Honourable senators, I rise today to speak to 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.

Let me be clear from the start: Bill C-49 deals with an important and essential topic for Canada’s energy future. Colleagues, you will know that I’m in favour of responsible resource development and further exploration and development of the Newfoundland Offshore Area, which includes all areas in the jurisdiction of the Canada-Newfoundland and Labrador Offshore Petroleum Board, or C-NLOPB.

The same is true for Nova Scotia. I’m also strongly in favour of responsible development of other offshore energy resources such as wind, solar, tidal and geothermal, and of transition fuels such as biodiesel, ethanol and natural gas, as well as the development of hydrogen as a fuel along all Canadian coasts — and wherever else the potential exists. This is, of course, as long as it’s done responsibly, within the rules and regulations and with fairness regarding the opportunities that come with that development.

While I support the principle of this bill, I do not support the haste with which we in the Senate are expected to deal with it. It was introduced at first reading in the other place on May 30, 2023, more than a year ago. Second reading was completed five months later, in October, at which point it was sent to the House of Commons Standing Committee on Natural Resources.

The committee devoted 12 hearings to the bill. It arrived here a year after it received first reading in the House, and we are expected to apply all our self-celebrated and careful sober second thought to it with three weeks of committee and chamber time.

This bill proposes significant changes to both the regulatory frameworks and existing laws affecting both offshore petroleum and offshore wind energy development, along with, perhaps, other offshore energy opportunities. Bill C-49 is not specific on that, but it does open the door to it, which I support.

These changes restructure and broaden our current approach integrating renewable energy initiatives while redefining oil and gas resource management.

Bill C-49 includes several key measures that I’ll summarize in a clear way to better explain the implications of these changes. First, the bill proposes to rename the current regulatory bodies; thus, the Canada–Newfoundland and Labrador Offshore Petroleum Board and the Canada-Nova Scotia Offshore Petroleum Board will become the Canada–Newfoundland and Labrador Offshore Energy Regulator and the Canada–Nova Scotia Offshore Energy Regulator, respectively. These new entities, called “regulators,” will now be responsible for regulating renewable energy projects in addition to the petroleum projects they already regulate.

Second, the bill introduces a new decision-making framework for federal and provincial ministers regarding the granting of permits for submerged lands. This process begins with the assessment of projects by the regulators, which make recommendations to the federal and provincial ministers responsible for energy and the environment. These ministers then have 60 days to review these recommendations and render a decision. The period can be extended by an additional 30 days if the ministers request it in writing.

The bill grants the Governor-in-Council, with full authorization of the provincial minister, the power to determine ongoing oil and gas operations and prohibit new activities in areas designated as marine protected areas. These provisions also apply to future offshore renewable energy projects.

Finally, the bill allows the federal government to rely on the regulator for consultation with Indigenous peoples. This could lead to legal challenges if the Crown’s duty to consult is not adequately respected, as this bill gives government ministers the final decision.

The government was very clear when it introduced Bill C-49 that a fundamental aspect of this bill was to align the Accord Acts with the Impact Assessment Act, or IAA, as they refer to it. Here is what is written in the government backgrounder that accompanied the bill:

In addition to amending the Accord Acts to modernize and expand the mandates of the Offshore Boards to include the regulation of renewable energy development, the other amendments introduced today will improve alignment with the Impact Assessment Act (IAA), establish new tools to support the Government of Canada’s marine conservation agenda and modernize the existing land tenure regime for offshore petroleum. . . .

The amendments introduced today follow through on the Government of Canada’s commitment to work with Nova Scotia and Newfoundland and Labrador to implement the IAA in the Atlantic offshore collaboratively. Specifically, the proposed amendments remove outdated references to the former Canadian Environmental Assessment Act, 2012 —

— known as CEAA 2012 —

— clarify the roles and responsibilities for the Boards during the Impact Assessment process to better align the Accord Acts with the impact Assessment regime; and simply ensure that the Accord Acts reflect how the Regulators and the Impact Assessment Agency of Canada work together while respecting the principles of joint management.

The backgrounder goes on to state:

It is important to note that none of these proposed amendments would change the Impact Assessment Act or the authorities of the Impact Assessment Agency of Canada or the Minister of the Environment, and that the strong environmental protections under that Act will continue to be upheld. The Government of Canada will continue to work closely with the Governments of Nova Scotia and Newfoundland and Labrador and the Regulators to implement the Impact Assessment Act in the Atlantic offshore going forward.

Colleagues, an interesting thing happened on the way to that alignment. That backgrounder is dated May 31, 2023, the day after this bill was introduced at first reading in the other place. Just as second reading was being completed there in October, the Supreme Court of Canada ruled that Bill C-69, the bill that Bill C-49 was to be aligned with, was “largely unconstitutional.” Those are the Supreme Court’s words.

The Supreme Court of Canada was preceded in its conclusion by the Court of Appeal of Alberta, which ruled the bill entirely unconstitutional. The Attorney General appealed that verdict to the Supreme Court, which ruled that while sections 81 and 91 of the bill were constitutional, the rest were not.

Bill C-49, as written, includes 32 references to sections of Bill C-69 that the Supreme Court identified as unconstitutional: sections 1 to 80 and 92 to 188. It also included both the discretionary decision-making power of a minister and the entirety of the designated project scheme, both of which are unconstitutional, so components of Bill C-49 may be unconstitutional as well. In fact, colleagues, it is clear they are.

In the short time that we will have to study the bill, we may not be able to look at that aspect. Upon reflection, these aspects of the bill should be referred to the Senate’s Legal and Constitutional Affairs Committee.

We are aware that the Minister of the Environment and Climate Change, the Honourable Steven Guilbeault, issued interim guidance to take account of the court’s ruling until the amendments can be made to the IAA. Of course, the House had time to consider the impact of these issues, but we’re the chamber of sober second thought and I think it would have been better if we had been afforded the time to study this aspect. A week at the Legal and Constitutional Affairs Committee could save years in court challenges.

In issuing his guidance, the minister assured the people of my province and of Nova Scotia that regional assessment for offshore wind development in Newfoundland and Labrador and Nova Scotia will continue. Honourable senators, in making the case for Bill C-49 the government stated that the potential for offshore wind development is particularly promising in Atlantic Canada, with Nova Scotia and Newfoundland and Labrador having some of the highest wind speeds in the world. Canada, the government said, can use what it calls our “. . . world‑class‑leading offshore wind resources . . .” to serve the local and international clean hydrogen markets. Moreover:

Industry interest in developing offshore wind and hydrogen projects has also grown substantially over the past year, with numerous projects now contemplated off the coasts of Nova Scotia and Newfoundland and Labrador.

That’s all well and good, of course, but until the constitutional uncertainty of the IAA is resolved and some decision is made regarding those contemplated projects, they will remain in limbo. Colleagues, global investors migrate toward regulatory certainty, and this is the opposite.

Honourable senators, as many of you may be aware, the hydrogen that Canada and much of the world currently produce is grey hydrogen, and producing it is carbon-intensive. I applaud the provincial governments for championing the movement to green hydrogen through wind power.

As you know, the Senate Committee on Energy, the Environment and Natural Resources completed a report on hydrogen last year, asking whether it was a viable option for net zero by 2050. Many witnesses, including the government’s own witnesses, were less than optimistic about how hydrogen can achieve or even contribute to our net-zero goals by 2050. That report says on page 33:

Government witnesses from NRCan, the lead department on the Hydrogen Strategy for Canada, told us that there is not yet a clear plan for achieving the vision of the strategy.

On page 34 of the report, the testimony of several non‑governmental witness is cited:

Mark Kirby of Canadian Hydrogen and Fuel Cell Association and Sabina Russell of Zen Clean Energy Solutions, each gave the federal government a “C-plus” grade on the hydrogen strategy due to a lack of smart goals with defined metrics. . . .

Jeff Griffin of Canadian Nuclear Laboratories called the hydrogen strategy a “strong framework toward [realizing net-zero emissions by 2050]” more than a detailed plan for getting there.

Finally:

Julia Levin of Environmental Defence Canada warned that the hydrogen strategy exaggerates the role of hydrogen and leaves “too much room for fossil hydrogen.”

Perhaps most damaging, the Office of the Commissioner of the Environment and Sustainable Development audited the Government of Canada’s claims about how much GHG emissions could be reduced by adopting hydrogen at the levels envisaged in the Hydrogen Strategy for Canada. The Energy Committee’s report states:

We were disappointed to learn that the CESD’s audit found numerous methodological issues in both NRCan’s and Environment and Climate Change Canada’s (ECCC) modelling and raised larger issues with how the federal government models and projects the greenhouse gas emissions reductions of its programs and policies.

Colleagues, I will exercise a little caution with regard to the government’s claims for hydrogen in relation to Bill C-49 that it will decarbonize provincial electricity grids and move to a non‑emitting electricity grid by 2035. However, I’m still in favour of trying, just as I was in favour of early exploration in the offshore petroleum sector before any guarantees were on the table. This expansion of the responsibilities of the offshore boards is a good step and is necessary.

Honourable senators, we must also be cognizant of the impact on the fisheries. At the House committee, they heard from many in the fishing industry who unanimously shared their great concerns about the consequences Bill C-49 could have on their activities. I have also heard of significant concerns from First Nations, particularly in Nova Scotia, regarding a lack of consultation.

The concerns deserve our particular attention. The lack of adequate consultation with fishermen has been a major criticism. The fishing industry, essential to the economy of many coastal communities, has not been sufficiently involved in the construction of this bill. I can almost guarantee that the lack of consultation will come back to bite.

In her second-reading speech, Senator Petten, the sponsor of this bill, referenced the organization called One Ocean. It is a good organization. I sat as the C-NLOPB representative on One Ocean for three years. Colleagues, that organization is an early warning system that helps to maintain harmony between the vibrant and important fishing industry and the vibrant and important petroleum sector. It is not a place where the real effects of colliding interests are readily solved. Now we are introducing another industry that will operate nearshore, where inshore fishing happens and has happened for 500 years. The instillation and operation of wind turbines will absolutely have an effect on the fishing industry, especially if it takes place on traditional fishing grounds during limited fishing seasons.

The House committee study heard from witnesses who said that these developments could disrupt marine coastal ecosystems, reduce fisheries productivity and jeopardize the economic viability of coastal communities. In addition, the lack of solid scientific data and comprehensive assessments has been another point of contention.

Ruth Inniss, representing the fishing industry, highlighted the uncertainty surrounding the long-term effects of wind farms on fish populations and other marine species. She called for guarantees for a proper assessment of these impacts before projects are implemented. The offshore boards will have to develop the in-house expertise for assessments like this, as they have done for the petroleum sector.

Honourable senators, I would also like to further address the issue of the new regulatory framework for recommendations made by the regulators on the granting of permits for offshore renewable projects. It’s important to point out that this step introduces an additional layer of regulation, which risks leading to significant delays and increased administrative burdens. According to clause 19 of the bill, the transfer of permit approval powers to federal and provincial ministers could triple the time it takes to make a decision. In the case of a call for tenders, the deadlines can be extended indefinitely until the call for tenders is concluded. This approach unnecessarily complicates the decision-making process and imposes additional obstacles to future energy projects. Administrative burdens and prolonged delays risk discouraging investors and hindering our economic development.

The same criticism can be made of the regulator’s authorization process as introduced by clauses 61 and 62 of Bill C-49 in connection with the Impact Assessment Act, or IAA. Indeed, Bill C-49 integrates the requirements of the IAA into the regulator’s authorization process, requiring them, when it is a designated project, to wait for a decision from the Impact Assessment Agency of Canada before they can issue authorizations. If an assessment is required, this can significantly delay the process. In addition, it allows the Minister of Environment and Climate Change to impose “any condition that he or she considers appropriate,” taking into account the public interest. These additional conditions can indefinitely extend the authorization period. In practice, this means the authorizations needed to start work on energy projects could be delayed for several months or even years. That, colleagues, is textbook regulatory uncertainty.

Honourable colleagues, I’m also concerned about clause 28 of Bill C-49, which seriously threatens Canada’s Atlantic offshore petroleum industry. By allowing the federal minister, with the agreement of the provincial minister, to ban drilling in certain areas and suspend ongoing projects, this provision could lead to significant job losses and harm our regional economy. This provision has nothing to do with wind energy opportunities but instead provides the federal minister the ability to shut down approved and well-regulated existing activities, including production. Colleagues, this will undoubtedly result in multi-billion-dollar lawsuits.

The revenue generated by this industry is essential for local communities, provincial governments and, indeed, the federal government, allowing them to fund essential public services and contribute to the economy. Colleagues, just this week at the annual Energy NL conference, my home province, via the premier, sent a strong message that as the future “energy capital of North America,” Newfoundland and Labrador isn’t expecting its interest in offshore oil to go anywhere. The premier stated:

We will be all in on oil and gas for decades and decades to come. Because the world needs us to be.

As I have mentioned in the chamber before, there will be a demand for oil and gas from Newfoundland and Labrador for years to come. Given that reality, how can Bill C-49, which grants the federal government the power to halt or suspend drilling activities, support this vital industry? This is yet another attempt by the Trudeau government to phase out the oil and gas industry. It probably doesn’t need to be said — but, of course, I will — that these are well-paying, middle-class jobs that support middle-class families and middle-class Canadian communities.

Honourable colleagues, I have raised the serious concerns I have with Bill C-49. There may be valid answers to all of these, but I have yet to hear them. My concerns and those of others should be given a fair and thorough hearing in committee. My province is therefore in no rush. The provincial government will need to pass mirror legislation — Nova Scotia’s government as well — before anything can move forward. When I last talked to the decision makers in Newfoundland and Labrador, they had not yet begun to prepare such legislation.

Colleagues, I began by stating that I’m in favour of the intent of Bill C-49. I’m in favour of establishing a regulatory regime for additional offshore energy resources for us to provide domestically and to world markets. I have, however, legitimate concerns that elements of this bill that have nothing to do with these additional opportunities will act as a Trojan Horse to damage the business case for the petroleum sector — not by lack of supply or lack of demand and not by high cost, as Newfoundland and Labrador is among the lowest-cost petroleum extraction jurisdictions in the world. It will be via regulatory uncertainty that will drive petroleum investment to other major petroleum jurisdictions: Russia, Venezuela, Iran and Saudi Arabia. These are jurisdictions that do not have the labour standards and environmental standards that we have and that will not employ our citizens, as we do.

Colleagues, I hope that some of these questions can be answered at committee and on further debate. Thank you.

Senator Wells, thank you very much for your speech, for agreeing to be the critic of Bill C-49 and for your long history with the C-NLOPB and its contributions to our province.

Senator Wells, as you know, both premiers not only supported this legislation but both provinces were actually at the table as Bill C-49 was being drafted. The premiers have publicly called for us to pass this legislation as soon as possible so they can introduce and pass the required mirror legislation. Of course, they need the bill first in order to do that.

Senator Wells, would you not agree, especially since both premiers are on board, that this bill deserves to be studied in a timely manner, as requested by both premiers?

Thank you, Senator Petten. That’s a great question.

I do not agree that it should be passed without adequate study. I would also agree that adequate consultations need to happen. If that doesn’t happen with First Nations — particularly in Nova Scotia — and with fisheries groups in Nova Scotia and Newfoundland and Labrador, this will be more trouble than it may be worth.

I recognize that the premiers of Newfoundland and Labrador and Nova Scotia are anxious to get this going because they are anxious to see wind energy.

I know the industry quite well and have spent 30 years in the fishery — almost as long as you have, Senator Petten. I know both industries very well, and I know that without proper consultation, this will be a bill that could come back and haunt, especially the provisions that have nothing to do with wind energy and that have everything to do with stopping oil and gas development. It is like a sausage. I might say, “Do you like sausages?” Your answer should not be “yes.” Your answer should be, “What’s in it?” I think this bill is that.

I am happy to take a question, Senator McPhedran.

Thank you, Senator McPhedran, for your question. Right now, I’m only concerned with Bill C-49 and my role as the critic of it. I think we have up to 70 Senate public bills somewhere in the process of Parliament. I don’t know how many more there are, but we have more private members’ bills that we would also like to see move through. I’m not sure if this adequately addressed your question. We would like to see all legislation, at some point, be given the adequate scrutiny it deserves. But Bill C-49 is the one I’m focused on today.

Is it your pleasure, honourable senators, to adopt the motion?

Some Hon. Senators: Agreed.

An Hon. Senator: On division.

(Motion agreed to and bill read second time, on division.)