous communities and the like, the specific plan could then be worked out together. It would be project specific. We would like the language in the act to be straightforward in requesting adaptive management be that critical last piece of the overall management of the project.
Senator Neufeld: Thank you for being here today and presenting to us. I have a number of questions.
Ms. Frampton Benefiel, the enhanced public participation that’s in the bill, I don’t know if I misunderstood you, but I thought you came across fairly strong that we should be listening to those that are affected or experts. Just clarify it for me which you mean because enhanced public participation means we open to the world. That doesn’t mean they have to listen to everybody, but it does say they have to deal with it. The panel, they’d have to deal with it somehow.
Ms. Frampton Benefiel: Yes.
Senator Neufeld: How would they deal with it in a realistic way? So, which way do you think, those that are directed affected or everyone?
Ms. Frampton Benefiel: In our opinion, even at the EA planning caucus, across the country and globally, we have to look at issues that are affecting us globally. Why not allow people who are experts in fields of global issues have a say at an environmental assessment that appears to be able to effect a global issue.
I’d like to point out something about hydro projects that probably no one in here has even looked at. We’ve been made aware not that long ago that the fish stocks on the Grand Banks and up along Labrador, the fish stocks in the Gulf of Maine and the fish stocks in the St. Lawrence River are most likely being affected by the fact that silica is behind all the dams up in James Bay and Hudson Bay and in Labrador and that silica is needed for diatoms to produce and those microscopic little devils produce phytoplankton which is the food for the fish. So, if there is an expert that believes this kind of situation or a person, a community that believes that this kind of situation is happening, they should be allowed to speak to it.
Senator Neufeld: Okay. And they would have as much say as someone who is local?
Ms. Frampton Benefiel: Absolutely.
Senator Neufeld: Thank you.
Ms. Healy, the project list has been discussed a lot. I don’t want to elaborate too much, but it’s strange to me why the government, after three years of hearings that they say they had with everyone, wouldn’t come up with a project list so that a lot of the discussion that we’re having around exploratory wells, may not be a discussion. In situ, may not even be a discussion. Can you tell me – and I imagine Total participated in the pre-consultation – was there talk about a project list, what would actually be reviewable and what would not be reviewable when you were participating in that process?
Ms. Healy: Thank you for your question.
Total participated in the earlier process related to this bill through industry associations of which we are a part. We did not participate as a separate company. It’s actually somewhat rare for us to participate directly in this way because we are active in so many countries around the world and we really try to take quite a neutral assessment of opportunities country by country. We do use a process where we assess the risk attached to investment in a country using 28 plus factors that we apply in a consistent way across countries. This bill, as it’s addressed right now, potentially impacts nine of those factors in a negative way in our assessment, resulting in a potential downgrading of Canada’s overall risk picture within our system. That assessment won’t be done until the bill is finalized. Then one of the questions relates to, potentially, if the investments are on a project list then maybe you’re able to sort of use a separate process or some of the challenges related to this process disappear. The challenge for us as an international investor is that absent knowing and seeing what that list is, there is a fear or a concern that the process to get on that list will require a lot of engagement and dialog with government that is not required in other jurisdictions.
It’s sort of the chicken and the egg, because before we decide to proceed with an investment or even to assess a potential investment, we assess the overall country risk. If we do a country risk assessment based on what’s in front of us and we see that there are gaps, then it affects our assessment. If the project list is available and transparent and it coincides with some of the things that we’re thinking about doing, then potentially helpful. I would say it’s a partial, not a full solution.
Senator Neufeld: Thank you.
Ms. Stapleton, you talked about UNDRIP and that it is a direct veto for Indigenous groups, at least I think that’s what you said. I’ve heard from Indigenous groups, we have, this committee, in Fort McMurray where there were different opinions about what UNDRIP actually meant. In fact, in the Senate, I listened to Senator Sinclair, who is an Aboriginal, firmly state that it was not a veto. Do you not think that it should be figured out first whether it is a veto or not a veto before it’s included? Because there seems to be some confusion. I’m not making it confusing. I’m trying to figure out what it actually means.
Ms. Stapleton: I appreciate the sentiment that the definition of UNDRIP and what it means in the context of this act can be challenging. I’m sure many of the clients we serve would feel much the same. I think using the term “veto” may be a bit strong. What I’m getting at here, as a representative from a consulting firm that serves primarily First Nations, Metis and Inuit governments, is that the Government of Canada made a clear commitment in the preamble to Bill C-69 and there’s a clear commitment to trying to walk that path of reconciliation and the desire to have outright mention of free, prior, informed consent. I don’t speak for the clients that we serve, but this is what I feel when working with our clients. They want assurances that the Government of Canada is staying true to that commitment and part of that is meaningful engagement and equally important, the provision of adequate capacity funding to support that engagement. I don’t believe any of the clients that we work with would feel that they want this, as you say, power to veto. They want assurances that a promise that was made to them by this government will be followed through on.
Senator Neufeld: I’ll read Hansard afterwards, but you did say that First Nations want the right to say no. I believe you did say that. Consent in the dictionary means yes or no. That’s where I took it from that you were meaning no. I believe that you have to do the consultation, all of those kinds of things. No one’s saying no to those kinds of things.
Senator Ravalia: My first question is for Ms. Healy. Your company is involved in a multinational process and you have the opportunity to deal with a variety of international jurisdictions with respect to oil and gas exploration. Is there one particular area where you found a gold standard that affords the opportunity to retrieve the oil and gas in a relatively seamless manner, in a cost-effective manner that you think could fit into the broad parameters of Bill C-69? Or, do you feel that the bill as it currently exists impedes that ability?
Ms. Healy: Thank you, senator. I do have the advantage of a bit more of a global eye view within my company. I have been personally involved in investments in 14 countries, but I’ve overseen decisions on investments in many more. The question of, is there an international gold standard? I would say there are a number of countries that fall into quite a good standard. The question for me, I think, from a policy perspective, would be to take the learning from those countries and apply the best of them to create the process.
I can undertake to send you a list later of how we view this as a company, but I can say personally in my experience, the U.K. has some very strong elements. Norway, the U.S., Brazil has some good elements in its system, as well. I feel that if the transcript is reviewed, not mentioning a country is going to make me unpopular in that country, so I’m going to pause there and say that I can undertake to provide in writing, from our perspective, where we think some of the gold standard is. Certainly within OECD countries, there’s a common commitment, a shared commitment on the environment. There’s a shared commitment for community engagement. There’s just very different ways of delivering on that within the legislation. I would say there are lessons to be learned from multiple countries, as opposed to a single one.
Senator Ravalia: With respect to this particular bill, do you think we’re outside of that parameter? Are we making ourselves less competitive than the perceived gold standard countries?
Ms. Healy: That’s a fairly fraught question and I know that within my industry there are varying points of view on that. I would say that from our perspective, we respect the Government of Canada’s rights and obligations to make the decision that’s best for Canada. Within this bill, there are changes that could accommodate and move this more into the space where we think Canada intends to be, but the changes are not insignificant. I’ve heard it referred to as some tweaks to the bill could achieve it. In our view, they’re not tweaks, but there are changes within this framework that it could still be achieved within the framework.
Senator Ravalia: Ms. Stapleton, recognizing that Indigenous communities in our country are not homogeneous, have you run into situations where there may be a pro and con approach within an Indigenous population to a particular development? How do you deal with those contrary views to arrive at a compromise?
Ms. Stapleton: Absolutely right. Just because you’ve worked with or visited one Indigenous community, by no means do you have a feel for what’s going on across our country. I do want to add that the clients that we work with, many of them certainly wouldn’t view themselves as anti-development. They are, however, looking for more meaningful engagement when it comes to how these projects are executed. When we work within a community and there are varying viewpoints, we start with conversations to figure out where those concerns lay. If we could, perhaps, help in identifying potential mitigation measures, or, if we could help at the negotiation table with the proponent, the Indigenous community or the non-Indigenous community. You could be right here in St. John’s and have many conflicting viewpoints around whether a particular project should proceed or not. You can’t please everybody. We know that. That’s just the way it goes.
We’re there to facilitate and like any good consultant, we just do our best to serve our clients’ needs and a lot of the times that means working directly with chief and council. They have been elected by their people to make decisions on their behalf, as well. We really just try to do our best to serve our clients and support them in whatever way they want to be supported. Sometimes that means helping them work more closely with the proponent and sometimes it also means, perhaps, suggesting that a particular project not be welcome to proceed until certain parameters are met.
Senator Massicotte: If I could follow up on Senator Neufeld’s comment to Ms. Stapleton. I’m also concerned about and struggling with this issue of consent. Clearly, the word consent in a dictionary means approval. That means if you need to seek approval, you have a veto. You have a right to say no and that’s the intent. But a Supreme Court ruling and many rulings of the Supreme Court, have done a phenomenal job of defining our respective rights, because we’re sharing the same geography.
The rulings of the Supreme Court made it very clear that in some cases if the rights are very significant or undetermined, then there is a need for consent. But, in many other cases, it’s the fact of sharing in a common way to satisfy the historical use of those lands by Indigenous communities. So, it’s vague. But 262, which is referred to in the beginning of the Bill C-69, makes it very clear. It suggests that consent is applicable to every case that affects their lands, irrespective of the degree. You seem to be saying that it is not really the intent of this thing. I gather you would agree that maybe we should amend the act and make it very clear that this consent would only be the case, where applicable. In other words, as defined by the Supreme Court. Would you agree with that?
Ms. Stapleton: I would suggest that the committee here reach out to more Indigenous governments and communities across Canada. It just goes back to the Government of Canada and what they committed to in rolling out this new impact assessment act. Free, prior and informed consent is an important part of that. It’s trying to get some assurances that project proponents will carry out meaningful engagement. Roberta has already spoken about her experience with Muskrat Falls, and correct me if I’m wrong, it was not a well-executed engagement program. It’s those types of scenarios that we hope to avoid, which is why we’re very pleased to see the addition in the new act of mandatory early planning and engagement. There certainly are proponents out there that we like to call enlightened proponents. When done right, we feel that this particular addition will be especially meaningful for the clients that we serve and all the more beneficial to the proponents of giving them more of a road map on how they can best work with the Indigenous communities directly affected by their project.
Senator Massicotte: Would you not agree that the Supreme Court has already dictated the fact there’s an obligation on us in the non-Indigenous community to have meaningful engagement and meaningful consultation with the Indigenous people when their rights are so affected?
Ms. Stapleton: I won’t argue with a Supreme Court decision. I am saying that I’m here as a consultant to Indigenous communities and the best way to find out how Indigenous communities would like to see free, prior and informed consent worked into the act, and how they would like to see the UNDRIP be carried out through the act, if for you to reach out directly to those governments and communities.
Senator Massicotte: That’s fair game. Thank you.
Senator McCallum: I want to go back to the statement that was made about all decisions having to be science-based. One of the concerns I have is that we had a previous witness who made a recommendation that Indigenous knowledge be made subordinate to scientific knowledge. I want to ask you about that.
When we look at science in the world of resource extraction and building hydro dams, I have seen so many negative impacts in the way things are built, in the way that science doesn’t address the issues they are supposed to address. When I look at the pesticides, PCBs, toxic waste, those are all hazards that science has recognized, yet no one in the scientific world challenges the wisdom of allowing the use of these products to increase. Science has grown in two segments, one that is industrially supported and the other supported by public funds. The overriding objectives of the industry supported science have always been greater profits for industry. That’s been their main aim.
When I look at the Muskrat dam and look at what happened with all the scientific based knowledge that should have built this. You look at the slope and the instability along the riverbank, the increased erosion downstream of Muskrat Falls, the water quality due to the increased erosion capability, the mercury contamination, the potential riverbank slumping downstream, the potential for that one segment of Muskrat dam that has been built on clay to fail and cause flooding.
Not only this, but the orphan wells that have been abandoned and all the toxic waste across Canada. Scientific knowledge should have addressed all this yet it continues to increase. So, could you explain a bit about what scientific knowledge you’re speaking about that you want this based on?
Ms. Frampton Benefiel: I think you said everything I would have said and I probably have to pull back on that solid statement on science. I agree with you that there are two divisions and industry scientists do what industry asks. Who pays them is an important part of what they will produce. Regarding “the no effects beyond the mouth of the river” situation, that science company was brave and they told Nalcor, “You will have effects beyond the mouth of the river.” What happened with that one is that the report disappeared. It probably went into a garbage can. Luckily, the scientist who did the report had a copy and I got a copy of it. That’s just one of the things that happened.
As far as Aboriginal knowledge and traditional knowledge, I would not have known, and neither would Nalcor have had any discussion about the fact that seals actually go up the Lower Churchill, the Grand River. Once the turbines are working there would be a smorgasbord of bits of fish coming through these turbines that the seals would go up. This came to me from a friend, an Inuit person, and he said, “They’re crazy. The seals go up that river to feed and if there are bits of fish, there’s going to be more seals go up.” So the methylmercury is going to increase in those seals.
Let me take back that it has to be all science and say that I agree totally with everything you’ve just said; that the science has to be independent. How do you get independent science? It’s difficult. All scientists across the country, they’re not that many experts in various fields. They are afraid that they’ll never get another job from a government perspective if they say something that’s — . Just like I read from the fellow who told Dr. Flyvbjerg that if he came up with issues that were going to affect his government, he would never get any more funding. That’s a known fact across this country.
So I think it behooves us to try to figure out how we have a block or a group of scientists that don’t have to be afraid and that Indigenous knowledge is important. I would not have known about the seals going up Grand River, except that an Inuit person told me that. That became a huge issue and then Harvard did the studies for Nunatsiavut and said that people, their bodies are going to increase in mercury from 300 to some cases 1500 per cent. We believe Harvard. Harvard has done studies on methylmercury all across the north. This is not their first foray into studying methylmercury issues. The Nunatsiavut government did a fantastic job. The seal situation is an example of how Indigenous knowledge was accepted.
So, I take back that it all has to be science-based because science is also in our communities. Another example, when you talk about the ice bridge from Mud Lake to Goose Bay, Nalcor said oh, they’re going to fix it because, you know, “it’s just going to freeze up two weeks later and open up two weeks earlier.” But the people who live in Mud Lake said “You’re out of your mind. We know that river. You don’t know the river.” So, sorry about that.
The Chair: Thank you very much.
Last question, Senator Patterson.
Senator Patterson: I’d like to direct my questions to Ms. Stapleton and Ms. Benefiel. I want to pay tribute to your dedication to your cause, Ms. Benefiel, but maybe give you another point of view. Ms. Benefiel, maybe a strong description, but you poo-pooed the focus on jobs and economic impacts that you say politicians are concerned about and I believe, Ms. Stapleton, you questioned inserting economic impacts into the criteria which has been recommended to us by many intervenors. I should be careful to speak about this province not being representative with two able people here, but I understand that the province has been struggling with high taxes, gas taxes, the provincial sales tax, crippling deficits, and threats to social problems. I’ve even heard, some years ago, talk of a potential bankruptcy. We heard this morning that the energy industry in particular has been a saviour for Newfoundland and Labrador; that it was up to a third of the province’s GDP in recent years, now around a quarter — 24,000 jobs projected in the near term, more than twice that by 2045.
All this is jeopardized, we’re told, by provisions in the bill. Isn’t a positive investment climate and considering economic impacts potentially important for your province, at least as a factor to be considered?
Ms. Frampton Benefiel: I’m sorry. I did touch on that in my report and I didn’t get to talk about it because I was a little too long-winded.
Senator Patterson: Here’s your chance.
Ms. Frampton Benefiel: Yes. Part of what we asked an expert to do during the environmental assessment of the Lower Churchill was to look at cost benefit analysis. So, costing what the river and the system itself was giving back to communities; an accounting of the benefits of the environment that is provided to humans. We seem to have no issue like you say with accounting for all the jobs and all the economics that comes from this and all the money that comes from this, but we are constantly pushing back on the idea that we need to look at what these rivers and ecosystems give us. That is fish to eat, clean water, clean air and those kinds of things.
Rachel Notley said projects should be rewarded for creating good jobs for Canadians, which in turn help grow provincial and federal economies and create resilient families and communities. In my opinion, resilient families and communities can be better created — of course, they need financing — if they’re in charge of how they want to see their area developed. These megaprojects are coming in and taking charge, total charge of a community.
Only communities can grant permission. Let’s at least give the communities the chance to see what the economics are of the benefits that come from having a beautiful place to paddle. That sounds very simplistic, but back during the environmental assessment, I did a report on how many outfitters could come down the river. We, Grand River Keeper, has guided people down that river for the last ten years and we know of a company that used to come in from Maine and bring ten people, charge them $6,000 each, fed them beans and bacon and made a fortune, and went back to Maine with all the money. Why can’t we do that? Why couldn’t our local community do things like that? Instead of taking that river and destroying — and who wants to paddle three huge reservoirs. I mean, not me. I love to paddle that river, but not on a huge reservoir. It just doesn’t make sense. So that’s my point about jobs. The jobs need to be community minded. They don’t need to be a boom and bust. What’s going to happen to our community when Nalcor leaves our community?
The Chair: Thank you very much for your questions and your answers.
(The committee adjourned.)