Natural Resources Committee on Feb. 5th, 2024

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you, Mr. Chair.

As we know, the NDP-Liberal coalition will get this bill passed right through. We are not blocking or obstructing this bill. We are merely raising concerns about the unconstitutional factors of the bill that should be resolved before it passes, so that there is certainty and confidence for investors.

Thank you.

[The Chair, Liberal, George Chahal]

Mr. Patzer, that's more of a debate than it is procedural relevance. I ask us—as I do at every committee, and I think we've been good today so far—not to use points of order for debate but for procedural relevance.

Thank you for interjecting.

I will go back to Ms. Jones.

Ms. Jones, I offer my apologies. We will go back to where you left off.

[Yvonne Jones, Liberal, Labrador, NL]

Thank you very much, Mr. Chair. There was no point of order.

As I think we've already established with the witnesses today, when I asked if this bill erodes the stability and protection for investors, the response from both panellists was no.

If the bill does not pass, what does this mean for Atlantic Canada in terms of the work that's been done to try to diversify the energy portfolio in those regions? What does it mean to the economy and for jobs for skilled workers?

I believe that, in the information I have in the briefings I've been given, this is not just one of the most environmentally friendly projects that we could do in consultation with all industry. It's also one of the most important initiatives that we have in continuing to stimulate growth in jobs and in the economy.

Can you add to those comments, please?

[Scott Tessier]

The best I can offer is that if Bill C-49 or something like it is not put into force, offshore renewable energy will not be regulated through an agent and the product of joint management, so one can assume it would look much more federal in its regulation.

[Yvonne Jones, Liberal, Labrador, NL]

Ms. Bonnell-Eisnor.

[Christine Bonnell-Eisnor]

I would agree with Scott that if the governments want to follow with a joint management regime and move forward with us as the regulator, if the bill doesn't pass, we can't be the regulator. With us as the regulator, you're not starting from scratch; you're starting at a really good place, and we're ready to go.

If the bill doesn't pass, then some other form would have to be determined on how that would be, and it might not be the joint management, which is what the province would want, so it would take longer to get going.

[Yvonne Jones, Liberal, Labrador, NL]

Can you tell me what the interest is in offshore wind and other renewable energy development in both of your provinces right now?

[Christine Bonnell-Eisnor]

With respect to Nova Scotia, there is interest. We have had lots of potential companies knock on our door and ask about our role as a regulator, because they've seen that the bill is tabled and they want to understand the process.

We've talked about our experience in regulating offshore oil and gas, and we encouraged them to get in touch with both governments that are readying the bill and the associated regulations so that they can understand what the regime will look like.

[Scott Tessier]

I've met with only a very small number of possible proponents in light of the fact that the regulatory regime is not in place. Similar to Christine, we steer them towards governments at this point and to the regional assessment.

I'm confident that once the regulatory regime and the legislative regime are in place, interest will pick up because, as Mr. Angus mentioned, the wind is here already.

[Yvonne Jones, Liberal, Labrador, NL]

I have one other question.

Once a project comes before the C-NLOPB or the CNSOPB to be reviewed, what's the process that you guys would take? Is there an external consultation process that you undertake as well, or is that work already done before it gets to your board table?

[Christine Bonnell-Eisnor]

With respect to engagement, there are opportunities for engagement with fishers, indigenous groups and other users of the sea throughout the process at many steps. For land tenure there are lots of opportunities for engagement. For a site assessment there will be engagement. Then it moves into whether the development of 10 or more wind turbines would trigger the Impact Assessment Act. There's engagement through that process.

For us to authorize a project for construction or development and production, there would be engagement opportunities for fishers, indigenous groups and others who want to be involved in the process to help inform us for our decisions.

[The Chair, Liberal, George Chahal]

Thank you for that.

Colleagues, first I want to thank the witnesses for providing testimony today and for appearing for this study.

If you would like to send in additional information via a brief, please try to do so before 5 p.m. on February 16.

Colleagues, we'll now suspend for approximately five minutes to change panels.

The meeting is suspended.

[The Chair, Liberal, George Chahal]

I call this meeting back to order.

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.

In our accordance with our routine motion, I'm informing the committee that all remote participants have completed the required connection tests in advance of the meeting.

As witnesses today, we have Mr. Normand Mousseau, scientific director from Trottier energy institute at the Polytechnique Montréal, by video conference. We have Mr. Peter Nicholson, chair of the board at the Canadian Climate Institute, by video conference. From the Cape Breton Fish Harvesters Association, we have Mr. Michael Barron, president, by video conference. From the International Union of Operating Engineers, we have Mr. Steven Schumann, Canadian government affairs director. From Nova Scotia Fisheries Alliance for Energy Engagement, we have Mr. Kris Vascotto, manager, by video conference. From Prince Edward Island Fishermen's Association, we have Mr. Ian MacPherson, executive director, by video conference.

We will start with Mr. Steven Schumann from the International Union of Operating Engineers, who is here in person.

You have five minutes, sir. I will be using these cards. Yellow will give you a 30-second warning, and red lets you know that the time is up. I will try not to interrupt mid-sentence.

The floor is yours. Go ahead.

[Steven Schumann, Canadian Government Affairs Director, International Union of Operating Engineers]

Good afternoon.

On behalf of the International Union of Operating Engineers in Canada, I am honoured to appear before the committee today.

The majority of our members build and maintain Canada's infrastructure. We build it all, such as hydro dams, mines, nuclear plants, solar farms, wind turbines and pipelines. We fully support Bill C-49 and the development of clean energy projects. However, the bill does not address the important issue of ensuring Canadians have the opportunity to work on these projects.

We have noticed that, when large projects are discussed, labour tends to be seen as an afterthought and not a forethought in decision-making. Wind farms cannot be built without a steady supply of labour, so labour must be a key focus. The Public Policy Forum estimates that the development of 1,000 offshore wind turbines near Sable Island would employ 30,000 Canadians annually during construction. It sounds wonderful. Unfortunately, there is no guarantee that Canadians will actually fill many of those positions.

If the federal government truly wants to support offshore wind, it must take measures to guarantee that Canadians work on these projects. We believe it is in Canada's best interest to encourage, through Bill C-49, the adoption of measures like project labour agreements, which cover all construction work for a project, utilize Canada's skilled tradespeople and apprentices, and ensure any foreign workers are paid the prevailing wage. At a minimum, strengthen the industrial benefits component found within the Nova Scotia and Newfoundland offshore petroleum board accords.

Look at what's happening in the U.S. on offshore wind. They have the Jones Act, which ensures that, between American ports—including offshore platforms—vessels are flagged, crewed and built by Americans. Some states have project labour agreements in place for offshore wind projects. The Biden administration encourages project labour agreements and community benefit agreements for these projects through their offshore leases.

Also, in the U.S., there's a national agreement with Ørsted, a project proponent that will help build the local workforce by guaranteeing that a certain percentage of the workforce for offshore work is local and provided by unions, and that our American members are able to shadow and receive on-the-job training. This allows the building up of a domestic workforce, gradually and realistically, for work that project proponents would otherwise seek foreign labour to do. However, even with this in place, it's estimated that, currently, only about 40% of the work is being performed by Americans.

At least there are attempts in the U.S. to ensure Americans are working on these projects. Nothing like these efforts has been discussed by any level of government in Canada. Unions, including our own, will have discussions with offshore wind project proponents. However, with no incentives from the federal or provincial governments, it's a challenge for us to ensure Canadian workers can work on these projects. As of right now, there's no guarantee that Canadians will have any of the offshore work, or even much of the onshore work, for these projects.

We ask that the committee consider labour guarantees in its deliberations on Bill C-49 and amend the bill to include a requirement that project proponents adopt project labour agreements, Canadian crewing requirements on vessels and, at minimum, some safeguards to ensure Canadians get to work on these projects.

Project labour agreements are more than just guarantees that local workers will have jobs on these projects. They're also a way for Canada to build its workforce by enshrining targets for the involvement of under-represented workers, such as women and indigenous Canadians. These types of agreements are nothing new to the Atlantic provinces and, in fact, have helped Atlantic Canadians obtain work on the projects that have impacted their communities.

Federal policies and incentives relating to offshore wind development should aim to benefit Canadian workers and their communities. We believe the federal government must take the lead in every effort to ensure Bill C-49 reflects the goal of supporting and building Canada's workforce. Some of the suggestions we've outlined today would be the best avenues for doing so.

Thank you.

[The Chair, Liberal, George Chahal]

Thank you for your opening statement.

We will now go to Mr. Mousseau for five minutes.

Go ahead.

[Normand Mousseau, Scientific Director, Trottier Energy Institute, Polytechnique Montréal, As an Individual]

Thank you very much.

Thank you for the invitation. I'm honoured. I regret that I was unable to appear before you in person.

I want to go back to the bill, which is certainly relevant but still contains a number of inconsistencies. The bill aims to add the management of offshore renewable energy licences to the already existing management of offshore oil licences.

As we heard earlier, technologies for generating electricity using offshore wind turbines are already available. It is therefore essential that the federal and provincial governments in Canada adopt the legislative tools to support the development of such projects, but they also need to facilitate the rapid implementation of projects to increase renewable energy production in the Canadian energy system. In that regard, this bill is relevant, appropriate and necessary.

Nonetheless, I see two significant issues. First, it's somewhat inconsistent with climate targets. Second, there's a lack of integration with other jurisdictions when it comes to renewable energy production, which is different from oil production. I'll come back to that in a moment, but first, I'll address the inconsistency with climate targets.

The bill, as presented, will treat fossil fuel extraction and renewable energy production equally. That's incompatible with what we know and with what international organizations are promoting. They're clearly saying that, if we want to reach the climate targets adopted by the signatories to the Paris accord, the development of new fossil fuel deposits must be prohibited. However, the bill doesn't do that; rather, it promotes both types of activities equally.

In my opinion, the bill should include a deadline, in the near future, after which no new licences for fossil fuel development will be granted or, at the very least, the bill would trigger, say, every five years, a review of the relevancy of continuing the exploitation or development of new offshore fossil fuel deposits.

In that context, we can say that the short title of the bill, which simply mentions the renewable energy aspect in relation to the Canada–Newfoundland and Labrador Atlantic Accord, does not reflect the nature of the bill in its current form, since fossil fuels get equal treatment. However, if the amendments I'm proposing are made, that title can be retained. That said, the title is a secondary issue.

Now, let's talk about how to prioritize renewable energy projects. It's important to understand that transporting renewable energy presents different challenges from those associated with transporting oil and gas. The bill refers briefly to green hydrogen. However, green hydrogen and its derivatives, such as ammonia, are still far from constituting a real market for renewable energy production, despite the visibility these molecules have been given.

This means that most, if not all, offshore electricity produced will need to be transported to the coast, and then to market. We cannot really consider offshore projects as being strictly offshore. They need to be integrated into a market connecting the provinces and other markets.

Furthermore, the current bill does not define potential upstream collaboration or an order of precedence, for example, in order to accelerate approval of projects that aren't limited to wind turbine construction. The transmission lines between provinces and more remote markets are needed. Therefore projects should instead be considered in their entirety, and an attempt should be made to create mechanisms to ensure more comprehensive approvals and consequently reduce the time it takes for projects to be assessed so they can get under way faster.

In my opinion, it would be better for the bill to recognize that putting oil in a ship for transport is quite different from the production of electricity, which requires transmission lines and more complex market integration with various levels of approval. Some thought needs to be given as to how to simplify that and allow the acceleration of renewable energy projects.

Those are my main comments on the bill. I will be happy to expand on them.

[The Chair, Liberal, George Chahal]

Thank you for your opening statement.

We'll now go to Mr. Nicholson from the Canadian Climate Institute for his opening statement.

Please, go ahead.

[Peter Nicholson, Chair of the Board, Canadian Climate Institute, As an Individual]

Thanks very much, Mr. Chair and the committee, for providing this forum to address the potential for really massive offshore renewable energy development off our Atlantic coast. It's a scale of opportunity that, quite frankly, has been underestimated. Realization of the opportunity will depend on many factors, but one essential precondition is an appropriate regulatory framework, and hence the relevance of Bill C-49.

I will very briefly summarize some of the content of a paper I wrote, entitled “Catching the Wind”, published last October by the Public Policy Forum. The purpose was to outline the opportunity to develop Atlantic offshore wind energy at scale as a significant contribution to Canada's clean energy requirement.

I want to emphasize that we are talking here about a project of national significance, not just a regional project, although there would be very significant economic benefits for Atlantic Canada. To date, much of the discussion of Atlantic offshore wind has been in the context of green hydrogen for export primarily to European markets. While this may be a promising opportunity, in my view, green hydrogen is not the biggest prize. The first and best use for Atlantic offshore wind would be to supply the national grid and to provide massive amounts of clean energy as far west as Ontario.

The starting premise is Canada's, and indeed the world's, commitment to eventually decarbonize the energy system. This will require an enormous expansion of electricity generation and transmission, both nationally and globally. How much? In Canada's case, we can draw on a detailed scenario published last June by the Canada Energy Regulator, or CER. The CER projected that to achieve net zero, Canada will need to double electricity generation.

Where will all this new energy come from? According to the CER scenario, about 15% will be from new hydro development. Some 25% will be from a tripling of nuclear generation. Another 15% or so would come from a mix of solar, biomass and geothermal, but almost half of the new generation would come from a sevenfold increase in wind energy. In the case of Ontario, for example, electricity generation would more than triple in the net-zero scenario, with almost two-thirds of the growth coming from a twelvefold increase in wind generation.

Where will all this new wind generation come from? Obviously, a great deal will have to come from a massive build-out of terrestrial wind farms across Canada, particularly in the west. However, wind facilities on the unprecedented scale required can generate very significant land use conflicts, particularly in more heavily populated areas where local resistance has already manifested.

What's the alternative? The alternative is to generate massive new energy from the strong and consistent winds blowing off our Atlantic coast. I'll illustrate with just one hypothetical example. Imagine one or more offshore wind facilities capable of generating a combined 15 gigawatts of electricity. That's a very large amount. It's enough to power six million to seven million average Canadian homes. This power could be provided by a thousand 15-megawatt turbines. They would occupy a total area of roughly 3,000 to 4,000 square kilometres of ocean surface. It's important to recognize that wind turbines at this enormous scale would be separated by at least 1.5 kilometres, thus greatly reducing the impact on marine activity and traffic. A great many areas off the Atlantic coast afford excellent siting conditions, including the example I provided in the paper of the vast Sable Island bank, though of course not on Sable Island itself.

There would be very significant direct economic benefits associated with the installation and ongoing operation of such a facility. For example, as was mentioned by Mr. Schumann a moment ago, there would be about 30,000 jobs during a multi-year installation and roughly 1,200 permanent jobs associated with maintenance. Fortunately, there's already a base of relevant marine skills in the region. With training, Atlantic Canada could eventually become a global centre of expertise in offshore wind.

The challenge here is going to be to mobilize the enormous investment to establish both the wind facilities and the expanded transmission westward from the coast. This will require many tens of billions spent over many years, but we are talking about an investment to secure both our future economy and a livable planet.

In conclusion, it is quite obvious that we have here a national opportunity of historic proportions, and for that opportunity to come to pass, Canada urgently needs a regulatory framework equal to the unprecedented nature of that opportunity.

Thank you very much. I welcome the questions.

[The Chair, Liberal, George Chahal]

Thank you for your opening statement.

We'll now go to Mr. Michael Barron, president of the Cape Breton Fish Harvesters Association.

Mr. Barron, the floor is yours, please go ahead.

[Michael Barron, President, Cape Breton Fish Harvesters Association]

Good afternoon, honourable Chair and committee members.

Once again, my name is Michael Barron. I'm the president of the Cape Breton Fish Harvesters Association. I represent multispecies harvesters. I am also an independent owner-operator harvester as well.

I sit before you today scared for my livelihood and for every other inshore harvester's livelihood. Thank you for the opportunity to speak on Bill C-49.

I must start my remarks by stating that five days is a little rushed to appear on a significant bill such as this. It is no different from the timeline that has been proposed for the passage of Bill C-49. It is rushed.

The new green offshore wind industry on the east coast of Canada will be the first for Canada, the first for Nova Scotia and the first for our marine environment—so many unknowns and so many very different variations from the oil and gas industry. We feel that this new industry constitutes its very own piece of legislation, not an amended one where we are trying to fit a round peg into a square hole. Time has dictated the process.

In an industry that is a major economic driver for Nova Scotia, the lack of consultation has not gone unnoticed by all fish harvester associations throughout Nova Scotia. Nova Scotia provides Canada with more than 35% of the world's shellfish exports. We rely on the federal government to protect our interests and to ensure this valuable, high-protein and low-carbon-produced food source continues to feed a global market.

In 2018, the Nova Scotia industry alone generated $1.9 billion and, on the same basis, in 2018 the total Nova Scotia employment impact of the industry was 16,300 jobs and $865 million in wages and salaries. This income supports community infrastructure, schools and hospitals. Further, the wealth generated permits people to purchase food, other goods and services and to remain and prosper in our coastal communities.

We understand that our climate is changing, and we realize that we all have a collective role in trying to find viable solutions. The fishing industry is not against green energy sources.

An example of the fishing sector and offshore wind coexisting is Scotland. The picture that is being painted, however, is not as glamorous as we are being led to believe. Scotland has a population of 5.4 million people. Their landed seafood value is 617 million pounds, which converts to $1 billion Canadian. In comparison, Nova Scotia is just one-fifth the size of Scotland, and in 2023 Nova Scotia's landed value was $2.8 billion.

Scottish fishermen have also stated that the amount of space they are losing to offshore farms is affecting the viability of accessing fishing grounds and resources. They have also provided documents to show wind farms within marine conservation areas. The Scottish federation feels that allowing wind farms within the conservation areas is infringing on their way to operate viably.

Turbines have a rated capacity that allows only certain wind speeds. For example, an eight-megawatt turbine is not always producing eight megawatts—that's only when it's ideal—and they are all going to need backups when necessary. They have cut-in and cut-out speeds. They cut in at 10 kilometres and they cut out at 90 kilometres. Consider this in the context of Nova Scotia weather, when hurricanes are increasing in frequency and severity.

According to a developer—BlueFloat Energy—that met with me and my staff, the ideal depth for a turbine is from 16 to 21 fathoms, which is prime lobster area here in LFA 27 in Cape Breton. This also affects spatial planning on other MPAs, agriculture, shipping and transport and marine navigation.

If offshore wind farms line our pristine coastline and the inshore fishery is displaced from our traditional fishing grounds, what will there be in the line of compensation? In Bill C-49, we have proposed subsection 183.22(3), which says:

Promotion of compensation policies

The Regulator shall promote and monitor compensation policies for fishers sponsored by the fishing industry respecting damages of a non-attributable nature.

We note that, assuming this means “sponsored” as “put forward by” and not “as funded by”, there is no legal requirement in this bill for developers to provide any compensation to the fishers. Regulators need to be held accountable for decisions and consequences. They need to be able to hold wind developers and operators accountable by sound legislation clearly written and understood by all marine users. Lessons should be learned from previous track records in tidal within the Bay of Fundy and in hydro at Muskrat Falls in Newfoundland.

In closing, a more involved in-depth consultation needs to be had with other primary users of this space moving forward.

Thank you for allowing me to present our position. I'm looking forward to your questions. Please note that I shortened this up to save time, and all of my remarks have been submitted.

Thank you.

[The Chair, Liberal, George Chahal]

Thank you for your opening statement.

We will now go to Kris Vascotto from the Nova Scotia Fisheries Alliance for Energy Engagement.

Go ahead. The floor is yours.

[Dr. Kris Vascotto, Manager, Nova Scotia Fisheries Alliance for Energy Engagement]

Thank you for the opportunity to provide our perspective on the bill before you.

The Nova Scotia Fisheries Alliance for Energy Engagement comprises harvesters from across Nova Scotia. Our alliance arose out of a shared need to communicate industry perspectives on energy development in the marine waters surrounding Nova Scotia. By bringing industry participants from all sectors, species and regions, we undertook to assemble and communicate our shared concerns to proponents, regulators and government on the development of energy resources in the waters that support the fisheries and, hence, the communities of this province we call home.

That this alliance includes participation from over 20 harvesting groups from across fisheries demonstrates the importance with which the fishing sector views offshore energy development. This issue is crosscutting, and my voice is the amplification of their concerns, questions and solutions.

To be clear, members of the NSFAEE do not oppose offshore energy development but seek that it be done in a responsible manner. Historically, members have relied on the federal government to protect the interests and viability of their enterprises. They have worked to support science and refine rules for the fishery, and they have tried to be part of the solution. In turn, they rely on the government to make good decisions.

Perhaps this is why members are surprised and dismayed by the content of the bill before you. Collectively, we understand that, as a planet, we are facing profound challenges related to climate change risk, and we realize that we all have an important role in finding a viable solution. However, rushing poorly thought-out legislation to govern an industrial marine development that remains largely in an experimental stage for Atlantic waters and lacks proper safeguards to ensure a viable and resilient coastal economy is myopic. It will act only to damage those who are perhaps the most informed stewards of the resources while potentially facilitating even more environmental damage.

Quite simply, we are concerned that the legislation as drafted fails to account for or even consider the fundamental differences between the offshore petroleum industry, which this legislation was originally intended to apply to, and the burgeoning offshore wind industry that is dramatically different in structure, function and impacts.

For instance, this legislation provides clear guidance for compensation for impacts to harvesters related to the construction, operation and demobilization of oil and gas facilities or offshore wind sites related to the release of “debris”. Let us be clear. This is to address direct damages if a trap is lost or a vessel is damaged as a result of falling infrastructure or otherwise—impacts that occur in a very narrow period of time. Any other consideration is directed to the Fisheries Act, confined to the release of “deleterious substances”, meaning a spill for oil and gas, but what does this mean for offshore wind? The answer is that it isn't even relevant. Unlike an offshore oil and gas development, wind farms render vast areas of the ocean off-line because of safety concerns and operational challenges as they harvest energy from the wind before it enters the ocean environment.

It has been demonstrated that the act of harvesting wind stands to alter the very basis of the ocean ecosystems and the marine communities and fisheries that they support, meaning that the very existence of a wind farm stands to alter fisheries productivity, stock distribution and even the ability of commercial fish stocks to survive and flourish. The current legislation before you provides no avenue for such losses to be recovered from offshore wind operators and appears to be intentionally silent on it, perhaps because the bill reads as a short rewrite of a petroleum-based perspective.

This is untenable at best.

Furthermore, as legislators, you have an opportunity to ensconce in law that the benefits of offshore wind development be required legally to be shared with those communities, fishers and industries that stand to be impacted by generation, operation, transmission and, potentially, lost fisheries production.

Again, this legislation before you speaks to sharing royalties with governments but not communities or people. This is problematic.

In Atlantic Canada, we are deep into a regional assessment process that, as approved by the federal and provincial ministers, seeks to identify potential areas for offshore wind development in the marine environment. However, embracing the outcomes of this process and using those selected areas to guide further detailed study and subsequent development are also completely absent in this legislation. This means that, despite all of the efforts of the fishing industry to help identify low-conflict areas for offshore wind and to ensure that appropriate baseline information, mitigation measures and monitoring are in place, there is no security that development would be restricted to those selected areas.

[Mario Simard, Bloc, Jonquière, QC]

I have a point of order, Mr. Chair.

Would it be possible to ask the witness to slow down? He is speaking too quickly for the interpreter to keep up.

[Dr. Kris Vascotto]

I apologize.

[The Chair, Liberal, George Chahal]

It's no problem, Mr. Vascotto. I would ask you to speak a tad slower—although you have about 30 seconds left—so that they can make sure they interpret everything you say.

Go ahead.