THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
OTTAWA, Thursday, February 28, 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 a.m. to give consideration to the bill; and, in camera, for the consideration of a draft agenda (future business).
Senator Rosa Galvez (Chair) in the chair.
The Chair: Good morning and welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources.
My name is Senator Rosa Galvez. I am a senator from Quebec and the chair of this committee. I will now ask senators around the table to introduce themselves.
Senator D. Black: Good morning. I’m Senator Doug Black from Alberta.
Senator Mockler: Percy Mockler, New Brunswick.
Senator Cordy: Jane Cordy, from Nova Scotia.
Senator Mitchell: Grant Mitchell, Alberta.
Senator LaBoucane-Benson: Patti LaBoucane-Benson, Treaty 6 territory, Alberta.
Senator Simons: Paula Simons, also Treaty 6 territory, Alberta.
Senator McCoy: Elaine McCoy, Alberta.
Senator McCallum: Mary Jane McCallum, Treaty 10, Manitoba region.
Senator Tkachuk: David Tkachuk, Saskatchewan.
Senator Seidman: Judith Seidman, Quebec.
Senator Massicotte: Paul Massicotte, Quebec.
Senator Richards: Dave Richards, New Brunswick.
The Chair: Our deputy chair will be here very soon. Here he is, Senator Michael MacDonald.
I would also like to introduce the clerk of the committee, Maxime Fortin, and, to my right, the two analysts of our committee, Sam Banks and Jesse Good.
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.
Today we welcome, from the Government of Saskatchewan, the Honourable Bronwyn Eyre, M.P.P., Minister of Energy and Resources. Thank you very much, madam, for joining us. I invite you to proceed with your opening statement, after which we will go to a question and answer period.
Hon. Bronwyn Eyre, M.P.P., Minister of Energy and Resources, Government of Saskatchewan: Thank you, Madam Chair, and good morning, honourable senators. I’m very pleased and very honoured to be here on this important issue on behalf of the Province of Saskatchewan and Premier Scott Moe. I barely made it with the clothes on my back at 2:30 in the morning due to the snow in Toronto. I would have walked or taken a bus or whatever it would have taken to pull up out front here and get here this morning.
In the interests of time, I will get right to the point. Certainly, if sober second thought were ever necessary, it is with this bill, which is the object of our discussions here today. It was about a year ago, following my appointment as Saskatchewan’s energy minister, that I first came across documentation related to Bill C-69 and some of the very grave concerns that were being expressed by leading energy operators about the uncertainty that even the prospect of this bill was creating.
Over the months, sector voices have continued to implore our government and our province to demand in turn of the federal government that, at the very least, the regulations be released so that we can all know what major projects will be subject to future impact assessment. A year on after my appointment, there is still no regulations, which will certainly define what major projects apply and under what terms. They really are the heart of the thing. Without the regulations, it makes analysis and debate of this bill abstract. The draft regulations simply must be released, and not releasing them is the very opposite of the transparency and clarity that the federal government claims to be aiming for with this bill.
Over the course of the last few months, at an official bureaucratic level, documents have been requested and exchanged between provincial and federal levels, but the question remains: To what end? It’s hard not to be cynical that, as provinces, we are simply being co-opted by this process, which is why this part of the process in the Senate with you is so important. It provides a chance to turn things around when it comes to what would be an economically devastating bill, a bill which, just a few months ago, wasn’t really on the public radar. Saskatchewan has certainly tried to raise awareness about it, and this process is doing that as well, so as a province, we are very grateful for that.
In the meantime, the federal environment minister, the federal resources minister and the Prime Minister himself continue to say that this bill is about streamlining and efficiency. Unfortunately, that is misleading and, at worst, doublespeak, because any logical look at this bill clearly shows how it will lead to non-streamlining and non-efficiency.
On timelines, for example, the federal government continues to maintain that Bill C-69 will lead to shorter timelines. However, this doesn’t include the 180-day early planning phase and the 30-day ministerial decision phase. Also not mentioned is the fact that the environment minister can extend timelines for an impact assessment report for a maximum of up to 90 days, or indefinitely, if that is what is recommended to Governor-in-Council.
Bottom line: you simply can’t add more mandatory conditions and all the opportunities for expansion of scope that this bill envisages and complete approvals in a shorter time. That’s simply not possible.
Under the way the bill is proposed, the clock can be stopped and timelines increased or outright suspended at any time, which leads one to wonder how that prospect and that uncertainty would have helped Kinder Morgan, Energy East or Northern Gateway. How is this streamlining? How will the prospect of this diminish the capital and investment flight from Canada that we are currently witnessing? And how will this help restore Canadian competitiveness?
Much ink has been spilt on the new subjective processes that will be introduced into environmental assessments, including the intersection of sex, gender and other identity factors. Standing tests are also being eliminated, which will lead to more delays.
There are other less discussed sides of this bill, which I think are important to highlight. Bill C-69 also introduces several elements by stealth, including free, prior and informed consent laid out in the United Nations Declaration on the Rights of Indigenous Peoples, the implications of which are still legally and otherwise very vague and very much in debate and question. If what is intended long term amounts to resource sharing, we must be able to have a free and open discussion and debate with our federal counterparts about the ramifications of this.
Another element in the bill is the purpose statement, clause 6. This would be a crucial tool for judicial interpretation of this bill in the future. It’s fair to say that there is a very clear, de-emphasis on the economy, competitiveness and investment in the energy and resource sector and a very strong emphasis in the purpose statement on — and I quote — “public consultation . . . alternative means . . . incidental effects . . . .”
Needless to say, this bill, to our mind in Saskatchewan, constitutes part of a toxic trio when taken side by side with Bill C-48, the clean fuel standard, and a toxic quartet or quintet with the carbon tax and Bill C-68. They all amount to major negative cumulative impacts on future investment in this country.
In conclusion, I would simply say that Canada has long been a somewhat delicate confederation when it comes to the constitutional division of powers and how we manage and negotiate them over such a massive geographical area, but that delicate balance, those interprovincial balances of power, has also worked. They have put us in good, enviable stead as a nation. We mustn’t upend that balance and the spirit of true cooperative federalism by allowing a federal bill to be imposed that significantly duplicates and overreaches into constitutionally enshrined provincial and territorial jurisdictions.
It’s also often said these days in the context of discussions over this bill that the current approval system is broken. It isn’t broken. It wasn’t the system that killed Northern Gateway or Energy East. The system can be worked with and improved. We can build on what we have as partners within this federation without overturning everything and having to start from scratch. After all, the system that’s being called “broken” is the one currently being relied on to — we hope — see the Trans Mountain project through.
It is the system that was relied on successfully to see through the Enbridge Line 3 replacement project, the announcement for which Minister Goodale, among others, myself, attended last summer. Minister Goodale and First Nations leaders, among others, praised the literally thousands of consultations that had taken place with Indigenous and other communities leading up to that day. He called it a system, a process, that worked.
What really drives what projects are approved in this country in the future all comes down to political will, a will that is behind and proud of the innovative, top-in-class energy and resource sector that Canada has always been known for, a will that will see it flourish and move forward. That’s what’s now in question, whether that will exists.
So I would ask, as honourable representatives of all provinces, that you consider the impact the energy and resource sector has on all provinces, which is why your off-site visits across the country will be so important, to see and hear from offshore in Newfoundland and Labrador, the mining sector in Ontario, hydro in Manitoba and yes, oil and gas, potash and uranium in Saskatchewan. These are the sectors that employ thousands of people and 34,000, for example, are employed directly and indirectly by the oil and gas sector in Saskatchewan. These are the sectors that employ thousands of First Nations people. Cameco, for example, in Saskatchewan has traditionally been the biggest employer of First Nations in the country.
These sectors are crucial engines of our economy and of our way of life, and we can’t submit these sectors or our country to more uncertainty and more delays, delays that would be directly caused by Bill C-69 and the other cluster of proposed tendentious legislation and a legislative process that is hurting cooperative federalism.
Honourable senators, please employ your formidable collective power to stop this bill. Thank you.
The Chair: Minister, thank you very much for accepting our invitation to testify. We will now move on to questions, starting with the vice-chair of our committee, Senator MacDonald.
Senator MacDonald: Thank you for your presentation this morning, Madam Minister. I think we both would agree that the Alberta Energy Regulator is one of the most experienced regulators in the country when it comes to dealing with natural resources. They told this committee when they were here that they’ve been consulted infrequently on Bill C-69. The Ontario government told us that the government has not consulted them since they took office. I wonder if you could describe the federal government’s consultations with Saskatchewan. Have they listened to you, if they have consulted, and are any of your suggestions reflected in Bill C-69?
Ms. Eyre: I would say that prior to the introduction of the bill, Saskatchewan was treated like any other stakeholder, which is unfortunate considering the very robust regulatory role that we too have played in Saskatchewan as responsible regulators. Again, it goes to that constitutional issue of infringement into provincial jurisdiction. There was that sense that we were just one of many prior to the introduction of the bill. Following the introduction of the bill, I think it’s fair to say that Saskatchewan feels that they have been talked at, not talked with.
When I was in Iqaluit at the federal-provincial-territorial meeting in August, one of the things that was offered at that time was that provinces, including Saskatchewan, could be walked through a “pilot project” of how this would work, how Bill C-69 could work. Considering that in Saskatchewan, for example, we have three major sectors that could be impacted — potash, uranium and oil and gas — I don’t know which one you would choose for a pilot project. But certainly the reality is in the mix and would be in the complexity of each and every project that would go forward. From uranium’s perspective, for example, they see that they will be submitted to a whole panel review process for a submine. So if that’s what we’re talking about in terms of a pilot project, it’s hard to compare that apples and apples with another pilot project in another sector.
My point is that there hasn’t been the consultation and the in-depth effort to understand the sectors that are impacted in a province such as Saskatchewan.
Senator MacDonald: You mentioned the uranium industry. This bill strips major responsibilities from the National Energy Board and the Canadian Nuclear Safety Commission. This is a major victory, of course, for foreign-funded activists who often claim these regulators have no credibility. Do you think it’s appropriate to reduce the role of these regulators? Does the Government of Canada have faith in the National Energy Board and the Canadian Nuclear Safety Commission?
Ms. Eyre: I think that they do. If we’re speaking about uranium, for example, they are life-cycle regulated by the Canadian Nuclear Safety Commission, so they are very unique in that regard and have had a very close integral relationship with that entity.
I think things are becoming lost in translation in terms of that idea, once again, that anything is broken. When we talk about people saying thank goodness Bill C-69 is going to come along and a new regulator because suddenly these other regulatory entities don’t work, there’s so much political dimension in why they haven’t worked and why the projects that haven’t gone ahead haven’t gone ahead. It hasn’t had to do so much with the regulatory system as the political realities.
Looking at uranium, for example, in terms of what’s envisaged by this bill, requiring all uranium mine and mill projects to go through an estimated seven to fifteen year review panel processes, as is currently proposed, in conjunction with the loss of the single-window assessment, licensing process under CEAA, that would effectively mean there will be no uranium mines or mills ever again in this country. I think we have to be pretty clear about that.
One of the elements of the bill that’s of grave concern to uranium and other mining is that scoping, as they call it, of so-called alternatives to a mining project. In other words, there’s a requirement that you potentially identify new mineral sources. But typically, a mining facility is built near or directly on top of a mineral source. Again, the alternatives are difficult in that instance, which is an understatement.
Those are some of the specific concerns that uranium, for example, is facing under Bill C-69. But in terms of the broader, “we need something new because it hasn’t been working,” it’s much more nuanced than that. I have highlighted, for example, in Enbridge Line 3, in a different sector, which worked under the current system.
The Chair: Thank you very much.
Senator MacDonald: Thank you, minister.
Senator Cordy: Thank you very much, minister, for being here this morning. Hopefully you can get to relax a bit later today after a long night travelling.
First of all, I’m really pleased that you mentioned mining potash, uranium, oil and gas, hydro, offshore oil and gas — I’m from Atlantic Canada. That is pretty important because many are pushing this bill forward as a pipeline bill. Indeed, it covers far more than pipelines, so thank you very much for pointing that out.
I am quite surprised when you say that the regulations should be released before the bill is passed. I’ve been in Parliament for many years, and I’ve not yet seen any regulations released before a bill is passed. I’m not quite sure how you can release regulations before you actually have the bill. Does it happen provincially that you release regulations before you pass the bill?
Ms. Eyre: I think, for us, there is a distinction. One example I heard somewhere along the road the last year was that if you’re going to pass, say, legislation that seatbelts are going to be mandatory, for example, you pretty much know what the purpose of the bill is going to be or what the purpose of the legislation is going to be, namely, that seatbelts are going to be mandatory. The regulations that follow are going to go to penalties, fines and some structure around the premise that is completely clearly understood. In this case, no one knows what the major project list is, so the very heart of what we’re dealing with within the context of the bill isn’t known.
Potash hopes it will be exempt, but there’s been nothing in writing, so to speak. Uranium is nervous. Certainly the oil and gas industry is nervous. But in Saskatchewan, we have SAGD. We have in situ oil sands in Western Canada, and, again, we don’t know whether they will be impacted or not.
What is concerning about the in situ oil sands, for example, is that shortly before Christmas I read in the media that there had been assurances by the federal minister, Minister McKenna, to Alberta that in situ oil sands would be okay because Alberta has a carbon tax. Then that was really the end of that. I haven’t heard anything more. Perhaps many of you have more detail on that. But to learn in the media that Saskatchewan might not be exempt because of an issue that’s before the courts, frankly, in terms of the carbon tax, is of grave concern, and there is bandying about in the media of what major projects may or may not be exempted.
There’s a pretty grave difference in this case to calls for the regulations, which, in fairness, have been called for by not only stakeholders but provinces for months and months. There have been assurances that these draft regulations will be coming out within days, and days and days and days. Therefore, I don’t think it’s unfair for provinces to request that we see these regulations because, as I say, they go to the heart of the matter. They go to the heart of what will actually be exempted and what will apply.
Senator Cordy: I can understand that from the provincial perspective. I can understand that you don’t bring regulations forward until — we don’t know but we assume we’re going to have a number of amendments in the Senate, so until that time.
I wonder if you could you explain further the free, prior and informed consent laid out in the United Nations Declaration on the Rights of Indigenous Peoples. I know the system that we currently have is driven by a duty to consult the Indigenous peoples. This new bill says early and inclusive engagement and participation at every stage with the aim of securing consent. When I heard you, I wondered if you are against Indigenous consultation, which is what I heard, but maybe you can expand that a bit for me.
Ms. Eyre: No, absolutely not. The point I’m trying to make is that if the UN Declaration on the Rights of Indigenous Peoples is integrated into Bill C-69, there are still a lot of questions, legally and otherwise, about the ramifications and implications of UNDRIP, so I think we need to have a free and open discussion, as I said in my remarks, about the consequences of that and what’s actually envisaged by that.
From Saskatchewan’s perspective, we feel that there’s a potential conflict with the numbered treaties, with treaty land entitlement frameworks that have worked very well in Saskatchewan, incidentally, and then the potential implications for land and mineral resource ownership. Again, that is something that needs to be discussed in the broader context of the bill.
In terms of duty to consult, certainly in Saskatchewan we have a very robust consultation process. That’s probably one of the concerns that people have raised about Bill C-69, which is that even where things are relatively smoothly laid out or straightforwardly laid out in terms of what a duty to consult entails and the process, there are all kinds of events or situations that can pause that rollout of project approvals, even within the current structure and even within the provincial structure. There are a lot of unknowns and unexpected things that can happen.
Again, it really just goes to not the duty to consult or the responsibility to Indigenous consultation, but simply a greater unsureness about what that will mean in terms of delays of projects and project approvals.
I understand that with Trans Mountain, for example, even before the federal government purchased the pipeline, there were 1,600 consultations with First Nations communities and others — 1,600 people and parties is the number that sticks in my mind. Again, the question becomes, if you are going to eliminate standing tests and you’re going to increase Indigenous consultation, what is the framework for that? Is that really laid out in the bill? And just consultation, period.
But I do think the purpose statement and I do think UNDRIP are elements that need to be discussed in an open fashion just in the context of the bill and the intentions of the bill.
The Chair: Because time is passing quickly, we will have three minutes for each person. Please, short preambles and straightforward questions, and answers as condensed as possible. Thank you.
Senator McCallum: Thank you for your presentation. I will go back to that free, prior and informed consent and the relationship you have with Indigenous peoples in Saskatchewan.
I’m glad this bill is here because I’m concerned about all the projects that have gone on and the environmental devastation that has occurred. Many of the orphan wells are still outstanding.
When you have the duty to consult, isn’t there a process where consent is given at some point? People seem to think that it means a veto, but it doesn’t.
As an Indigenous person, I’ve lived my life in tutelage, and consent was not a right that I had. It’s very important for us to have it and to give it so we’re no longer held in tutelage.
When you do the consultation and people say, “We don’t want the mines here, or hydro,” how do you handle that with the people?
Ms. Eyre: All I would say, and what I was trying to highlight in my remarks, what I’m asking, somewhat rhetorically, is whether we aren’t doing that already in terms of process. For example, as I mentioned, Enbridge Line 3 replacement where there were literally thousands of consultations with First Nations and other communities, and understandably so. It was a success in the sense that finally the outcome was positive and they were on board and they felt part of the process and they felt that that duty to consult had been fulfilled and that approval in the broadest sense had been given. All I’m really trying to challenge is whether we need a completely different bill to get at, perhaps, the same result.
Senator McCallum: When I look at the statement with UNDRIP, you bring in the federal government and the province, but there’s no mention of First Nations. They are title holders, and I believe they need to have a bigger profile than given in the document. Can you comment?
Ms. Eyre: I’m not sure what document you mean.
Senator McCallum: This one.
Ms. Eyre: From the speech. I see.
Senator McCallum: Because you talk about delicate balance, resource sharing, partners within the federation, but you don’t mention First Nations.
Ms. Eyre: Certainly I meant to. And, of course, they are part of that delicate balance. That goes without saying.
Senator McCallum: Okay.
Senator Richards: Thank you for being here. I certainly have some concerns about Bill C-69 as well. People who support this bill keep bringing up the spectre of the 2012 bill as being much worse. I’m not familiar with that bill as I’ve only been in the Senate for a year and a half, but I see this bill as a spider web of regulations and continual federal oversight and potential litigation. Do you think this is a worse bill than the 2012 bill?
Ms. Eyre: I think it’s one of many. As the purpose here today is to speak of Bill C-69, I think we have grave concerns as a resource province, but we should have grave concerns as a resource country about creating more uncertainty. I think sometimes we forget about the almighty dollar, and it’s not always comfortable to raise, but even in terms of looking at some of these timelines and the extensions of timelines and the scope for expansion of timelines, that early phase of a mining development is absolutely crucial, but it’s also extremely expensive. I don’t think enough of a concept is there about what mining companies, junior mining companies or investment entities put on the line when they actually try to plumb for resource. I think that’s a little bit lost in the mix of legalese in the case of this bill. I think one of the major concerns is the timelines and the scope for expansion, one of many, and as I mentioned in my remarks, other legislation we are very concerned about as a province.
Senator Richards: We know that Alberta is losing hundreds of millions of dollars a week. Can you give us an estimate of what Saskatchewan is losing or has the potential to lose in the next few years, maybe?
Ms. Eyre: To go back to my exploring mining point, there are billions of dollars attached just to exploration. In the case of uranium or other mines, if that were to stop as a result of this bill, it gets into very big numbers across sectors. In potash, for example, depending on the company, it depends whether there will be a new mine envisaged to be built in the next 10 years or so. That might be over the course of more years, but in terms of a brownfield site, a nitrogen facility, would a decision be reached to stay in Canada because of Bill C-69? The answer I’m hearing increasingly is no, that they would relocate.
Senator Mitchell: Thanks for being here. Given your emphasis, minister, on the free and prior informed consent, which is a reference to the United Nations Declaration of the Rights of Indigenous Peoples, are you aware that the Conservative MPs in the House of Commons unanimously supported an amendment to this bill in committee, and it was further supported in the house, to put reference to UNDRIP in the preamble of this bill, and that included the MPs from Saskatchewan? Have you consulted with your MPs from Saskatchewan to see why their position would be so different than your position?
Ms. Eyre: It’s not a difference of position. The point I was trying to get at in my remarks was that there was not enough debate about the implications of that in the purpose statement. I have had a lot of conversations about the purpose statement with people who have legal outlooks on things, and they say that it’s a very formative part of the legislation.
In terms of the UN declaration, it’s not about duty to consult or the importance of consultation. That’s not the point. It is simply about some of the uncertainty that arises from that, among other things, in the bill. From Saskatchewan’s perspective within the Ministry of Energy and Resources, for example, that has been expressed and raised as simply uncertainty, which is what I was attempting to highlight.
Senator Mitchell: There has been plenty of debate here. We will send to you the speech by Senator Murray Sinclair, who is the first Aboriginal judge in the country, renowned for his insight into these kinds of issues, who categorically argued that it’s not a veto by any means.
My second question is on your point that somehow this bill is a clear de-emphasis on the economy, a de-emphasis I would imply from your statement comes from CEAA 2012. In CEAA 2012, the economy is mentioned five times, and several of those five it’s just technical. In this bill, it’s mentioned explicitly 31 times, and in reference through definition of sustainability and effects, both of which emphasize positive economic effects, it’s mentioned 131 times.
Senator Patterson: But not in the purpose statement.
Senator Mitchell: Yes, it is. The first three things in the purpose statement are economy. Sustainability, economy and effects. The first three.
How is it that people like Senator Patterson and your statement continually say that somehow this bill does not emphasize economy when it’s 161 times since the priority three bullets in the purposes? It just seems odd that would be the conclusion.
Ms. Eyre: This goes to some important points. Bill C-69 removes the significant adverse environmental effects threshold and it moves to a public interest decision threshold. There are more mandatory considerations. I think there are currently 12, and it moves to 20. Standing tests are removed. You can say it is about the economy as much as you like, but the reality is that if you add more mandatory considerations and more scope for extending timelines — again, we haven’t really talked about timelines, but they are inherent in the bill in terms of what can be expanded, delayed and suspended. That simply is bad for business, and so business is saying that in spades across the country and across the province to me. They are terrified of this bill and the impact it will have on the economy. I think we should listen to them.
Senator Massicotte: Thank you for being with us this morning. I certainly agree with you that we have a serious problem in Canada with approval of major projects. Now, you put it all to political will. Obviously, before you fix a problem, you have to find out what the problem is. The problem I have with the political will explanation — I’ll look at a bit of a history. There was actually a study that had been made by three fellows in a regulatory quarterly of 2018, and they examined every project in excess of $1 billion in Canada. They make a note that in 2007, there was a corporate cabinet directed to improve their performance. From 2007 to 2010, service standards governing guidelines were again improved. In 2011, regulations were established again to undertake comprehensive studies to shorten the timelines. In 2012, there is adoption of the generally applicable legislative timelines in CEAA. Now we have in 2018, another commitment. As you know, the federal government committed to over $5 billion to get a pipeline done. So to say it’s a lack of political will in spite of the efforts of the previous governments, and this one, I’m not sure we get there.
If you look at it from that study, projects in excess of a billion dollars still take close to five years. It’s immensely long, as opposed to the average of two or three years. In the internationally developed countries, it is probably closer to two years.
If it’s not political will, what do we do? How do we get there? We can talk about the details, but there has to be something we have to do. I’m not sure we can simply say it’s political will and the problem is solved. It looks like they’ve tried very hard in the last 22 years.
Ms. Eyre: In terms of potash and uranium and Saskatchewan resources, they have not been previously under attack. They are now with Bill C-69, and the mining industry at large. In terms of the oil and gas sector, I guess I would just say that Energy East was ready to go, Northern Gateway was ready to go, and Trans Mountain was ready to go but got stopped in the courts and then stopped again politically.
I think it’s fairly obvious, well, to me and I think it’s fair to say to Saskatchewan, that it is a matter of political will, that the reason that those projects didn’t go forward and the reason that, for example, mines won’t go forward in the future would be as a result of legislative policy decisions taken by this government.
The system isn’t perfect, clearly. I understand, for example, from other provincial perspectives, the flaws they see with the current system are real and important, no question. The question is whether there needs to be a bill that is this sweeping and this tendentious ideologically to overturn everything we have. I think the system is somehow being blamed for those projects not having gone forward, and it isn’t that. It is political decision-making.
Senator Woo: Thank you, minister, for your testimony. I was going to ask you some questions about amendments that many of us are thinking about to improve this bill, but it strikes me that you may not be interested in those kinds of questions because you’ve given the most robust defence of the current regime, the CEAA 2012. You say it’s not broken, essentially, and then you encouraged us, in the close of your testimony, to employ our formidable collective power to stop this bill.
Can I be clear? Your advice would be very helpful to us as to where you stand. Do you want us to kill this bill? If you do, have you consulted with industry, and do they in fact share that view that the best course of action, given that you believe the current regime is not broken, is for us to use our collective formidable power to stop the bill in its tracks?
Ms. Eyre: Yes, I believe that. I do.
Senator Simons: I have to tell you, minister, I share deeply your concerns about the lack of a project list, but I am curious about some of your comments. You’ve said that you felt under the regime laid out in Bill C-69, it would take seven to fifteen years to approve a uranium mine. I grant you that there is some uncertainty about the planning stage, but how on earth do you get to fifteen years in a bill that actually does lay out pretty clear guidelines for how long a project can take for approval?
Ms. Eyre: That information comes directly from the Saskatchewan Mining Association and consultations they have done with uranium companies in the province.
Senator Simons: How on earth do you get to 15 years looking at the bill? I don’t understand. I can see that it might take longer, but 15 years? Surely that’s not possible.
Ms. Eyre: Their view is, as I said earlier, that if you go through the year review panel process, in conjunction with the loss of that single window assessment and the licensing process that’s currently in place under CEAA, that would effectively mean no uranium mine, as I said in my remarks. That’s according to industry voices and the SMA, and the seven to fifteen year number is theirs. I assume they have done pretty serious plumbing of the implications of this with sector partners in Saskatchewan.
Senator Simons: What do you make of the fact, then, that the Mining Association of Canada pretty robustly supports Bill C-69? They have some concerns about the uranium mining provisions, but on balance they’re loudly in support of this bill.
Ms. Eyre: I can’t speak for Mr. Gratton and his motivations and views. He was in the province of Saskatchewan last year, and I know he was very outspoken about what he called the unfortunateness of the politics of pipelines, to which I would say you bet it’s political. If anything is political in this country, it’s pipelines. I found that regrettable because I don’t believe that somehow there should be aspersions cast on those who make the pipeline issue political simply because it’s of existential importance to our economy.
That said, the Canadian Mining Association has said that. I know with a lot of the groups that are in favour of the bill in principle, they still have a lot of amendments and changes that they would like to see made. So that’s of interest. People who oppose it want amendments and people who are in favour of it want amendments and changes. So take that as you will.
The Saskatchewan Mining Association, for one, has expressed quite clearly that they have grave concerns about this bill in its current form, and certainly many other industry groups across the country, as you’ll know, share those, the Canadian Mining Association being one.
I think, frankly, that mining and other companies and sector groups across the country are afraid to speak out about this bill. Wouldn’t you be if, for example, you don’t even know if your sector is exempt or not?
Senator Patterson: Hear, hear.
Senator Seidman: Minister, thank you for your presentation. You did refer, among many things, to subjective processes that will be introduced into environmental assessments. We have heard here that many are not confident that clause 22 sets out an explicit list of factors to consider an impact assessment. They argue that policy considerations are inserted in every review, and these result in a move away from a technical and science-based approach. A technical and science-based approach is predictable and transparent, which is what industry requires, as you suggest. Some have said that that would include definitions and hard measures for those criteria so that proponents would feel reassured that the factors to be considered are not moving targets. Could you respond to that, please?
Ms. Eyre: I’m a little unclear on the question. Would you mind putting the question slightly differently?
Senator Seidman: With clause 22, you yourself have referred to subjective processes that will be introduced into environmental assessments, and that’s the point that I’m trying to understand better. So perhaps I’ll just allow you to elaborate on that.
Ms. Eyre: For example, I mentioned the new mandatory considerations that are being added to the process, and I think, as Andrew Roman said — he is a retired environmental lawyer — in a recent interview, you can’t have 10 times as much complexity and do it in half the time and still give everybody a chance to say what they want, including the increased public participation that is now going to be funded by the new assessment agency. And he was the one who pointed out that in the Trans Mountain process, you have 1,600 people and parties making submissions, and the new law seems to suggest that you’ll have even more.
So again, as I’ve said a number of times, I think it’s the uncertainty about what that means and how you improve on what is currently happening, and even on processes that have worked, such as Enbridge Line 3, for example, where you had very successful and First Nation consultations.
In terms of the subjective criteria, I think it’s simply common sense that if you add more conditions, get rid of standing tests and introduce pretty vague things such as this gender intersection — I’ve heard all ranges of interpretation on that one, and I find it intriguing as a woman what that actually entails because you see in the mining industry and in oil and gas, for example, the massive work they have done to attract women. It’s impressive, and it’s not well known. I think it’s unfortunate to tar the energy and resource sector with toxic masculinity when they’re doing so much good work in communities.
Senator Martin: Minister, thank you very much for your testimony. I have heard you use the word “uncertainty” on several levels. When I think about some of the concerns I’ve heard regarding investor uncertainty — I should say I live in Burnaby south, right at the front line of the Trans Mountain pipeline, and I’m very close to where the protests have taken place and several elections now where many sides have weighed in, so I’m right on the front line. But I know one of the most compelling speeches I’ve heard in the chamber is from my colleague Senator MacDonald who talked about the East Coast and, as a Cape Bretoner, how much he loves the coast but he knows it’s not his coast; it’s Canada’s East Coast. Just like Vancouver’s West Coast is Canada’s West Coast.
So taking that perspective, you also mentioned not understanding what the regulations will look like, and even after the enactment of this bill, it will take a good year to maybe 18 months or possibly more for these regulations to be clear. So there’s just a whole long period of uncertainty. Have you experienced, in Saskatchewan already, due to investor uncertainty, certain projects or parties that were already maybe several years in discussion either cancel or withdraw or delay just the discussions that were ongoing? I’m trying to understand the level of uncertainty and what impact you’ve already felt. In British Columbia, I have talked to business leaders who, after several years of discussion with people from other countries, have just said, “This bill is creating such uncertainty,” and they chose to go elsewhere. Would you talk a bit more about what the uncertainty has caused in Saskatchewan?
Ms. Eyre: The numbers are very sobering in terms of — and I referred to this in my remarks — capital flight. They’re quantifiable and, in Saskatchewan, absolutely quantifiable. I think the number one thing that I hear when I talk to energy sector partners and stakeholders in the province is the lack of equity and the fact that they have enormous difficulty now going down to the States, for example, to private investors and saying, “Invest in Canada, invest in this project, think of investing.” Increasingly, and very soberingly, the message is, “Not Canada.” They’re getting this impression. So it’s very challenging for Saskatchewan and other resource provinces, but it should be for the country, to hear about that and to really think about what that means. Part of that is this. As you say, it will take a while even if this were to pass for it to get standing and going. It’s the enormous uncertainty that is starting to manifest itself in terms of other factors as well, but what I hear quite a lot is this great challenge in raising equity internationally for Canada.
Senator Patterson: I think we’re fortunate to have a minister experienced in the regulatory process and the natural resources sector with us here this morning. Thank you for being here.
You talked about the loss of the single window. I remember when CEAA 2012 was introduced there was the mantra of “one project, one review.” Now, as I understand it, this bill splits impact assessment, licensing and lifestyle regulation, and it doesn’t clearly allow for substitution of provincial or existing federal regulators like the Nuclear Safety Commission. Is my understanding correct, and is that your concern?
Ms. Eyre: Absolutely. And the uncertainty.
To the previous question about that transition period of moving away from those two current regulators to one and what that will mean, in terms of the uranium industry, for example, with Canadian nuclear, there have been some pits and heights and valleys, as it were, in that relationship, but it’s relatively stable. That simply creates more upheaval.
We haven’t really touched on the specifics of the timelines issue, but in terms of a mining project, I think it’s important to emphasize the fact that that early planning phase that’s being envisaged by Bill C-69 wouldn’t be part of the current structure in terms of that exploration. As I said, it often takes months or years before a development even proceeds to an environmental assessment. Massive investments can be made at that time, which, of course, stands to be lost later if there are reviews or suspensions of the project. Again, it’s unclear how the early planning phase exactly dovetails into the regular process of Bill C-69, and much of the information that will be required during this phase is prescribed by the regulations, which we haven’t seen.
So again, to the broader question about confusion over the melding of the two into one, absolutely, but also into some of the changes that we would see under this bill that we don’t have under the current bill and under the single window system, as you alluded to.
Senator Patterson: The toxic quintet you talked about — carbon tax, Bill C-48, clean fuel standard, Bill C-68 and now Bill C-69 — does this represent demonization of oil and gas by our federal government?
Ms. Eyre: In my respectful submission, I think it does relate to an antagonism of the resource sector, and not just oil and gas. That has been a very ambitious legislative policy schedule that has seen to these bills. If I had enough time in my day to also take on Bill C-68, Bill C-48 and the clean fuel standard, I would. I think people should, and colleagues should be singing from the rooftops protesting those bills because, taken in tandem, we will certainly be setting ourselves apart internationally as a uniquely resource-skeptical country if these were to pass.
Senator Mockler: Minister, thank you for sharing your thoughts.
Being from New Brunswick, I’m not against killing any bill. I think it’s important that we improve and modernize bills. I think that we’ve seen in the past, even when we’ve had some companies from Saskatchewan who were in New Brunswick, that you were important stakeholders to our communities.
With your experience with legislated timelines, do you believe that the federal government has always met those timelines for the province of Saskatchewan?
Ms. Eyre: Well, it depends on what you mean, I suppose, by meeting timelines. I know what you’re attempting to get at, but prior to the spectre of this bill, there wasn’t so much of an issue relating to uranium and potash, for example, because they’ve been governed, except for the CNSC element to the uranium side of things, by a very robust, well-respected provincial regulatory process. So now that would change. That’s another subtext to this bill that should be paid attention to, namely the constitutional infringement that we see into what has worked robustly to this point.
In terms of other timelines, I suppose we were waiting with bated breath in Saskatchewan for Energy East, Northern Gateway and, of course, Trans Mountain to go through. We took on faith in the process that they would. In terms of a holistic, broader timeline, we felt that those were not met and that our oil and gas sector in Saskatchewan certainly suffered significantly as a result.
Senator Mockler: Minister, when you talk about Energy East, it really touches all of Atlantic Canada, and if there was a project that was a nation-building project, Energy East was the project, with the others that you’ve mentioned. I believed in Energy East.
What would you recommend government do in order to have better consultation with stakeholders?
Ms. Eyre: Not to get overly sentimental, but I really do feel that this is a cooperative federalism issue. It was a sad day when the Premier of Quebec talked about dirty energy a few weeks ago at the first ministers’ conference. I hope we can come together, and I think the role of the federal government, and of provinces as individual components of the federalist model, is that we have to make sure that we all remain unified and that this issue doesn’t divide us. That is what is so worrying about in this bill. It, along with other bills and policies, is beginning to pit regions against each other in a way that we haven’t seen in a long time.
I guess if you ask about the role of the federal government, it would be to take a hard look at what has flowed out of this process and to try to nation build. We all have a role in that, and the energy sector is something we should be so proud of as a whole country, for what it’s brought to our country.
Senator Patterson: Hear, hear.
The Chair: Thank you very much, Minister, for your presence.
For the second portion of this meeting, continuing our study on Bill C-69, we now welcome, from the Government of Newfoundland and Labrador, Dwight Ball, Premier of Newfoundland and Labrador; and Siobhan Coady, M.P.P., Minister of Natural Resources.
Thank you very much for joining us this morning. I invite you to proceed with your opening statements, starting with you, premier, after which we will go to a question and answer period.
Hon. Dwight Ball, Premier of Newfoundland and Labrador, Government of Newfoundland and Labrador: Good morning, honourable chair and to all our committee members. It’s certainly a pleasure to be with you today.
I am very pleased to be joined by my colleague the Honourable Minister of Natural Resources in Newfoundland and Labrador, Siobhan Coady. We are looking forward to sharing our views on Bill C-69.
As part of your review as a committee on this particular piece of legislation, I’m guessing you would have heard a wide range of views from many Canadians. I’m also guessing that some of those submissions would have been to suggest that you just outright reject this piece of legislation. While the Province of Newfoundland and Labrador is concerned that the bill in its current form will increase regulatory burden, increase cost and increase timelines, without enhancing environmental outcomes, we also recognize that the status quo is not acceptable and that improvements must be made.
What I’m saying is that CEAA 2012 is not working. But from our perspective, I see this as an opportunity. It’s an opportunity to bring improvements to Bill C-69. However, we must create a responsible but internationally competitive regulatory environment that can support our government’s efforts to meet ambitious targets for economic growth in our resource sector.
Many of you would know of Lorraine Mitchelmore. She is the chair of the Resources of the Future Economic Strategy Table. She noted in her report that was titled The Resources of the Future that “resources have been the foundation of the Canadian economy.”
That is true for Canada, which has the third largest per capita natural resource endowment in the world. It accounts for some 1.82 million jobs and contributes 17 per cent of our country’s GDP.
That is true for Canada, and is equally true for Newfoundland and Labrador as a resource sector. In Newfoundland and Labrador, it contributed some 25 per cent of our provincial GDP in 2016 and almost 18,000 person years of employment. It’s very impactful on a small province. Newfoundlanders and Labradorians pursue opportunities across the resource-based economy, including our offshore oil and gas, petroleum refining, mining, mineral processing, fisheries aquaculture and our forestry sectors.
Newfoundlanders and Labradorians need to be able to develop sustainable, diverse natural resources. The need to do that is greater now than ever, as our province confronts some of the unprecedented fiscal and economic demographic challenges that we see in our province. Our government is rising to the challenges and has developed sector work plans, outlined and coordinated actions that we are taking with many industries in our province, including the oil and gas industry, but we’ve also included our labour groups, academia, Indigenous governments and organizations and other stakeholders to grow the economy in our province, to grow together.
As premier, I am proud to live in a country where the federal, provincial and territorial regulatory systems recognize and prioritize health and safety of workers and the protection of our environment. However, Newfoundland and Labrador faces significant competition in jurisdictions around the world in attracting investment to responsibly develop our natural resources.
Offshore Newfoundland and Labrador, for example, is attracting global attention, with $4 billion committed in exploration. We’ve seen eight new entrants in the past two years and some 650 leads and prospects identified to date. In less than 7 per cent of our offshore, we have independently verified our potential for 49.2 billion barrels of oil and 193.8 trillion cubic feet of gas. So this is significant.
What is also significant is that in a world where we look at greenhouse gas emissions, it’s important to also highlight that offshore Newfoundland and Labrador, when you look at the carbon intensity of a barrel of oil — and I want to be very clear, Newfoundland and Labrador’s offshore oil is at 12 kilograms of CO2. The world average is 18. So we are already 50 per cent better than the world average in carbon intensity on a barrel of oil offshore in Newfoundland and Labrador.
We’ve seen the recent discoveries. We’ve proven production and robust industrial and supply servicing capabilities in our province. The province’s resources are attracting the attention of global industry. We see Newfoundland and Labrador on the verge of a new era in frontier oil exploration and development.
That said, we all know that exploration wells are the key to unlocking the vast potential of our offshore. We are particularly concerned with the handling of exploration wells in Bill C-69. Exploration is a short-term, well-understood activity that precedes subsequent development and production phases of a project, and exploration wells are routinely subject to very comprehensive mitigation measures as a matter of course. This is happening.
To put this in perspective, requiring exploration wells, drilling, to undergo an impact assessment by a review panel could take as long as 870 days, while the activity itself could last just a couple of months.
Investors are expressing concern about investing in our offshore, despite the vast potential, because our environmental regulatory regime already lags far behind other countries. I am talking about very sophisticated countries like the U.K. and Norway, both of which have exploratory well drilling through assessment in a matter of months. Indeed, we know from experience that capital does not leave the industry; it just moves to other jurisdictions that, frankly, do environmental regulation better.
I’ve already told you, if we lose it with the carbon intensity per barrel in offshore Newfoundland and Labrador, it is likely going to another jurisdiction where there’s much more carbon intensity.
I’m here to say that we have to do better. From an oil and gas perspective, that means exploration must not be subject to impact assessment, and Newfoundland and Labrador is partnering with the federal government and the Canada-Newfoundland and Labrador Offshore Petroleum Board on a regional study of exploration well drilling to make sure that this practice will not be subject to impact assessment.
This does not mean that Newfoundland and Labrador is not committed to properly balancing the environment and economic growth. We are. We believe it is possible to balance environmental protection with responsible resource development, and we would argue that finding this balance is an indispensable economic imperative and that this should be the focus of your efforts in amending Bill C-69.
In fact, we can see that this is the focus the federal government is also taking in the 2018 fall economic statement. Finance Minister Bill Morneau at the time committed to establish an external advisory committee on regulatory competitiveness to identify opportunities to streamline regulations in a way that balances health and safety and environmental protection and the business realities that we all face in our country. This approach resonates strongly with Newfoundlanders and Labradorians, as we benefit tremendously from the positive impacts of responsible resource development.
We have an opportunity. Let’s make the amendments. Let’s get this piece of legislation right. Canada’s regulatory system must facilitate our ability to continue to avail of the positive economic impacts on every subsector of the resource economy. We all know that positive economic impacts mean we have a positive social impact, and we do this with balance.
I will now turn to my colleague, Siobhan Coady, Minister of Natural Resources, to further elaborate on our concerns with this bill.
Hon. Siobhan Coady, M.P.P., Minister of Natural Resources, Government of Newfoundland and Labrador: Thank you very much, Premier Ball, and good morning, honourable chair and Senate committee members.
I am very pleased to be here this morning.
As the Minister of Natural Resources, I’d like to thank you for the opportunity to be here today. The intent of this bill is to provide a more timely and more certain regulatory process that would facilitate development in an environmentally sustainable manner with greater public support and less uncertainty. Our government, however, has concerns that the proposed bill currently before you will not meet those objectives.
We’re here today asking for changes that will reflect the federal government’s commitment to decrease ambiguity on timelines, clarify the role of the Canada-Newfoundland and Labrador Offshore Petroleum Board in environmental assessment, enshrine in legislation the policy intent around regional assessment process, remove exploration wells and geological surveys from the designated project list and respect the principles of the Atlantic Accord.
As senators, you have the opportunity to amend this legislation and create a bill for impact assessment that balances environmental protection with economic development. In Newfoundland and Labrador, and indeed across our country, our natural resources are the foundation of our economy. We’re requesting the proposed changes to ensure our economy can flourish and remain globally competitive.
A fundamental principle of the Atlantic Accord agreement is the joint management of the Canada-Newfoundland and Labrador offshore by both the governments of Canada and the government of Newfoundland and Labrador. The agreement jointly established the C-NLOPB, Canada-Newfoundland and Labrador Offshore Petroleum Board, to administer all provisions of the accord act. Bill C-69 must respect the principles of joint management and shared jurisdiction entrenched in the Atlantic Accord.
As currently written, Bill C-69 affords the federal minister and cabinet the power and discretion to pause, suspend or cancel a project throughout the project assessment life cycle. We believe the legislation must be amended to reflect the joint management principles of the Atlantic Accord, requiring the federal minister to consult with the provincial minister on matters that have potentially significant impacts on our offshore.
Timelines for environmental assessment must be globally competitive and not exceed those of comparable international jurisdictions, such as Norway or the United Kingdom. The automatic deferral of all offshore activities, as currently written in Bill C-69, to the designated project list to a review panel would impose timelines that are longer and more uncertain than under the current CEAA 2012. A well-defined designated project list is required to address concerns of regulatory uncertainty. Projects should be placed on the designated projects list using clearly identified criteria focused on the most complex environmentally sensitive projects with long-term operational life cycles.
Project activities that are short in duration, smaller in scale, with minimal environmental impact, frequently occurring and are well established should be subject to approval and authorization from the life-cycle regulator, such as the C-NLOPB, which has been doing this for approximately 30 years.
Prior to CEAA 2012, the C-NLOPB was the responsible authority for performing all environmental assessments in our offshore. C-NLOPB has expertise in all areas of offshore oil and gas operations and is responsible for all other operational approvals in the C-NL offshore area. To not fully utilize their expertise would undermine the purpose of the IAA, which is to perform more effective and efficient assessment on impact. It is important that the federal government enhance the opportunities to incorporate the C-NLOPB in the new process to the fullest extent possible. As this is the policy intent, their authority should be enshrined in legislation and not just in regulation.
We also believe formal recognition of the regional assessments would greatly improve Bill C-69. Bill C-69, as currently written, lacks provisions that guarantee that the regional assessment process will be respected and there are no mandated timelines for the completion. The act must define how the results of the regional assessment will apply to future offshore activity and decision-making. We believe the role of regional assessment should be enshrined in legislation and not just regulation.
In conclusion, our government is committed to environmental protection built on an evidence-based and balanced approach. Bill C-69 must balance economic opportunity with clear, prudent, time-sensitive environmental assessment, oversight and regulation.
Former federal Natural Resources Minister Jim Carr said:
The Canada-Newfoundland and Labrador offshore area remains one of the most attractive jurisdictions globally for oil and gas development. I look forward to continued collaboration with our joint management partners to realize the full potential of our offshore resources and to ensure they can be developed safely and responsibly.
The Province of Newfoundland and Labrador agrees and respectfully asks for amendments to Bill C-69 in order to realize the full potential of our offshore resources, not just for Newfoundland and Labrador but indeed all of Canada. Thank you.
The Chair: Thank you very much, Premier Ball and Minister Coady. We are going to question go to the question and answer period. We have to stay to a strict three minutes, so a very short preamble and concise answers. Thank you so much.
Senator MacDonald: Premier Ball and Minister Coady, thank you both for being here today.
Newfoundland and Labrador is such a great example of how to manage this resource. Not only do you have the only offshore oil drilling in the country producing product, but it’s being done in one of the richest fishing grounds in the world. I think that has to be put on the record.
Bill C-69 strips the Canada-Newfoundland and Labrador Offshore Petroleum Board’s authority to conduct impact assessment of designated projects. The offshore boards can participate in review panels but are not allowed to form the majority of the panel. They are being denied this.
Do life-cycle regulators like that board have poor safety and environmental performance records, Newfoundland? And what would be the benefit of deliberately preventing life-cycle regulators from forming the majority of the board?
Mr. Ball: That was a great preamble. I agree with what you said. Also, the C-NLOPB, as Minister Coady has said already, has been doing this work for nearly 30 years, so it has been tested. I think there was a recognition in CEAA 2012 that this oversight was not included in that bill, and just prior to this new piece of legislation, there was every intent of actually bringing the C-NLOPB back in as responsible authority, which we believe it should be.
The key to this is that we have an accord that was signed in 1986 that says that Newfoundland and Labrador has joint management. So we fully expect and we are asking that responsible authority be put back into the legislation, not wait for the regulations, which we have not seen. Let’s get that back into legislation where it belongs, and it aligns us with the Atlantic Accord, which has been a long-standing agreement that we’ve had with the Government of Canada. We’ve had a long history, as you have mentioned already, of regulating our offshore in a very safe manner and with other competing interests as well.
Senator MacDonald: You mentioned the shared jurisdiction. In the mid-1980s, that was the aim the Premier of Nova Scotia, John Buchanan, and they negotiated the same thing for Nova Scotia. We know how important these arrangements can be.
Let’s take an example. I’ve watched the evolution or the development of the offshore in Newfoundland. Bill C-69 makes the assumption that review panel assessments are superior to the life-cycle regulator assessments. That assumption is obvious. The bill removes the powers of the NEB, the CNSC and the offshore boards in Nova Scotia and Newfoundland. Was the Hebron Project in Newfoundland assessed by the review panel? Has that project been successful? And do you agree with that assumption that review panel assessments will be superior to the life-cycle regulator assessments?
Ms. Coady: Thank you. As the premier has said, we believe the role of the C-NLOPB should be as the responsible authority. That was stripped in CEAA 2012 and, of course, Hebron went through a different process than they would have gone through under the impact assessment. I can tell you currently in offshore Newfoundland and Labrador of four exploration wells, for example, that are duration of 30 to 60, maybe 90 days, and they have to go to a two-year plus process. Think about that now. Over two and a half years for a 30- to 60-day well.
I can tell you for one that’s currently in assessment right now, CEAA is requiring them, for example, to do a study of the global impacts of climate change on the Bay of Fundy, to do an exploration well 300 kilometres off the coast of Newfoundland and Labrador.
Global competitiveness is a huge issue here. We believe that that we should have the C-NLOPB, which has 30 years of experience, as the responsible authority. Most importantly is enshrining the role of C-NLOPB in legislation so that we have a clear definition of their role in environmental assessment.
You mentioned previously to the premier, and the premier responded about not having a role at all currently, or having a diminished role on the panel. We believe that it should be a strengthened role. We know in regional environmental assessments they are co-chairing, and that is something that is now taking place.
I will draw to your attention one of the things that the bill does say. It talks about how any designated activity currently under this act must go through the panel process. Think about how a 30- to 60-day well would have to go through a panel process with a diminished role of C-NLOPB.
We have to get the exploration wells and seismic activities, geological activities off that designated project list through a regional environmental assessment, and that policy intent must be enshrined.
The Chair: Thank you very much.
Senator Cordy: Thank you both very much for being here. It’s always great to have somebody from Atlantic Canada.
When we’re talking about the resource sector, which is very important and you’ve explained that in your opening remarks, and the fishing, if any province is understanding the importance of balancing the environment and the resource sector, it is those provinces that are on the coastal areas. Thank you very much for pointing that out.
You both talked about the Atlantic Accord and the importance of entrenching the jurisdiction of the province. I’ll speak just about Newfoundland and not Nova Scotia, although we could probably say that as well, and the impact assessment and ensuring that everything is entrenched. We know that in the budget of 2007, basically the Atlantic Accord was gutted and Nova Scotia and Newfoundland lost a lot of funding from the federal government.
How are you looking at entrenching this within the bill? Is it an amendment that would specifically state that, or should it be longer? Do you have any recommendation for amendment in order to preserve the rights that the Atlantic provinces have within the Atlantic Accord? I happen to think that’s also extremely important and that it’s recognized.
Mr. Ball: There are a couple of things. When you look at investors that are looking at Atlantic Canada, in our particular case, Newfoundland and Labrador, it really comes down to certainty. What investors will tell us, even those that are operating offshore now, is that they do not want to see regulatory paralysis that gets in the way of further developments. So it really comes down to certainty.
Our belief and feeling is that we have rights within the Atlantic Accord agreements that have been tested and that we would want to see. We are now reviewing a very important piece of legislation. We have an opportunity to do what was intended to do a few years ago, recognizing that CEAA 2012 was not working. So there was an intention to fix this. Of course, it got lost in the transactions that normal legislative reviews would go through. We want to see it put back into the act where we believe it should be, and we want to draw on the experience of what we’ve been doing for decades, as Siobhan has said, offshore Newfoundland and Labrador. That’s what we want to see in this amendment.
Ms. Coady: If I may, the current act does allow the federal minister and the cabinet the powers to pause or suspend. As I said in my opening remarks, that has to change. We do have a joint management principle in the Atlantic Accord that must be respected.
Senator Cordy: Thank you.
Senator Woo: Thank you, premier and minister. I lived in Newfoundland when Hibernia started, so I understand very well the importance of the oil and gas industry. Your testimony is very constructive, very specific and very helpful to us, but I’d like you to perhaps elaborate a bit more on how we can solve the problem of the role of the Canada-Newfoundland and Labrador Offshore Petroleum Board.
You talked about how that expertise should be used to the fullest extent possible in the new process. The simplest solution, I suppose, is to remove the prohibition on the majority. Perhaps you would comment on that. Removing the prohibition doesn’t mean that there will always be a majority, but it allows for that possibility. I would like you to comment on that idea. If that’s not the preferred approach — getting more people on the review panel — are there other ways to use the expertise of the offshore board to the fullest extent possible? Help us with some solutions.
Mr. Ball: First of all, I think we need to build on the experience that we’ve already seen, but we also need to recognize that we have an agreement that’s been around for a long time that grants the authority for joint management with Newfoundland and Labrador and the federal government. We believe now there is an opportunity.
There are really four areas when you look at this particular bill, as Siobhan has mentioned, about the federal minister and the powers of the cabinet. This creates the uncertainty that we don’t think is necessary at this particular point in time.
We talked a lot of designated project lists and the exploratory wells and what their role would be, and we need to get those off the list so we can become competitive. We talked about the information that’s required where submissions are made and the delay in timelines that would drive investment away if Newfoundland and Labrador, and we talk about the life-cycle regulator, that being the C-NLOPB.
These are the principles of the Atlantic Accord that we want to see put into this act. Rather than actually suggest changes that would move us away from what is already a very successful and tested environment, let’s work with those, recognizing where we are today and that we can do better. Look at the impact on a province like Newfoundland and Labrador and all of Canada, $250 billion spent in natural resource development in Canada right now. We know there is more to be done, and I just mentioned to you the opportunities that we have offshore.
There are the four areas that I just outlined right now, but key to all of this is that the life-cycle regulator must be within the Atlantic Accord Act, the C-NLOPB, and we must use the experience that they have in this new legislation.
Ms. Coady: You could entrench into the legislation the C-NLOPB as the responsible authority. You can go back to what we had in 2010 and 2012. It steps up then as the lead.
From there, you could manipulate the bill as it is and make changes to remove the prohibition. You can remove the prohibition or make changes and intensify the language around the regional assessment that will get rid of that issue that I’ve mentioned around the designated project list. You could make those changes. You can entrench in the legislation the role and responsibilities of the C-NLOPB with regard to the environmental assessment process.
The first thing that the Premier and I are saying is just make C-NLOPB the responsible authority again. That would be the first thing. Falling from that, you could do all those other things that I mentioned.
Senator Mitchell: Thanks very much. Great to have you here.
My first question is with respect to the weakness of CEAA 2012. Minister, you made the point that it takes 2.5 years now to review exploratory wells. My understanding is that the regional assessment provision in the new structure would do an umbrella review and then these exploratory wells wouldn’t require a subsequent review. That would be a good thing. Are you saying that you want to ensure that that is enshrined in the legislation and not just stated as a policy directive?
Ms. Coady: You are correct. There is ambiguity around the role of the regional environmental assessment. If you look at the bill currently, and I can read from it exactly, it says specifically that anything regulated offshore in Newfoundland and Labrador must go to the panel. The current bill states that.
Now, maybe in regulation you might say something a little different. We haven’t seen that, though we’ve been asking for quite some time to see the regulations and promised for quite some time. But even with the regulations, if your policy intent, which I believe legislation should clearly outline, is for the regional environmental assessment to be the mechanism and means by which you ensure that exploratory wells, seismic activity, geological activity, well-known activities offshore are through this regional environmental assessment versus a panel, enshrine it in legislation. Be clear, be certain, less ambiguity. We have to have certainty for our partners. Even now, the provinces move forward with trying to partner with the federal government to do a regional environmental assessment, and they are still not sure if this will work with Bill C-69. There is ambiguity, and that’s the worst thing you can have in the investment industry.
Senator Mitchell: My next question concerns an epic half-full, half-empty situation that I’ve observed or been confronted with: input from environmental advocates versus input from the industry. Right now, for big reviews, the offshore board is not officially included in the CEAA process. On the other hand, the bill puts it in there. One would jump to the conclusion that that might give the offshore boards more power, and that’s the conclusion that the environmental groups have come to. It gives them more power, so they don’t like that. On the other hand, the industry says, “We don’t want to be on that board despite the observations of others that it would give us more power, that the board would have more power.” How does it work that industry thinks it has more power when it’s not on a panel and the environmental advocates think it has too much power when it’s on that panel?
Ms. Coady: Thank you for that question. There is an interesting dilemma in your language there. You are correct, and the Premier articulated at the beginning that CEAA 2012 must be fixed. We are not here to advocate that we continue along the lines of CEAA 2012. It’s just not functioning and not appropriate. We’re here to help fix Bill C-69. That’s our first opportunity.
It’s very interesting to say that environmental groups are concerned about having a life-cycle regulator like C-NLOPB involved in the process, and I’m not quite sure the rationale for that. C-NLOPB has been involved in the process for 30 years. They have a fairly significant record and I think a fairly good record in protecting the environment and ensuring responsible development. They take their time on projects. They make sure they review them adequately.
When you’re looking at Bill C-69, right now there is a small role for C-NLOPB, but it prohibits them from doing much more, from going much further. Remember, everything according to this particular legislation must go to the review panel. We hear and understand the policy intent is that through a regional environmental assessment it will not be required for exploratory wells, but there is nothing that says that.
Senator Seidman: Thank you both very much for your presentations today. As you’ve heard around the table, they have been extremely valuable to help delineate some of the amendments that might be necessary, specifically with regard to the life-cycle regulators.
In your submission, minister, you were very clear in your synopsis of the key issues around the role of the life-cycle regulator, and you explain it by saying that the life-cycle regulators are only included as minority representation on the panel. You’ve advocated clearly about the amendment necessary to reinstate the supremacy of the region, in effect, and the regulators, but are you advocating then that the panel would have a majority representation? If the panel exists, how would you fix the representation on the panel?
Ms. Coady: What we would like to see is, first of all, the responsible authority going to the C-NLOPB. What we clearly have articulated is that with Bill C-69, you should remove the restriction that they not be allowed to be the majority. The panel is very important.
Again, clarity around the designated project list is required. I can speak for Newfoundland and Labrador, but I can tell you in speaking with my colleagues across the country that this is causing grave uncertainty in all projects, what’s on the project list and what is not on the project list.
But very importantly for Newfoundland and Labrador is the role of the regional environmental assessment. That role is not clearly defined in the bill, but the policy intent is there. I keep hearing the policy intent, but I’m not seeing it. I think what we’re talking policy intent, it should be in legislation.
Mr. Ball: What we hear from investors is that it’s really this confusing stage right now, and that’s understood, until we clarify what the intent is. There have been good signals to suggest that we can land in the right spot, but until we know with certainty that we’re in that right spot where we deserve to be, we will continue to ask questions about that. We need it clarified, and we need to be able to put confidence back into a system where those investors and those people with environmental concerns can understand clearly what the approach is.
When you have this ambiguity and this area of vagueness, that is when opinions are formed and processes may be ill informed. Until we get the clarity and confidence that’s required, people will stand back and not make the investments that we think are critical at this particular point in time.
Senator Simons: Minister Coady, I believe you might have been referring to the substitution provisions in clause 31. This is what I find really perplexing. The substitution provisions provide that the assessment panel can cede its power to another body. Yet, in 32(b), it specifically says that you can’t substitute to the offshore boards. Surely that’s backwards.
Senator Patterson: Right on.
Senator Simons: You spoke to some suggested amendments. It is a really complicated bill. I know in my province of Alberta, we will be hearing from Premier Rachel Notley soon. The government has been working with industry and environmental groups to come up with a suite of suggested amendments. I don’t know if you have been doing anything similar in Newfoundland and Labrador, if you have specific texts that you want to leave with us or you want to send to us later, or if you’re asking us to do our own work.
Ms. Coady: Thank you for pointing out the specific section, because you’re absolutely correct.
Senator Simons: I’m starting to see this bill in my sleep.
Senator Patterson: So am I.
Ms. Coady: It is incongruous that they say one thing on the one hand and then the other, so there is some ambiguity there. We have suggested texts that we will leave with you and we will send to you. We have been working with —
The Chair: Could you please send it to the clerk of the committee?
Ms. Coady: Yes. A suggested text to help ameliorate some of the concerns around the bill. That will be given to you. Again, this uncertainty is causing us tremendous problems, and why specifically in the bill it says that everything has to go to the review panel, I can’t speak to what the rationale for that is. We know that there is a policy intent that says exploration wells through this regional environmental assessment process will not be on the designated projected list. Why is that not in the bill if that’s your policy intent?
Senator Simons: I can’t express to you strongly enough my own frustration at the lack of a project list. Thank you for your clear testimony.
Ms. Coady: If I can add one more thing, under 22(1), there is a list of about 20 factors that are to be considered, but there’s not a good discussion in those 20 factors about the economic impacts.
Senator Patterson: Hear, hear.
Ms. Coady: This is no weighting in the importance. I think that causes a lot of uncertainty as well.
Senator Mockler: Premier Ball, first please permit me to say to your minister that I know the leadership she’s providing in your province.
Thank you for saying a few words in French, because it’s important, and the francophone community of Newfoundland and Labrador will surely appreciate it.
Premier, I was debriefed lately about this new federal impact assessment act and the impact it will have on the role of the Canada-Nova Scotia Offshore Petroleum Board as well as the Canada-Newfoundland and Labrador Offshore Petroleum Board. From what I’ve heard with your comments, there is no doubt what you’re asking government to do is all about clarity. It’s all about transparency, accountability, predictability and the economic impact it will have in Atlantic Canada.
Premier, I am from New Brunswick, and I have participated in many Council of Atlantic Premiers meetings as a former MLA from New Brunswick, and I want to congratulate you and your province for your joint approach to developing our natural resources for all of Atlantic Canada, looking at a vision of projects that is a nation-building initiative.
I have been made aware, however, that in your December meeting, you had many concerns about Bill C-69. You sent to the Prime Minister of Canada a joint letter from the four premiers. My question to you: Have you had any acknowledgment on the points you raise in your letter to the Prime Minister of Canada and was that your first letter that was sent?
Mr. Ball: I thank you for your question. To your point, in Newfoundland and Labrador, and all four Atlantic premiers, we see a recognition that as four Atlantic provinces working together on many issues — not just the oil and gas industry — with that level of cooperation, all of us will be better provinces as a result of that cooperation, and we have seen some benefits of that in the last few years.
With that said, there are concerns, and when we raise concerns, we bring these concerns to the proper level.
This is the third letter that we’ve been able to jointly pen and send to the Prime Minister. This last one only went off a few weeks ago and, to my knowledge, we have not been in receipt of any correspondence to that particular letter, but it outlined similar concerns in all three letters. In the last case, we sent letters to all three party leaders, and that was the recommendation given the environment they were in, and we wanted to make sure that all three party leaders federally understood that the four Atlantic provinces had concerns with this particular piece of legislation. To my knowledge, we have not received any correspondence back from that letter, but we’ll be meeting again tomorrow on my way back to Newfoundland and Labrador, and the premiers will be meeting again.
Senator Mockler: Like the chair has said directly, if there are any amendments that you want to make us aware of, please do not hesitate, through our clerk.
In Newfoundland and Labrador, currently the total timeline is about four and a half years. When we look at the total calculation, the bill here would probably go between six and seven years. For the record, could you explain to us, is it true that your province already has one of the most rigorous assessment regimes in the world?
Mr. Ball: We believe we do, and we have success to show for that. Even in the current environment, we believe industry and from the analysis we’ve seen, it could take us up to 850 to 900 days under the current process. Many industry leaders have told us in their reviews it could be up to 1,000 days.
Until you have the established timelines with the commitment of when the clock stops and doesn’t stop, people will come up with all kinds of numbers when you really don’t know what the certainty is. That is our concern. You’ve heard me say it many times. This money is not leaving the industry, it’s just leaving the jurisdiction. When the money and investment leaves, we all know what goes with that, and that is jobs. In Atlantic Canada right now, particularly in Newfoundland and Labrador, we need jobs. We also know when people are working, we can afford social programs. When I look at the impact assessment that it would have on a province like ours, I want to consider the economic impact, the environmental impact and the social impact that we have on all groups. These are the three pillars.
When you want to do a proper impact assessment on a province like ours and the people that live there, we need to look at this in a very fulsome few, and we need to put the legislation in place. That is finding the balance. If there is a message, this is not about finding the balance with our environment. Newfoundlanders and Labradorians feel strongly about protecting our environment, like all Canadians do, but we do not want to lose the opportunity to attract economic investment to our province.
When we live in a world where people are very concerned about carbon emissions, and if you’re going to use oil, we are 50 per cent better than the world average in carbon intensity in a barrel of oil. We’re creating jobs and making contributions to the only province east of Saskatchewan that is not receiving equalization.
Senator Patterson: Thank you. We’re privileged to have a first minister here, and honoured.
Minister, you talked about the designated project list and the need for clearly defined criteria. I was astonished when we heard from officials earlier this month and asked about the guidelines for the designated project lists, and they said they’re in the consultation process. There are consultation documents going on.
We have heard from your offshore oil and gas industry’s association about what they call the extremely negative impact on the East Coast offshore oil and gas industry if exploration drilling remains on the designated project list. By the way, this is also an issue in Alberta with the in situ wells and in the nuclear industry with the SMRs. With the swelling opposition to this bill all across the country, I think it would be very helpful to the proponents of the bill if they clarified, in your case, the exploration drilling issue.
I’d like to ask you, or Mr. Premier, have you discussed this with the federal government? Have you received assurances, wink-wink nudge-nudge or otherwise, that this will be dealt with? If they want this bill to be passed, you would think they would eliminate some of these glaring causes of uncertainty and lack of investor confidence.
Ms. Coady: Thank you very much for your important question. We need to ensure that our opportunity offshore of Newfoundland and Labrador is realized, and we have to shorten the timelines from prospectivity to production. It is essential. We are seeing now in the United Kingdom and Norway shortened time frames, probably from prospectivity to production, between six and nine years. If we’re going to be five or six years just trying to get environmental assessment through, we’re not going to meet these international time frames.
We’ve been speaking to the federal government on a regular basis for a number of years. Our key messages that I brought here today, we have been speaking on those same messages for quite some time.
I understand through the regional environmental assessment, which is now about to embark in Newfoundland and Labrador, that the exploration well, seismic activities, regular activities offshore would no longer be required on the designated project list. But the only thing I have for certain is a bill that says everything is on the designated projects list.
If your policy intent is that it not be on the designated project list, it should be clarified in legislation and not left to regulation that can be changed at any moment. If your policy is intent is there, enshrine your policy intent. We know that things change over time. We want to make sure that we have clarity and certainty on what the role of the regional environmental assessment process would be on this designated project list. So, yes, my understanding is with the regional environmental assessment —
Senator Patterson: Who told them that?
Ms. Coady: This is in conversations with multiple ministries with the federal government, and especially as we’re moving through now and starting the process of a regional environmental assessment. In our most prospective area off the coast of Newfoundland and Labrador, we understand, and I have verified the understanding, that once you have the regional environmental assessment, that exploration, seismic, geological, regular activities would go through the C-NLOPB at that point, because there would be no further consultations or environmental assessment required. But it’s an understanding. There is nothing that tells me that.
Senator Massicotte: Thank you, premier and minister, for being with us this morning. It’s very useful.
Just a quick question. You mentioned earlier that your CO2 intensity is 50 per cent more efficient than comparable world oil. I assume your barrel of oil has the same level of intensity as, say, a barrel of oil in Western Canada? Am I correct in that?
Mr. Ball: No. It’s about the measurement. It is about when you get a supply vessel that would leave the port of St. John’s and would go 500 kilometres and you look at the latest deep water development that we’re looking at off our shore. It’s about how much carbon we are using to get that barrel of oil to a refinery. We have lots of analysis that supports the fact that our carbon intensity per barrel of oil is much less than the world average and in other provinces. This is not about competing with a jurisdiction like Alberta. This is just making a point that the world is using oil, and not all for gasoline. It’s using it for petroleum products, and there is no indication that’s changing any time soon.
Senator Massicotte: I got that regarding CO2, that they’re half. How about the energy intensity of a barrel of oil in Newfoundland and Labrador? How does that compare to world standards?
Mr. Ball: I don’t have the number for you.
Senator Massicotte: What is the average cost per barrel —
Mr. Ball: It depends on where it is.
Senator Massicotte: Offshore. Five hundred miles.
Mr. Ball: Five hundred kilometres in very deep water, eleven hundred kilometres, when you look at the latest resource, much of the older ones that have been around. When Hibernia started producing in 1997, and it took over 20 years to get that project to where it was in 1997, and it’s still producing, and there are all indications right now that we’ll see this well producing beyond 2041.
Senator Massicotte: At an average cost of?
Mr. Ball: It’s lower now because the upfront costs are in the project. If you compare the labour costs on a barrel of oil in Newfoundland and Labrador compared to a place like Alberta, the upfront cost has now been recovered and we have fewer people working there, so therefore the price per barrel of oil is much less. It depends on the project.
Senator Massicotte: Give me an example. Give me Hibernia and a new project.
The Chair: Senator Massicotte.
Senator Patterson: Send it to the clerk.
Mr. Ball: We can get that. Hibernia is a low-cost operator because it’s been around and is paid for. Here’s the key when you look at carbon intensity: We can put in tie backs. If you look at the offshore Newfoundland and Labrador and the sub-sea tie backs that occur from the main operating field, you’re seeing kilometres that would go on the ocean floor that would reach in many metres underneath the ocean to extract the oil. It’s a very complex system. It’s been tested. It’s been around a long time. It’s low cost right now, and it’s creating significant benefits, not only for Newfoundland and Labrador but to all of Canada.
The Chair: Thank you. Premier Ball and Minister Coady, thank you so much for this constructive conversation.
Mr. Ball: Thirty seconds, I promise you. We understand as provincial leaders that we have a role to play, but if there’s a message that could lead this table — for the senators who are here, I appreciate your time — let’s not forget that this is an opportunity that we have to fix a piece of legislation that will benefit not only Newfoundland and Labrador but all of Canada. We have stranded resources out there right now that have questionable developments that will create jobs for all of us in this country, and we have an opportunity now to get it right. That is why we’re here today.
The Chair: Thank you very much.
We now welcome, from the Government of Alberta, the Honourable Rachel Notley, Premier of Alberta; and Beverly Yee, Deputy Minister, Alberta Environment and Parks. Thank you very much for joining us today. I invite to you proceed with your opening statement, after which we will go to a period of questions and answers.
Hon. Rachel Notley, Premier of Alberta, Government of Alberta: Thank you very much. Let me just begin by saying that it is truly a pleasure for me to be here today. I very much appreciate the opportunity. I’d like to, of course, begin by recognizing that we are here on the ancestral land of the Algonquin people.
I know that the Premier of Alberta doesn’t often speak before this committee. Things are a touch busy back home right now, but I couldn’t miss opportunity to be in Ottawa in the winter because it’s not Alberta in the winter. No, it’s because it’s such an important topic that we are addressing here today, and it’s very important to the people of Alberta. That’s why I’m here.
Quite frankly, as I’m sure you’ve heard from others, there is a sense in Alberta — and I think to some degree in the West — that we’re not being entirely heard on this issue. It seems sometimes, with the greatest of respect, that not everybody in our Nation’s capital completely gets the issue as it relates to the economic fortunes of the Province of Alberta and other parts of the country as well. With my remarks today, I want to try to help fix that. I want to make the case as clearly as I can, that Bill C-69, as it is currently written, does not work for Alberta. Therefore, in our view, it doesn’t work for Canada.
Let me be clear. I don’t think that the system that Bill C-69 is intending to replace is any better. The former government’s environmental assessment act was broken, it was misguided and it was damaging to our economy as well, so we agree that the process for approving infrastructure projects needs to change. We absolutely agree that Indigenous consultation and environmental protection are central in building trust in a modernized approval process, and building trust is an objective we must seek with greater energy. We also agree that in ignoring these things and this objective over the last little while, that Ottawa has failed the country and failed Alberta. We know the old ways of doing things is not an option.
But, senators, we have to get this right. We can’t swap one broken system for another broken system. We can’t build trust with more investor uncertainty. We can’t replace a no-pipeline process under the former Conservative government with a no-pipeline process under a Liberal one. It seems, either by design, by wilful ignorance or perhaps just by accident that we are on the verge of doing just that with Bill C-69. It needs to change, and not because Albertans don’t share national ambitions for this country. Far from it. In Alberta, we are nation builders. We contribute much to the country, and in fact I would argue we punch well above our weight, but a bill that harms Alberta’s economy undermines the very national ambitions it purports to advance.
I trust I don’t need to tell everyone here how important Alberta’s energy industry is to the well-being of every Canadian. As I like to remind audiences around this country, there’s not a school, hospital, road, bike lane or port anywhere in the country that does not owe something to a strong energy industry. When Alberta’s energy industry is hurting, everyone in Canada is affected in some way. That’s true whether you live in Fort McMurray, Victoria or Wakefield.
As you know, we are coming through one of the toughest recessions in our history in the province of Alberta. Things are starting to look a little bit better. Our economy is growing again, new jobs are being created, the deficit is coming down faster than forecasted, we have strong public services like public health and education, and by getting our priorities right in Alberta, just something we were able to talk about a couple of days ago, we’ve been able to cut child poverty in half over the last three years, ensuring that we continue to have the lowest child poverty rates in the country. But there’s a lot more for us to do, and we won’t be satisfied until the recovery reaches every kitchen table, and we are not yet in a position to say that that’s what’s happening. Our work continues.
We’re encouraged by the new investments that we’re seeing in upgrading, and our government is doing a lot of work on that. That, of course, is also impacted by this bill. Working with industry, the government has leveraged more than $12 billion over the course of the last 12 to 18 months in private sector investment to build new petrochemical and upgrading facilities in our province. We’re very encouraged by that. We’re also encouraged by the new investment we’re seeing in renewables. We’re now one of the hottest renewable markets on the continent, frankly. Because we’re leading on climate action, not only are Albertans breathing much cleaner air, we’re also positioning our economy for the future that we know is coming.
But here is my point: We can’t continue to do these things. Alberta can’t continue contributing what we do to the Canadian economy; we can’t lead on climate action, as we have been; we can’t build renewable energy opportunities, as we have been; we can’t use our energy abundance to build a better, fairer, more equal Alberta and Canada, a Canada where child poverty is something we all believe we can and will eliminate all together. We can’t do those things if Ottawa makes it virtually impossible to build the energy infrastructure we need. It’s just that simple.
Let’s talk about pipelines. We need them to move our energy products, and that is a good thing for Canada — moving our energy products. The energy industry accounts for 7 per cent of Canada’s GDP. In 2017, capital spending by Alberta’s mining and oil and gas sector accounted for 20 per cent of private sector capital spending in Canada as a whole. Our exports make up 14 per cent of our total merchandise exports in Canada. In 2017, the energy industry contributed about $215 billion to the nominal GDP and employed over 275,000 people across this country.
Last fall, our economy in Alberta faced yet another crisis. Why? Well, because we ran out of pipeline capacity. We just ran out. That meant that the value of our energy in Alberta dropped to roughly 20 per cent of the price we could have secured in world markets. WTI was over $50 a barrel, and Albertans were getting under $10 a barrel. At that point, it was costing the Canadian economy roughly $80 million a day. Our government was forced to curtail oil production by almost 10 per cent. Let’s think about that for a moment. In the Maritimes, they were importing Saudi oil, and here in Ontario, you were importing American oil — both at world prices. In the West, in Alberta, we were cutting production. This, my friends, does not a country make. It just doesn’t. This is why we need to be far more strategic when it comes to building national economic infrastructure.
As you know, there’s been a great deal of discussion about Trans Mountain Pipeline and its future prospects. We are pleased that that project continues to move forward at a pace. We’ll just call it “a pace.” Let’s remember that the first application for Trans Mountain began in 2013, and six years later, in 2019, we still don’t have an approval and we don’t have construction under way. This is not a way to build our economy. We must do better as Canadians. If we were more strategic, we could be leading the world, not chasing it. We could be getting so much more out of our products than we do. Instead, we’re forced to curtail production and lease rail cars to move our products.
You can understand why, as I began with my comments, people are getting a little frustrated and angry. We all know that the only long-term solution, the only lasting solution to this thing that I’m describing, is modern, well-regulated pipelines that move our product safely around this country. For the past four years, we’ve been making that case across the country — speaking to supporters, opponents and skeptics. To some degree, that work is paying off. It’s important for that to be understood, too, because the bar is moving a little on that. A large and growing number of Canadians, I would argue, now support Alberta’s fight to build a new pipeline. When we started, 4 in 10 Canadians supported the pipeline; now, that number is up to around 7 in 10.
As a result, when investors were scared off by British Columbia’s threat to take unconstitutional action, blocking Alberta’s energy products from reaching the coast, the federal government stepped in and bought Trans Mountain. For that, I definitely give Ottawa credit. It’s a national project that is in the national interest — a fact underscored by the NEB’s decision to reissue its approval certificate last week.
Why would Ottawa invest $4.5 billion in a pipeline at the same time as proposing Bill C-69? It leaves us shaking our heads.
I’m here today in good faith as a fellow Canadian ready to have a reasonable conversation, to answer questions, to address concerns, all in the name of building a national consensus, not pitting people against each other. It is the hard work of nation-building in a country like ours.
Here is what you can do to help. I want to talk about the areas where we would like to see some improvement.
Let me begin by saying that our government supports the need for institutions to build greater public trust while at the same time improving clarity and certainty for proponents. That’s why we believe significant changes need to be made to ensure that both objectives can be met.
Let me begin by saying that our government supports, in general, the intentions included within the proposals you will have seen from industry as they relate to Part 1 and Part 2 of Bill C-69. In addition, I’d like to offer a few amendments that I think would make a big difference. We have a formal submission in which we have laid out these pieces in considerably more detail. I’d like you to know that we would like the Government of Canada and Senate to consider the amendments we will be proposing as a comprehensive package. We strongly encourage folks not to select individual proposals for approval but, in fact, consider the whole suite of amendments together in order to achieve what we are attempting to get done here.
First of all, there has already been a great deal of discussion around the project list. In the absence of a clear written commitment around what will or will not be on that list, we are proposing, quite frankly, we simply amend the IAA to exclude specific project types. In particular, we want to amend clause 4, adding a new subsection that would simply exclude in situ, interprovincial pipelines, all generating units using natural gas, renewable energy projects, and refining, upgrading and petrochemical facilities. These proposed changes are vital for the continued success of Alberta’s energy sector, and it would ensure that these projects are not subject to additional duplicative oversight. While it may seem it’s a long list of items to be excluded, we believe that such an amendment would recognize the oversight and regulation that is currently built into our provincial system and, of course, I know you’ve already heard quite a bit about that from the AER.
In order to provide additional clarity to the draft of the impact assessment act, we also request that clause 22 of the bill be amended. These changes would allow approvals to run more smoothly. Currently, the clause contains a number of new terms that have not been seen previously in the legislation, and our concern is that they would be open to too much additional interpretation and, therefore, too much litigation. For example, instead of saying “the changes to the environment or to health, social or economic considerations,” we suggest that the act be changed to focus instead on the “effects on federal jurisdiction.” We all know that this is actually a term that’s previously been used and about which there is already legal consensus. There are a number of additional wording changes that have been submitted in our proposal, but overall they are geared towards providing greater clarity and less opportunity for legal exploration of meaning where we don’t necessarily need that to be a thing that we spend our time on over the course of the next decade.
In order to ensure that project approvals are not caught in an endless loop of delays, we are also suggesting that there be an amendment to clause 62. In essence, this would provide a hard limit for the completion of assessments. We’re suggesting that the bill include a 730-day limit on the agency assessment and review panel assessment — a hard limit — and a 300-day limit for pipeline and other life-cycle regulator assessments, including the ministerial ordered delay. This is designed to allow for discretion, to a point, and ultimately to put a limit on how long this can go on.
I understand that concerns have been raised at this committee that there could be unintended consequences of that kind of provision, where a proponent is actually the one that is seeking the delay and they would be compelled to then start again from the beginning. We would simply suggest, if this is a genuine concern, that the answer is to include a provision that would allow for an extension to the hard limits at the request of the proponent but, otherwise, to limit the discretion of the minister to delay beyond a certain point. We think there is still a great deal of flexibility within those overall timelines for the minister to do what the minister needs to do. It would still allow for substantial and full reviews to be completed while still ensuring that the projects can proceed strategically.
A climate leadership plan is really important for the Province of Alberta. Our message has been consistent and clear: We believe that it is important to create a system or a lens through which we understand that we can and should grow the economy and protect the environment at the same time. Use of the word “balance” or anything that intellectually pits one against the other leads us down a path where we succeed on neither. We must, basically, look at those two objectives as things that must go hand in hand.
We believe that our climate leadership plan allows us to move forward in a way that protects our environment while promoting economic prosperity. The climate leadership plan is a robust, made-in-Alberta strategy that diversifies the economy, creates jobs and reduces the emission of greenhouse gases that cause climate change, together. It provides clear, stringent regulations to ensure that industry is meeting provincial greenhouse gas emission objectives.
Alberta’s plan reduces methane by 45 per cent, taking an incredibly harmful greenhouse gas out of our air. It phases out all coal pollution by 2030. Given that Alberta burns more coal than the rest of Canada combined right now, that is a major step forward. In 2018 alone, emissions in Alberta dropped by 7 megatonnes. That’s the equivalent of taking 1.5 million cars off the road. Simply, through our plan right now, the projected change as a result of our plan shows that, by 2030, we will have eliminated three Metro Vancouvers from the amount of emissions otherwise produced in Alberta. This is not nothing. This is a plan that is real and that is bringing about the kind of change that we, frankly, owe our future generations to be able to demonstrate. Our climate plan has also transformed Alberta into one of the most sought-after renewable energy markets in all of Canada, if not North America. We are setting record lows for renewable energy prices at the same time that we have more than doubled our renewable energy capacity in just the last two years. Most importantly for today’s discussion, it provides for a legislated cap on greenhouse gas emissions.
If Bill C-69 is to move forward, we request that Alberta’s climate leadership plan be formally recognized. This recognition would mean that projects approved under the CLP meet federal standards and would be exempt from further assessment unless there were other significant impacts in other areas of federal jurisdiction.
In addition, on the matter of greenhouse gas emissions generally, we also request that the bill be amended to specifically exclude downstream emissions. We’ve heard that it is the intent and the signal and the this and the that, but it is not yet in writing. We need to see that exclusion of downstream emissions clearly laid out in writing.
Another means of ensuring timeliness is to provide greater certainty around the scope of public engagement in this act. In the absence of clarity regarding the panel’s authority to rely on its expertise to define that scope, this could also end up being a source of ongoing litigation. As such, we would like the panel’s authority to be clarified in the legislation. Details surrounding these amendments have also been outlined in our written submission.
As we have repeatedly stated, we believe that the IAA must ensure the federal government is acting in the public interest as they evaluate potential projects. As written, the bill does not take into account the economic and social benefits of a project under review, and this is a major misstep. We are aware of the argument that these issues are embedded in the definition of sustainability. However, it is our view that the consideration of economic and social benefits should be elevated within the statutory language in order to ensure that adequate weight is given to these matters. As a result, we propose an amendment that would include specific consideration of economic and social benefits in the public interest. Projects should be rewarded for creating good jobs for Canadians, which, in turn, help grow the provincial and federal economies and create resilient families and communities. We believe that the socio-economic benefits of a project should absolutely be evaluated as a way of measuring if the project is truly beneficial for Canadians.
Madam Chair, Bill C-69 also provides for broader strategic policy assessments. In many cases, these will apply only to provincial and national jurisdictions, such as is the case with climate change. As a result, it is critical that legislation specifies that provincial membership is required on the advisory councils envisioned under clause 117 of the IAA, where strategic assessments are undertaken.
When it comes to panel reviews, the expertise of life-cycle regulators also cannot be overstated. As such, it’s our position that there should be significant representation from the life-cycle regulator on panel reviews. This is an example of good governance and would allow for informed decisions to be made.
Finally, we’re recommending that the IAA limit the minister’s discretion to add projects to the existing project list. Our amendment would not remove the minister’s ability to add projects to the list entirely. It would simply ensure that projects are only added if there is a significant potential adverse effect within federal jurisdiction. This would maintain the clear lines between federal and provincial jurisdiction, something which is critical, and would ensure that we avoid duplication that would result in serious delays in project approvals.
As I said at the beginning of my remarks, changing the way Canada approves infrastructure projects is long overdue. As I said before, one broken system cannot be replaced by another. Therefore, Bill C-69 needs to be fixed. It needs to be done on behalf of, in our case, a province that’s the largest energy-producing province and a province that’s the economic engine of the country. We are also a province that is showing that economic growth and environmental protection can and must go hand in hand, and we want to make sure that this gets right from the perspective of wanting to unite — not divide — the country. Getting this right is a critical decision of the people in this room, as well as other rooms in the city.
I thank you very much for taking the time to listen to me. I’m very happy to hear your questions.
The Chair: Thank you very much, Premier Notley, for that very constructive statement and bringing a specific point in the form of amendments.
Senator McCoy: Madam Chair, my apologies to you and to my premier. I have another commitment at another committee. Thank you.
The Chair: Premier Notley is with us only 45 minutes, which leaves us only 15 minutes. I will shorten the period per senator to two minutes. Please, no preamble, straight to the target question. Just one question, and I won’t ask a question, so you can have my three minutes.
Senator MacDonald: Thank you, Premier Notley, for your presentation. You started off your remarks by saying you thought Alberta is not always being heard. I think that’s changing. I also think it’s also a pan-Canadian phenomenon. A lot of Canadians don’t think they’re being heard on this issue.
I want to speak about employment. For the last 10 years, I’ve been flying back and forth from Nova Scotia to Ottawa and, for the first three or four years, the plane was always filled with oil workers coming home. Big money. They were all driving F-150s and building nice homes and were able to live in the Maritimes and commute, but there is no one commuting any more. Those who do still have a job have to live there, but many have lost their jobs.
We have seen major energy firms divest from the oil sands and relocate to other parts of the world, and Canada is just the latest. It’s hard to believe a great Canadian petroleum company has left Alberta in spite of the fact that Alberta has a highly skilled workforce, advanced infrastructure, some of the largest oil and gas reserves in the world and a proven regulatory framework. Why are the companies leaving, and what is the impact of this on Alberta families? Is Bill C-69 part of the solution to the problem, or does it exacerbate the problem?
Ms. Notley: I think what exacerbates the problem is the global inability for us to get energy infrastructure constructed. Whether we’re talking about, as I’ve said, how long it’s been taking with Trans Mountain, whether we’re talking about what’s happened to Northern Gateway or what happened with Energy East, ultimately it came to a very clear head in the fall of 2018. Of course, most investors in the oil and gas industry could see that slow car crash coming from quite some distance. So now we’re in this position where we literally can’t move our product out in the most efficient and marketable way. It’s hardly surprising that investors are nervous, so the solution is to stop with this.
We have to understand that this is a nation-building thing. We came together as a nation to build a railway, and we need to come together as a nation to build some energy infrastructure. Energy, as you rightly pointed out, is still a fundamentally important part of our economy, not just in Alberta but also in places like the Maritimes and British Columbia. The number of people in B.C. who make a living, a number of communities throughout parts of British Columbia that rely on the cheques that folks that work in the oil and gas industry bring home, whether they earn them in Alberta or other parts of the country, is huge.
The way to do that is provide certainty. I am not one of those people that will say to scrap the bill because, frankly, the alternative is not certainty either. What we need to do is get it right. There are parts of this bill that I think achieve that objective, but there are parts that, if they are left uncorrected, whether intended or not, the only people making money will be the lawyers. And quite frankly, there just aren’t that many lawyers in Canada. So we actually —
Senator MacDonald: There are quite a few.
Ms. Notley: There are a lot, but not enough of us to drive a whole economy, quite frankly.
Senator Cordy: Thank you very much for being here today. It has been very helpful. I’m very pleased to hear that your economy is growing, your deficit is coming down quickly and child poverty has been cut in half, because that’s families that are no longer in poverty. I’m from Nova Scotia, and there are so many Nova Scotians living in Alberta. I think that many if not most Nova Scotians have relatives living there.
You spoke in your opening comments about putting a scope around consultation. I wonder if you could just expand on that a little bit, because the challenge is that you want to hear voices that are relevant to a project and important to a project, and, on the other hand, you don’t want it so that you’ve got 5,000 people or more physically presenting.
Ms. Notley: There’s a balance to be struck because you want, of course, to ensure that you have earned public trust, and you need to earn public trust.
When I talk about scope of consultation, that’s separate from talking about Indigenous consultation, because I think that is driven by our constitutional obligations and we need to always be alive to making sure we get that right. I think that the opportunities at the front end to actually engage Indigenous communities in a much more meaningful form of participation and ownership, quite frankly, in some of these projects, is likely going to be your best foot forward in bringing these communities along and meeting their needs.
In terms of overall consultation, we need to make sure that those who are directly impacted have a voice. We need to make sure that it does not become a forum within which players well removed from the project or even our economy — provincially, locally or nationally — are able to have too much influence. We are suggesting that we rely on the expertise of the panel to make that call, but we then make it clear that the panel has the authority to do that so the decisions of the panel are not then the subject of yet another five years of litigation. The way it’s written right now, it seems that the panel would try to exercise that, but since they’re not being legislatively recognized for the expertise that they would bring to that work, it then becomes something that is really easy for people to play around with in the courts for too long.
Senator McCallum: Thank you for your presentation. First of all, I have a letter from the Athabasca region chiefs. There are 10 questions. I will ask one, but if I can send it to your office and it’s given as evidence. It’s from the Athabasca Chipewyan, Dene, Fort McKay and Mikisew. The question is: If Alberta manages cumulative effects, environmental assessment, energy regulation, assessment of impacts to rights of Indigenous people so effectively, can you explain why both Fort McKay First Nation and Beaver Lake Cree First Nation have filed suits against Alberta claiming infringement of rights due to the approval of oil and gas and oil sands project?
Ms. Notley: I think there are disagreements, and anyone who has standing has the right to protect that standing by going to the courts. We know that a number of communities have done that. At the same time, though, we engage in a very robust level of consultation with many of these communities on these projects.
For instance, on the tech project that is currently under review, they have absolutely filed statements of concern. They’ve asserted their legal rights. At the same time, there is exceptionally robust backing and forthing and consulting going on right now with, for instance, the Mikisew on what they would like to get from the Government of Alberta, as well as many other industry players in the affected area, in order to balance out their rights and ensure that their traditional rights are protected. We’re very close to coming to a deal with them as a result of probably two years of negotiations.
So yes, they’re filing claims. Absolutely. No reason they shouldn’t do that. But even as that’s happening, there have been very effective conversations to get to a place where there’s consensus. I don’t want to say it’s absolutely there yet because I would say we’re about 95 per cent there, but it’s the product of a lot of work. We’re going to continue to do that.
There are a number of mechanisms where we’ve expanded the opportunity and role for Indigenous communities in that area to play a larger role. For instance, we’ve expanded our monitoring to allow for the consideration of Indigenous knowledge and to make sure that they are more engaged members of the monitoring committees that govern the lower Athabasca region. We’ve elevated opportunities for Indigenous people not only to participate but to ensure that Indigenous knowledge is formally recognized as a means of driving that monitoring work.
It’s a really long conversation. I don’t want to go on for too long, but that’s the start of the question.
The Chair: Senator McCallum is going to send the questions, and we will receive answers.
Senator Richards: Thank you very much, premier, for being here. My son worked in Alberta when his wife was home pregnant, and most of my friends’ sons and daughters are out there now. A lot of them have come back, but they love it. It’s a beautiful province. Bow River is a great place to fish.
I’m going to speak a bit about the hand-in-hand. I think the fact that your province is having to buy rail cars to get oil to market shows a disconnect between Alberta and Ottawa, between evaluation and commitment to jobs, and between environmental concern and the very jobs that would help the entire infrastructure of our nation and the whole social and economic structure of our society. This seems to be an existential and ideological difference that I don’t know will be solved by amendments. Might you just comment on that?
Ms. Notley: I think that hard things do not have simple answers. Maybe because I come from a labour and legal background, I am more a fan of digging in and negotiating better outcomes to come to a better solution than I am in pursuing black and white outcomes. If we can get the ear of the drafters of this legislation so that we make the right changes, I think we can come out of this with a better plan in place than what is there in the absence of Bill C-69. Again, we’ve got Trans Mountain and we’ve got Northern Gateway. It’s been almost 70 years since we built a pipeline to tidewater. We don’t exactly have a record of success in the absence of Bill C-69.
What we need to do is dig in practically and with an open mind to make sure that we fix the problems, we understand the risks on both sides and we listen to the folks who have been trying very hard to get stuff done. That’s why I say that industry has a tremendous amount of insight to offer. They’re proposing pretty practical sets of amendments, and I would suggest that is a good starting place.
At the same time, Bill C-69, with those amendments, continues to achieve the other objectives, which are important: building public trust and ensuring that we get our relationship with Canada’s First Nations right as we move forward.
Senator Mockler: Premier, thank you for coming. It’s quite an opportunity to listen to what you have said and what you’re suggesting. Coming from New Brunswick, I will not talk to you about Energy East, but I believe in nation-building projects that will help all Canadians coast to coast to coast.
When we look at the Trans Mountain pipeline, the oil will be shipped to existing U.S. markets. What is your view on what we need to do to build a pipeline and facilities to accommodate tankers large enough to ship oil to Asia, because TMX does not? While I have the floor, what are your views on the proposed tanker ban?
Ms. Notley: I would say at the outset that I don’t think that TMX is forever bound to not ship product to Asian markets. I think that if we get it to the coast, then there’s flexibility in terms of where the product goes. There is no question. That’s the first thing.
There is no question that the tanker ban is discriminatory. We were not banning LNG, but we are banning products from Alberta. That seems to be the practical outcome of Bill C-48. We’re not a big fan of this.
I think we have to keep our options open. I absolutely understand and support the safety concerns there. We have to do the work to address those concerns, and we have to do the work to know that we have the support of the Indigenous communities who are affected, because there are significant communities that would be impacted by the removal of the ban. Those are the issues, but I think we have to keep our options open.
I don’t accept the notion that Trans Mountain won’t ultimately give us the opportunity to reach out to new markets outside of the U.S.
The Chair: Premier Notley, I know you have to leave, but we started at four minutes late. Can you take two more questions?
Ms. Notley: Sure.
Senator LaBoucane-Benson: Mine is a very quick question. I know that Ms. Yee has been working with the Indian Resource Council, CAPP, CEPA and other proponents to align amendments. The amendments that you have split submitted today, though, are just for Alberta?
Ms. Notley: Yes. What you are seeing today — well, you haven’t actually seen them. You’ve heard me talk about them. More detail will be available in a few days. Those are our amendments. CAPP and CEPA support our amendments. They have additional amendments. Those amendments don’t contradict ours. There is more detail, as one would expect from a proponent that needs to administer the act and administer their progress through the act. I think their proposed amendments for the most part align with the same objectives, and that’s how it works.
Senator LaBoucane-Benson: We’re not getting an aligned package, then?
Ms. Notley: I think there was a little bit of a raised expectation in that regard.
Beverly Yee, Deputy Minister, Alberta Environment and Parks, Government of Alberta: We have had good discussion with the industry, and the set of amendments is primarily looking through the lens as a regulator, being in the position of a regulator. We reviewed every one of them with industry. We took some of their suggestions to make the amendments. We also took a look at their set of amendments, and we are in support of the intent. Their amendments address changes they’d like to see as a proponent being regulated, so there are some significant operational kinds of changes that they make. If you look at the whole collection of their amendments and our amendments, they all focus on improving certainty and clarity. They focus on areas where provincial jurisdiction needs to be recognized. They focus on the importance of having good time limes to adhere to. There is lots of consistency there.
We’ve talked about and we’ve reviewed in detail, strategically, how they get presented to you. Our understanding is that the industry has already presented their specific amendments to you, or at least some of the associations have. As the premier has acknowledged, we acknowledge that we support the intent of their amendments as well.
Senator Mitchell: Thanks, Premier Notley. I want to say, as an Albertan, that I appreciate your leadership. You have faced huge challenges, and you have absolutely risen to them, so thank you very much.
My question is in response to your statement about the important need to build public trust. I’ve thought about that a great deal, of course, and one of the things it comes down to is building bridges in order to build pipelines. I wonder if you could comment on whether you see this bill as making any movement towards building trust, what elements do that and whether there are some elements that you would add to that or take away from what’s in it for other reasons.
Ms. Notley: I think the planning phase is a helpful piece because it allows for there to be a lot more front-end work by everyone so hopefully those who are critically impacted can be brought in early on and we have greater consensus the closer we get to major regulatory decisions. I think that is good. We give the panel the ability to look at the scope of who would be involved. We look at these larger issues that need to be considered. Frankly, a lot of those are already considered. I don’t know that there’s necessarily a lot of change. It’s really more about making sure that the process is clearer and that we bring people in earlier, and then we also keep everybody accountable to moving through it in a responsible way. I definitely like the provisions with respect to sharing information more clearly, having that common understanding of what the science is so that we’re not reinventing the wheel every time and people are not having to redo all that work. So I think there are pieces in it that are good.
As I say, you’re not going to build trust in industry and in the world of the investors who are currently not investing because they’re worried about it by saying “trust us,” and there is a lot of “trust us” in the current construction of this bill. If that’s the only way to build trust, we would have a much different world, but I think we all know that saying “trust us” or “trust me” does not normally end up with people feeling high levels of trust, so you need to show it.
The Chair: Thank you very much, Premier Notley and Ms. Yee, for visiting us and your constructive statements.
Dear colleagues, before I suspend, do you agree that we resume in camera to discuss the travel?
Hon. Senators: Agreed.
The Chair: Thank you.
(The committee continued in camera.)