THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
OTTAWA, Tuesday, June 11, 2024
The Standing Senate Committee on Energy, the Environment and Natural Resources met with videoconference this day at 6:30 p.m. [ET] to examine Bill C-49, An Act to amend the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act and to make consequential amendments to other acts; and in camera, to examine the subject matter of Bill C-50, An Act respecting accountability, transparency and engagement to support the creation of sustainable jobs for workers and economic growth in a net-zero economy (examination of a draft report).
Senator Paul J. Massicotte (Chair) in the chair.
[Translation]
The Chair: Good evening, everyone. My name is Paul Massicotte, senator from Quebec and Chair of the Standing Senate Committee on Energy, the Environment and Natural Resources.
Before we begin, I’d like to remind all senators and other meeting participants in the room about the following important precautionary measures.
To prevent disruptive — and potentially harmful — audio incidents capable of causing injury, all participants are reminded to keep their earpieces as far away as possible from all other microphones at all times.
As indicated in the communiqué from the Speaker to all senators on Monday, April 29, the following measures have been taken to help prevent audio feedback incidents.
All earpieces have been replaced by a model that significantly reduces the likelihood of audio feedback incidents. The new earpieces are black, whereas the former earpieces were grey. Please use the approved black earpieces only.
By default, all earpieces not in use at the start of a meeting will be disconnected. When you are not using your earpiece, please place it face down in the centre of the sticker affixed to the table, as shown in the image. For information about the guidelines on preventing audio feedback incidents, please consult the cards on the table.
Please ensure that you are seated in a way that creates as much distance as possible between microphones. Participants must plug their earpiece only into the microphone console directly in front of them. These measures have been introduced to ensure that we can carry out our activities without interruption and to protect the health and safety of all participants, including the interpreters.
Thank you all for your cooperation.
I would now ask my colleagues to introduce themselves, starting on my right.
Senator Verner: Josée Verner from Quebec.
Senator Miville-Dechêne: Julie Miville-Dechêne from Quebec.
[English]
Senator Petten: Iris Petten, Newfoundland and Labrador.
[Translation]
Senator Aucoin: Réjean Aucoin from Nova Scotia.
[English]
Senator Manning: Fabian Manning, Newfoundland and Labrador.
Senator Prosper: Peter Prosper, Nova Scotia, Mi’kma’ki territory.
Senator MacDonald: Michael MacDonald, Cape Breton, Nova Scotia.
Senator McBean: Marnie McBean, Ontario.
Senator Gold: Marc Gold, Quebec.
Senator Wells: David Wells, Newfoundland and Labrador.
Senator Arnot: David Arnot, Saskatchewan.
[Translation]
The Chair: Today, we are beginning our study of Bill C-49, An Act to amend the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act and to make consequential amendments to other acts.
For our first panel, we welcome the Honourable Jonathan Wilkinson, P.C., Minister of Energy and Natural Resources, accompanied by Abigail Lixfeld, Senior Director, Renewable and Electrical Energy Division, Annette Tobin, Director, Offshore Management Division, and Daniel Morin, Senior Legislative and Policy Adviser, Natural Resources Canada.
We are also joined by Christie Chute, Senior Director, Programs Sector, Marine Planning and Conservation, Department of Fisheries and Oceans Canada.
Finally, we welcome Lori Macadam, Director, National Marine Conservation Area Establishment, Parks Canada.
Welcome, minister, and thank you and your colleagues for accepting our invitation. You have ten minutes for your opening remarks.
[English]
Hon. Jonathan Wilkinson, P.C., M.P., Minister of Energy and Natural Resources: Thank you.
Senators, I’m certainly pleased to be here to discuss Bill C-49, the Atlantic Accords amendments act.
[Translation]
We talk a lot these days about climate change. Climate change is altering our planet’s environment in a host of negative ways.
We saw this last year in Canada when we experienced our worst wildfire season on record.
Last year’s forest fire season was highly instructive. It gave us a glimpse of what the future holds unless we manage to fight climate change.
[English]
At the same time, climate change is also rapidly transforming the global economy and global finance in ways that are creating enormous economic opportunities for those who approach the transition to a low-carbon future in a thoughtful, determined and focused manner. As I said recently to some of your colleagues studying Bill C-50, the sustainable jobs act, the global energy transformation is both an environmental imperative to protect the planet for future generations and an economic opportunity on a scale similar to the Industrial Revolution.
For Canada to seize the extraordinary economic opportunities created by a transition to a net-zero economy, we must first accept the scientific reality of climate change and ensure that this informs and shapes Canada’s economic strategy. It is a choice that is being made by many of our allies and partners.
In the summer of 2022, President Biden signed the Inflation Reduction Act into law, representing the most significant action our neighbours to the south have taken to fight climate change and massively expand green industrial investments.
The European Union, the United Kingdom, Japan, Australia and many others have put into place strategies for accelerating clean industries such as hydrogen, renewable energy, critical minerals, nuclear power, carbon management technology and more.
This global transformation is increasingly a significant competitive pressure, as countries, including China, have invested massively to build a low-carbon economy while securing major market share in global supply chains.
Canada has developed an economic strategy for securing prosperity in a low-carbon future that is, in part, focused on seizing those opportunities that will be enabled through the energy transition. One of these opportunities is hydrogen.
Hydrogen represents a major enabler for decarbonization domestically and a major opportunity for the export of energy. On the East Coast, the hydrogen opportunity is focused on harnessing the wind resource that exists in Newfoundland and Labrador and in Nova Scotia. With the longest coastlines in the world and wind speeds rivalled only by the North Sea, where the offshore wind industry was born, Bill C-49 will ensure Nova Scotia and Newfoundland and Labrador seize this immense opportunity by enabling the development of an offshore wind industry. Globally, this industry is forecasted to be worth $1 trillion.
To quote Dr. Peter Nicholson, who will probably be familiar to many of you, who said when discussing Bill C-49, “. . . we have here a national opportunity of historic proportions . . .” and “a project of national significance.”
Bill C-49 was developed in close partnership with the governments of Nova Scotia and of Newfoundland and Labrador. Adhering to the principle of joint management under the accord acts, every period, every comma and every word have been developed with and agreed upon by the provinces. Every province will also pass mirror legislation should Bill C-49 be adopted.
This legislation will ensure a modern, clear and robust regulatory regime for offshore renewable energy and do so in a manner that effectively considers vital fishing interests, supports Indigenous communities and protects the environment.
The bill makes amendment to the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act. The key amendments include leveraging the world-class expertise and the commitment to environmental protection of the existing offshore boards. I know one of your members has significant experience with the offshore boards. This bill will expand their mandates to regulate the entire life cycle of offshore renewable energy projects.
Consistent with existing case law and current practice, this bill recognized that the government may rely on established assessment and regulatory processes to fulfill the Crown’s duty to consult and accommodate any adverse impacts if appropriate. This is, of course, in addition to other avenues of consultation such as those through impact assessments.
Third, it recognizes the importance of Atlantic Canada’s fishing industries, ensuring they are thoughtfully considered when assessing proposed projects. We further strengthened this by adopting amendments that affirm the government’s intent to consult fishing activities throughout the submerged land licence issuing process.
Fourth, the bill modernizes aspects of the land tenure process so they are aligned with new technologies and global best practices, including by limiting the duration of a significant discovery licence to 25 years.
Finally, the bill will expand the application of occupational health and safety regimes to offshore renewable energy projects, and it also extends the regulatory and liability regime for abandoned facilities.
Senators, we can effectively fight climate change while concurrently creating good jobs, prosperity and economic opportunity in all parts of this great country. Bill C-49 is a key element of doing this for the provinces of Nova Scotia and Newfoundland and Labrador.
With that, senators, I certainly welcome your questions and your comments. Thank you very much.
The Chair: Thank you very much, minister. We will go to questions now.
Senator Arnot: Thank you, minister, for coming today.
Minister, concerns have been raised about the consultation processes with Indigenous communities and the use of the word “may” in the legislation. Has that meaningful consultation occurred, in your opinion? Do you believe Bill C-49 ensures meaningful consultation and collaboration with Indigenous communities in Newfoundland and Labrador and Nova Scotia, particularly in light of the fiduciary duty?
Second, are you aware of specific measures to guarantee that Indigenous persons will have access to the incredible employment opportunities generated by this bill?
Mr. Wilkinson: Those are excellent questions, senator.
With respect to engagement and consultation, there was significant engagement with Indigenous communities in the development of this bill. Together with the governments of Newfoundland and Labrador and of Nova Scotia, we sent letters out to all Indigenous communities to engage in that conversation in 2022. They were again sent out in May 2023.
There were a number of communities that came back and engaged in those processes, and that has been helpful in the context of moving this forward.
But in terms of engaging things like the protocol, which is of significant interest to some of the senators here, the regional assessments — all of the project-specific environmental assessments — actually engage the duty to consult. That means they engage the protocol, so there will be robust engagement for any particular project moving forward.
In terms of the employment opportunities, yes, many of the projects already have equity participants that are Indigenous communities. There are five in Nova Scotia alone. Some of the things we have done recently in the budget, where we created the Indigenous loan guarantee program, which is a $5-billion program, are actually about enabling access to equity to invest in exactly these kinds of projects.
Senator Arnot: My second question is this: Minister, can you comment on the synergy between Bill C-49 and Bill C-50 in terms of transitional job opportunities?
Mr. Wilkinson: Bill C-50, as you know, is about setting up a framework to ensure accountability and transparency to have plans as to how we are actually going to move forward to create jobs and economic opportunities in all provinces and territories in this country in a low-carbon future. Pieces of that are essentially the specific opportunity areas where Canada believes that it actually either has or can create a comparative advantage in the world and can actually be a provider of either products or technologies, not just domestically but internationally.
This bill, which is really about enabling offshore electricity development for the purpose of, yes, generating electricity, but a lot of it is about generating hydrogen, is one of those areas where we actually see enormous opportunity. If you saw Dr. Nicholson’s comments in the report that was released, just one of these projects in Nova Scotia, he says, will create 30,000 construction jobs — one project.
Senator Arnot: Thank you.
Senator Manning: Welcome, minister.
Bill C-49 does not provide details on potential compensation for members of the fishing industry who might be excluded from offshore areas due to renewable energy project approvals, such as for wind farms. On May 30, 2023, a CBC News article mentioned a public statement by the chief executive officer of the Canada-Nova Scotia Offshore Petroleum Board, who explained at the time that the terms and conditions were such that seabed licences and compensation schemes were being determined by the federal and provincial governments.
Can you enlighten us on any recent developments, if any, that have taken place with regard to the compensation scheme for fisheries? Would the compensation process involve third parties, such as wind farm developers?
Mr. Wilkinson: That is an excellent question, senator.
The concerns of fish harvesters are extremely important. As a former fisheries minister, I take those concerns very seriously.
It is very important that we have mechanisms in the context of looking at specific projects such that the voices of fish harvesters are heard in that context. There was an amendment in the House that relates to ensuring fish harvesters have a voice in the context of submerged licence discussions. Fish harvesters are involved in the regional assessments, but they will be involved in any specific project assessment, which would trigger — if there are impacts — the discussion around compensation.
I don’t know if my officials want to add anything to that.
Abigail Lixfeld, Senior Director, Renewable and Electrical Energy Division, Natural Resources Canada: I would add that in the context of a specific project and in further conversation with the provinces of Nova Scotia and of Newfoundland and Labrador, that is really the appropriate place for discussions for potential compensation to take place.
The approach we have taken in the development of the bill is around cooperation and coexistence to find ways to ensure that fishing activities can continue to thrive alongside offshore renewable energy development, to mitigate any potential impacts on fishing through the regulatory process and then, as a last resort, to ensure there is compensation required. That is something that is, generally speaking, squarely within the remit of the developers themselves.
Senator Manning: The proposed section 56 in the bill puts any and all offshore areas at risk of being rendered unusable for resource development, even though such activities may be under way through an appropriate regulatory approval. This is according to Max Ruelokke, who is a professional engineer and has been active in the Newfoundland and Labrador oil industry since 1980. What’s your response to that?
Mr. Wilkinson: As you will know very well, senator, the accord acts function in such manner that there has to be agreement between the province and the federal government for any actions to take place. It’s a dual-key system; it always has been, and it will remain that way.
Our view is that conservation is important, and there are some particularly important areas from a biodiversity perspective. I think all Canadians agree on that, in an era where biodiversity is declining in Canada and around the world. However, it has to be done in a manner that also acknowledges the important role that industry plays in creating jobs and economic opportunity.
There is a marine protected strategy that exists for marine areas as well as for terrestrial areas, but in terms of where those things actually end up going, that is a discussion between the federal government and the provinces. We both have to agree upon that. We’ve been having those conversations for many years now.
Senator Manning: So the provinces will be part and parcel of that decision making at all times?
Mr. Wilkinson: Yes, absolutely.
[Translation]
Senator Miville-Dechêne: Welcome, minister. How do you think that Bill C-49 can promote the development of new energy sectors — I’m thinking of wind turbines — without affecting marine biodiversity? According to the U.S. Geological Survey, offshore wind turbines adversely affect marine mammals via collisions, noise pollution, habitat loss and reduced reproduction. Renewable energy development and wildlife are both important. How are you going to balance the two?
Mr. Wilkinson: It’s important. We have to think about ways to protect species, especially endangered species like whales and others. Of course, this industry can’t operate in certain places, like marine protected areas, for instance. Many states have offshore wind energy industries in areas where protected species live. We need to ensure that we keep these two important aspects in mind as we perform our work. We need more electricity, but we have to think of ways to protect species too.
[English]
Senator Miville-Dechêne: When you said, “There are many states . . .,” were you talking about American states?
Mr. Wilkinson: No, like the United Kingdom, for example.
Senator Miville-Dechêne: Okay, thank you.
Senator Gold: Welcome, minister. It is nice to see you.
Minister, Bill C-49 clarifies that both the federal and provincial governments are entitled to rely upon the existing regulatory processes of the regulators to fulfill the Crown’s duty to consult with Indigenous peoples. As you know, the regulators are responsible to the federal government and to the respective Crown; in this case, these are the governments of Nova Scotia and of Newfoundland and Labrador. They are responsible for administering the provisions of the accord acts on their behalf.
Can you and your officials elaborate as to not only how this reflects current practices and relevant case law but how it will continue to ensure that the perspectives of affected Indigenous groups will be appropriately heard and considered going forward, in keeping with section 35 of the Constitution Act, 1982?
Mr. Wilkinson: Thank you, senator. I would say it is consistent with existing practice, certainly consistent with the way in which we have done joint management, but it’s also consistent with other regulators, including the Canada Energy Regulator, in terms of being able to rely.
It’s also consistent with existing case law. As a former law professor, you know, I believe, the two respective decisions are the Clyde River and the Chippewas of the Thames First Nation cases, which underline the ability to rely. It’s not that you’re devolving the responsibility, but you can rely on these regulatory processes, and that’s how we do it in other areas, not just this.
Senator Gold: Going forward then, minister, what responsibility does the government have to ensure that the appropriate perspectives of affected Indigenous groups are being properly taken into account?
Mr. Wilkinson: We obviously do have a responsibility. It is in part through the work of this particular framework piece of legislation, but I would say it’s particularly true in the context of where the rubber hits the road. It’s on the regional assessments and the project-based assessments that have the potential to actually impact section 35 rights.
In that context, there is a duty to consult and accommodate if required, and that is something that this government takes very seriously, but so do the courts of law.
Senator MacDonald: Thank you, minister, for being here.
The promise of many jobs is welcome in Nova Scotia, but we have a very important and lucrative fishery in Nova Scotia, and those jobs are important as well. I grew up in a fishing community, and most people on the coastline in Nova Scotia grew up in fishing communities.
The commitments on the order of five gigawatts, which translates to thousands of square kilometres of ocean space occupied by wind farms, why doesn’t the bill pay heed to the cumulative effect on the fishery from wind farms as large as the ones being proposed for Nova Scotia’s offshore and how they may impact the fisheries in the entire region?
Mr. Wilkinson: Again, a great question. Let me just say a couple of things. Certainly, this government and I personally, having held the role of Minister of Fisheries, have to be very strongly cognizant of any impacts on the fishery. I certainly remember very keenly some of the interactions I had with fish harvesters in Nova Scotia and in Newfoundland and Labrador.
I would also say that the provincial governments also, obviously, have an interest in ensuring that we are addressing the issues that are raised by fish harvesters, and certainly Premier Houston as well as Premier Furey have been strong supporters of this legislation, but the cumulative effects issue is really important.
It’s important in many contexts, but where you actually get at the issue of cumulative effects is in the regional assessment. My expectation of the regional assessments is there are going to be areas where they simply say that this is not appropriate for the development of offshore wind, that there are areas that are more appropriate. Some of the rationale behind that, I would expect, may involve the fishery. I don’t want to prejudge what the independent committees are actually doing, but the regional assessment is exactly where they are supposed to look at issues around cumulative effects.
Senator MacDonald: Where there’s an area that’s suitable for a fishery and suitable for wind generation, which one is going to get priority? Which one will be supported?
Mr. Wilkinson: I think the work that will be done, and this is obviously going to be case by case in terms of the particular sensitivities, particularities of the area, but the idea from the get‑go would be to try to find ways to ensure that you can actually do both. If the answer is you can’t, then you’re going to have to make a choice. But ideally, you can find ways that you can actually live together. There are, as I say, many jurisdictions around the world where a healthy fishery exists alongside a healthy renewable energy industry.
Senator Prosper: Thank you for being here, minister. I wanted to thank you for your letter of June 10 that was cc’d to my office and which outlines a number of things with respect to the extent of consultation engaged with Indigenous peoples, the Mi’kmaq within Nova Scotia, and it gets further into other Mi’kmaq within the Atlantic as well.
I posed a question to Senator Gold in the chamber, and he basically referred me to direct this question to you. It’s a similar question.
On the website for the Nova Scotia’s Office of L’nu Affairs — the provincial equivalent to Crown-Indigenous Relations and Northern Affairs Canada and Indigenous Services Canada — the office states:
On August 31, 2010, after a three-year pilot period, the thirteen Mi’kmaq communities through the Assembly of Nova Scotia Mi’kmaq Chiefs signed an historic agreement with the Governments of Canada and Nova Scotia. The Mi’kmaq-Nova Scotia-Canada Consultation Terms of Reference lays out a consultation process for the parties to follow when governments are making decisions that have the potential to adversely impact asserted Mi’kmaq Aboriginal and treaty rights. . . .
I met with your officials to get briefed on this bill, and all they could say to me was that they sent some letters out to the communities. This, as you know, is following the protocol set out in 2002 under the Umbrella Agreement. This was confirmed to me in a June 4, 2024, letter from Chief Sidney Peters, who is Co-chair of the Assembly of Nova Scotia Mi’kmaw Chiefs.
I’m surprised to learn about this oversight given your government’s commitment to nation-to-nation relationships with Canada’s Indigenous people, as well as true reconciliation with First Nations people.
Minister, can you please explain to me why your department failed to follow the consultation terms of reference that your government, Canada, as well as the province of Nova Scotia, are signatories to? Thank you.
Mr. Wilkinson: Thank you, senator. I certainly appreciate your thoughts and your questions.
What I would say is the work that was done with respect to this bill was to attempt to engage Mi’kmaq communities across Nova Scotia, and as my officials would have explained, there were letters that were sent out in 2022 inviting conversations, and then there were letters sent out again in 2023. There were a number of communities that actually came forward to have those conversations, to have input into the framing of this piece of legislation.
Those were engagement, but in terms of consultation, which is what you’re talking about with respect to the tripartite terms of reference, those will be engaged through the regional assessment and through the project-specific assessments because they certainly bring into play section 35 rights. So, there will be a broader consultative process. This was really engagement in the context of structuring a piece of legislation.
Senator Prosper: Thank you. Given that you’re saying that consultations are more specific to regional assessments and project-specific engagement, does that mean you don’t see any consultation duty owed by your government with respect to legislation to Indigenous peoples?
Mr. Wilkinson: My officials may want to speak to this, but it is very clear that there are consultation obligations associated with things such as regional assessments where there can be impacts on rights, but the Supreme Court has been clear with respect to the development of legislation that doesn’t engage the same thing, and so it is more of an engagement process. It was a reasonably fulsome engagement process, particularly with some of the communities who took us up on it.
Senator Prosper: I guess that’s questionable. I tend not to agree that it was fulsome. My reading of the law is there exists at least some element of the consultation duty with respect to legislation. It does impact rights-related issues, so thus it triggers that duty, but I’ll defer to your adviser.
Mr. Wilkinson: The only other thing I would say, senator, and you would be well aware of this, is that many of the Mi’kmaq communities — it’s an adjacent issue; it’s not directly to you but to the point you made — are actually equity participants in many of these projects, the hydrogen projects.
Senator Wells: Thank you, minister and officials, for coming.
Minister, clause 28 of Bill C-49 gives the federal minister the authority to ban drilling in certain areas — drilling for, obviously, petroleum resources — and to suspend ongoing projects, which obviously would result in significant job losses, harm to the economy and stifling investment, which I understand may be the point.
Why is clause 28 in this bill when it has absolutely nothing to do with wind energy?
Mr. Wilkinson: Let me just say a couple of things, and then I will turn to Abigail Lixfeld.
There is absolutely nothing in this bill that is about stifling the development of energy in Newfoundland and Labrador. I think it’s a bit disingenuous to suggest otherwise.
Senator Wells: That section is still there.
Mr. Wilkinson: Fair enough. There is nothing in this bill that allows the federal minister to actually take action without the agreement of a province and territory. With respect to the specifics of clause 28, do you want to say a couple of words, Abigail?
Ms. Lixfeld: I’d actually defer to my colleague Annette Tobin.
The purpose of Bill C-49 does a number of things. In addition to expanding the mandate of the offshore regulators to include renewable energy, it also provides an opportunity to update the legislation, which has largely been untouched since first introduced almost 35 years ago, to reflect certain changes that have evolved over time. Providing and clarifying tools with respect to marine protection and the role of each minister in the unique context of joint management was something for which we sought the opportunity and had the support of the provinces to do through Bill C-49.
Senator Wells: Thanks for that. With that provision in there and the ability of the minister to suspend ongoing approved projects that would have production, let’s assume there is a lawsuit, which obviously I think there would be, and the payout could be in the billions of dollars because it’s opportunity costs as well as investment to date in the capital — significant for the offshore in Newfoundland and Labrador. Who would be on the hook for paying that liability?
Mr. Wilkinson: I’m not sure of a universe in which any minister, federal or provincial, is going to do something like that. What I would say is that would be a decision that one would have to come to in conjunction with the relevant provincial minister, and there would have to be some pressing reason as to why one would do something that normally wouldn’t make much sense.
Senator Wells: So, if you can’t see in the universe why it would happen, why is it in there under clause 28 of the bill?
Mr. Wilkinson: Do you want to speak to that?
Annette Tobin, Director, Offshore Petroleum Management Division, Natural Resources Canada: Yes, hello. Clause 7 of the bill confirms that any regulation made under the accord acts, including that section you reference, is done jointly. There’s no scheme here where one level of government could create a regulation to prohibit petroleum activity or to take a decision to cancel an interest and to compensate for that.
As we had said in a brief a couple of weeks ago, this was really to provide for a tool that does not currently exist in the accord acts created in 1985. You can do a word search. There’s nothing on marine conservation. It was recognized that there could be instances where under the accord acts you would want to prohibit activity in a particular part of the offshore area, and you would want that decision done jointly, consistent with the spirit of joint management.
Senator Wells: Sure.
[Translation]
Senator Aucoin: Thank you, minister.
I come from Cape Breton, a coastal fishing village. I know that my colleagues have asked some questions about the fisheries, and you said that fishers would be consulted. From what I understand, by the time the project gets under way, the fishers will have given their consent.
What guarantee will there be, during and after construction, that fishers will remain part of the discussion, as necessary?
Mr. Wilkinson: Of course, the interests and perspectives of fishers are very important, not only to the assessment process, but later on too.
If any problems arise, we have other legislation, like the Fisheries Act, that we need to follow, and fish species are protected. We can assure you that the project must function within a framework.
Senator Aucoin: You may have answered the question from Senator Manning, but as for the compensation paid to fishers, has anyone thought about whether it would include incidents, debris or disruptions of the fishery, especially during construction? In fact, considering such things after the project ends is one thing, but it’s important to pay attention to them during construction too. That could include a much larger region, or it could mean that fishers can no longer go to another large region later. Has all of that been considered?
Mr. Wilkinson: Yes, a framework is in place to ensure that compensation is provided when fishers are impacted.
Senator Aucoin: Thank you.
[English]
Senator Petten: Thank you for being here this afternoon, minister. I want to talk to you about the economy. I know that you’ve been touting this bill and its positive impacts on the economy. Can you elaborate a little bit more on some of those positive impacts?
Mr. Wilkinson: Yes. The world is changing and evolving because the science of climate change tells us that we must if we want to leave a habitable world for our children and grandchildren. In that context, there will be different opportunities that arise that are associated with helping us move through the energy transition.
One of those opportunities is hydrogen. That is for the purpose of decarbonization, particularly industrial decarbonization, but it is also about actually helping our friends and allies who don’t have the kinds of resources we have in Canada, whether that’s wind on the East Coast or natural gas and the ability to sequester carbon on the West Coast.
There is a chance for us to create jobs and economic opportunities, particularly in rural and coastal communities, which are actually going to be a source of prosperity moving forward. It is an enormous economic opportunity for these two provinces as we move forward. I think you hear that from both of the provincial premiers: one, who is a Liberal, and the other, who is a Conservative.
Senator Petten: I remember when I first started looking at this bill, there was the issue of the onshore opportunities, whereas this bill is about addressing the offshore. Could you address that? Sometimes when we talk about fisheries and some of these impacts, it’s more about the onshore wind energy that’s happening. I just wondered if you could clarify that.
Mr. Wilkinson: Yes. The regulation of onshore wind is the purview of each of the provinces. They have their own regulatory regimes. They obviously have to respect certain federal laws, particularly the Fisheries Act, as they implement those kinds of things. That is not just true onshore, though. It’s also true in the bays, which are provincial jurisdiction. In the case of Newfoundland and Labrador, we have an agreement with them that the bays actually extend to the jaws of land. The bays are actually a bit bigger in Newfoundland and Labrador in terms of where their jurisdiction holds. They clearly are going to have to be very sensitive to some of the concerns that people raised here as they think about developing it.
The onshore and potentially the bays are going to be first. They will happen before offshore wind. We are just putting in place the regulatory structure for offshore wind that enables us to move and take the next steps that include the regional assessments and, ultimately, individual project assessments and the bids for land tenure. It is going to be very important that we are all very focused on ensuring that the practices that we’re talking about here, from a joint management perspective, are also replicated at the provincial level.
Senator Petten: Is that the same for Nova Scotia as well?
Mr. Wilkinson: It is. The bays are provincial, but they have not gone so far as to ask us to do something around the jaws of land, so the bays are a little bit smaller.
Senator McBean: I have been going back and forth; I have two questions and I’m going to go with door number one.
Senator Petten was just asking you about the assessments and what’s going on. There has been discussion from Senator Miville-Dechêne and Senator MacDonald about considerations of managing the impacts and balancing things.
Bill C-49 aims to streamline approvals on this, so I want to bring in the timing of it. Bill C-49 aims to streamline approvals, and some could argue that this is going to come at the expense of the environmental assessments and the consultations and whatnot. How will this bill ensure a balance is struck between the efficient project approvals and the robust consultation and environmental reviews that look into the long-term planning?
Mr. Wilkinson: That is an excellent question. I would say this whole issue of the balance is not a simple one. It has particularly been highlighted in terms of how problematic it can be in the context of the race we are engaged in to try to actually mitigate carbon emissions in line with what science tells us we need to do. That tells us, for example, that we need to develop a whole bunch more critical minerals, but that means a whole bunch more mines. So how do you actually manage the environmental impacts, and how do you balance all of these things? It tells you you have to go fast.
In the context of this, this is really an enabling framework. It doesn’t speak so directly to how we actually expedite the development of these kinds of projects, but it does enable a framework through which we will be doing the regional assessments and the individual project assessments. There, we are having exactly those conversations, which are about how we think about being able to go more quickly than we have in the past but doing so in a manner that doesn’t cut corners from an environmental perspective and certainly doesn’t cut corners from the perspective of consultation and engagement with Indigenous communities. That’s something the government has been talking about and working on now for some time. There was a cabinet committee — a working group — on these issues. I think you will see something from us very soon that tries to lay out a bit more of a framework to address exactly the issues you’re raising.
Senator McBean: We’re talking about the potential of all the opportunities. While Bill C-49 focuses on Atlantic Canada, could it serve as a national framework for regulating future offshore renewable energy projects in areas like the Pacific Coast or — I’m from Ontario — the Great Lakes? If so, are there provisions within the bill that allow for adaptation based on regional, environmental and economic considerations?
Mr. Wilkinson: That’s a very good question. It’s funny because I’m an MP from British Columbia, and I’ve had people ask me exactly that question — why not B.C.?
Yes, I think there are a lot of learnings that could come from this bill. It’s probably a little bit different in other contexts because we don’t have the accord acts anywhere but in Newfoundland and Nova Scotia. Certainly, I think there are elements of this that could apply to other parts of the country should they be interested in going down this path.
I would also say that, to date, I have not had any of the other provinces approach me about actually developing something that could approximate this. If British Columbia reached out and said they actually wanted to put in place something akin to this, would we be open to it? Sure, but I would also say that because the accord acts are there, the appropriate regulator is probably the Canada Energy Regulator, and there’s probably something we can talk about with B.C. or others under that.
Senator McBean: Like Ontario. Okay.
Senator Anderson: Thank you, minister.
My question centres around consent and engagement to get a bit more clarity on what you said. There’s a common theme with new legislation that I’ve run across in my last five years here with the Senate. It’s the lack of consultation and engagement with Indigenous peoples once that legislation is on the floor. It’s very common. It happens with almost every piece of legislation that comes to us.
In your statements, you spoke about significant engagement. To me, “significant” means something much larger than a letter. Can you please explain, clarify and elaborate on your statement regarding your significant engagement and the letters you mentioned and how you engage protocol? Can you please tell us what exactly is that protocol?
Mr. Wilkinson: Let me just say a couple of things, and then I will turn to the officials who were actually part of the process.
There was engagement in the context of the legislation. As I said, there were a couple of different letters sent to all the relevant communities, and there were conversations with a number of the communities directly. Certainly from a consultation perspective, there will be significant consultation. There already is consultation through the regional assessment, but there will also be on any project-specific assessment because those actually engage section 35 rights that require deep consultation and accommodation.
Ms. Lixfeld: The letters that were sent were issued prior to the bill’s introduction, when it was still in the concept stage. They outlined the government’s intent and what we were thinking. Those letters were developed and issued jointly with each of the respective provinces, recognizing the bill is a jointly managed piece of legislation.
The government also launched the regional assessments for offshore wind, and the Minister of Environment and Climate Change has been quite active in engaging communities all across Atlantic Canada to speak about how this legislation will create an offshore renewable energy industry and to talk about some of the potential considerations that governments need to keep in mind.
In subsequent follow-ups with communities, we also discussed the bill’s progress through the parliamentary process and acknowledged that there would be opportunities for robust participation in the parliamentary review committee. Some communities did participate. They either wrote letters or participated in the hearings. I understand that you will be hearing from the provincial ministers as well. I imagine their governments have also undertaken direct engagement throughout that process.
Senator Anderson: There are lots of words thrown around, like “substantive” — that you’ve had this engagement. You speak about people who responded. Do you have records of who responds? Do you give numbers of how many people have responded and where they’re from? Because that information is much more helpful in understanding exactly the context and nature of your consultation.
It sounds like you’ve had lots of engagement and consultation with the respective provinces. At what point do Indigenous peoples become involved at that level? Because as Indigenous peoples, as soon as we read this legislation, we know the impact it’s going to have on us as peoples. So I fail to understand how the legislation is not seen in the same context as Indigenous peoples see it.
Ms. Lixfeld: I believe that in the letter that was sent on June 10, there is a list of the engagements that had taken place and specific reference to the communities that did participate. That information is available in terms of the discussions that took place in the development of the legislation.
As Minister Wilkinson noted, when it comes to the actual application of the legislation — when we’re talking about implementing this framework — there are a number of tools that governments must use before we even get to the point of considering a specific project. That is where the duty to consult really becomes paramount.
The Chair: Thank you.
Minister, if I could, I’ll ask you a question. As you know, we spent a lot of time several years ago on the impact studies and the whole issue. The Supreme Court recently came back and said you guys have an overreach — you’re offside — and, therefore, you have to make amendments. You did make amendments, and you now have a revised draft. In this room, if you look at the response from Alberta and other provinces, they’re not impressed. They’re quite upset and are saying that this is ridiculous. You’ve spent all this time, and you’re nearly right back to where you were.
Now we have new legislation coming up — the one we’re talking about, Bill C-49 — and there are also impact studies within that context. Is that also going to be a refusal by the provinces because they don’t like the approach the federal government used, or is this an exception?
Mr. Wilkinson: No, I don’t think so. Bill C-49 basically just replaces outdated references to the previous legislation, which was the Canadian Environmental Assessment Act, 2012. It clarifies how the offshore boards will work with the Impact Assessment Agency. But the amendments we have proposed in the budget implementation act to address some of the concerns the Supreme Court had actually don’t affect Bill C-49 at all. These are largely administrative. I don’t see those two as being related. I probably would have a slightly different interpretation than you in terms of the amendments to the Impact Assessment Act, which I actually do think fulsomely address the requirements of the Supreme Court, but that’s my view.
Senator Gold: Minister, as I read it, this legislation really represents cooperative federalism at its best. Can you please share with us why both the Province of Nova Scotia and the Province of Newfoundland and Labrador are supporting this legislation? Why is timely adoption important, especially in light of the need for both provinces to enact mirror legislation once Bill C-49 has received Royal Assent?
Mr. Wilkinson: Senator, let me start with why it’s important that we do this expeditiously. The world is moving, and Canada is not alone. There are others looking to seize the opportunity, particularly related to hydrogen. If they get there well in advance of us, that’s probably our loss. That’s our friends to the south, Australia, Qatar — it’s a whole range of other countries.
The need for speed is important in that context and also in the context of decarbonization. Germany can’t meet its emissions reduction targets unless it actually has a reliable source of hydrogen, so that is really important. It is, as you said, a great example of cooperative federalism that we have two provincial premiers who do not share the same political stripe saying we need this and we need it now; we need to get it done. They speak in fairly eloquent tones. The minister in Nova Scotia, who is a member of the Conservative Party, said:
In years to come, I think people are going to look back at this. Once this gets moving along, once Bill C-49 is passed, people will look at this decades from now and say, “Here was a move that made Nova Scotia a capital of renewable energy in the world.”
That is the way the two provincial governments think about this, and we think about it the same way. We have worked in lockstep, as folks know, on the Atlantic Accords. Every period and every word were negotiated, and they need to introduce exactly the same legislation — not one word can be different — into their legislatures once we are done here.
It is an enormous opportunity. It’s something that crosses party lines. We all recognize it. I talk to Premier Houston and Premier Furey about this very frequently. It is a big step forward, and we need to ensure that we seize it.
Senator Gold: Thank you. Do I understand correctly that, at least with regard to Nova Scotia, they are waiting both eagerly and anxiously because they had hoped, in fact, to be starting to work on their mirror legislation had we been able to get this over the finish line before we rose? We can’t, but am I correct in thinking that time is really of the essence for them in terms of how they see the projects that they’d like to get online getting online?
Mr. Wilkinson: Yes. Premier Houston, I think, would like to move this into the provincial legislature this fall. The idea is to actually get into a position to have some kind of a call for bids process in 2025. It’s part of the plan that he has announced in terms of development of this industry in Nova Scotia. It’s part of our work to meet the needs of Germany. I have been meeting with the Germans. I was there a month and a half ago, and we will be having more conversations very soon. Germany is anxious to see us move forward and have comfort that we’re going to be able to meet their needs. Yes, the timing is really important.
Senator Wells: On that, you’ll recall that German Chancellor Scholz came to Canada looking for natural gas a couple of years ago and was denied, saying there was no business case for it.
My question is not on that. Senator Gold mentioned cooperative federalism. We understand that’s a good thing. It’s great in Canada. But the federal minister — and this goes back to Senator Manning’s question on the cooperation between the federal minister and the provincial minister — still maintains an absolute veto over any projects in the Newfoundland offshore area. They both have to sign off on it.
Mr. Wilkinson: The federal minister cannot veto something without engagement with the province.
Senator Wells: I shouldn’t have used the word “veto.” They can simply decline to sign.
Mr. Wilkinson: These are typically dual-key solutions. As you will be aware, with your history with the offshore board, the province and the federal government work collaboratively on these issues on an ongoing basis.
With respect to the comment on liquid natural gas, I would refer you to Premier Higgs. We worked very closely on that issue for a long time. It was Premier Higgs and the companies that came to the conclusion that shipping gas from Alberta through the United States with the upgrades simply didn’t work. There’s a business case, but it’s on the West Coast, not on the East Coast.
Senator Wells: Yes. Of course, in Newfoundland and Labrador, we don’t need pipelines, tankers or rail. We just ship it to the closest supply point in North America to where the market is. It’s a different business case in Newfoundland.
Mr. Wilkinson: Yes.
Senator Wells: I’ve read the memorandum of understanding, or MOU, between the federal government and the Newfoundland and Labrador government. I don’t know if the Nova Scotia one is the same. I’m assuming the MOU is attached to the bill in some way. If that’s the case, can the MOU be changed in the future without resorting to changing the legislation?
Mr. Wilkinson: On the mechanics of that, I will turn to one of you, folks.
Ms. Lixfeld: Yes, the regulatory area or the regulatory boundary is going to be given effect through regulations under the amended accord acts. Bill C-49 passing will enable us to actually demarcate where the offshore regulator operates and where the province will be operating.
It’s hard to know what the purpose of the MOU is once that exercise has been done, because it will set out that the province is regulating within the bays, and outside of the bays, it is the joint management area. It’s a fair question, but I’m not sure what the purpose of the MOU will be once its function has been completed.
Senator Wells: For instance, there are 16 bays listed. What if the province wanted to add another bay? Would they have to go through the legislative process or the MOU process?
Ms. Lixfeld: It could be done through regulations under the accord acts.
Senator Arnot: Minister, I’m just wondering about security issues in this context. The bill contemplates federal and provincial negotiations. It also contemplates critical international negotiations, the collision of boundaries and the exclusive economic zone. How confident are you that the provincial and federal governments and the regulators proposed in this bill will be prepared to act in light of global security issues?
Mr. Wilkinson: There are probably a couple of different levels to that. The underpinnings of this bill are very much focused on global energy supply and energy security issues. This is about working to try to address some of the needs that our European friends have to enable them to continue to actually move away from the utilization of Russian natural gas and, ultimately, the utilization of natural gas for non-carbon-capture-based applications.
We’re having the same conversation with Japan on the West Coast, but the basis of the hydrogen is actually hydrogen from natural gas, which is where the CO2 is captured and sequestered. That’s about energy security for Japan in the context of moving toward a low-carbon world.
There are provisions in here that relate to things like transboundary areas that are really updating the mechanisms as to how we deal with those. That is obviously particularly germane to France, given that we have Saint-Pierre and Miquelon.
Senator Arnot: I don’t have a supplementary question, unless you want to amplify that.
Ms. Lixfeld: No, other than to say I would love to go to Saint-Pierre and Miquelon because it looks lovely.
Senator MacDonald: Minister, I don’t think there’s any question that people fundamentally support the legislation. There’s support in Nova Scotia and Newfoundland and Labrador, but I still go back to the fishery. There has been a recently released map of marine conservation areas from Fisheries and Oceans Canada, or DFO. Obviously, these conservation areas will reduce the amount of area where people can fish for a living.
Does the bill require the flexibility to allow the consideration of offshore wind projects within conservation areas? Will the same flexibility apply to offshore oil and gas exploration?
Mr. Wilkinson: There are, as you know, different tiers of conservation areas. There are marine protected areas and then there are other effective area-based measures, which include marine refuges. Each of them sets out certain criteria that are allowed and certain criteria that are not allowed.
In the case of marine protected areas, for those that were created after 2019, oil and gas is not allowed, but in marine refuges, oil and gas exploration is allowed.
In the context of renewable energy, I was the Minister of Fisheries when we developed those standards. We didn’t really contemplate offshore wind at that time. It’s probably a measure of how fast this whole conversation is moving. I would say within a marine protected area almost certainly there would be big challenges for it because there would be a whole range of permits that would be required that I think would be very difficult to obtain.
In the context of some of these lower-standard things, I think that’s something that’s going to have to get worked out.
Senator MacDonald: Can you just distinguish between those two areas, marine protected areas and the other? What criteria are used?
Mr. Wilkinson: Sure, and we have an official from DFO who can correct me where I go wrong here, but marine protected areas — and Canada uses a standard that many in the international community use — are sort of the highest tier of protection, and there’s very little that’s actually allowed in there from an industrial perspective.
My colleague here will remind me, but I think even fishing is more problematic in a marine protected area, whereas in a marine refuge, there can be fisheries allowed. You can actually have exploration for oil and gas.
Senator MacDonald: Thank you. What are the criteria that are applied to make one unacceptable for any development and the other one acceptable?
Christie Chute, Senior Director, Programs Sector, Marine Planning and Conservation, Department of Fisheries and Oceans: Thanks for the question. As the minister noted, there are two categories of protected areas. There are marine protected areas and other effective area-based conservation measures, or OECMs. In marine protected areas, we have Marine Protected Areas Protection Standard. The Government of Canada would prohibit a number of activities in all federal marine protected areas, including oil and gas exploration, development and production; mineral exploration and development; and a number of other activities, including fishing using bottom-contact gear. So that’s the set of standards.
In OECMs, we take a more flexible approach where we look at the risk of human activities to the conservation objective. There’s more flexibility, and we don’t have a protection standard that specifies activities prohibited.
Senator MacDonald: I understand, but what is the driver? What are the criteria that determine that this area can have no development whatsoever — no fishing, no exploration, no minerals?
Ms. Chute: Great question. In our marine protected areas, it would be the conservation objectives in the area that drive whether or not a human activity can continue to occur. We would do a risk assessment to look at the potential impacts from human activities on the conservation objectives and the conservation priorities of the area, and then we would design the protected area accordingly.
Mr. Wilkinson: Senator, I misspoke. She was right and she has reminded me that even in the highest standard fishing can be allowed. It’s just fishing with things like bottom trawling, which actually disturbs the base, but you can actually have a fishery within a marine protected area.
Senator MacDonald: Thank you.
Senator Prosper: I just want to follow up with a question and just briefly state that I don’t think the Mi’kmaq are just completely opposed to this bill. It’s more or less having that opportunity to be meaningfully engaged within the legislative process, and I understand there are considerations that were put forward, certainly within the letter of June 10, where it provides that established engagement processes with Indigenous communities were followed. That’s within the letter. I spoke to you about the consultation terms of reference, which have been around for a while. It’s the preferred process for consultation.
So I’m looking to get detail on what the established engagement process that your department undertook is. Secondly, what is the distinction between engagement and consultation? Is there a linkage between those two? Thank you.
Mr. Wilkinson: To the first part of that, we’re certainly happy to provide more of a summary than what was in the letter to actually try and answer some of the particular questions, but in terms of engagement versus consultation, I’ll pass that over to Ms. Lixfeld.
Ms. Lixfeld: The duty to consult, I think, is a well-understood term and exists in law where there is a potential impact on the established or asserted rights of Indigenous peoples and obligations that are set out on the part of the Crown to accommodate as appropriate.
That really rests within the Crown, but that’s not the only opportunity or the only reason that governments should reach out to Indigenous communities, to talk to Indigenous communities, to seek their perspectives and their feedback. The duty to consult is a very high standard that must be met in certain circumstances, and, as a matter of good governance and good policy, governments should always seek out opportunities to engage Indigenous communities on things that might impact their rights, their interests, to encourage participation, to seek feedback.
And that is the standard that we attempted to reach in the development of the legislation in terms of making it as known as possible what the government was intending to do to communicate to chief-in-council throughout Atlantic Canada and throughout Mi’kma’ki and to provide those opportunities to have a conversation.
Senator Prosper: But why wouldn’t you engage, say, an already pre-existing process that has been established for years on consultation? Why wouldn’t you engage that?
Ms. Lixfeld: We understand there to be a difference between consultation and engagement, and that the tripartite protocol has been established where there is a requirement or a need to do the capital “C” consultation on the record for the purposes of discharging the duty to consult. Where that duty is not found, governments should rely as a matter of practice and a matter of good governance on engagement. So we do see the difference. We understood that the tripartite arrangement was for the purposes of consultation, and we understood that we were looking to engage with impacted communities.
The Chair: Thank you very much. Minister, I think we’re nearing the end of the evening, but I wanted to pose to you this question, which you’ve answered many, many times, but Canadians overall have difficulty understanding the message. We’re supposed to be green. We “talk green” a lot, but then to many people’s eyes we’re also an oil-and-gas people. We’re oriented and we’re ruining the world and ruining every concept we have. Therefore, people sort of say, “Boy, is this complicated. Are they being honest with me? Why would they use this language?” And it seems like we’re goosing up oil and gas wherever we can, including subsidies and so on, but then at the same time it’s not.
Could you try to use words — if Canadians are listening to us. How do you get that message across where there’s coherency and to the best of our interests? Could you help us out there?
Mr. Wilkinson: Absolutely. I’ll give it a whirl. The world faces an existential threat, which is climate change, and if we do not fundamentally change how we are doing things and work to reduce carbon emissions in a very significant way over the coming decades, we, as I said before, are going to leave a very challenging scenario for our kids and our grandkids. That’s a science issue. It’s not a political issue. It shouldn’t be a partisan issue. It’s a science issue.
However, we also have to recognize that the world’s not going to change overnight. This is a transition, and it’s a transition that will happen over decades — not months, not weeks, not even a few years. It’s a transition that will need specific actions that are taken in every sector of the economy. What we need to start to see are — and we are seeing in many places — changes that are actually altering the kinds of energy that we are using.
We need to move to the point where we actually see the elimination over time, by 2050, of the utilization of oil and gas in combustion applications where you are not capturing the carbon. You can’t get to net-zero emissions unless you actually do that. In the context of getting to that, we are still going to be using gasoline in many of our cars for the next couple of decades. We need to be participants and monetizing the resources we have in a thoughtful way during that transition.
That’s one of the reasons why the focus in the oil and gas space needs to be on reducing production-related emissions so that Canada can be one of the lowest in terms of production emissions so that the value of our product on the international market will be there in a world that’s looking to decarbonize.
Our oil and gas sector also needs to be increasingly focused on non-combustion applications, particularly of oil, that is, things like solvents, waxes, petrochemicals, building materials like carbon graphite, which are almost a third of the utilization of oil today. Again, it requires you eliminate production emissions if you’re going to be able to use those products in a net-zero world.
The same thing is true with gas. There is a path forward for natural gas; that’s called hydrogen. In the context of actually producing hydrogen in an ultra-low carbon way, there’s a pathway there.
We have to look at it sector by sector. We have to understand that it doesn’t happen overnight, but we have to be working with urgency. The time we have available to us — not just as Canadians but as human beings — is not that long.
The Chair: Thank you, minister. Thank you to your colleagues for being with us and getting us to better understand the issue. We thank you.
We will now continue in camera.
(The committee continued in camera.)