Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue No. 38 - Evidence - February 26, 2019
OTTAWA, Tuesday, February 26, 2019
The Standing Senate Committee on Fisheries and Oceans, to which was referred Bill C-55, An Act to amend the Oceans Act and the Canada Petroleum Resources Act, met this day at 6:27 p.m. to give consideration to the bill.
Senator Fabian Manning (Chair) in the chair.
[English]
The Chair: Good evening. My name is Fabian Manning. I am a senator from Newfoundland and Labrador and I am pleased to chair this evening’s meeting. Before I give the floor to the witnesses, I will ask the members of the committee to introduce themselves.
Senator Munson: Jim Munson, Ontario.
Senator Busson: Bev Busson, from British Columbia.
Senator McInnis: Thomas McInnis, from Nova Scotia.
Senator Campbell: Larry Campbell, British Columbia.
Senator Bovey: Patricia Bovey, Manitoba.
Senator Christmas: Dan Christmas, Nova Scotia.
Senator Petitclerc: Chantal Petitclerc, from Quebec.
The Chair: Thank you, senators.
The committee is continuing its study on Bill C-55, Ann Act to amend the Oceans Act and the Canada Petroleum Resources Act. For our first panel this evening, we are pleased to welcome two witnesses. Via video conference, we have Paul Barnes, Director, Atlantic Canada and Arctic, Canadian Association of Petroleum Producers; and with us in the room is Robert Lewis-Manning, President of the Chamber of Shipping of British Columbia.
I was in a committee with Mr. Lewis-Manning this morning. Full disclosure: We’re not related, not that we know of. I would suggest to Mr. Lewis-Manning that this committee will run more smoothly than this morning’s.
We welcome you both here. Sorry for the short delay. We had some votes in the chamber, but we are delighted to convene our meeting this evening.
On behalf of the committee members, I thank you both for being here. I understand you have opening remarks, beginning with Mr. Lewis-Manning, and then we will have questions from senators.
Robert Lewis-Manning, President, Chamber of Shipping of British Columbia: Thank you very much and good evening, chair, and members of the committee. I am pleased to join you to offer observations and, hopefully, recommendations to improve this bill. I am providing my comments from the perspective of marine transportation and trade more generally.
The Chamber of Shipping of British Columbia represents the interests of shipowners, agents and service providers responsible for over 60 per cent of Canadian international trade by maritime transport. This includes everything from people in ferries and cruise ships to bulk commodities such as grain that is exported overseas to Asia. Our members’ vessels can include some of the largest of vessels but also smaller vessels like tugs and barges.
The marine transportation sector is very involved and supportive of Canada’s effort to protect our pristine coasts in a variety of ways, including through the Oceans Act. Overall we are supportive of the intent of this bill and suggest that some relatively minor tweaks would support improved protection and, most importantly, avoid unintended consequences. These proposed amendments would focus on the proposed powers of the minister, the definition of an ongoing activity, and the proposed offences and punishment sections.
The potential risk to the marine transportation sector is likely in the development stage of an interim MPA, or marine protected area. I may be using the word “interim” loosely, but, in effect, in this bill it is an order as opposed to the regulated requirement.
The proposed legislation provides the minister with the authority to establish an interim marine protected area without additional consultation, even with other ministers, and then define the classes of activities permitted and prohibited in the interim MPA. Ships both large and small operate in a diverse and frequently demanding environment. Their capacity to operate safely is influenced by a number of external and also onboard factors that include, but are not limited to, the weather, hydrography, cargo loading and human elements such as fatigue.
The spatial constraints or operating limitations that might arise from a regulatory framework built around this bill could limit a vessel’s ability to mitigate the impacts of these factors and to transit safety and efficiently. While many existing MPAs have typically been of low consequence to commercial marine transportation because they are located largely in coastal areas where vessels do not operate frequently, this is expected to change in the future as Canada moves toward its 2020 targets. For example, DFO is intending to establish a marine protected area on the west coast of Vancouver Island, which will encompass 140,000 square kilometres, which is an extremely active area for commercial shipping, fishing and tourism.
With respect to ongoing activities, the bill proposes that the minister will list the activities that are permissible in a specific MPA and define such activities as those that were lawfully conducted or authorized in the previous year. This level of legislative vagueness leaves considerable latitude for the minister to define ongoing activities. Just because an activity has not happened in a proposed area previously does not necessarily mean that the activity would be harmful to the area or inconsistent with the protection objectives of an interim marine protected area.
The proposed legislation also contains a framework for enforcement. A robust monitoring and enforcement regime is supported and is certainly a key aspect of a strong legislative framework. Notwithstanding, the provisions in the proposed legislation are somewhat inconsistent with those found in the Canada Shipping Act currently and do not reflect a coherent integrated approach between the relevant departments. The scale of punishment appears to be extreme in the case of small-vessel operators, which are clearly egregious and could result in undue harm to coastal businesses and many of the communities they serve.
In an effort to improve upon the proposed legislation, we hope that you will consider the following recommendations.
One, include a provision in the legislation that requires the minister to publish his or her intent to establish an interim MPA in advance. A reasonable period of notice would not only provide awareness and focus within governments but would also provide visibility to external stakeholders and coastal communities that may be directly impacted by a new MPA.
Two, consider including a provision in the bill that requires the minister to consult with other key ministers as well as relevant regulated industries prior to establishing the interim MPA. In doing so, this would avoid unintended consequences or incongruence between different pieces of legislation or regulations. This does not need to be a lengthy process and should include a focus regarding activities that would be permitted in the interim MPA.
Third, we recommend considering the definition of an ongoing activity. Restricting it to a lawful activity that occurred in the past year does not reflect the realities of commercial marine transportation, and it places unnecessary constraints on other initiatives that may be progressing more quickly than the five-year restriction for establishing the marine protected area.
And, finally, review and align the bill’s punishments to reflect those already in the Canada Shipping Act, especially as concerns smaller operators. marine protected areas need to deliver results driven by tangible benefits. While the proposed legislation may demand a fixed schedule for implementation and management, it does not replace the need for proactive stakeholder dialogue and input.
That concludes my opening remarks, and I look forward to continuing this dialogue with the Q & A. Thank you.
The Chair: Thank you, Mr. Lewis-Manning.
Mr. Barnes?
Paul Barnes, Director, Atlantic Canada and Arctic, Canadian Association of Petroleum Producers: Good evening, honourable chair and members of the committee. I am Paul Barnes. I am Director of Atlantic Canada and Arctic for the Canadian Association of Petroleum Producers, which is often referred to by the acronym CAPP. I am based in St. John’s, Newfoundland. CAPP appreciates the opportunity to provide feedback to the Senate committee to help inform your review of this bill. We have an interest in Bill C-55 because it has some implications for our industry.
As background, we are an association of oil and gas companies involved in exploration, development and production of oil and gas in Canada. CAPP members produce about 80 per cent of Canada’s natural gas and oil resources both on land and offshore.
I’ve been working in the oil and gas industry for over 30 years now and have been with CAPP for about 20 years. My role is responsible for Canada’s offshore oil and gas areas, which is principally off the East Coast of Canada and in the Beaufort Sea area of Canada’s Arctic.
In my role with CAPP, I have been involved in a number of specific Oceans Act marine protected areas, or MPAs, in Newfoundland, in Nova Scotia and in the Northwest Territories, both through direct discussions with DFO on their creation and in participation on stakeholder advisory committees for MPAs that are located near oil and gas interests.
CAPP is generally supportive of the bill and the intent of the Government of Canada to make the proposed amendments to the Oceans Act and the Canada Petroleum Resources Act. The amendments provide additional certainty to industry regarding activity in a proposed MPA area, improves the timeline on the MPA creation and provides compensation to oil and gas licence holders if they are negatively impacted by an MPA decision.
It should be noted as well that the amendments to the CPRA do not apply to areas where there is a joint management regime in place, for example, Newfoundland and Nova Scotia offshore areas, and therefore only applies to the offshore areas in the Arctic, offshore British Columbia, Hudson Bay and the Gulf of St. Lawrence.
The following is what the bill means to the oil and gas industry. First, the average time to date for creating Oceans Act MPAs is around seven to ten years. The bill reduces that time frame to about five years. This reduces some of the uncertainty to our industry, as it shortens the timeline to understand if an MPA will actually be created and what oil and gas activities can or cannot occur within an MPA if it is actually created.
The bill also proposes to create a new authority to designate an interim protection MPA based on preliminary science and consultations, and allowing any industry activity like oil and gas currently taking place in that area to proceed but prevents any new industrial activity until such time as a formal MPA is in place. This is a reasonable approach.
Finally, the bill allows for the government to compensate any oil and gas licence holder that may be prevented from undertaking an activity on their licence if their licence is included within the boundaries of an MPA and if oil and gas activity in that MPA is prohibited. It should be noted that not all MPAs prohibit oil and gas activity.
In conclusion, we understand the Government of Canada recognizes the importance of developing Canada’s offshore oil and gas industry to its full potential, and this means developing natural resources in an environmentally responsible way. The proposed amendments as contemplated in Bill C-55 provide our industry with more certainty over regulatory activity in the ocean environment where we may operate and compensation if negatively impacted by future regulatory decisions.
I thank you for this opportunity to present, and I look forward to any questions you may have.
The Chair: Thank you, Mr. Barnes. Certainly we want to get right into our questions.
Senator Petitclerc: Thank you very much, both, for your presentations.
Mr. Lewis-Manning, in your statement, you talk about the scale of punishment that appears extreme in the case of small-vessel operators. I wanted to have more detail on that. What are we talking about? Who will be touched by that? How big a challenge is that? Could you give me more perspective on that?
Mr. Lewis-Manning: Thank you very much.
The theme I’m hoping to project is that all users of Canada’s coastal waters are not necessarily the same. Most of the companies we represent, for example, are big operations with the resources to understand the regulatory framework of a Canadian coastline where they are operating.
There are family businesses with two tugboats or a fishing boat where they spend 90 per cent of their time on the water, and their ability to understand all the various regulations and different zonal planning through those regulations is getting quite complex in Canada. There has to be some degree of acknowledgment that not all operators on our coasts are working at the same level. That’s the theme I am trying to project. You don’t want to unnecessarily summarily fine a small enterprise that is supporting a community, with a very significant fine, if the intent was never there to violate something in a marine protected area. That’s the general theme I’m trying to convey.
Senator Petitclerc: Are you saying that the smaller operations will be somehow disproportionately impacted?
Mr. Lewis-Manning: I think the risk is there that they could be, yes.
Senator Campbell: Thank you for coming from British Columbia, and thank you for coming by the waves from Newfoundland.
Mr. Lewis-Manning, you say we should consider a reasonable period of time that would provide awareness. What are we talking about here?
Right now it is seven to ten years to get to the MPA. We are looking at going to five. What would be the appropriate period of time that should be out there for everybody to take a look at what is going on?
Mr. Lewis-Manning: Thank you for the question. For commercial marine transportation, if there was an intent to establish an MPA, a year’s notice would be helpful, and then the list of activities/prohibitions, six months in advance.
Most of us in the commercial marine industry are involved with all the relevant departments all the time. But sometimes connecting the dots between other initiatives falls through the cracks. I often find industries providing those linkages into different federal departments and also different levels of government, and having that time to sort through it is important so there are not unintended consequences that could last as long as five years.
Senator Campbell: I live on Galiano Island, which is in the Southern Gulf Islands, where the pods of whales are and all the rest of it. What does your industry think of these ideas of MPAs? What is your take on them?
Mr. Lewis-Manning: Overall, supportive. We have learned a lot in a very short time. We have not dealt with Oceans Act issues, historically, for decades, but we are playing catch-up. We are starting to get fairly sophisticated with species at risk, for example. Certainly you would be aware, on Galiano Island, of those species at risk in your neck of the woods.
One of the challenges is managing industrial activity in high-density areas. For the most part, we have not seen marine protected areas where there are a lot of activities. But as Canada increases its protective measures, that day is coming. We have to be prepared for that conflict, not a negative conflict, but having MPAs in areas of high activity. And why I gave the example off the west coast of Vancouver Island is that that will be an area of high activity and a lot of different users. It will be an interesting process as it develops. It is standing there to be developed quite quickly now.
Senator Campbell: You seem extremely supportive of this bill. Is there anything you don’t like about it, Mr. Barnes?
Mr. Barnes: Yes, we are certainly very supportive of the bill. There are some areas that could be a little clearer when it comes to, as Mr. Lewis-Manning suggested, publication of some information in advance to know that an MPA may be created, and also some clarity with respect to the penalties that could occur to different industrial users for noncompliance. Some of the wording in the act could certainly use some improvement.
As I mentioned in my opening remarks, we are generally supportive of the concept of the bill.
Senator Campbell: Thank you.
Senator Bovey: Thank you both for being here and for your experience. I have a question for each of you.
Mr. Lewis-Manning, you questioned the definition of ongoing activity. My question is twofold. I would like to know if there are shipping activities that are occurring or authorized to occur in the year prior to a ministerial order that would not be captured by the definition of ongoing activity. What is missing from ongoing activity for something that might not have happened in that year? And on the flip side, what sort of activity would not be covered under ongoing activity or would fall under the exemption laid out in proposed paragraph 35.1(3)(a) of the bill?
Mr. Lewis-Manning: It is a very complex question to answer, and there is some learning happening in the federal departments themselves.
In an industry that is global and heavily regulated, I guess you could argue that everything is authorized; it isn’t permitted, but it has constraints imposed on it. There is yet to be a definition around whether that is specifically authorized.
I will go back to my example off the west coast of Vancouver Island because it is a living example of this bill, and I imagine it will be quickly implemented once this bill passes.
When we give them the list of what we think are activities, we are not giving them a list that says, “A ship sails through this box of the ocean.” We are telling them all the possible things that a ship might do, does, or might be required to do in that.
I can tell you that the Department of Fisheries and Oceans was quite surprised when we gave them the list. They passed it over to Transport Canada, and they were surprised. There is a lot of learning. I don’t want to be negative about it, but having a time-based approach to it may be overly constrictive.
The other part I would like to highlight is that there may be a project that has yet to get to a sufficient stage of approvals that could be approved within that five-year period. That is an area where the bill might unintentionally impact negatively some sort of expansion or new operation that’s going through some environmental review process, whether provincially, federally or both.
Senator Bovey: Having lived on Vancouver Island for many years and having kayaked on those waters, I am well aware of what’s in a lot of them. One example I have used over time is Hecate sponge beds and the fragility and the uniqueness there.
Do you think, working with DFO, it is possible to come up with lanes of traffic? I’m not sure if that’s what you call them in the marine business, but lanes of traffic that would respect MPAs and not impede the shipping?
Mr. Lewis-Manning: Thank you. I wish you had been at my committee appearance this morning. We talked extensively about the subject.
Yes, there is a strong connection between managing risk and protection. We are not at a sophisticated enough level that the two are integrated, but we are moving in that direction.
Managing sensitive areas of our coast through routing and other measures is absolutely feasible, and we would be supportive of it.
Senator Bovey: Mr. Barnes, I very much appreciated your input to these discussions. You mentioned that the amendments in the bill provide additional certainty to an industry regarding activity. I wonder if you could discuss what you mean by the further certainty that Bill C-55 brings to your industry?
Mr. Barnes: Yes. As I mentioned, our experience to date is that the creation of MPAs has taken a long time, some up to 10 years. That’s a long time not to know whether an MPA will be created and what conditions may or may not be allowed to occur within an MPA. You could, at the end of the day, have an MPA that restricts all oil and gas activities, restricts it for a portion of the year, or allows certain activities to take place in certain portions of the MPA at certain times. Having a long period when an MPA is created and not knowing what activity may or may not take place in that area has created some uncertainty.
This bill proposes to reduce that time limit to five years, which is a lot better than we have it today, and provides us a little more certainty.
Senator Bovey: You see it as a positive move to shorten it, while in other industries that might be affected by it, there are still some learning curves to be able to come up with some of the definitions, as Mr. Lewis-Manning said. Thank you.
Mr. Barnes: Yes, that’s correct.
Senator Gold: Thank you and welcome to you both.
Mr. Barnes, there have been witnesses that appeared before us who suggested that all Oceans Act MPAs have minimum standards and some have argued they should include the prohibition of any oil or gas activity. I assume your industry would reject such a blanket ban, but perhaps you could share with us your thoughts as to some of the factors that ought to be taken into consideration to determine whether oil or gas activity in a particular MPA should be prohibited versus allowed or regulated in one way or the other.
Mr. Barnes: We would agree that with certain MPAs, depending on what they’re designed to protect within that MPA, maybe there should not be any oil and gas activity allowed within it. Again, it comes down to what is to be protected and the science around it.
To use an example, there is a proposed MPA called the Laurentian Channel MPA, located off the south coast of Newfoundland. It is going through Gazette Part I now. The way it is designed is that it is a very large MPA and certain parts of it restrict certain oil and gas activity, for example, seismic programs. It restricts it at certain times of the year when it is known that certain mammals may be in that MPA and may be impacted by noise created by the seismic programs. So there are zones suggested to be created within that MPA where you are not allowed to undertake seismic activity for certain portions of the year.
Likewise, there are zones within the MPA that are proposed to protect the seabed from such things as sea pens or sea cucumbers. Because drilling may occur in that area, no oil and gas is allowed to occur in that particular zone with an MPA because drilling may affect what’s on the ocean floor.
In that whole example, oil and gas can occur in certain portions of the MPA but not in all areas because of what it is designed to protect.
Senator Gold: Mr. Lewis-Manning, in your remarks and notes, you mentioned that a vessel’s safety might be negatively impacted by the particular constraints of a given MPA. Can you give us concrete examples of the impact that these constraints currently have on the shipping industry? And is there something that this bill could say to ensure that those types of negative impacts are taken into account when making decisions about the MPA generally or the conditions and constraints attached to them?
Mr. Lewis-Manning: Thank you. I guess I am speculating a lot. Currently, there isn’t really any direct impact, but as we increase our coverage of marine protected areas, one could foresee the areas when vessels would have to route around various areas for all the right reasons.
If a vessel was in ballast and was not carrying cargo, it may have to adjust its trim, for example. It may have to change its ballast, which may be taking in or discharging ballast water. That may have environmental impacts. It also may have to adjust its course to deal with adverse conditions.
You can see the potential for vessels having to deliberately alter their routing through somewhere they should not be routing for the safety of the vessel and the people in it. I’m not sure we’ve got to that point in time yet, but you can see it on the horizon, especially with these much larger marine protected areas that are envisioned. That’s what I’m referring to.
I was bringing up the bill as you were asking the question to see if there is actually a provision to deal with issues of safety of life at sea. If it is not in there, it probably should be.
Senator Gold: Thank you.
Senator Christmas: I have a question for both of our guests, starting with Mr. Barnes.
While appearing before this committee on February 6, 2019, Susanna Fuller of Oceans North indicated that she believed a balance could be struck between ocean protection and oil and gas exploration and extraction. As an example, she noted that in 2018, Shell Canada was purported to have relinquished offshore exploration rights it held off the coast of British Columbia.
In your view, Mr. Barnes, can a balance be struck between ocean protection and oil and gas exploration and extraction?
Mr. Barnes: Yes, I very much believe that. I was using the example of the Laurentian Channel proposed MPA earlier. That’s a very good example of a balance: allowing industrial activity like oil and gas to occur in portions of the MPA where it wouldn’t have an impact on what’s being protected, but prohibiting oil and gas from other areas of the MPA where activity may impact what’s being protected there.
So, yes, I would agree that oil and gas activity and environmental protection through MPAs can certainly co-exist together.
Senator Christmas: In your view, do you think the existing Bill C-55 allows for that balance? Do you see that in the bill as drafted?
Mr. Barnes: I would not say it allows for the balance, because it does not go into any restrictions as to oil and gas activity or no oil and gas activity within an MPA, or any industrial activity for that matter. It just helps us provide some clarity as to how long it would take for an MPA to be created. It also provides some clarity if our industry is impacted in the future. If an MPA is granted and oil and gas activity cannot occur, the industry player or the operator would be compensated for any loss.
Senator Christmas: Thank you, Mr. Barnes.
Mr. Lewis-Manning, one of your recommendations was that this committee should review the bill’s punishments. You mentioned in your remarks that the scale of punishment seems extreme, especially for small operators. Could you elaborate on that and why you believe that review should be undertaken by this committee?
Mr. Lewis-Manning: There are two pieces to that. I think there are some inconsistencies between the scale of punishments in the Oceans Act, or the proposed amendments to it, and the ones that exist in the Canada Shipping Act. They probably should have some synergy.
As I think I was explaining earlier, there are different types of operators on our coasts. Some are big companies with lots of resources to understand the complexity of the regulatory environment. Then, there are small operators who have to respect this law as much as a big operator but don’t have the resources necessarily to understand it as well. I would be concerned about a smaller operator unknowingly having an infraction under this act and having fairly significant summary convictions and fines that are provided for in this bill.
That is not to say it is not important, but there needs to be some level of reasonableness and education provided. There are a lot of users on the water and they are not all companies with 300-metre ships that have the resources to understand all of this complexity.
Senator Christmas: I take it you are suggesting that we look at a scale of punishments?
Mr. Lewis-Manning: I think it would be wise. The bill tries to do that, but it’s a very complex issue. I think it deserves more attention for the sake of a lot of those smaller businesses that are working in a relatively small geographical area on a Canadian coast.
But, of course, as marine protected areas grow in importance, they are going to need to understand their operating environment better. It’s probably why you don’t see many of them asking to appear before a committee. They are busy and out on the water.
Senator Christmas: Thank you, Mr. Lewis-Manning.
Senator McInnis: Thank you both for appearing before us this evening.
Mr. Barnes, I became a bit perplexed when you mentioned zones, I took it, within the MPA. As I’m sure you are aware, the accord acts provide supremacy regarding offshore activity for minerals around all of the waters of Nova Scotia and Newfoundland. What did you mean by zones within the MPA?
Mr. Barnes: The example I was using was the Laurentian Channel MPA and the way it is designed. It is a very large MPA, and the Department of Fisheries and Oceans has designated zones within that MPA that restrict oil and gas activity and some zones that allow for activity. Some activity can occur within certain times of the year, and in other zones, it can occur year round.
It’s a unique MPA in the Canadian examples of MPAs because it has these zonal qualities, but it’s a very large MPA and it’s understandable why DFO decided to go that route.
Senator McInnis: Of course, you are aware that if you wanted to do seismic testing or drilling off those shores, the accord acts, which cover out to 200 nautical miles, all around the waters, that the supremacy is there for drilling and offshore exploration.
Here is my challenge. Off the shore of Nova Scotia, there are currently 2,165 kilometres of an area of interest. It has been designated by the minister. They have five years to work and consult, and then it becomes a regulation and possibly an MPA. The fact that it has been designated by the minister upfront, the footprint is frozen. How is an exploration company to go out now, under the guise of this designation, and drill, despite the fact that the accord is there?
Mr. Barnes: It certainly can go out now and undertake any oil and gas activity because it is designated as an area of interest. It is not designated as a marine protected area. An oil and gas company that has a licence, whether in that area of interest or outside, can undertake any activity within that licence that it is authorized to take.
Senator McInnis: Under the accord acts?
Mr. Barnes: Under the accord acts, yes. There is no restriction, even under the area of interest, which is a term under the Oceans Act, that prohibits oil and gas activity.
Senator McInnis: Either in an area of interest or an MPA?
Mr. Barnes: That’s right.
Senator McInnis: How popular would you be, going out?
Mr. Barnes: It definitely would not be popular. We would certainly avoid MPAs designed for a very sensitive area when we know that our activity may have some impact on the species that are trying to be protected there. We would not, as an oil and gas industry, want to be in that area either.
Senator McInnis: The fact that the accords are there, unique to Newfoundland and Nova Scotia, has to be an attraction to oil companies, is it not?
Mr. Barnes: It is certainly an attraction because the accords act legislation does provide a lot of certainty when it comes to the activities we can undertake.
But when the Canadian government implements environmental legislation, it usually overrides, to some degree, the accords legislation, even though you mentioned the primacy of the accord acts. Legal teams have told us that Canadian environmental legislation tends to override the accord acts.
Senator McInnis: Well, that’s not what my research says, and that’s not what a senior official from Natural Resources said to this committee a week ago. The accord acts are supreme, and that’s important. We should talk about that because I think that’s important.
Have you thought about the matter of compensation? Have you determined what compensation for what? How far does the compensation go? I’m not talking in the Maritimes; I’m talking about in B.C., or wherever. What kind of compensation is it? Is it just your costs? Is it potential loss of revenue? Is it loss of royalties to the provinces or territories? Has anyone thought about that when we are talking about compensation?
Mr. Barnes: No. That would be one of the areas that I would say could be strengthened within the bill because at the moment it’s open-ended. As an oil and gas industry representative, we would want all that you mentioned considered, not only the cost of not being able to do activity. But if a company expended money to invest in acquiring a licence with the intent of exploring and hopefully producing what is found there and was prevented from doing so, some compensation should be awarded.
Senator Busson: I want to thank you very much, Mr. Barnes, for attending this evening, as well as Mr. Lewis-Manning.
I wanted to ask Mr. Barnes a question around compensation. Clause 20 of the bill talks about compensation for oil and gas; and, of course, in the thinking of many taxpayers, oil and gas exploration is a very positive thing for taxpayers in Canada’s bottom line. The fact that compensation is being considered for oil and gas industry endeavours that may be impacted by MPAs and, in that case, would end up being a negative bottom line for Canadian taxpayers moving forward.
You have covered some of my question when you answered the question asked by Senator McInnis, but what is your view generally about the impact of compensation on the activity of your industry in areas that might be considered for MPAs?
Mr. Barnes: If an operator has acquired a licence and is permitted to undertake activity and is thwarted from doing so because, at some point after acquiring the licensing, the Government of Canada decides to put an MPA on top of the licence, or a portion of it, and restricts oil and gas activity, it’s only fair that company that acquired a licence on good faith would be compensated for not being able to undertake the activity it expected to undertake.
Senator Busson: The fact that compensation may or does exist under the act, does that dilute or allow it to be a complete answer, or any part of an answer, of whether or not there would be consideration of exploration in a certain area?
Mr. Barnes: No. Maybe I’m not understanding your question, but to us it’s a matter of fairness. If you acquire a licence, you expect to undertake whatever activity you can on that licence, and you should be awarded costs and compensation for not being able to undertake that activity.
Senator Busson: Thank you very much.
The Chair: I want to thank our witnesses for your presentations this evening. We look forward to having you here again some day.
Everybody should have received a copy of the report in the Navigator magazine about our study on search and rescue. It will give you an idea of the positive feedback on our study.
For our second panel this evening, we welcome, by video conference, the Premier of Nunavut, as well as the Deputy Minister of the Department of Economic Development and Transportation.
I want to thank the premier for his letter of November 27 in relation to Bill C-55. We’re delighted to have you here this evening with us to expand on those comments you sent me earlier. The floor is yours.
Hon. Joe Savikataaq, Premier of Nunavut: Mr. Chairman, I’m Joe Savikataaq, Premier of Nunavut and the Minister of Environment in Nunavut. This is Udlu Hanson, Deputy Minister, Department of Economic Development and Transportation.
I thank you for this opportunity to address the Standing Senate Committee on Fisheries and Oceans regarding Nunavut’s concern with Bill C-55 and to make recommendations for its amendment.
Our government has expressed serious concerns to Canada pertaining to the bill since the spring of 2017. As I outlined in my recent letter to the chair of the committee, the Honourable Fabian Manning, the Government of Nunavut has identified that this bill will give Canada the authority to designate areas for marine protection without our consent in waters within or adjacent to Nunavut and that we may consider for possible future development.
It would also give Canada the authority to remove geographical areas from development that are currently subject to discussions at the devolution negotiation table.
Finally, it would prohibit access to petroleum resources, preventing Nunavut from benefiting from these resources in the future.
We have been particularly concerned with clause 5 of the bill, which empowers the Minister of Fisheries and Oceans to designate an interim marine protected area by order until the area’s final designation through Governor-in-Council regulations is in place.
This is spoken to in proposed subsections 35.1(2) and 35.3(1) of the bill. The creation of such interim protection for a marine protected area is at the discretion of the minister and has no requirement for the consent, or for consultation with, the territorial or provincial governments that may border the marine protected area.
This interim order can last up to the five years and, further, appears to not be subject to the requirements under section 33 of the Oceans Act, which states that the minister “shall cooperate . . . with provincial and territorial governments” in exercising his or her powers under the act.
The Government of Nunavut is concerned that the amendments proposed in this bill run counter to the objectives of cooperative federalism that the Government of Canada has publicly committed to and undermines ongoing devolution negotiations. The proposed changes ignore Nunavut’s role in the territory’s economic development, environmental stewardship and governance. The change threatens to compromise the improving government-to-government relationship Canada is trying to build.
Furthermore, the Government of Nunavut is increasingly concerned with amendments proposed in the bill regarding the Canadian Petroleum Resources Act, which could prohibit interest owners from commencing or continuing work in federal waters subject to an MPA. Again, we believe that the Government of Nunavut must be part of a decision-making process to allow or prohibit exploration or other activities in a marine protected area.
We disagree with the proposed amendments that allow the Government of Canada to make unilateral decisions that could impact Nunavummiut with respect to mineral and petroleum development, tourism, commercial fisheries and shipping in Nunavut waters.
The Government of Nunavut reviewed the committee’s report, Healthy Oceans, Vibrant Coastal Communities: Strengthening the Oceans Act Marine Protected Areas’ Establishment Process, as well as the Government of Canada’s response to the report, including those recommendations inclined with our position. We have outlined those supported recommendations and provided additional commentary to supplement the identified action items.
As the representative of Nunavummiut, the Government of Nunavut supports that a decision maker is essential to the establishment and sustainability of future marine protected areas in Nunavut. The Government of Nunavut has strategies for future development and, therefore, it is critical that the Government of Nunavut be involved as a co-decision maker in the marine protected area establishment process, both interim and permanent.
The process seems designed to limit the ability of stakeholders to raise legitimate concerns they would face should a marine protected area be created in a place that affects them. Nunavut, having the longest ocean coast in Canada, is going to be affected disproportionately compared to the rest of Canada.
Indeed, the effects of the bill’s approach are already clearly evident in several new proposals for marine protected areas that have come our way. I want to reiterate that we are not against the creation of protected areas, but rather we need to have a decision-making role in the process. We have expressed our concerns with the general failure of Canada to involve the Government of Nunavut in this decision-making process with respect to marine protected areas on a number of specific occasions.
Last October, I wrote to Prime Minister Trudeau and reminded him of our concerns with Bill C-55. In the letter, I stated:
I want to remind the Government of Canada of the specific concerns regarding the proposed amendments to the Oceans Act and the Canada Petroleum Resources Act ( Bill C-55). We do not support the creation of Interim Marine Protected Areas without the Government of Nunavut playing a decision-making role in the process. To reiterate, this type of unilateral decision will potentially affect future economic opportunities for Nunavut, and undermines the ongoing devolution negotiations.
Unilateral decisions have undermined our relationship with the Government of Canada in the past — for example, the imposition of the moratorium on offshore oil and gas. This decision was shared with the Government of Nunavut only a few hours before it was announced in the media. The ongoing Strategic Environmental Assessment for Baffin Bay and Davis Strait will be considered a key element in the review of the moratorium, and again the Government of Nunavut is excluded from the decision-making table for the future outcomes of this Strategic Environmental Assessment.
To the Government of Nunavut, it is obvious that we must have a seat at the decision-making table regarding important decisions such as the moratorium on oil and gas in our territorial waters and the process to establish marine protected areas in our territory.
If Bill C-55 gets Royal Assent, it will further legitimize the Government of Canada to make unilateral decisions on behalf of Nunavut, which will directly affect the future economic opportunities for future generations of Nunavummiut.
Therefore, the Government of Nunavut calls upon the Government of Canada to amend the bill to require consent from bordering jurisdictions prior to the designation of a marine protected area, and prior to the prohibition of any activity within that proposed marine protected area in those jurisdictions. This commitment would strengthen and enhance the opportunity for collaboration and engagement in the establishment of marine protected areas within and adjacent to Nunavut territorial waters.
Thank you, Mr. Chair.
The Chair: Thank you, Mr. Premier.
Senator Gold: Thank you, Premier, for making yourself available and for your very helpful and thorough presentation.
I want to pick up on the last comment you made, which echoes the letter you wrote to the chair of this committee in November 2018 recommending an amendment requiring the written consent of affected provincial or territorial governments prior to the designation of an interim or permanent MPA, and calling for your government to have a decision-making role in the process.
Would you elaborate on the processes or structures you envisage to give effect to your recommendations? Are you suggesting that your territorial government would have a veto over the decisions? There is a continuum, if I can suggest, from consultation on one level, with the ultimate decision being in the hands of the minister, to veto on the other extreme, to something else, and there are probably many steps along the way in that continuum. Can you help us understand what structures you contemplate to give effect to your recommendations?
Mr. Savikataaq: We’re not asking for a veto, but I’ll give you one example where it has worked very well.
There is a marine protected area now — Tallurutiup Imanga — and we worked with the federal government and the QIA, which is the regional Inuit organization. We were part of the process right from the beginning. Right now, to the best of my understanding, they have signed an AIP with the federal government on getting that and turning it into a marine conservation area. That’s one example where we all worked together for the same goal. It is probably easier and faster if we all work together instead of poking at each other on the side.
Senator Gold: We’ve heard from other stakeholders — and everybody’s interests are different; I’m not equating them with the government. We’ve heard time and again that we are better off working together at the front end of the process, identifying common areas and learning from each other’s experience.
Do you have specific recommendations for how to capture this idea of participation in the decision-making process or the meaning of consent? I raise that issue because the whole question of free and prior consent is very much in the air these days in the Senate, in other contexts, and certainly in relation to Bill C-262. It would be helpful for us to know, if you can, what mechanisms you would see as appropriate to give effect to the role that you are seeking in this process.
Mr. Savikataaq: I would think that, generally, when anything is going to be done, there is a working group. We would like to be part of the working group at the bureaucratic level. Generally, when you have a working group, they come up with an MOU, and then, at the political level, that MOU would be signed. So we would be right at the beginning of the process and be there until the end of the process.
As I stated in my opening comments, we are not opposed to marine protected areas. We want to be part of the decision-making process to get it into a marine protected area and also what prohibitions might be put on the area. We would like to be part of that process too.
When an area is taken away, part of our future is taken away. There might be resources under there that we will not have access to anymore. With Bill C-55, there is no consultation process. If it passes as is, the DFO minister can say that this area is protected, and then we have five years to justify why it should be one. We think that’s backwards.
If you want a marine protected area, we should be part of the process, and we will contribute to the reasoning of why the marine conservation area should be there.
The Chair: Mr. Premier, after our meeting this evening, if you think of something that you want to forward to us — recommendations or suggestions — feel free to send them to the clerk. Following the interaction here, you may think of something afterwards.
Senator McInnis: Premier, welcome and thank you for doing this.
I hear you when you talk about consultation, but, as you know, the Constitution gives the land and the streams to the provinces and territories, and up to the mean tide is federal jurisdiction. However, for a federation to work properly, there has to be a partnership.
This business of the new act, and the mechanism they are putting in place with respect to designation upfront — without consultation with the provinces, without consultation with the public — they come out, make a decision in Ottawa, and they say that this is an area of interest. In five years, they have to turn the order into regulations.
I’m not sure what the problem was with the previous mechanism. Yes, it took a longer period of time, but at least there was consultation along the way. Do you not agree that this new fast-track effort — incidentally, it is being put in place so that they can reach the 10 per cent by 2020. That’s the reason they are doing it. They could have done it under the previous system in five years. Five years is a long time. Do you not agree that this so-called fast-tracking, without consultation or partnership, is the better way to go? What was so terribly wrong with the previous way?
Mr. Savikataaq: I absolutely agree with you, senator. I saw nothing wrong with the old system either. In my opinion, it is to fast-track so that the Canadian government can meet their commitments to the UN for 10 per cent protected water areas within Canada. We have the longest coastline, plus we are not a province. We are a territory, so we don’t have autonomy over a lot of stuff here as provinces do; so we are being disproportionately affected by this decision.
Senator McInnis: Your land claims agreement was legislation, was it not? It was an act?
Mr. Savikataaq: Yes.
Senator McInnis: Where would that rank in terms of the Canada Petroleum Resources Act? When you negotiated this, I take it that this act would have entrenched some rights. It strikes me that that’s part of the research. You probably have the answer tonight, but if you don’t, someone should look at this to see if you do have the rights under the act that would be supreme to this amendment that’s taking place with respect to the Canada Petroleum Resources Act. Have you looked at that?
Mr. Savikataaq: The land claims act is constitutionally protected, so it is pretty high up there. It would trump that. The only thing is the land claims agreement is on the land. To the best of my understanding, there is no offshore component of the land claims agreement. It stops at the high-water mark, I believe.
Senator McInnis: You need an accord like we have in Atlantic Canada.
Mr. Savikataaq: You’re right.
Senator Patterson: Thank you to Premier Savikataaq and Deputy Minister Hanson. I know you have a legislative assembly budgetary session going on now, so we really appreciate your time here tonight.
Premier, you referred to the prejudice to the devolution negotiations that are now under way. If I may, colleagues, devolution negotiations are about transferring province-like authorities, ownership and management of lands and resources from the federal government to the territories.
In Nunavut today, the feds own and manage the land, and the same with the offshore, but you said negotiations are under way. These negotiations are being governed by a Lands and Resources Devolution Negotiation Protocol signed in 2008 between the Government of Nunavut, Government of Canada, and Nunavut Tunngavik representing the Inuit of Nunavut.
Without going into detail, clause 3.2, under “Oil and Gas,” in the devolution negotiation protocol talks about the parties agreeing to discuss the management of offshore and seabed oil and gas resources as an integrated unit in a future phase of devolution negotiations. It also says that the federal government recognizes the need for the integration of onshore and seabed oil and gas management. It also recites that they will work together to develop administrative arrangements which seek to provide the Government of Nunavut greater input in respect of oil and gas management in Nunavut.
I wanted to get that on the record because you’re saying that this bill, by allowing unilateral removal of areas from development that might be discussed at the devolution negotiation table, is prejudicing those negotiations.
So my question is: How are things going with the devolution negotiations? Are you making progress? Could you give us an idea of how that’s going and what stage you’re at?
Mr. Savikataaq: We are making progress, otherwise we wouldn’t be negotiating. We’re not going to go backwards. We are making progress.
One of the places we’re trying to get to is under the seabed as part of the negotiations. As Senator Patterson is quite aware, we have a land claims agreement here, and a lot of the known minerals on the land are owned by the Inuit organization so they’ll get the royalties.
As part of the negotiation process, we have to come up with a way to have province-like abilities to raise money on our own, too. We don’t want to always depend on the federal government for all the money that’s needed to run Nunavut. That’s part of the negotiation process. We would like to get royalties from under the seabed. That’s why we said if you create a marine protected area without our consent and we’re still negotiating, that’s like negotiating in bad faith because you’re taking a chunk of area away that we want to negotiate before we are even done our agreement.
Another thing I would like to point out is that the minister can make the marine protected area unilaterally. At the same time, they can also decide that a marine and energy resource assessment does not have to be done in that area. Therefore, we don’t know what potential is in that area because it is not a requirement. For Tallurutiup Imanga, they had to do a MERA, a mineral and energy resource assessment, so we know what’s there and what we’re giving up. But in this quick process here, it’s not a requirement anymore, so not only would we lose that area but we don’t know what’s in that area that we have lost.
Senator Patterson: You talked about the Tallurutiup Imanga as a good process that has involved the three parties — the Inuit, the Government of Nunavut and Canada. I think it’s going to set up Canada’s largest protected area. I would say Nunavut is already doing its share in marine protected areas.
You mentioned two other proposals that have come your way. One is the strategic environmental assessment I believe in Baffin Bay and Davis Strait. If I understand it right, you are not involved in that. The feds involved you in the Tallurutiup Imanga but not in the results of the SEA process.
And I understand there is a High Arctic basin proposal for a protected area, which covers the oil-rich Sverdrup Basin, the so-called last ice area, which was a pet project of Mr. Gerry Butts when he was with the World Wildlife Federation.
Can you tell me about your involvement, if any, in the High Arctic basin proposal, where that is and how much ocean that’s going to involve?
Mr. Savikataaq: I believe the Tallurutiup Imanga is 109,000 square kilometres. If my memory serves me right, the last ice area, or High Arctic basin, is 209,000 square kilometres, so it’s a huge area. And with that High Arctic hub, it was looking like it would be a unilateral decision between Canada and a Qikiqtani Inuit Association. They’ve been negotiating. We didn’t hear about it until well into their negotiations, and that’s when we said, “No, just slow down the process; we’re not against this, but we want to be part of the process.”
We have negotiated, and we signed an MOU so we can be part of the process in terms of working out on that marine protected area for the last ice.
Like I stated, we’re not against it. We want to be part of the process. We’re the Government of Nunavut and this is our area. And it’s no different from the provinces putting up an argument on their issues if a huge chunk of their coastal area is to be taken away without their consent and almost without their knowledge.
Senator Patterson: There is a quick fix to this. By the way, I think Prince Edward Island is under 6,000 square kilometres, and this area is 200,000 square kilometres, to give everyone an idea of the scale of it.
There is a quick fix to this and that would be to amend the bill to give Nunavut what I think you’ve called a decision-making role in the process. Is that what would satisfy the Government of Nunavut, and is that similar to what the Government of the Northwest Territories is working on?
Mr. Savikataaq: I’m not that familiar with the Government of the Northwest Territories, but we’d like to be part of the decision-making process, both in terms of creating marine protected areas and the prohibitions that may or may not come with what can be done in that area.
I have the paper here in front of me: Tallurutiup Imanga is 1.9 per cent of the total area towards the 10 per cent that Canada wants, and if you add last ice, that’s another 3.8 per cent. That’s over 5 per cent of the total area that Canada wants. We’re only one of 13, but we’d be putting in over 5 per cent of the 10 per cent that would be marine protected areas.
Senator Bovey: Premier, thank you and welcome. I was part of the group that had the pleasure of going to Nunavut this past September. It was a delight from the time we arrived until the time we departed.
I will ask you to clarify a few things for me. I’m getting a little muddled with what happened, when and how. Maybe I’m just too caught up on definitions.
You’ve talked about negotiations and consultations. I wonder if you can correct my understanding. My understanding is that section 31 of the Oceans Act emphasizes the importance of collaboration in the development of plans for integrated management of all activities or measures. Sections 32 and 33 carry on by emphasizing the importance of cooperation with territories governments and bodies established under land claim agreements. I think I’m correct when I say that MP Tootoo and MP McLeod made an amendment to the bill in the House of Commons, so that amendment was in place before it came to us.
I had assumed — and correct me if I’m wrong — that enshrining those agreements was absolutely critical in all of this. If I’m wrong, I would like to know.
You mentioned the recent efforts on behalf of Nunavut and the Qikiqtani Inuit Association and the Canadian government to facilitate a partnership to explore the protections in the High Arctic basin, and you talked about the positive outcomes of the memorandum of understanding. We have examples of what those discussions could be, should be, and we have examples of what has worked.
Can you clarify for me what is missing in the current collaborative measures? I appreciate they may not have been up to, shall we say, the gold standard mark in the past, but I wonder if the most recent agreement, the MOU, really showed a new light, a new way, a new process that can be, ought to be and should be enshrined?
Mr. Savikataaq: I keep saying it — and I may sound like a broken record — but we want to be part of the process. There were some amendments made, but I believe they did not go far enough. The reason they have not gone ahead with creating the hub of marine protected areas is because this bill has not passed yet. That’s my belief. We want to make sure that this is a good bill.
With the High Arctic basin up there, we had to fight to get our point across, so that we would be part of the process.
That’s why we have an MOU now. The MOU is just to start the process of what we want to get done. With Tallurutiup Imanga, there was an MOU long ago. That one went through the process. The other senator talked about the old system, which in my opinion worked. Yes, it took longer, but sometimes there are fewer hurdles if it takes longer because you work out all the bugs before you get to the end. With this new process, you get to the end and then you may have opposition and it may take just as long in the end if there are any court cases.
Senator Bovey: I just wanted to clarify that the process used collectively for the MOU was a constructive, positive process.
Mr. Savikataaq: Yes, it was.
Senator Bovey: So we have an example of a process that works and that respects the needs, the rights and the desired roles of the parties at the table — or in the water, I should probably say.
Mr. Savikataaq: Yes, senator, you are absolutely correct. It is respectful and it works. It’s slower but it works.
Senator Christmas: It is a pleasure to meet you, Premier Savikataaq. I want to thank you for making your position very clear about what Nunavut expects. We certainly appreciate that.
After listening to you, I am beginning to wonder if there is a gap in this bill. I think you alluded to a collaborative approach or a collaborative process that needs to be part of this bill and which is now not there.
In your previous comments — forgive me if I’m putting words into your mouth — you discussed how working groups have been successful in the past in paving the way for that kind of collaborative decision-making approach.
I want your comment on this: If something were to be inserted in this bill that would commit the Government of Canada — at least in your territory, because you do make a strong point that you have the longest coastline in this country — before any kind of MPAs are designated in your waters, that there must be some kind of collaborative structure, like a working group, to identify the areas before any final decisions are made? What would be your thoughts on filling that gap with such an approach?
Mr. Savikataaq: I think that’s a good recommendation as long as we would be part of the process. The working group would have to have Nunavut representation on it.
As I keep stating, we are not against marine protected areas. We want to be part of the process right from when they start figuring out which areas they want to protect and what they want to protect it from. A working group generally works very well; they do all the footwork and then it goes up to the political level. That’s where it starts to take form, once they’ve done their work.
Senator Christmas: Given that we are facing such a tight timeline in that Canada wants to designate this 10 per cent of marine protected areas by 2020, do you think there is still time to establish such working groups and meet the global target?
Mr. Savikataaq: I’m not sure if they will be able to meet their global targets. Those are targets that Canada has committed for the UN, but we are Canada. We are here for a long time and we are a part of Northern Canada. Why should Nunavut waters be targeted the most? If they did that in B.C. or Newfoundland, I am sure there would be quite an outcry. What if they said, “We are going to do this just because we want to meet our targets, and we really don’t care what you want”? That’s the wrong thought process, in my opinion. You want to meet targets, but you want to work with the people who live there, who use the area. You have to have a bit of common sense.
Senator Christmas: Thank you, premier.
Senator Patterson: Premier, we have a made-in-Nunavut regulatory regime for the land as a result of the Inuit land claim. There are co-management boards composed of Inuit, the Government of Nunavut and the Government of Canada, which regulate water, wildlife, impacts of development and the like, as you well know. We recognize, of course, that the Inuit helped establish sovereignty for Canada in Arctic waters and Inuit are a marine-economy people.
I’m wondering what you envisage in the long range as a result of your devolution negotiations for the offshore. What kind of regime would you like to see for management of the offshore? We are taking care of the onshore, I think, very well. It is a model for Canada, with the participation of Inuit and the territorial government. What is the long-range future for the offshore? What is the desirable outcome of the devolution negotiations?
Mr. Savikataaq: With the devolution agreement there, ideally we would have some ownership of it and, like you said, we would have a co-management system where we work with the Inuit organizations and with the federal government. It is not that we want everything. We just want development done at our pace and respecting whether we want it or not. We are here to do the wishes of Nunavummiut. We will do our best for the wishes of the Nunavummiut. But, at times, we have our hands tied because we are a territory. We can only do so much. We are like the little kid who has to have handouts from the federal government. We would like to go beyond that. We would like to become a bigger kid so that we can raise some of our own funds. I think that would be a win-win both for the federal government and for us. It would be the next step in the growing-up process. We are the youngest territory here, and we have to catch up with the rest of Canada.
Senator Patterson: More power to you. Thank you. Qujannamiik.
The Chair: Thank you, premier. It was a wonderful discussion and we certainly welcomed the opportunity for you to propose some recommendations to us. As I said earlier, if there is anything that you think of, after our meeting this evening, that the committee should have in their vault, feel free to send it along to the clerk. We thank you for your time this evening.
Mr. Savikataaq: I will do that. If something comes up, I will send it.
The Chair: Thank you.
(The committee adjourned.)