In overhauling Canada’s regulatory environmental review process, Bill C-69 has good intentions, but as written it would endanger the very things it is trying to fix: explains Patrick McDonald of the Canadian Association of Petroleum Producers. McDonald and Energy Examined host Tonya Zelinsky discuss what's involved with this controversial proposal, the latest update on Senate deliberations, and why Bill C-69 could drive away investment and cost jobs in industries well beyond oil and natural gas if it isn't changed to prevent an already complex regulatory review process from becoming unmanageable.Full transcript of podcast:
Tonya: Welcome back to another edition of Energy Examined, the podcast aimed at discussing some of the biggest issues facing Canada’s oil and natural gas sector with the industry insiders in the know. I’m your host Tonya Zelinsky and today we’ll be talking about one of the biggest, most controversial pieces of legislation being proposed by the government of Canada, Bill C-69 or the Impact Assessment Act. Joining me today is Patrick McDonald, the director of climate at the Canadian Association of Petroleum Producers. Patrick has been working closely on this file for several months or maybe longer. Thanks for joining us here today Patrick. How’s it going in the world of Bill C-69?
Patrick: It’s going great. It’s going great. Glad to be here. Thanks for having me.
Tonya: Well, there has been a lot of talk about Bill C-69. In Western Canada for sure everyone seems to know about this, but for those people who aren’t familiar with it, can you give us a bit of a summary? What is it?
Patrick: Yeah, you bet. So, in terms of Bill C-69, it’s a bill right now that’s been moving through the legislative development process and it makes changes to the environmental assessment process in Canada, as well as, it modernizes the National Energy Board, as well as making changes to the Navigation Protection Act. So this bill has, again, the potential to make fundamental changes to three different acts that are currently within the federal legislative framework.
Tonya: Was there something already wrong with these three different acts that they needed to create one to encompass it all or what were the – what was the rationale?
Patrick: It depends on who you ask, whether or not there was problems. You know, I think there was obviously a desire from government over this mandate to make some changes. In terms of issues on the regulatory framework on major projects, I think we as industry have made it clear that there are some challenges and those have been with things like the TransMountain Project and delays on construction and revisiting approvals that were issued and things like that. And when we’ve had derailments on a number of other pipeline projects like Northern Gateway and Energy East – a lot of those due to the regulatory review process. So, I think in terms of our view of the regulatory process, there’s definitely room for improvement. We, at the start of this, you said months, I have been working on this for a number of years and earlier on in the process, we commissioned an international study to look at environmental assessment processes globally, and see how Canada matched up and so while in Canada we had a lot of best practices in Canada that were undertaken elsewhere, it was also found to be one of the most expensive and costly and lengthy review processes in the world. And so that’s, when we’re starting with that point, it’s not a surprise on why we’re struggling to get investment in major projects and get these projects through the application process to construction, which again, in the end is going to be a benefit to all Canadians because that means jobs, that means growth in our economy, etc.
Tonya: So, now I know as you just said, you’ve been working on this for several years – what are some of the biggest issues in Bill C-69 that deal directly with the oil and natural gas industry? And why does it affect our industry so much?
Patrick: Well, a lot of the pieces, maybe just in terms of infrastructure, why this bill has the potential to impact us is one, it has the potential to impact some projects, the resource recovery projects that we build, so there’s a draft project list out for discussion right now until Friday is the deadline
Tonya: And Friday being what – the 31st of…
Patrick: The 31st of May is the deadline to provide feedback on this draft project list and so that’s one, there’s a number of oil and gas projects that could be subject to this review process – upgrading, in situ, oil sands recovery, oil sands mining, and it is a reality that currently the number of oil and gas projects that would be subject to this process is increasing from what it was in the past and so that’s a major component. But as well as, for our producers for us to be successful we have to gain market access so we need to be able to get our resources to market and another type of project that is encompassed in this is our major pipeline project so any new major pipeline, in order to deliver our resources would be subject to this and given the shift that the bill is taking in terms of what’s considered in these, you know, things like how emissions and how a project will contribute to Canada’s ability to meet its climate change commitments and the intersection of sex and gender, there’s just a number of new policy issues that are embedded in the bill that have the potential to add to the complexity of an already complex framework.
Tonya: This just sounds incredibly confusing to me, what they’re trying to propose here with Bill C-69. Now correct me if I’m wrong with this, based on what you’ve just said it sounds like there are far greater implications across the board. We’re talking about investor confidence. We’re talking about potentially a longer regulatory process. And those are things that are not just affecting oil and natural gas. That could affect other industries or other projects, other communities – you name it – across Canada. Should Canadians be – should they try to understand what this bill is? Should they be concerned about what the bill is?
Patrick: So, in terms of this legislation, should Canadians be concerned and be paying attention? Absolutely. This is, you know, while we’ve been focussing a lot on this in relation to our industry, every major project type – whether it be a hydro dam or a wind generation station or nuclear – so any, any project that’s potentially developing resources or delivering energy for Canadians to use could be subject to this, to this process. And yes, we’ve heard a lot about it, but Canadians are concerned. The Senate Standing Committee who has been tasked with studying the bill went across the country and heard from hundreds of witnesses about their level of impact and we’ve heard a number of provincial governments speaking up about this bill and how it could impact their ability to run their economies and build the projects that are in their jurisdiction and so, while we’ve been talking about it in terms of oil and natural gas projects, it is much broader and it is spanning the entire country.
Tonya: Well, for our listeners in Western Canada, they might know Bill C-69 as the “no more pipelines” bill – that’s what it’s kind-of been dubbed here, but this has implications for offshore Atlantic Canada as well. Can you talk a little bit more about that – how this might affect them?
Patrick: You bet. So on offshore currently, one of the things that folks might know about is things like offshore exploration wells are currently subject to this environmental assessment process and so, if we’re looking at how we can be competitive with other jurisdictions in terms of development, if we have a regulatory process that is years for things just like exploring for resource to consider if we actually want to do a production project that puts us at a real disadvantage. And so it’s no surprise that our offshore members and the governments within Newfoundland and Labrador and others on the East Coast are very concerned with this bill as well because it could further impact our competitiveness and that’s one thing that we’ve been seeing from the outset, is that things like exploratory wells for offshore are not rightfully – they don’t belong in this process. This thing should be geared towards only the major projects that have a potential for significant effects that are within a federal jurisdiction.
Tonya: Aren’t they already heavily regulated through -- like in Newfoundland for example, the Canada and Newfoundland and Labrador Offshore Petroleum Board? They have oversight in place already.
Patrick: That’s a great point. If we look at the offshore boards that regulate that type of activity, we look at across the country, we have provincial regulators that have the expertise for oil sands, for example, in Alberta and for LNG and gas production in B.C., so we’ve got either these provincial or federal regulators that have the expertise and the knowledge, and currently as written, this bill, it takes a lot of the ability to utilize that expertise out of that, so it’s marginalizing the use of all lifecycle regulators, provincial or federal. And that should be a concern for Canadians because that’s expertise that we would want to be part of these reviews as opposed to not, so we’ve got all of those components and really one thing we’ve been struggling with is the duplication of regulation. In order to be competitive, we need to have a framework that limits duplication. If we have one project, we really should be doing one assessment. We shouldn’t be doing multiple assessments, but in order for that to happen, we need provincial and federal governments to work together, and that doesn’t seem to be something that’s been happening on this bill because, just given public the comments made by provinces, those wouldn’t be comments that we’d be seeing if they were working effectively on this.
Tonya: Seems to be a little bit of a lack of collaboration on this bill.
Patrick: I would say that you’ve hit that rightly.
Tonya: Well, so today, which is actually May the 29th, a report went to the senate from the Senate Standing Committee of Energy, the Environment and Natural Resources. And I believe this contained a number of amendments. Can you elaborate a bit on what this is and what the next steps are because you’ve been working on this for years, but now we’re in a race, it seems, to the finish.
Patrick: The timelines here are pretty short and there are some pretty critical components here. So as I noted, the Standing Committee went across Canada and heard from witnesses and gathered feedback and did a very robust and rigorous assessment of this bill and as such, is proposing about 188 amendments that they are proposing in this bill in order to make the legislation workable for, in their view, provinces and stakeholders and for industry that we can ensure, that we can navigate through this process. And I gotta give it to the committee – they studied it, they did their work and listened to Canadians. I think that’s the biggest basis, you know, they went across to listen to Canadians and incorporate amendments that would actually make a difference to the Canadian regulatory framework and so today, the chair and other members of the committee presented it to the broader Senate this report that summarized what they studied and the proposed changes, and now we’re moving into debate, there will be debate within the Senate and if the report gets accepted and passed, then the bill would move to third reading into the Senate, which is near the finish line.
Tonya: It’s like the final stretch.
Patrick: It’s almost the final stretch here and then once a decision is made by the broad Senate, it’ll go back to the government, to the House of Commons and that’s where they’re going to consider whether or not to accept the recommendations of the Senate.
Tonya: So, it hasn’t been that we wanted this bill to go away. It’s simply that we want it to work for all facets of industries, the communities and Canadians as a whole – that’s where the amendments came from. We weren’t asking them to just drop the bill.
Patrick: Since the bill was introduced a year or so ago, we’ve been advocating and trying to fix this bill. We’ve done extensive work with our members to come up with, in our view, a suite of amendments, a system of amendments that would make it something that is workable, that we think industry would, if those changes were made, we might have some proposed projects and there would be some degree of certainty that you could get through the process, and after you’re through the process, you would have an approval that would stick, and decisions that would stick and with that, we’ve been very active with government. And unfortunately, initially we didn’t get a lot of movement, now the Senate has responded and recognized that there were some fundamental flaws with this bill and as such, made a great deal of changes and so right now, we’re really at the point of, is government – if those changes move through the Senate – what is going to happen to this bill?
Tonya: So, can you tell me what comes next with this bill? It’s in the Senate. It’s going to the House of Commons. Are we just basically now in a waiting game?
Patrick: I think we’ll have a good indication, I mean there’s potential more amendments that could happen at the Senate outside of the committee but within the broader Senate. And then, as with other pieces of legislation, it would move to the House of Commons and their consideration. So, whenever there are changes to a bill, the government has to receive those and consider those. So we’re in a bit of a waiting game, but, you know, the clock is obviously ticking in that we’re coming up very closely to the end of the legislative session and coming up to the summer break, so a lot of work and a lot of meaningful discussions to happen between now and the end of June.
Tonya: Well, there’s a lot of excitement going on in the next few weeks. I guess I’ll be waiting on pins and needles as to see what happens with Bill C-69. So, Patrick, thank you so much for joining us today.