Impact Assessment Bill—Canadian Energy Regulator Bill—Navigation Protection Act
Nineteenth Report of Energy, the Environment and Natural Resources Committee Adopted
May 30, 2019
Honourable senators, as Deputy Chair of the Standing Senate Committee on Energy, the Environment and Natural Resources, I’d like to join the discussion today at report stage of Bill C-69, the proposed impact assessment act, and provide some insight to the testimony our committee heard during its extensive review of this controversial piece of legislation.
The bill will change the framework for which large-scale resource development projects are assessed in Canada. Due to the complexity and magnitude of Bill C-69 and the importance of the petroleum industry to this country, the committee decided to travel from coast to coast to hear from Canadians from all regions of the country. In addition to the many meetings we held in Ottawa, we travelled to Western Canada to hear from witnesses in Vancouver, Calgary, Fort McMurray, Saskatoon and Winnipeg. We also held meetings in Eastern Canada in St. John’s, Halifax, Saint John and, finally, Quebec City.
We heard from representatives from national industry associations, oil and gas companies, mining associations, power generators, builders’ associations, chambers of commerce and boards of trade, unions, ferries and airports, researchers and professors, Indigenous groups, urban and rural municipal associations, environmental organizations, investors, human rights groups and provincial governments.
The report before us today is based on the evidence we heard, over and over again, from 277 witnesses and 108 hours of testimony across our country and two weeks of arduous discussions on clause by clause. The result: 188 amendments.
I’m not going to take you through all of them. Senators Galvez and Tkachuk did well yesterday to summarize the amendments in the report, so I’d rather spend our time today focusing on the testimony that was put on the record.
It was made clear to us that the status quo does not suffice — CEAA 2012 is apparently not working — but that Bill C-69 as originally tabled in the Senate was absolutely unworkable and that it would make a bad situation far worse.
We were warned many times that if Bill C-69 was not substantially amended, it would likely become impossible for any major resource project to be built and that it would bring an industry that is already suffering to its knees. We were warned that due to the uncertainty and lack of clarity in the bill, as well as increased timelines and ministerial discretion, investment in the Canadian energy sector would continue to disappear.
That’s no exaggeration. We heard about the astronomical amount of potential investment in this country that has disappeared, gone to another jurisdiction, investment that would have employed hundreds of thousands of Canadians and contributed to the funding of essential services like education and health care, for example.
The energy industry drives our economy. It is by far the largest contributor to our GDP. Canadians ignoring this truth do so at their economic peril.
I’ll begin with some of the testimony that we heard about the significance of the energy industry and what is at stake for our economy.
At the request of Senator Wetston, the committee made sure to invite witnesses that could speak first hand to the implications of Bill C-69 from a financial and investment perspective. One of these witnesses was Mac Van Wielingen, founder of ARC Financial Corporation. He told the committee that the oil and gas extraction and pipeline business in Canada is eight times larger than Canada’s auto parts manufacturing sector and four times larger than our telecommunications sector, and that’s just oil and gas.
The committee heard that Canada’s energy industry is the sixth-largest producer in the world, accounting for over $200 billion of our GDP and employing over 900,000 people directly and indirectly. I would say the stakes are very high for the Canadian economy and Canadian families.
We had the opportunity to hear from the CEO of Enbridge, Al Monaco, in Quebec City. Perhaps he put it best:
What this could mean to Canadians is loss of tax revenues to fund education, health, and community; disappearance of meaningful, well-paying, highly skilled jobs; an exodus of our youth and talent and innovation that our sector creates; lost opportunity for economic reconciliation with Indigenous communities; and the erosion of Canada’s competitiveness.
This is not just an energy industry problem; it’s a critical issue for Canada, so it’s essential we get this bill right.
The committee heard endless testimony about the alarming state of investment in the energy sector in recent years, otherwise known as the flight of capital. Billions of investment dollars are leaving Canada because investors see regulatory uncertainty as a risk they are not willing to take with their money. Can you blame them? Would you take that risk? If you had hundreds of millions of dollars to spend on a major resource project, would you spend it in Canada, knowing full well that it may take 900 days for that project to be assessed, with no certainty of approval, or would you just take your money to another jurisdiction with a better chance of a timely return on your investment?
Our committee heard that Canada ranks 34 out of 35 OECD countries for the time it takes to get regulatory approval for projects. This is according to the World Bank’s Ease of Doing Business Index.
Investment isn’t leaving the energy sector around the world; it’s just leaving the Canadian energy sector. The global demand for oil and gas is going up, and unless we get this right, energy will still be developed, just not in Canada and not to world-class Canadian standards.
The committee also heard from Grant Bishop and Grant Sprague of the C.D. Howe Institute. They told the committee that between 2017 and 2018, the planned investment value of major resource-sector projects has decreased by $100 billion in Canada. They told us that Bill C-69, as it was received by the Senate, would only make it worse.
We heard this over and over again from investors, industry stakeholders, and many chambers of commerce and boards of trade across the country. The status quo may not be working, but the original Bill C-69 would make it worse.
Michael Dilger, CEO of Pembina Pipelines, warned the committee in Calgary that the proposed system will end up favouring foreign oil, saying:
Many foreign jurisdictions don’t have nearly the ethical or environmental standards that we already impose, let alone what Bill C-69 contemplates. They’re transported from halfway around the world, which is causing even more greenhouse gases. They’re imported down the St. Lawrence Seaway instead of matching Canadian supply with Canadian demand . . . . It absolutely defies logic.
I could not agree more. Where is the logic in setting our industry and workers up for failure, then allowing for foreign oil to be imported from Saudi Arabia, Nigeria, Azerbaijan and so on?
We develop our oil and gas at world-class standards. Canada is at the top tier in terms of environmental regulations. We should be proud of that and proclaim it.
Climate change is something we have to tackle from a global perspective. The best thing we could do to combat climate change is to displace dirtier energy. Theoretically, although not possible in the short term, if Canada were to provide all of the world’s oil, global emissions would go down 23 per cent, according to testimony we heard from experts at committee. When the committee was in Newfoundland, we heard that our offshore oil, for example, is 30 per cent below the average for greenhouse gas emissions at extraction.
When we export our oil, gas and natural gas, we are displacing other products that are produced under far lower standards, or, in the case of our natural gas, we will be displacing coal.
The energy landscape will eventually shift to a lower-carbon future, but this shift requires massive capital investment, research and development to get there. We need to start treating our energy as part of the solution, not the problem. Stop treating our energy as if it’s the pariah of the energy world. We are the gold standard, the premium product. We have the opportunity here to displace inferior products and significantly reduce global emissions.
When in Nova Scotia, we heard from Nova Scotia Power about their own ambitions for carbon reduction through electrification. They told us these projects require massive investment but that these investors need clarity — clarity not provided in Bill C-69.
When in Saint John, we heard the same sentiment from New Brunswick Power. We also heard from the Atlantica Centre for Energy about how the inability to build pipelines is only resulting in increased transportation by rail, which comes at a much higher risk. Oil by rail has doubled in Canada in the last two years. Regarding Bill C-69, we were told:
The net result will be that no new investment is made in state-of-the-art pipelines, yet other transportation will continue to grow unabated. Bill C-69 does not increase the protection of health, safety and the environment by moving oil to rail. It will not be a win-win. It will end up being a lose-lose.
Mr. Van Weilingen also provided some perspective about the negligible effect that phasing out our oil sands will actually have on global emissions:
If we phase out our oil sands, our lost barrels would be replaced by other suppliers of heavy oil.
He continued:
The net reduction in global greenhouse gases from the phase-out of our oil sands would be 0.03 of 1 per cent. The impact on the globe would be negligible. For further context, the increase in greenhouse gas emissions from China and India in 2018 relative to 2017 was equivalent to adding 10 Canadian oil sands sectors per year. Canada’s oil sands greenhouse gas emissions are immaterial to the issue of global emissions and climate change.
The world needs more Canadian energy, not less of it.
Across the country, we heard witnesses raise concerns over several key aspects of Bill C-69. I’ve mentioned some of them already.
From an industry perspective, several key areas of concern were mentioned repeatedly. Concern was raised over the unfettered scope and opportunity for litigation and delay, that there are substantial opportunities to impede, potentially forever, even the soundest of investments in high-quality projects. There are legitimate concerns about timeline uncertainty, something that we heard from nearly everyone. This is a major concern to investors.
Ministerial discretion was also a widespread concern, as well as the marginalization of life-cycle regulators.
The committee also heard from many rural and urban municipal associations. All shared the concerns of industry relating to uncertainty for investors and the implications for their communities. We heard that Bill C-69 will destroy jobs and family security and result in the strangulation of community service delivery.
I also want to address the testimony of the provincial governments, beginning with our eastern provinces. Premier Higgs of New Brunswick told the committee:
This bill, in its current form, is an impediment to investment in New Brunswick, in Atlantic Canada and in Canada’s energy sector. . . . It’s very hard not to conclude that this bill is a no-pipeline bill.
Premier Higgs urged us to adopt the amendments proposed by industry, stakeholder groups and provincial governments.
The Council of Atlantic Premiers sent a letter to the federal government signed by the four Atlantic premiers, taking issue with fundamental flaws of the bill, stating that it will “. . . not meet the dual objectives of environmental protection and economic growth.”
While in Quebec City, the Minister of Environment and the Fight Against Climate Change for Quebec, Benoit Charette, told us that Quebec takes issue with what they feel would be a duplication of evaluation and infringement of provincial jurisdiction, and that Bill C-69 would accentuate problems. In Ottawa, we heard from Ontario’s Minister of Energy, Northern Development and Mines, Greg Rickford, who told us that Ontario shares it is concerns about Bill C-69 that have been raised by other provinces and industry associations. We heard from Manitoba’s Minister of Growth, Enterprise and Trade, Blaine Pedersen, who echoed similar concerns.
Moving west, we heard from Saskatchewan’s Minister of Energy and Resources, Bronwyn Eyre, who had words of encouragement for the committee:
Certainly, if sober second thought was ever necessary, it is with this bill.
Finally, the committee heard from both former Alberta Premier Notley and newly elected Alberta Premier Kenney, both of whom spoke passionately regarding the well-known disdain that Alberta has with the proposed legislation. Premier Kenney told us that Alberta endorses the amendments proposed by CAPP and CEPA, and that Bill C-69 infringes on provincial jurisdiction.
I also bring to the attention of honourable senators that since we concluded clause-by-clause consideration, the Alberta legislature unanimously adopted a motion supporting the amendments we adopted and sent a letter to the Prime Minister indicating their support of our work. This letter was signed by the leaders of all four parties in the Alberta legislature, including former Premier Notley.
Honourable senators, although most of the focus in the media has been on Alberta, as you can tell from the testimony we heard from provincial governments, this really is a pan-Canadian issue.
Senator MacDonald, your time is up.
I am asking for five more minutes.
Is it agreed, honourable senators?
Nine of ten provinces are sending a clear signal to this government that Bill C-69 needs significant revision.
Before I conclude, I want to share some of the testimony that was heard from several Aboriginal groups involved in resource development. Their presentations certainly resonated with me.
In Calgary, we heard from Chief Roy Fox of the Blood Tribe, representing 13,000 members, 45,000 members of the Blackfoot Confederacy and over 130 First Nations who are members of the Indian Resource Council.
Chief Fox told the committee that, in the past seven decades, First Nations have progressed from being passive royalty recipients to employees, partners and owners in the oil and gas sector. He explained how this has benefited the Blood Tribe, providing critical funding for housing, cultural and recreational services, educational programs and has helped provide a path to self-determination and financial sovereignty.
In Saskatoon, we heard from Sean Willy, President of Des Nedhe Development, which is 100 per cent owned by English River First Nation, north of Saskatoon. He told the committee that Bill C-69 will eliminate opportunities that can support Indigenous people’s rights to economic reconciliation and self-determination.
Speaking about the growing number of First Nations involved in the energy sector he said:
This is not a trend that’s going away.
In Vancouver, we heard from Calvin Helin, the President and Chairman of Eagle Spirit Energy Holdings, proposing an energy corridor from Fort McMurray to Lax K’walaams on the northern coast of British Columbia. It has the support of 35 First Nations and would be 85 per cent equity owned by First Nations. The project would be a game changer for First Nations in the area, some of whom, as Mr. Helin told the committee, typically have 90 per cent unemployment.
We also heard from Brian Schmidt of Tamarack Valley Energy, and an honorary chief of the Blood Tribe. He explained how First Nations are, first, being hurt and, foremost, by the downturn of investment:
. . . investors and companies will simply move their capital from Canada to other jurisdictions.
Capital can move, but First Nations cannot move their territory.
Colleagues, we have to get this right. We have the opportunity to ensure that Canada has the framework in place to be a stable and responsible energy provider to the world.
It was clear to me that the overwhelming evidence this committee heard pointed to the fact that Bill C-69, as it arrived to us in the Senate, was inadequate and fundamentally flawed. We heard that amendments would need to be a system — an untorn fabric adopted holistically — in order to make this bill workable.
Canada shares a common geographical, environmental and economic zone with the United States. It’s imperative that we provide our workers and regions with the framework necessary to be competitive in that environment.
Honourable senators, the Conservative members of the committee proposed a package of amendments that were based entirely on the evidence we heard from key national industry stakeholders, the provinces and municipalities, and the proposed amendments that they felt were imperative in order to fix the bill.
And I want to acknowledge the work that the ISG members of the committee did in presenting their own package of thoughtful amendments. Thankfully, the committee was able to accept our package of amendments and work collaboratively to incorporate much of the package of amendments put forward by ISG members.
I think the objective here, colleagues, is to have a system where everyone directly affected by a project is confident that they can have their views and concerns heard, where industry and stakeholders are confident that there will be clarity and certainty in the process, with reasonable timelines and without the risks associated with unilateral political discretion on timelines and approvals.
If we get this right, we can get projects built that are in the national interest, that are environmentally sound and create hundreds of thousands of jobs, all the while getting our premium product to market and reducing climate emissions.
I want to note that we heard, over and over again, from witnesses from the energy sector that they welcome a rigorous process and expect nothing less.
That, colleagues, is the objective, and I think the report on the table from this committee can help get us there.
I urge all of you to adopt the committee’s report, and I sincerely and seriously urge the government of the country to accept the results of our deliberations.
We need to listen to Canadians. We have listened to Canadians, and I urge the government to do the same. Thank you.
Honourable senators, I’m pleased to rise today to speak to the committee report on Bill C-69.
The Standing Senate Committee on Energy, the Environment and Natural Resources adopted over 180 amendments to this legislation, the greatest number of amendments to a government bill that I’ve seen in my service as a senator. By the way, that was on top of the amendments that were approved the other place, which I think numbered around 100.
While this sheer volume of amendments is unusual, I would like to underline to all of my colleagues that Canadians very clearly asked us to make major changes to this legislation. We heard no fewer than 277 witnesses testify on the bill, and we travelled to nine cities, from Vancouver to St. John’s, Newfoundland and Labrador, to gain a full understanding of how the bill affects different regions of Canada. Everywhere we went we heard that Bill C-69 would have major consequences for Canadian workers unless we amended it.
I remind my colleagues that the committee received substantial amendment requests from nine out of ten provincial governments. The pushback against this bill from so many different provinces — represented by Liberal, Conservative and NDP governments — was unprecedented.
I, too, would like to focus my remarks today on the province of Alberta. To recap, the previous government, led by Premier Rachel Notley, came to Ottawa to demand an extensive suite of amendments to Bill C-69. Premier Notley told us:
. . . Bill C-69, as it is currently written, does not work for Alberta.
We heard the same message from Premier Kenney when he came to testify to the committee days after being sworn in:
. . . if this bill continues in anything like its current form, it is unacceptable.
Recently, Premier Notley’s NDP government fell to the United Conservatives and Premier Kenney’s party earned a large majority after campaigning in staunch opposition to many NDP policies.
When it comes to Bill C-69, former Premier Notley and Premier Kenney largely agreed. Premier Kenney criticized Bill C-69 in the strongest terms, telling the committee:
. . . this bill, if passed in anything like its current form, will, in the submission of the Alberta government, be a disaster for the Canadian economy and will seriously rupture national unity.
If it passes in anything like its current form, the Government of Alberta will launch an immediate constitutional challenge . . . .
Sobering thoughts.
Furthermore, Premier Kenney endorsed the suite of amendments put forward earlier in the year by the previous provincial government. The Province of Alberta is united across the political spectrum in demanding amendments to Bill C-69.
Colleagues, we listened to those demands carefully. Allow me to go through the Alberta government’s specific amendment requests.
They asked us to amend the definition of cumulative effects to explicitly prevent downstream emissions tests. This test was arbitrarily imposed on the Energy East application after four years of review, directly resulting in the termination of the project. This amendment is included in the committee report before you in the exact language requested by Alberta. It was labelled CPC-1.04 V6.
They asked us to allow for the creation of some qualifications for granting a person standing in an assessment. Namely, is a person affected by the project, or does the person have relevant information or expertise? The committee adopted an amendment labelled CPC-1.37c to address this request.
They asked us to amend section 4 to clarify that projects under exclusive provincial jurisdiction will not be captured by a federal assessment process set out in Bill C-69. This includes projects like intraprovincial pipelines and short pipeline extensions. This amendment is included in the committee report in the exact language requested by Alberta. It was labelled CPC-1.09 V6.
They asked us to amend section 9 to put science-based boundaries on the unlimited ability of the Minister of Environment and Climate Change to designate projects for federal review. The same amendment was requested by the Government of Newfoundland and Labrador. This amendment is included in the committee report. It was passed in the form of two separate amendments, CPC-1.13a and CPC-1.13b.
They asked us to amend clause 22(1) to clarify that the act only applies to effects within federal jurisdiction. Almost all provinces — not only Alberta — are concerned that Bill C-69 overreaches into areas of provincial jurisdiction. This amendment was adopted by the committee under the label CPC-1.19d, version 6.
They asked us to amend clause 27 to clarify the scope of public participation provided for in the act. This amendment was adopted by the committee under the label CPC-1.22d.
They asked us to amend clause 47 to reverse Bill C-69’s discriminatory treatment of Canada’s pipeline regulator, which the bill will rename as the “Canadian Energy Regulator,” instead of the National Energy Board. This request was adopted by the committee under the amendment labelled ENEV-1.35.
They asked us to amend clause 51 to clarify the scope of public participation when a project is assessed by a review panel. The adopted amendment CPC-1.36b addresses this request.
They asked us to amend clause 62 to put a hard limit on the length of project assessment. This is covered by amendment CPC-1.42a.
They asked us to amend clause 63 to address the overly negative focus of the bill when laying out the factors that must be considered in an assessment. This is covered by two adopted amendments, CPC-1.42b and CPC-1.42c.
They also asked us to amend clause 117 to address the makeup of the advisory councils that will be created under Bill C-69. This request is reflected in the amendment ISG-1.66 version 2.
Finally, Alberta asked us to create a privative clause to shield decisions made under the act from legal challenge. A senior Justice department lawyer told the committee that Bill C-69 creates more opportunity for legal challenge compared to CEAA 2012. Anti-development groups will take advantage of those opportunities to obstruct projects unless there is a privative clause. The committee adopted an amendment that would create one entitled CPC-1.48, version 6.
As you can see, the committee report on Bill C-69 respects the wishes of Alberta’s government and official opposition, and, most importantly, those amendments have been endorsed by Premier Kenney. I believe that their amendments along with those made by other provinces have made the bill better, and I implore all of my colleagues to vote for the adoption of the report before us.
I want to comment on the committee work. I was grateful for the decision to travel across Canada to hear submissions on Bill C-69, though that was not achieved without opposition from some committee members, who, I’m sure, would not wish to be named now.
The committee hearings showed the high degree of concern about this very large bill — all 392 pages. At one point, I thought it was legislative drafting gone wild. Particular concerns were expressed from our natural resource sectors, not only corporations but also small businesses and workers who depend on good-paying jobs in the resource sectors. The oil workers, the miners, the builders of pipelines and drill ships reflect the economic pillars on which this great country was built.
This bill was seen by many in its last version as unbalanced, an attack on the very sources of our strength and the future of this great country. It was pointed out that in all of its 392 pages, the word “competitiveness” appeared only twice and that neither the words “economy” nor “economic growth” appeared at all. Happily, these shortcomings were addressed in the report before you today.
Now, that travel took time, and I thank the Senate for the support given to make that possible. This may be seen to be a precedent building on the Finance Committee’s consultations across the country on proposed changes to business taxes, but I think that’s a good precedent for legislation of such significance.
At the end of the day, those intense coast-to-coast consultations meant we were hard pressed for time to consider amendments, let alone do clause-by-clause consideration of the bill. There was indeed a prospect that the committee work would founder due to a lack of time to sift through what turned out to be, as you’ve heard, 187 amendments.
This was solved, to the credit of the Senate, albeit at the last minute, amongst leadership to accept the thoughtful amendments proposed by industry stakeholders and other interests. Although I have identified certain amendments in my remarks today as “ISG” or “CPC” according to the complex colour-coded matrix we worked from, which was prepared in record time by our law clerks and committee clerks, these really should be considered as committee amendments.
Now they are not perfect. I still have concerns, but I think the end result is that a bill with flaws has been made better. I think we have made it more balanced.
And I want to say that there was a subcommittee appointed, and I was privileged to be part of that. We worked very hard — morning, noon and night. We were supported by very able staff from all quarters. I want to mention that I have a picture that was snapped late one night with Senator Carignan, Senator Wetston, Senator Woo, Senator Cordy, Senator Mitchell and Senator Tkachuk. Senator Tkachuk still had his sports jacket on at that late hour — his suit. He stood out in the picture.
In tribute to the capable staff that supported us all, I would particularly like to take the liberty of acknowledging my very hardworking Director of Parliamentary Affairs, Claudine Santos, for the diligence and energy she poured into that work.
We worked hard in a balanced way with goodwill and respect, and I think we’ve made the bill better. My fondest hope as we move the bill forward in accepting this report is that it does not get cherry-picked or tampered with in the other place. There may be some technical flaws that can be fixed, but it was a massive effort of the committee.
Senator Galvez, as a rookie chair, had a baptism by fire chairing that committee, and I don’t mean that disrespectfully, but you were a rookie chair, I think it’s fair to say. But we got the job done, not without challenges and some temper tantrums here and there. We worked hard. I think the ultimate result is a good result, although it may not be perfect and acceptable to everyone. But I really hope our work is respected in the other place. We heard today, on another Senate bill, that amendments were accepted unanimously by the other place. I really hope that can happen with this bill.
I commend it for your positive considerations. Thank you.
Are senators ready for the question?
Is it your pleasure, honourable senators, to adopt the motion?
Some Hon. Senators: Agreed.
An Hon. Senator: On division.
(Motion agreed to, on division, and report adopted.)
Honourable senators, when shall this bill, as amended, be read the third time?
(On motion of Senator Mitchell, bill, as amended, placed on the Orders of the Day for third reading at the next sitting of the Senate.)
