THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
OTTAWA, Monday, June 17, 2024
The Standing Senate Committee on Energy, the Environment and Natural Resources met with videoconference this day at 2:30 p.m. [ET] to examine the subject matter 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.
Senator Paul J. Massicotte (Chair) in the chair.
[Translation]
The Chair: My name is Paul J. Massicotte. I am a senator from Quebec and the chair of the committee. Today, we are conducting a meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources.
Before we begin, I’d like to ask all senators and other in-person participants to consult the cards on the table for guidelines to prevent audio feedback incidents.
Please take note of the following preventative measures in place to protect the health and safety of all participants, including the interpreters.
If possible, ensure that you are seated in a manner that increases the distance between microphones.
Only use a black approved earpiece. The former grey earpieces must no longer be used. Keep your earpiece away from all microphones at all times. When you are not using your earpiece, place it face down, on the sticker placed on the table for this purpose.
Thank you all for your cooperation.
I will now ask my fellow committee members to introduce themselves, beginning on my right.
[English]
Senator Petten: Good afternoon. Iris Petten, Newfoundland and Labrador.
[Translation]
Senator Miville-Dechêne: Julie Miville-Dechêne, Quebec.
[English]
Senator Robinson: Mary Robinson, Prince Edward Island.
Senator Anderson: Margaret Dawn Anderson, Northwest Territories.
Senator McCallum: Mary Jane McCallum, Manitoba.
Senator Wells: David Wells, Newfoundland and Labrador.
[Translation]
Senator Galvez: Rosa Galvez, Quebec.
[English]
Senator Arnot: David Arnot, Saskatchewan.
[Translation]
The Chair: Today the committee will continue its 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 of witnesses, we welcome, via video conference, Mr. Paul Barnes, Director for Atlantic Canada and Arctic with the Canadian Association of Petroleum Producers, and Mr. Colin Sproul, president of the Bay of Fundy Inshore Fishermen’s Association.
Welcome, and thank you for agreeing to come. We’ve set aside five minutes for your opening remarks. The floor is yours, Mr. Barnes, followed by Mr. Sproul.
[English]
Paul Barnes, Director, Atlantic and Northern Canada, Canadian Association of Petroleum Producers: Thank you for the invitation to appear before you today to provide our comments on Bill C-49.
My name is Paul Barnes, and I am Director, Atlantic and Northern Canada for the Canadian Association of Petroleum Producers, or CAPP, as it’s often referred to. I’m based in St. John’s, Newfoundland and Labrador. I have over 30 years of experience working extensively in the offshore oil and gas industry and working extensively during that time with the Atlantic Accord legislation, which is being amended with this bill.
The Canadian Association of Petroleum Producers is a non-partisan research-based industry association that advocates on behalf of member companies that explore for, develop and produce oil and natural gas in Canada.
I had the opportunity to present in front of the House of Commons standing committee on natural resources during that committee’s review of Bill C-49. As I noted then, a large portion of this bill focuses on renewable energy development, but my remarks will focus solely on the aspects of the bill that directly relate to offshore oil and gas activities and its regulation.
I will begin my specific remarks on various clauses of the bill with a focus on three clauses — 36, 71 and 72 — where CAPP would like to see amendments to the current bill.
Clause 36 of the bill introduces a significant change for the offshore oil and gas industry. The move to a 25-year fixed-term for future significant discovery licences is the premise of that clause. Moving to a fixed term without adequate flexibility to extend the term could have unintended consequences due to the challenging operating environment surrounding offshore oil and gas development in Atlantic Canada, as current projects have taken up to 30 years sometimes to develop.
There may be unique cases in the future in which more than 25 years is necessary to move from exploration to production, and CAPP encourages the government to provide flexibility for these unique circumstances. Specifically, legal language on the ability to extend the term if a licence holder or operator can demonstrate that they are diligently pursuing development should be considered in the bill.
Clause 71 of the bill allows governments to make regulations to regulate access to offshore infrastructure, including the enforcement of tolls and tariffs. In CAPP’s view, access to infrastructure is not an issue that requires additional regulation nor should it be included in this bill. Offshore facility owners are open to the consideration of adding production from others who wish to access its facility if a facility has extra capacity, provided that they share in the responsibility for all related costs and liabilities and provide a fair return on the risk investment.
Moving toward a system whereby governments can regulate access and enforce tolls and tariffs adds uncertainty to an environment in which there are a limited number of projects and facility owners are open to negotiations directly with others.
Clause 72 of the bill repeals the requirement to go through the Canada Gazette Part I process. We understand that this relates to administrative changes only that do not require broad consultation and suggest that the language in the bill should be clearer. Clarifying that the Canada Gazette process will only be bypassed for administrative changes will ensure that there’s no confusion related to the importance of consultation on significant legislative changes.
Before concluding, I would also like to highlight some of the positive changes in the bill that our industry supports.
Clause 28, for example, relieves the prohibition of oil and gas activities in a marine protection, environmental or wildlife conservation area. The intent of this section is to solidify the role of both the federal and provincial natural resource ministers if there is to be any prohibition of oil and gas activity in any area. The Canadian Association of Petroleum Producers supports this section of the bill, given the joint management regime that governs offshore oil and gas activity in Newfoundland and Labrador and Nova Scotia.
Clause 134 of the bill provides added flexibility in testing requirements to demonstrate its significant discovery. The CAPP is supportive of this change, but suggests that the language in the Atlantic Accord Acts can be clarified even more through this bill to acknowledge new technologies to satisfy the requirement to demonstrate a significant recovery.
The Canadian Association of Petroleum Producers is also pleased to see that the bill clarifies the role of the offshore petroleum board’s individual impact assessment process.
That concludes my specific remarks. Once again, thank you for the invitation to appear as a witness during the committee’s review of this bill. I will be pleased to answer any questions at the appropriate time.
The Chair: Thank you very much. Mr. Sproul?
Colin Sproul, President, Bay of Fundy Inshore Fishermen’s Association: Committee chair and members, thank you very much for this opportunity to share our views.
I appear before you today on behalf of the Bay of Fundy Inshore Fishermen’s Association where I serve as president. For 29 years, we have represented owner-operator fishing families on the shores of the Bay of Fundy in Nova Scotia. Our group has a distinguished history of advocating for sustainable fishing practices and community-based fisheries management.
Over this time, our commitment to the responsible use of resources has led us to partnerships with many groups in academia and the conservation community. We have a long history of cooperation with governments and regulators at all levels, earning us a reputation as a valuable ally on ocean issues.
Our members are proud of this legacy and committed to preserving our way of life for future generations of Nova Scotians.
A number of people have come before the committee to speak to the technical aspects of the bill. Although they are very important, today I would like to focus on the general lack of consultation or consideration for the fishing industry. For hundreds of years, Nova Scotia fishermen have practised a truly sustainable way of life, harvesting the renewable resources of Nova Scotia’s ocean bounty. Our careful stewardship led the industry to becoming the economic powerhouse of Nova Scotia, delivering billions of dollars annually to our economy.
The prosperity of all Nova Scotians rest on this foundation, which must be kept secure. The time has come to recognize fishermen — much like farmers — as a bedrock of the Atlantic Canadian economy and critical to the food security of all Canadians. Fishermen should not be forced to scramble or receive last-minute opportunities to have their interests considered by this government for the bill. Our industry is not a box to be checked or an obstacle to be avoided. As long-standing stakeholders in Nova Scotia’s offshore, we should have been approached at the outset by regulators and proponents. The government, in its headlong rush to develop offshore renewable energy, has certainly missed this most important of steps.
The decision of Nova Scotia’s fishermen both inshore and offshore — who are frequently at odds to work together — speaks volumes about our grave concerns. We have also been clear about our commendable intent. A non-obstructionist, good faith approach toward the government shows that we’re willing and able to share the ocean if our interests are also considered in good faith. However, many fishermen are beginning to recognize that this is not the case. As always, we only ask for fair consideration and a level playing field.
Our members are now asking legitimate questions. Why isn’t the government paying more heed to the effects of large-scale wind installations on whale populations given the very stringent rules that we, as an industry, operate under to protect the same animals? Why are regulators not considering the cumulative effects on the commercially valuable species that we harvest? Why are regulators not collecting robust baseline data on the Scotian Shelf in areas that will undoubtedly be disturbed by industrial-level construction so that those effects can be measured in the future? Who will compensate these fishing communities for the loss of generational wealth when they are displaced by wind farms from their traditional fishing grounds? How can this bill be considered comprehensive without provisions for end-of-life decommissioning of these projects? Has this government learned nothing from the debacle of tidal energy development in the Bay of Fundy, and why aren’t those lessons being applied now?
Clearly, the massive wealth generated in Nova Scotia by our industry deserves protection for the benefit of all Canadians. These questions must have answers to secure our future. The prudent course of action here is to take the time to get things right, but it’s also the law. Section 1 of the Fisheries Act and other acts of Parliament clearly state:
. . . where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.
We recognize that these uncertainties exist and that regulators are choosing to ignore them in their haste.
Chair and committee members, thank you, and I invite your questions.
The Chair: Thank you very much. We appreciate it.
Senator Wells: Thank you, Mr. Barnes and Mr. Sproul for your presentations. Mr. Barnes, I’ve spoken with you at length about oil and gas issues and with you, Mr. Sproul, about fisheries issues. Thank you for your dedication to both sectors.
Mr. Barnes, I want to talk about clause 36 — which you referenced in your opening remarks — regarding the 25-year limit on development. In the past, I know — and you know — that it was indefinite or in perpetuity, so a potential operator could hold a licence and not further drill it or produce it. Therefore, I think the 25 years is reasonable in case there was another company that wanted to come in and produce in the absence of the initial licence holder doing the producing.
If there were an amendment or if we were to look at this bill in a different way, what would you propose to be a reasonable way to address that capping at 25 years versus in perpetuity, which is not acceptable?
Mr. Barnes: Thank you for your question. You are right. Currently, significant discovery licences are held in perpetuity. This bill does changes the term of those licences to a fixed 25-year term. That is consistent with what we see internationally. What we see, internationally, is a provision in legislation that allows for a licence holder, if it is at the end of its licence term — for example, at the end of year 24 or 25 — and is working toward producing on that licence, to have the licence extended.
What we don’t see is language to that effect in this bill, and that’s what concerns us. It is in my written remarks as well as our written submission. What we are proposing is simple language along the lines of the ability to extend the licence beyond 25 years if an operator or licence holder can prove that they are diligently pursuing production on that licence.
Senator Wells: Mr. Barnes, thanks for that.
What if a company is at year 23 of 25, and they see the horizon coming — coming fast? What would be some of the things that could stop or delay them from executing under the 25-year time limit?
Mr. Barnes: There could be a variety. We have just gone through a pandemic. As everyone in the room here knows, when the pandemic hit, a lot of the shipbuilding and steelmaking kinds of industrial activity around the world came to a halt. So a number of production facilities around the world that are associated with our industry also came to a halt as a result of it. If, for example, a company is in year 23 and a pandemic occurred or there was some type of worldwide shortage of steel or the downing of certain of the international fabrication yards, and the company couldn’t get their facility built, then they run the risk of having the licence expire with no ability to extend it.
Senator Wells: Okay, thank you very much.
Mr. Sproul, is your issue with the legislation that there was not enough consultation, or are there specific measures? You actually mentioned some of them. Are there specific measures you would like to see amended or absent from the bill?
Mr. Sproul: Thank you for the question, senator.
Clearly, there has been a lack of consultation with the industry, and the industry had a really good response — given the small time frame in which we had to do it — by forming the Nova Scotia Fisheries Alliance for Energy Engagement. Through that vehicle, we made a presentation to the regional assessment, but we’re not seeing the recommendations put forward by the regional assessment in the bill.
First and foremost, if there is damage to a fishery by oil and gas development in these same areas, then there are vehicles in the Fisheries Act to compensate communities and fishing families for that loss of revenue. However, there are no such remedies in this bill, and that is a major omission for our members. We need to see something relating to that.
More importantly, the bill needs to deal with the importance of cumulative effects, because what is proposed for offshore Nova Scotia is not understood by the Canadian public. I believe the sheer magnitude and the size of the wind farms make the importance of cumulative effects rise to the surface. There has not been any concentration on them, especially the cumulative effects on the commercially important species in terms of its effects on water mixing but also things like the migration of lobster and a lot of other species.
For that reason, we think the bill needs more time, more examination and more amendments.
Senator Wells: Thank you, Mr. Sproul.
Senator Miville-Dechêne: I have a question for Mr. Colin Sproul — two questions, in fact.
Have you studied what’s happening in the United Kingdom about the cohabitation between the wind farms and the stocks of fish to see if there was really an impact?
My second question is this: You were saying at the start of your presentation that you have been taking care of the stock of fish very well and trying to be prudent in terms of fishing. I was just looking at googling the Bay of Fundy. This was a while ago, so practices may have changed, but in 1989 the population of salmon had gone down by 90% in the Bay of Fundy due mainly, I understand, to fishing.
First, how good are your conservation efforts regarding fish, the ones you were describing; second, have you looked at the impact of wind farms on fish stocks? I was thinking of Great Britain because they have wind farms there, but there are examples in other places.
Mr. Sproul: Thank you for the questions. First, regarding the salmon populations in the Bay of Fundy — that is, during my generation or my father’s generation — Atlantic salmon have never been fished commercially in the Bay of Fundy. They are not a commercial fishery. The decimation of the Atlantic salmon runs in the Bay of Fundy is related to development on the rivers by hydroelectric dams.
When I was referring to our excellent management of the fishery, I was referring to things like lobster which is delivering more value to Nova Scotia than the groundfish fisheries of the past, which were mismanaged by governments and not fishermen. There’s a big difference in how the lobster fishery is managed. It’s managed organically by fishermen in partnership with regulators through the Integrated Atlantic Lobster Fisheries Management Plan. We’re proud of that, and certainly not responsible for the demise of the Atlantic salmon, which happened in freshwater rivers by power companies.
Senator Miville-Dechêne: Fair enough.
Mr. Sproul: In terms of the situation in Europe, fishermen in the North Sea have been incredibly impacted by the proliferation of offshore wind farms, especially in terms of being excluded from their fishing grounds because of the presence of the turbines.
It’s also important to note that a lot of the science that was conducted was funded by the wind industry and was not done independently by governments and regulators, which we would really like to see here in Canada.
Senator Miville-Dechêne: What can be done? Obviously, energy through windmills is important in order to have clean energy. However, you think that you may be impacted. Apart from having some compensation, like you have for oil development, do you see any other solution that could be brought forward?
Mr. Sproul: Thank you for the question. I was careful to say in my statement that we’re not seeking to be obstructionists to wind farming. Most fishermen I know are proponents of renewable energy. It takes respect for our views and a focus on important fishing grounds that we can’t afford to give up as well as the places that we can share with wind farmers.
There’s been a huge difference between the stance taken by Canadian fishermen and the one taken by American fishermen where they are totally opposed to wind farms and are seeking to obstruct them in any way they can.
We are coming to the table in good faith and saying that, yes, there are places where wind farms can be installed, but there are places that we cannot afford to give up as fishermen. That’s a really big difference.
Senator Miville-Dechêne: Thank you.
Senator Petten: Thank you for being here, witnesses.
Mr. Barnes, you mentioned looking at the amendments under oil and gas. As you know, with this bill there has to be mirrored legislation in the provinces.
Have you gone to Newfoundland and Labrador or Nova Scotia with the amendments to get their comments?
Mr. Barnes: Thank you for your question. Yes, I’ve had a number of meetings with both the Province of Newfoundland and Labrador and the Province of Nova Scotia, as well as with Natural Resources Canada here federally regarding the amendments. In fact, when I presented in front of the House of Commons committee we put in a supplementary submission to that committee outlining some potential wording for those amendments.
Both the federal department and the two provincial governments felt there seemed to be a rush to get this bill done, especially in light of potential wind investment. They said they would try to address either our amendments post the bill being promulgated and/or have the offshore petroleum boards adjust some of their guidance to regulate addressing some of the issues that we have with the clauses.
Senator Petten: In your 30 years of experience, has the Canadian Association of Petroleum Producers in Newfoundland and Labrador had any issues or conflicts coexisting with the fishing industry offshore?
Mr. Barnes: Unfortunately, occasionally we have conflicts largely around operating in the ocean together in close proximity. Most of the conflicts, however, have been relatively minor. We were able to mitigate a lot of the conflicts by setting up an entity about 20 years ago called One Ocean. Basically, it’s a volunteer organization between the oil and gas industry in Newfoundland and Labrador and the fishing industry in Newfoundland and Labrador where we address issues of common concern through an independent body that’s associated with the Fisheries and Marine Institute at the Memorial University of Newfoundland. That entity has afforded us great conversations with the fishing industry — really good communications and relationships with them — so that we are able to address issues before they become major issues.
Senator Petten: You would say there’s been no issues of coexisting with the two industries?
Mr. Barnes: We’ve had some issues, but they have been overcome and they are relatively minor in nature.
Senator Petten: Thank you.
Senator Arnot: This question is for Mr. Barnes. Mr. Barnes, the Canadian Association of Petroleum Producers is an influential body in this country. I know about the amendments that you’re proposing, but I have a different set of questions for you.
Do you believe that CAPP members are prepared to engage with Indigenous communities in a meaningful way in the future with your non-renewable resource focus?
What strategies do you or your members have to make meaningful collaboration and cooperation, encourage investment by First Nations communities and/or corporations, and the employment level of First Nations people in the industry in the Atlantic and Northern Canada region?
Mr. Barnes: Thank you for those questions. When it comes to offshore oil and gas activity, our members not only engage the Indigenous communities in Newfoundland and Labrador but also take the opportunity, especially recently, to engage with other Indigenous groups throughout Atlantic Canada knowing that those groups may also potentially fish in Newfoundland and Labrador waters and/or catch species that may migrate from Newfoundland waters into other areas of Atlantic Canada.
Any time there is an oil and gas activity — that is, if any of our members have started to plan for exploration activity and/or development or production — they have engaged with local Indigenous groups. Likewise, as an association, when we do large events — sometimes we do forums, whether they are safety forums or environmental forums to hear from different community groups or Indigenous groups — we always invite Indigenous groups in Newfoundland and Labrador or through Atlantic Canada to participate.
We have a fair amount of engagement, and we certainly plan to do so in the future.
Senator Arnot: How many Indigenous people are currently employed in this area by your member corporations?
Mr. Barnes: I don’t have any statistics of that nature, but I can certainly provide those to you.
Senator Arnot: I would appreciate that in writing, if you could, sir. Thank you very much.
Senator Galvez: I have two questions for Mr. Barnes and one for Mr. Sproul.
Are any of your members planning to promote or construct wind farms in that area? To produce energy from oil, you need energy. Where are you getting your energy?
Mr. Barnes: Many of our members are also investing in renewable sources of energy, like wind farms. I know a number of them are investigating potential investment opportunities, both in Newfoundland and Labrador and Nova Scotia. At this point, none has come forward with any investment, but all of Atlantic Canada is on the radar screen for a number of our members who are interested in further investment in that sector.
Senator Galvez: Is to change the sector, or is it to continue with oil and gas but using renewable energy?
Mr. Barnes: It is to continue in oil and gas, as well as to invest in the wind sector. It is also potentially to use wind for some aspects of oil and gas activity, such as small-scale wind power on platforms.
Senator Galvez: Okay.
Last week, the government officials said that there is currently no clause in the Atlantic Accord to give authority to the federal and provincial ministers to reverse course on oil and gas permits on the basis of environmental or wildlife conservation or protection, but we know that things happen. In that area, we have seen a decline of fish stocks, but the government would be enabled to protect that under the present circumstances. It is able to compensate but not to prevent.
Cenovus Energy had to pay a $2.5 million fine for a 2018 oil spill from the White Rose oil and gas field. That was the largest offshore oil spill in Newfoundland and Labrador.
So accidents do happen.
Are you suggesting that, jointly, the federal and provincial governments should have no recourse at all to change a decision and offer protection and compensation in order to address environmental risks and concerns?
Mr. Barnes: I don’t think I fully understand your question. We support the provinces of Newfoundland and Labrador and Nova Scotia, and the federal government, having a joint role in compensation with respect to the cancellation of any licences.
Senator Galvez: Compensation — but what about prevention or taking away permits in the presence of a danger of environmental concerns or risks?
Mr. Barnes: Again, the way we read the bill is that both natural resources ministers would have to approve the cancellation of any licence that might conflict with any marine protection or conservation area.
Senator Galvez: Okay. I will go on a second round.
Senator McCallum: I wanted to go back to Division VI, Royalties and Revenues. It addresses accord implementation, royalties, interests and penalties. It is amended to include the offshore now to complement the existing royalty scheme for oil and gas production. What is the existing system? Are First Nations receiving any royalties or interest from your productions right now?
Mr. Barnes: The short answer is “no,” there are no Indigenous groups receiving direct compensation or payment from royalties. The royalty payment from offshore production in Newfoundland and Labrador goes to the Province of Newfoundland and Labrador for their dissemination and use.
Senator McCallum: Okay.
So, when you say you’re working with First Nations, how do you work with them, if they are not getting royalties? How are they engaged in the process — to have meaningful engagement?
Mr. Barnes: We would normally leave that type of engagement to governments. The engagement that our industry normally undertakes is providing information to Indigenous groups and others before an activity occurs to allow them to understand the activity and for us to understand any concerns they may have about the activity. For the most part, that is the direct engagement we have with Indigenous groups.
Senator Galvez: Mr. Sproul, it seems there is a kind of competition between oil projects, projected future wind projects and fishing. Is it possible for you to elaborate on the difference in the return on investment for these types of projects and the employment that is generated in the provinces of each of these sectors? What are the positive impacts for the communities?
I am asking because you said there are cumulative and indirect impacts, but those are being taken care of by the new environmental impact assessments. I am more interested in the social and economic impacts of these different projects.
Mr. Sproul: Thank you for the question, senator.
The most important thing to point out is the social and economic impacts that are being delivered to Nova Scotia by the fishery right now. There are more than 25,000 jobs directly in the fishery in Nova Scotia and thousands more indirectly. The latest numbers from 2022 show Nova Scotia’s fishery exports at nearly $3.5 billion for a province of fewer than a million people.
So, we can’t overstress the diffuse economic benefits of the fishery that are delivering solid middle-class incomes to remote areas of Atlantic Canada. It is bigger than that, senator. I recall you asking me a question a number of years ago when I testified to a standing committee. You said you had never heard a non-Indigenous person talk about as deep a connection to the ocean as I had that day in Halifax. I want to tell you that has not changed for me nor for the members of the Bay of Fundy Inshore Fishermen’s Association. The benefits of our fishing history are greater than money. They are social, cultural and the fabric of who we are as Nova Scotians. We are really keen to protect those.
We don’t want to obstruct other industries. We truly believe we can share the ocean.
We don’t want to see one incredibly valuable industry traded for another. For that reason, we really need to focus on the cumulative dangers to commercially valuable species, as well as others, like whales.
The Chair: I will cut in on this question. It is on the same economic perspective. Please give me a sense of something. If I took the same resources — I don’t know what — a thousand square miles or whatever it is — if you take it, which one is more profitable? Is it oil and gas or fishing for the same resources available for the comparable?
Mr. Sproul: Thank you to the question. I can only speak about the fishing side of that equation. I don’t have the context to talk about the prosperity that is delivered to Newfoundland and Labrador, for instance, from oil and gas.
The one difference I would draw is the diffuse economic benefit that fishing provides. In terms of the proposed wind farms, there will be some jobs created during the construction. I think it is pretty clear that, after that, they would be very limited.
I am not sure what royalty mechanism we can hope to see in Nova Scotia, if any at all. I see a benefit for the developers and for Nova Scotia’s electric company, but I don’t think we will ever see the diffuse economic benefits of the fishery.
The Chair: Mr. Barnes, how would you answer that question? Which provides the most benefits to the province?
Mr. Barnes: In Newfoundland and Labrador, I believe the oil and gas provides greater GDP to the province than the fishing industry, but they are both fairly close. Certainly, they are both the largest industries in Newfoundland and Labrador that contribute to the economy. The fishing industry provides more employment than oil and gas, but the oil and gas sector provide more royalties and benefits.
As I was mentioning earlier in answer to the question of Senator Petten, both industries have been able to work very effectively together and coexist, because we occupy a large amount of the same ocean space. Often, our industry uses fishing industry boats and/or people for different activities, such as providing environmental services or watches as we move certain facilities around the ocean.
Senator McCallum: Do you know what area the renewable will cover now? There will be a lot of turbines; I don’t think we know how many. What will be the cumulative effects of this added assault to fishing and ecosystems in the area? In Ontario, 155 communities have now refused wind turbines. These are municipalities now and in the future.
Have you considered the effects of the turbines and what they will do to the area?
Mr. Barnes: I think the question is probably best answered by Mr. Sproul, since I’m not involved in the wind side of the energy business.
Mr. Sproul: Thank you for the question, senator. I think the answer to your question is that we don’t know. We can only surmise that there will be cumulative effects from the turbines based on other situations where there is data from other turbine installations worldwide.
What is proposed for the seas off Nova Scotia is novel and it’s not proposed in an adaptive management scheme; it’s full-scale, very large installations of very large turbines right from the start. This points to the need to collect better data about the situation on the Scotian shelf right now and to develop at a rate where any potential impacts can be assessed and then mitigated.
I understand the need for green energy development, as all fishermen do. We have considerable concerns about ocean warming. However, these concerns cannot be used to wipe away the legitimate questions that need to be answered about offshore energy development — whether they are concerns around transmission to shore up the power and its potential barrier effects on the migration of species, or whether it is about ocean mixing, which can be increased or decreased based on the turbines. The most concerning of all for the fishermen are the floating turbines, which would see huge mooring chains sweeping the bottom and destroying ecosystems.
The answer to your question is that we don’t know, but it is incumbent upon the government to seek more data and get more answers around these questions.
Senator Wells: I have a quick question for Mr. Sproul and then one — possibly two, if we have time — for Mr. Barnes.
Mr. Sproul, with your concern about the lack of consultations with the groups you represent, if we return in the fall to further address this bill, would you see the summer months as a suitable amount of time for such consultations or are fish harvesters busy and is it not the right time? Can you give us some insight on that, please?
The Chair: Senator Wells has volunteered to meet with you during the summer months.
Senator Wells: I can do that.
Mr. Sproul: I certainly wouldn’t want to speak for the entire fishing industry in Atlantic Canada, but I know that any time that could be granted to further assess the risk and prepare responses would be warmly welcomed by all of us. We need a lot more time to do the science that’s required to see full-scale installations offshore. I think that a few more months over the summer would be a big help, and I would encourage the committee to see that that happens.
Senator Wells: Thank you.
Mr. Barnes, two things — one on the question of Senator Galvez regarding a spill and the potential for ministers to cease a licence. I happen to know that there is also condition of licence, currently in force, where if there is a deleterious spill or any other violation that violates the conditions of the licence, penalties can be handed out by the board; they have the authority to do that.
I wanted to ask you about One Ocean. For full disclosure, I was a member of the Canada-Newfoundland and Labrador Offshore Petroleum Board for three years on One Ocean.
What would you say would be the effect of having a third party? We already have the fishing and petroleum industries. What would you say to having, let’s say, the wind energy sector as part of that? Do you see that as workable? I think you sit on One Ocean as well. I know you did when I was there.
Mr. Barnes: Yes. That’s an interesting question. Our most recent One Ocean board meeting was Thursday of last week, and that very same question came up. We are seeing in Newfoundland and Labrador more engagement by wind energy companies with the fishing industry. Some of the same concerns that the fishing industry has regarding wind industry have been addressed with the oil and gas industry.
This was largely raised by the fishing industry: What if we invited wind energy companies to the One Ocean table? From an oil and gas perspective, we would have no objection to that. One Ocean is an incorporated entity, so it has to have bylaw changes, et cetera, but I foresee that becoming a reality in the not-too-distant future.
Senator Wells: Thank you.
Senator Petten: Mr. Barnes, were you a part of the regional assessment process that has been ongoing in the province?
Mr. Barnes: We were not involved in the regional environmental assessment for wind, but we were involved in the regional environmental assessment for exploration activity for oil and gas.
Senator Petten: There is an assessment that is ongoing now. As you know, part of this is a MOU signed by the Province of Newfoundland and Labrador around the onshore and offshore jurisdictions. Sixteen bays in the province are included in the onshore, which is a provincial issue, and I understand there are issues with Indigenous consultation. Are you part of those inshore bays as part of CAPP? What is the jurisdiction of CAPP?
Mr. Barnes: The jurisdiction of the oil and gas industry are the pure oil and gas areas where there are current licences for oil and gas activity. I stand to be corrected, but technically the offshore area is beyond 12 kilometres from the shoreline out to the edge of Canada’s continental shelf. From an oil and gas perspective, we wouldn’t be involved in the bays themselves, when it comes to pure oil and gas exploration development and production. We are loosely involved when it comes to transshipping oil and gas through, for example, Placentia Bay, but that’s really an extension of the oil and gas industry.
Senator McCallum: There are 86 wind turbines on the Wolfe Island wind facility on the St. Lawrence River. In that case, direct benefits went to one side of the border only. This is split between Canada and the U.S. The people who are the closest to the wind farms did receive payments, including payments to landowners and to the Township of Frontenac Islands. Now they find that the U.S. is starting to resist any more because they don’t have benefits coming from them.
Will the government structures in this bill fully consider benefits and costs to all players? Do you know, Mr. Sproul?
Mr. Sproul: Thank you, senator. To my knowledge, there are no provisions in the bill to provide either direct compensation or direct benefits to the communities that they are adjacent to.
Senator Galvez: Can any of you provide the committee a map where we can see the areas with strong wind potential, the present areas where oil and gas have been found and has potential for exploitation, and the areas where we need to protect the ocean because of the fish stock or the whales? Without having these in mind, it is very difficult to give ourselves an idea of how complex this problem is. Also, why are these projects there? Is it to be an economic lever for the region, or is to provide the electrical energy that the region needs?
Where are we with the regional assessment? I think we should have the regional assessment first and then discuss what we are discussing.
The Chair: Mr. Barnes, can you provide us with that?
Mr. Barnes: Certainly, from the oil and gas perspective, I can provide maps where there is oil and gas activity is occurring and also the prospective oil and gas areas. But I would direct you to the Department of Fisheries and Oceans because they have undertaken an exercise over the last several years wherein they are putting the oil and gas industry map on top of the potential wind energy map and on top of the fishing industry species and where they are fished to see if there is any interaction or overlap.
The Chair: I think that’s a good idea. If we could follow up on that and make sure that we can get it, I’m sure we would all love to see it. It is pretty important to us.
Mr. Sproul: Senator, I would also be happy to provide you with that data on behalf of the fishing industry, and I would encourage all of the committee members to review the written submissions of the Nova Scotia Fisheries Alliance for Energy Engagement, which would show the areas of overlapping concern.
Senator Petten: I have a quick question for Mr. Sproul. I wanted to ask you the same question: Did you participate in the regional assessments in Nova Scotia?
Mr. Sproul: The Bay of Fundy Inshore Fishermen’s Association didn’t participate directly. Most of the fishermen’s associations in Nova Scotia participated through our membership in the Nova Scotia Fisheries Alliance for Energy Engagement. We were happy to be able to share our concerns directly with the regional assessment group.
The Chair: Thank you very much to our two witnesses for coming in front of us and answering some important questions to allow us to better understand what is going on. Thank you very much.
For our second panel, we welcome Thomas Arnason McNeil, Senior Energy Coordinator for the Ecology Action Centre.
Thomas Arnason McNeil, Senior Energy Coordinator, Ecology Action Centre: Thank you and good afternoon to all members of the committee. My name is Thomas Arnason McNeil, and I am the Senior Energy Coordinator at the Ecology Action Centre in Halifax, Nova Scotia. For over 50 years, the Ecology Action Centre has taken leadership on critical environmental issues, from biodiversity protection to climate change to environmental justice. My team works to advance policies that will help to facilitate the decarbonization of the bulk power grid and support the development of renewable energy. Together with colleagues in our marine program, we are currently involved in the regional assessment for offshore wind development in Nova Scotia.
We appreciate the opportunity to address the committee, not only to express our overall support for the much-needed amendments that Bill C-49 brings to the Accord Acts, but also to call on the policy-makers gathered here to suggest amendments which we feel will fundamentally strengthen this regulatory framework governing the development of offshore wind in Atlantic Canada.
I hope that we can all agree — both members of the committee and other witnesses that have attended prior panels — that we are facing a climate crisis, that the record-breaking wildfire season last year was not a figment of our collection imagination, that an increased risk of floods, storms and extreme weather events poses a serious threat to our coastal communities in Atlantic Canada, and that the far-reaching consequences of unchecked climate change on our marine ecosystems fundamentally threaten ocean livelihoods.
I hope that we can all agree that any serious effort to combat this crisis demands a swift transition toward renewable energy. This transition should not only be understood as a necessity, but as a tremendous economic opportunity as well. According to analysis by Natural Resources Canada, potential offshore wind generation capacity in Atlantic Canada could be as high as 26 gigawatts.
For the record, that’s significantly higher than the maximum electricity demand here in Ontario last year. That kind of power could generate as many as 52,000 direct jobs annually during construction and installation and thousands more in ongoing operations and maintenance.
Senators, I hope we all understand what is at stake, and I hope we can all appreciate the need to start off on the right foot. Laying the foundations for a new offshore renewable energy sector requires attention to detail. Having encountered opposition to renewable energy development in Nova Scotia firsthand, I would urge the committee to strengthen this bill.
Do not open the door to spurious arguments. Do not allow for regulatory uncertainty or gaps in policy which could undermine the social licence of wind power.
We believe these pitfalls are easily avoided. Do not allow for complete discretion on the part of the offshore energy regulators to conduct regional assessments and strategic assessments. Do not allow for ambiguity when it comes to the regulators’ responsibilities to conduct project-level assessments when impact assessments under the Impact Assessment Act are not required.
We recommend that Bill C-49 be amended to require a strategic assessment, we call it a strategic environmental assessment, or SEA, and that the results of the SEA be followed when a call for bids is issued. Furthermore, we recommend that Bill C-49 be amended to require that each offshore wind energy project undergoes a project-level environmental impact assessment conducted by the regulators when a federal impact assessment is not required.
These two recommendations represent an attempt to provide regulatory certainty for public stakeholders, the regulators and for project proponents. While it is important that we move quickly to facilitate the development of renewable energy, the details of this bill matter.
These recommended changes are echoed in a joint letter sent to the Minister of Energy and Natural Resources on June 5 on behalf of seven environmental organizations and submitted to the committee as part of my supporting documentation.
I would like to reiterate our overall support for Bill C-49. Above all, our intent in making these recommendations is to strengthen the legislation and ensure the longevity of offshore wind energy development in Atlantic Canada. We are strongly supportive of many aspects of this bill, including provisions that will allow regulators to prohibit offshore energy, both oil and gas and renewables, in marine conservation areas, as well as the ability of the provincial and federal ministers to jointly cancel existing oil and gas interests in conservation areas.
Thank you for this opportunity. I welcome your questions.
The Chair: Thank you, Mr. Arnason McNeil. Just to give you some comfort, when you make your list of enumerations of values or point of reference, I think we are largely on the same page. I think my colleagues would agree. The problem is not there. The problem is the execution or interpretation. Starting with questions, Senator Wells.
Senator Wells: Thank you, Mr. Arnason McNeil. You talked about regulatory uncertainty. Do you think in the offshore renewable sector that regulatory certainty is important? Would you — sorry?
Mr. Arnason McNeil: Sorry, are you finished your question?
Senator Wells: That’s the first part.
Mr. Arnason McNeil: Certainly, I think it’s essential.
Senator Wells: Are you in agreement with ministers having the ability to cut off the licences of any renewable energy projects offshore, or should they have some other reason for doing it?
Mr. Arnason McNeil: What I’m here today to say is that consistency is important. There should be no reason to develop wind energy projects outside of the current area identified according to the regional assessment. If we are developing projects outside of that area, we need to do another regional assessment and we need to make sure that we’re doing environmental assessments even when they are not required by the Impact Assessment Act. I think we can do that to provide certainty for the public in terms of that process. What we don’t want is to create the appearance that these projects have somehow gotten around assessments. In my opinion, above all, that is something that undermines confidence in renewable energy writ large, from a public perspective.
Senator Wells: Thanks. I think I understand your answer.
Let’s switch out nonrenewable energy for renewable energy. Would you be in favour of the regulatory uncertainty for the oil and gas sector in the offshore? Or are you opposed to oil and gas regardless of renewable or nonrenewable?
Mr. Arnason McNeil: Again, I’m here for a very specific purpose. I don’t really want to stray outside of what I would define as my area of expertise. I’m not an expert in the development of offshore oil and gas. I’m here to hopefully strengthen what the legal regime is for the development of offshore wind.
Senator Wells: Thank you.
Senator Galvez: I don’t know if you heard the answer to my question from Mr. Barnes when I asked him if his members were also going to be proponents of wind electricity projects, and he said yes. What is your opinion of oil and gas being proponents of wind turbine projects in order to generate electricity?
Mr. Arnason McNeil: We will need a massive amount of capital investment in offshore wind energy if we are going to make it happen. Ideally, as a society I would like to see us move away from the type of exploitative corporate-controlled interests that have really been responsible for oil and gas development.
At the same time, investment is needed so it’s difficult to say. We’re talking about a level of wind energy that is monumental. Capital investment is needed. Would I want to outright ban those companies from investing in wind power? I will go out on a limb and say not necessarily. I think any investment in renewable energy is fundamentally positive and fundamentally the direction we need to move as a society. I’m pleased to hear that the Canadian Association of Petroleum Producers doesn’t oppose offshore wind development outright.
If they want to invest in what will be, again, a monumental economic opportunity for Atlantic Canada, then I don’t think that’s a negative thing.
Senator Galvez: Okay.
Senator Petten: Thank you for being here. According to Ms. Bonnell-Eisnor with the Canada-Nova Scotia Offshore Petroleum Board — she was a witness last week — and she said:
It is my understanding that the projects will not be smaller. It is not economic to have less than 10 turbines. In fact, they would be much bigger than that. There is a provision in the Impact Assessment Act that if the project list says 10 or more turbines; however, there are other options afforded there, too.
The Minister of Environment and Climate Change Canada . . . could require an impact assessment if there are less than 10 turbines. As well, anybody can request that the minister consider a full impact assessment be done if they are less than 10, if a project doesn’t meet the project list.
If it is still determined that a full impact assessment is not required, we will not authorize a project without a very robust environmental assessment that is done as well. The operator has to prove to us, their due diligence and meet all the requirements for an environmental assessment.
Does this not address your concern regarding times the IAA may not be triggered?
Mr. Arnason McNeil: My retort, and I think you’ve pointed to something important, would be then why not require an environmental assessment where not required by the Impact Assessment Act? We are claiming that we will do them anyway, why not enshrine that within the regulation?
The Impact Assessment Act, ultimately I am pleased with it the way that it is currently formulated, but we all understand that regulations and legislation can change over time, and so why not take this opportunity to require that we are doing environmental assessments even in cases where we’re talking about projects smaller than 10 turbines, or if that rule changes why not require it in this piece of legislation? That would be my response.
Senator Petten: Do you see the importance of a timely situation of getting the bill approved?
Mr. Arnason McNeil: Certainly. I don’t think that any of the recommendations that we are making should be misconstrued as a desire to delay the legislation. I would really like this bill to be passed as quickly as possible, but I think what we’re saying is let’s do it right. Let’s get off on the right foot here.
Again, we are talking about just an immense amount of wind power in Atlantic Canada, so let’s dot our I’s, let’s cross our T’s, and let’s make sure that the framework governing this development is detailed and does not allow for loopholes.
Senator Galvez: We are hearing a lot in the news about the changes ongoing in the Atlantic Ocean, especially in the Canadian portion of the ocean. Can you elaborate more on what these changes are and why this area is so vulnerable? Why is it more sensitive to all the crises, the diversity, the ocean acidification and climate change?
Mr. Arnason McNeil: I will preface any remarks by stating I’m not an expert. We do have experts in the impact on marine ecosystems as it relates to climate change at the Ecology Action Centre.
I would, first and foremost, point you to our written submission which does go into some detail with regard to these impacts. It’s my understanding — and I’m not an expert in marine conservation — that the changes and impacts we’re seeing in terms of climate change in Atlantic Canada, threaten ocean livelihoods writ large in the long term, whether it’s migratory changes to patterns of where fish congregate, or where lobsters congregate in their breeding patterns.
Any expert in marine conservation would tell you that climate change poses a serious threat to our fisheries. Ultimately attempting to mitigate climate change, not throwing in the towel, but instead saying look at the production capacity we have in Atlantic Canada for offshore wind, that is of the utmost importance. But I would refer you to our written testimony as well.
Senator Arnot: Mr. McNeil, you spoke to the significant promise of renewable energy under Bill C-49, up to 26 gigawatts. I’m really interested in your opinion of what kind of a timeline are we realistically looking at? We need a lot of investment. We need a lot of labour. We also need permitting. Given this, what are the realistic time frames in your opinion? Perhaps more importantly, what is the realistic potential of these projects contributing to Atlantic Canada’s energy transition?
Mr. Arnason McNeil: Thank you for that question. I’ve met with project proponents who are trying to build out large-scale, offshore wind projects on a 2030 timeline in order to contribute to the decarbonization of Nova Scotia’s grid.
These timelines always seem so far away, right, the 2030s, but 2030 is less than six years away.
Senator Arnot: Tomorrow.
Mr. Arnason McNeil: Exactly. I think we will start to see a very significant labour demand. We already have labour shortages in Nova Scotia certainly, but I think a 2030 timeline is not unrealistic. We will see this industry take off in the 2030s, a 2035 or a 2040 timeline.
I would reiterate the fact that there is immense potential in terms of economic opportunity in Atlantic Canada in the long term. Investments in offshore wind energy are investments in the economic future of Atlantic Canada, whether that’s in 2030 or 2035 or 2040.
Senator Arnot: Thank you very much.
Senator McCallum: Thank you for your presentation. I wanted to go over some potential negative impacts of offshore wind power.
Yes, we do need to look at energy, but if we move too fast where there are more negative impacts than positive, we need to know that so we can make responsible decisions.
Some of the negative impacts include increased ocean noise with an impact on fish, whales and other species; the introduction of electromagnetic fields that make it more difficult for fish and other species to navigate, detect predators, communicate and find mates; changes to habitats and hydrodynamics creating a reef effect where marine life cluster around the hard surfaces of wind development; impacts to the lifecycle stages of ocean species, such as spawning or dispersal of larvae; changes to the distribution and survival rates of marine life; increased vessel traffic; and the release of contaminants that can be consumed or absorbed by marine life.
When you look at that and now you have the offshore oil, I’ve looked at the map and it’s around Newfoundland. It’s very extensive, and now you will add all these wind turbines. What effect do you think that will have on the fish or the species? At the end of the day — and this is what First Nations have said in oil and gas country — they have removed our ability to live off the land. Now the oil and gas are gone, people leave. What will they be left with, the generations to come?
My question is: What do you think will be the impacts of the double energy sources that people are proposing?
Mr. Arnason McNeil: Thank you for your question. I, of course, need to preface my answer by saying that I myself am not an expert in marine conservation. I am here today really to call for a more stringent approach as it relates to environmental assessments and strategic or regional assessments as it relates to offshore wind.
A big part of what we are trying to say, what the East Coast Environmental Law is trying to say, and what Ecojustice, West Coast Environmental Law have said in signing on to this letter that we have submitted to the committee is let’s try and do our due diligence in terms of environmental and regional assessments, and let’s not create loopholes in that process.
I do think that coexistence between fisheries is possible with regard to renewable energy development. Let’s not cite them next to each other, right? Let’s have setbacks. Let’s create the kind of separation between these two industries that will be needed to build confidence, both within Indigenous communities and other fisheries stakeholders. I do think that coexistence between these two industries is possible.
I and others have noted that we’re not the first. We won’t be the first to develop offshore wind energy in the world. In some ways, this is a well-trod path, but let’s look elsewhere to other countries in the world for best practices in order to create a legal regime for the development of offshore wind. Let’s not allow these projects to be built without environmental assessments, for example.
Again, without being an expert in marine conservation, I can’t go into the details, but I would also refer you to our written submission. I would invite any communication or any questions between you and others at the Ecology Action Centre who are experts in marine conservation as we continue to engage with our Regional Assessment Committee in Nova Scotia.
The Chair: Thank you very much, Mr. McNeil. We appreciate you being with us this afternoon, and thank you for partaking and sharing your knowledge. It is much appreciated.
I just want to warn that we are meeting tomorrow night at 6:30. We hope to get permission from the Senate to sit, which we expect, and that will be our last session on this committee on this matter until we come back in September. Thank you very much, and good evening.
(The committee adjourned.)