Natural Resources Committee on Feb. 1st, 2024

[The Chair, Liberal, George Chahal]

I call this meeting to order.

Welcome to meeting number 82 of the House of Commons Standing Committee on Natural Resources.

Pursuant to the order of reference of Tuesday, October 17, 2023, and the adopted motion of Wednesday, December 13, 2023, the committee is resuming consideration 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.

Since today's meeting is taking place in a hybrid format, I would like to make a few comments for the benefit of members and witnesses.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your microphone, and please mute yourself when you're not speaking. For interpretation for those on Zoom, you have the choice at the bottom of your screen of floor, English or French. Those in the room can use the earpiece and select the desired channel.

I will remind you that all comments should be addressed through the chair. Additionally, taking screenshots or photos of your screen is not permitted.

With us today for the first hour is the Honourable Seamus O'Regan, Minister of Labour and Seniors. We will proceed with Minister O'Regan's opening statement.

Joining Minister O'Regan, we have, from the Department of Employment and Social Development, Helen Smiley, director general of strategic integration and corporate affairs. Supporting the other departments, we have, from the Department of Natural Resources, Abigail Lixfeld, senior director of the renewable and electrical energy division, energy systems sector, and Annette Tobin, director of the offshore management division, fuels sector.

Minister O'Regan, the floor is yours for five minutes. Welcome.

[Seamus O'Regan, Liberal, Minister of Labour and Seniors]

Thank you very much.

Good afternoon, everyone. It's a pleasure to be able to speak to Bill C‑49 today.

People of Newfoundland and Labrador have relied on the ocean forever, and others across Atlantic Canada have too. It's who we are. It's what we know. We are very proud of it. Bill C-49 recognizes a significant opportunity. Out my way, when you see an opportunity, you grab it.

I'm old enough to remember when the accord was born at the hands of people like John Crosbie, Brian Peckford and Bill Marshall. I was lucky enough to work for Premier Brian Tobin when he hit Hibernia first oil and wrote those first speeches.

However, I can tell you that the in-between times were bleak because of the cod moratorium. Oil saved my province. Times were bleak, and then we started to build our offshore. I remember first oil and I remember thinking, “We don't have a clue what we're doing.” We didn't know what was possible, but we knew what could be done and we knew we had to go for it. Jointly, we managed and regulated it through C-NLOPB. We stayed the course and people prospered. In fact, people built up energy and oil and gas right across this country and around the world.

We started in Newfoundland's offshore in what the CEO of Exxon Mobil has described to me as the harshest environment in the world that his company operates in. We found a way. More importantly, we built up one of the most skilled labour forces the world has ever seen. People noticed and companies noticed, much like they're doing right now.

Look, the world is evolving. Where we get our energy and how we get it are evolving too. Naturally, the Atlantic Accord should evolve. Unions agree, industry agrees and the provinces agree. This is because the world is looking for wind and looking for hydrogen, and Newfoundland and Labrador, God knows, has the wind and can produce the clean hydrogen the world is rushing to get.

I must admit that I had my doubts, but then I stood on a runway in Stephenville, Newfoundland, to see the German Chancellor's plane land with possibly some of the top CEOs in the world: the CEOs of Siemens and Mercedes. They were telling us they wanted to buy hydrogen from us. This race around the world is on, and delaying this any more is like starting the race with your shoelaces untied.

Markets are moving. Business is moving. Investment is moving. We need to skate to where the puck is. Today, the Alberta Investment Management Corporation just announced a new billion-dollar fund dedicated to global energy transitions in decarbonization sectors.

This is a challenge, and we are proud to take on a challenge. We applaud the engineering skills that build a West White Rose gravity-based structure, because they are the same skills that build the wind turbine monopiles that are stored right next door in Argentia, Newfoundland.

The same C-NLOPB that has managed the offshore for decades will usher in the same success for wind and hydrogen. Newfoundland and Labrador's offshore industries association, one of the biggest advocates of our offshore over the years, has already gone ahead and changed its name to Energy NL because it knows where the market is headed. That very same Energy NL, which changed its vision in 2022, now looks to a sustainable and prosperous lower-carbon energy industry. It gets it. It's following the money.

This industry will be built. It's already happening. China is already producing half of the global supply of offshore wind. Do you think China is slowing down? Do we want those jobs going to China? No, thank you. I want Newfoundlanders and Labradorians on the ground floor of this trillion-dollar industry. I want them supplying the world with wind and hydrogen and taking home the profits.

Newfoundlanders and Labradorians—Canadians—should not lose out on this. This is about the livelihoods of thousands of workers back in my home province. It's about their families. It is about them doing what they do best.

This bill was drawn up with the provinces of Newfoundland and Labrador and Nova Scotia. The premiers want it. Premier Furey and Premier Houston, one Liberal and one Progressive Conservative, are both urging that we get ahead of this and get on with it because they want it, because businesses in their provinces want it and because workers in their provinces are the best in the world at it.

We have done so in the past, and we will do so again.

[The Chair, Liberal, George Chahal]

Thank you, Minister, for your opening statement.

Colleagues, before I begin our first round, I just want to remind everyone that I use these two cards. Yellow means there's 30 seconds remaining, and red means time's up. I'll try not to interrupt you mid-sentence, but I will be waving these. If I have to interrupt you, I will, just to keep our meeting on time and on track.

We will now begin our first round with the Conservative Party of Canada and Shannon Stubbs.

Mrs. Stubbs, the floor is yours.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Chair.

Thanks to the department officials and Minister O'Regan for being here.

Minister, I've enjoyed many of our conversations about the inextricable links between Albertans and Atlantic Canadians, who for generations have built each other's provinces to the benefit of all of Canada. As a first-generation Albertan—and you and I have talked a lot about our common roots—and as the daughter of a Newfoundlander, I care deeply, just as you do, about offshore petroleum opportunities for Newfoundlanders and Labradorians, for Nova Scotians and for all Canadians. I also care deeply and Conservatives care deeply about future opportunities in new and renewable technologies.

Just as you've outlined, it is surely true that the same pioneers and innovators who have unlocked offshore Newfoundland and Labrador with incredible talent and technology are the same pioneers who unlocked the oil sands. They'll be the same pioneers to lead the future of alternative technology development and the fuels of the future.

Here's what my concern is about Bill C-49, despite the mischaracterizations of your colleagues. I won't hold those against you, because you haven't been here at the committee. This is the problem with the bill. You know that the global market for offshore petroleum exploration and development is highly competitive because it's extensive in scale, cost and risk. Even exploration is outstanding in that way.

That is why it is very important for regulatory and fiscal regimes to be certain, clear, predictable and fair. They are, in fact, inextricable from the business case decision that private sector proponents would make. The truth is, as you know, for offshore petroleum development, a private sector proponent will spend years and years, raise millions of dollars in capital and head towards exploration to only maybe do about three or four bids a year, and they can choose to go anywhere in the world.

Just as you've said, Newfoundlanders and Labradorians have led the world in this effort, and in 2022, of course, five bids worth $230 million were bought from the offshore of Newfoundland and Labrador. Those represent thousands of jobs, spinoff jobs and economic opportunities for Newfoundlanders and Labradorians and all Canadians.

That was the number in 2022—five bids. Bill C-49 was introduced in May 2022. There was another bid for offshore petroleum exploration off the coast of Newfoundland and Labrador in November 2023. Do you know how many bids there were?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

No, I do not.

[Shannon Stubbs, Conservative, Lakeland, AB]

It was zero. There were no bids. This is my concern. The same story is being seen in production such that in 2020, Newfoundland and Labrador produced over 100 million barrels of offshore petroleum per day. Today—and I know you know this better than almost anyone—that's fallen over 35% to less than 67 million barrels per day.

Those are the consequences of layers and layers of anti-energy policies and legislation. That's why Conservatives oppose Bill C-49. It's very clear that the uncertainty and lack of clarity—and the proof is already in the pudding—will end offshore petroleum development. The truth is that the lack of certainty and lack of clarity will also be barriers to private sector proponents who want to develop offshore renewables, because they require the same things around certainty, clarity and consistency.

I wonder if you, like me, will call on your minister to fix Bill C-69 since Bill C-69 is full of sections that have already been declared unconstitutional. Those sections are in Bill C-49. That causes exactly the same kind of uncertainty regarding clarity that will prevent offshore petroleum developers and private sector proponents who want to to get into offshore wind renewables.

Are you also concerned that the government has not done a single thing to fix Bill C-69 in 110 days and that Bill C-49 includes proposed sections 61, 62, 169 and 170, which all come from Bill C-69 and are all unconstitutional?

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Let me elaborate on the premise of the question, because I definitely agree with you. The competitiveness of our offshore was paramount, and I can tell you that Paul Barnes from the Canadian Association of Petroleum Producers was in the room.

I got an earful as soon as I got elected, because the problem we were confronting was that the Conservative government that preceded us had managed to take a 300-day timeline on exploratory wells and make it 900 days through the CEAA in 2012. It put us completely out of the ballpark when it came to competing with the North Sea or competing with Norway—

[Shannon Stubbs, Conservative, Lakeland, AB]

This government has been in place for nine years and—

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

—and we have reduced that from 900 days to 90 days.

[Shannon Stubbs, Conservative, Lakeland, AB]

—you are the minister right now, and we're dealing with Bill C-49.

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

I know you said—

[Shannon Stubbs, Conservative, Lakeland, AB]

Minister, I need to explain. The timeline—

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

—a lot of disparaging things about the IAA—

[The Chair, Liberal, George Chahal]

Minister, I'll ask you to just hold your thought for a second. We have a point of order from Mr. Aldag.

Mr. Aldag.

[John Aldag, Liberal, Cloverdale—Langley City, BC]

Mr. Chair, I'm going to go back to the same issue that we had a couple of days ago with members asking questions but not allowing our witnesses to respond. You have spoken about the difficulties—

[Shannon Stubbs, Conservative, Lakeland, AB]

He was talking about a government nine years ago.

[John Aldag, Liberal, Cloverdale—Langley City, BC]

—of the interpreters and other staff being able to do their jobs if we have multiple people speaking.

I think you should remind those at the committee that if they're asking questions, they should give the courtesy to the minister to actually respond to the question.

[The Chair, Liberal, George Chahal]

Thank you, Mr. Aldag, for your point of order.

Colleagues, it is important that we have one person speaking into the mic at a time so the interpreters, who do a tremendous job, can interpret effectively. Let's make sure we do allow, as the question comes, the minister to finish his answer and his thought, and then you can proceed to another question.

I hope all colleagues can abide by these rules for the best interest and functioning of our committee, but most importantly for the interpreters, who we want to make sure do a concise and accurate job of interpreting.

Minister, you were mid-sentence. If you would complete your thought, we could go back to Mrs. Stubbs.

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Yes. We were able reduce the time from 900 days to 90 days using the regional assessment provision that's contained within the IAA. The way you did it before is that you myopically looked at this section here and that section there, and you had different environmental assessments and all the consultations. The red tape and duplication were the worst I have ever seen in my time in public life, which extends a few decades.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Minister—

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

What we were able to do is reduce that and do one massive assessment—

[Shannon Stubbs, Conservative, Lakeland, AB]

I'd like to talk about Bill C-49—

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

—and we reduced the time from 900 days to 90 days. However, I had to correct that—

[Shannon Stubbs, Conservative, Lakeland, AB]

Yes, except—

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

—because that competitiveness is really important.