Evidence of meeting #52 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was clauses.
A video is available from Parliament.
6:40 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
It's reasonable, then, for me to ask this: What are the dividends that are generated from this project to the benefit of Canadians every year? Yes, it fluctuates. Give me a range. If you can't, that's fine. Just admit that you don't know, and we can move on to some other questions.
6:40 p.m.
Director General, Corporate Finance, Natural Resources and Environment, Economic Development and Corporate Finance, Department of Finance
In the agreement, the early years would be the ones over which there would be probably the greatest correlation between dividends prior to the agreement and the dividends most recently. You can see in the agreement that in 2019 the payment from Canada to Newfoundland was just below $135 million.
6:45 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Help me understand this. The agreement that we now have between Canada and Newfoundland and Labrador provides for fixed payments every year. Is that correct?
6:45 p.m.
Director General, Corporate Finance, Natural Resources and Environment, Economic Development and Corporate Finance, Department of Finance
That's right.
6:45 p.m.
Conservative
6:45 p.m.
Director General, Corporate Finance, Natural Resources and Environment, Economic Development and Corporate Finance, Department of Finance
There's a schedule in the agreement, which is, by the way, a public document. Each year between 2019 and 2056 has a different amount. They vary from as high as $232 million or roughly $233 million to around $15 million in the out years. Then, of course, the agreement also prescribes that the Province of Newfoundland and Labrador make payment to the federal government.
The net benefit to Newfoundland and Labrador from this agreement was around $2.5 billion. That was part of the public communications when the government signed the agreement in 2019.
6:45 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Can I ask you a question about something that's been bugging me? The Auditor General of Canada has said that the 2019 payment, the first payment that was made to Newfoundland, lacked proper legislative authority. Does your department agree with that assessment, or do you differ?
6:45 p.m.
Director General, Corporate Finance, Natural Resources and Environment, Economic Development and Corporate Finance, Department of Finance
We took careful note of the Auditor General's comment. It's for that reason the government included in the supplementary estimates and sought parliamentary authority to make the payments in 2020. Those payments were done with parliamentary authority. Of course, it factored into the decision to include it in the bill here, related to the budget implementation.
We believe that the initial payments, which were the subject of the Auditor General's comment, were made pursuant to legal authorities.
6:45 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Okay. I have two last questions. First, what is the life of the Hibernia project? How long is it expected to generate revenues?
6:45 p.m.
Director General, Corporate Finance, Natural Resources and Environment, Economic Development and Corporate Finance, Department of Finance
At the time the agreement was signed, the estimate was that dividends would continue to accrue until 2056. That was factored into the agreement itself.
6:45 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Okay.
How compatible is the federal government's financial support of this oil project even now...and the agreement that was signed between Canada and Newfoundland and Labrador in 2019? How compatible is that support with the government's net-zero emissions by 2050 plan? The federal government is committed to net zero by 2050, yet it's promoting Hibernia. It continues to promote Hibernia.
6:45 p.m.
Director General, Corporate Finance, Natural Resources and Environment, Economic Development and Corporate Finance, Department of Finance
I'm not sure I'm in a position to answer that question in a comprehensive manner. The underlying equity stake in the project is something the federal government has held for a number of decades. It's really something that continues and I think was taken into account when the government made those broad commitments to net zero by 2050.
6:45 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Thank you. I thought maybe the chair would jump in, because it was actually a political answer that was required. I appreciate your trying to answer.
6:45 p.m.
Liberal
The Chair Liberal Wayne Easter
I figured we were just starting, so we'd be kind. I will remind folks that we have an absolute hard stop at 8:30 and we hope we can get the budget implementation act out of committee tonight.
Did you have a question, Ted?
6:50 p.m.
Conservative
Ted Falk Conservative Provencher, MB
Thank you.
I just wanted to follow up a bit on Mr. Fast's questions. Is this $3.3 billion going to be the aggregate of the payments made to Labrador and Newfoundland for the entire period?
6:50 p.m.
Director General, Corporate Finance, Natural Resources and Environment, Economic Development and Corporate Finance, Department of Finance
That is the cumulative total of the payments from Canada to Newfoundland and Labrador, and then there are cumulative payments from the province to the federal government of approximately $800 million, which brings us to a net of $2.5 billion.
6:50 p.m.
Conservative
Ted Falk Conservative Provencher, MB
That's a net of $2.5 billion. Do you actually have a schedule of those payments?
6:50 p.m.
Director General, Corporate Finance, Natural Resources and Environment, Economic Development and Corporate Finance, Department of Finance
That's right. This is outlined in the agreement, which is publicly available. Schedule A outlines the payments from Canada to the province, and schedule B outlines the payments from the province to Canada.
6:50 p.m.
Liberal
The Chair Liberal Wayne Easter
Shall clause 201 carry?
(Clause 201 agreed to on division)
(On clause 202)
6:50 p.m.
Liberal
The Chair Liberal Wayne Easter
Thank you very much, Mr. Millar.
We're on division 16, on the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act.
On clause 202, I believe, Ms. Kennedy, you're on.
6:50 p.m.
Acting Director General, Federal-Provincial Relations Division, Federal-Provincial Relations and Policy Branch, Department of Finance
Thank you.
Clause 202 amends the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act to authorize the Minister of Finance to make an additional fiscal equalization offset payment to Nova Scotia of $85.6 million for the 2020-21 fiscal year.
It also extends the minister's authority to make additional fiscal equalization offset payments to the province for fiscal years 2021-22 and 2022-23 if the province receives an equalization payment for those fiscal years. These amendments would ensure that Nova Scotia is not penalized due to the timing of an arbitration settlement payment that it received in 2018.
6:50 p.m.
Liberal
The Chair Liberal Wayne Easter
Are there any questions here? We're on pages 253 and 254 of the bill.
Mr. Fast, your hand is up.
6:50 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
I have two questions. One, what is the status of the Sable Offshore Energy Project? I'm assuming it is pretty well exhausted.
6:50 p.m.
Liberal
The Chair Liberal Wayne Easter
Go ahead, Ms. Kennedy, if you have the answer. It's not really related to Bill C-30, but we'll let it go.