Saving Canada's Coasts from Regulatory Capture: Senate Votes Down New Impact Assessment Act

This Bill Cannot Stand. Rescue The New Impact Assessment Act Before It's Too Late.

by Sierra Club.ca

June 11, 2019

In spite of what has been referred to as a "flood" of evidence from fishing organizations, indigenous leaders, and environmental groups, the Senate has voted down an amendment to fix the new Impact Assessment Act, Bill C-69.

The amendment proposed by Senator Cordy in response to overwhelming criticism of the Bill from Atlantic Canadians, would have prevented offshore boards from chairing assessment panels that will determine where, when, and if oil drilling will go ahead in Canada's Atlantic waters.

As you know, I have little faith in the ability of offshore boards to credibly assess the risks of offshore drilling.

(For more, see my presentation [copied below] and that of many others who presented to the Senate's Energy, the Environment, and Natural Resources Committee when they travelled to Halifax, St. John's, and St. John).

• Because of what this will mean for Canada's Atlantic waters, the whales, fish, and fisheries that need protection from oil drilling, this Bill cannot stand.

• Because the fallout from this will be rubber-stamping of 100 new exploratory wells and massive, seismic programs off Newfoundland and Nova Scotia, this Bill cannot stand.

• Because Newfoundland and Labrador’s offshore oil and gas ambitions will produce enough greenhouse gas emissions to produce almost 10% of the global carbon budget to keep us within the 1.5-degree Celsius limit, this Bill cannot stand.

With your help, we can get our elected leaders to fix this Bill before the government rises for the summer. But we don't have much time.

Please write now.

Thank you for taking action.

Gretchen Fitzgerald - National Program Director

Gretchen Fitzgerald, National Programs Director, Sierra Club Canada Foundation:

I would like to acknowledge that we are on unceded territory of the Mi’kmaq people.

My focus today is to ask you that the offshore petroleum boards have less, not more, power under the new Impact Assessment Act.

Sierra Club Canada Foundation is a national grassroots organization with the mission to empower people to be leaders in protecting, restoring and enjoying a healthy and safe environment.

Sierra Club has been involved in the development and amendments of environmental assessment laws since their inception in Canada. We have participated in numerous environmental assessments over the years, including the cleanup of the Sydney Tar Ponds, the Muskrat Falls mega hydro project, the Digby Quarry, and various offshore oil and gas projects off the East Coast.

Because of this experience, we know that offshore boards do not have the mandate or the expertise that would enable them to assess accurately and without bias offshore oil and gas projects.

The phase-out of fossil fuel development and the just transition for those affected by this change is what the Senate Energy Committee should be holding hearings on today.

Offshore oil and gas development usually occurs over the time scale of decades, but the Intergovernmental Panel on Climate Change has told us all that we do not have decades, as you are all very well aware. We have a matter of 11 to 12 years to prevent a climate crisis and limit global temperatures from rising above 1.5 degrees Celsius.

According to the IPCC report issued last fall, the final tick box is political will for achieving these safe levels. As senators you must be part of this will.

The Government of Newfoundland and Labrador plans to increase oil and gas development off its coast with potentially devastating impacts on climate and our oceans. Calculations performed by my colleague’s organization, Ecology Action Centre, indicate that if Newfoundland and Labrador develop oil and gas reserves as proposed in its advanced 2030 document on the way forward on oil and gas, this single province will be responsible for almost 10 per cent of the global allowable GHG emission budget to keep our planet within 1.5 degrees Celsius.

To us, it is not a weakness but a strength that the Bill C-69 will require us to take into consideration the impact of proposed projects on our obligations to meet climate targets. The early planning phase proposed in Bill C-69 is also a step in the right direction because it will engage community members and Indigenous communities earlier in the process and allow them a window into planned projects that will affect them.

Sierra Club Canada Foundation has concerns about Bill C-69 in that it does not go far enough to ensure there is science-based decision making by requiring independent review of assessment reports or by ensuring that decision making on proposed projects happens free from political interference.

Bill C-69 does not commit to ensuring we uphold the rights of Indigenous peoples by obtaining free, prior and informed consent. It does not propose a method for engaging in collaborative consent processes, a concept proposed by the expert panel on Bill C-69.

Given the reason for engaging in the process of drafting a new Impact Assessment Act was to make environmental assessments credible again. We are very concerned about giving greater powers to the offshore boards as is proposed in the draft bill.

The offshore petroleum boards have a dual mandate to promote oil and gas development and to protect the environment and the safety of workers.

Members of the boards are often drawn from the fossil fuel sector and do not have expertise in protecting the environment, ecology and endangered species or in reflecting the concerns of other marine industries such as fishing and tourism.

Some examples of poor decision making on behalf of the offshore boards in recent memory include having no rules in place that would halt attaching a drill to the seafloor when there were nine-metre waves occurring off Newfoundland last November, resulting in an estimated spill of 250,000 litres of oil into our oceans, not a single drop of which has been recovered. We do not know the death toll of seabirds caused by this spill.

Another bad example is allowing seismic blasting to proceed when critically endangered blue whales were migrating into the Gulf of St. Lawrence in 2010. There is growing evidence that seismic blasting can be devastating for marine mammals and other ocean life.

Recently, the Nova Scotia Offshore Petroleum Board issued a call for bids for oil exploration that includes Sable Island National Park Reserve. This would allow drilling within one nautical mile of this precious island.

Perhaps there is no greater example of the failure of offshore boards to deal with the impact of oil and gas development than allowing offshore oil and gas to occur in the Gulf of St. Lawrence.

The Gulf of St. Lawrence is bounded by the coasts of five of Canada’s ten provinces. The Mi’kmaq, Maliseet, Innu and Inuit people have fished and travelled in the gulf for thousands of years.

The Newfoundland Offshore Board is responsible for issuing calls for bids and permitting oil and gas development in its section of the gulf, even though this is a single shared ecosystem.

A spill in the gulf could impact the coast of five provinces, threaten multi-billion dollar fishing and tourism industries. Noise from seismic blasting, chronic pollution and a major spill from oil development in the gulf could spell the extinction for critically endangered whales and other threatened species in the gulf.

We are particularly concerned about the critically endangered North Atlantic right whale. They had major deaths in the gulf two years ago.

A recent scientific paper indicates that the Gulf of St. Lawrence, because it is such a unique place, where arctic waters and the warm gulf stream waters mix, will be greatly impacted by climate change. It may be more than any other marine ecosystem on this planet.

Scientists warn that the warming of waters in the gulf may create hypoxic or low oxygen levels that will not enable it to sustain life in some areas.

In spite of these multiple threats and calls for a moratorium from numerous organizations and the chiefs of Indigenous communities in the gulf, the offshore petroleum board has allowed oil and gas exploration to continue.

Offshore petroleum boards should not be getting more power under the new Impact Assessment Act. Certainly, they should not be able to appoint two members to a review panel or even chair an assessment panel. Our recommendation is that they would play an advisory role to assessments but not sit on review panels at all.

The influence of the oil industry over the drafting of Bill C-69, which has already been weakened, is making it difficult to see how the government will accomplish its mandate to make assessments credible again.

We know as practitioners that this influence will be brought to bear once impact assessments are undertaken for specific projects. Giving more power to offshore boards in Bill C-69 is simply a bridge too far.

In conclusion, our major recommendation to the committee today is to limit the role of offshore boards in reviewing offshore oil and gas projects. Thank you very much.

Senator Mercer: My question is actually a fairly simple one. It should have been directed at the previous panel as well. We have done some things right, though, even without heavy regulations being in place.

The regular route of whales coming into the Bay of Fundy was constantly having trouble with shipping. Industry came up with a solution to move the shipping route coming into the Bay of Fund and over to Saint John, New Brunswick, farther east and closer to Nova Scotia. Guess what? That is where the whales aren’t. Since they have moved that, there have been very good results with fewer incidents of ship/whale encounters in the Bay of Fundy.

At all our committees we tend to end up hearing the bad news stories. I wish people would tell us some of the good news stories, and that is a good news story.

Ms. Fitzgerald: Yes. We are very heartened to see that there are seven new baby right whales were born over the winter months. They are coming back, but they are coming back through a pathway of hazard. You will be hearing presentations on the impact of seismic on marine mammals later today.

The noise from that blasting is so loud that it can be heard halfway to Europe. If we are blasting off Newfoundland, as we plan to do this spring, and if we are blasting for the next 10 years, as we are proposing to do off Nova Scotia, those whales all the way down the seaboard will be hearing that noise and experiencing it as a constant stress. It is a blast that happens every 10 to 14 seconds.

It is like having a strobe light in your face for days, to weeks, to months. That is the comparison because whales use sound as we use vision to find their mates, to find their babies and to find their food. The impacts of seismic are far reaching.

I am glad to see the shipping industry is taking action. The rapid action of the fishing community in response to the deaths of whales in the gulf is wonderful to see.

We need to understand the scope of what we are doing with regard to ocean noise, offshore oil and gas development, and their impacts on global biodiversity and the entire seaboard.

It is interesting to note that in the United States there has been action to limit this development unlike in Canada.

Senator Simons: My question is for Mr. Butler this morning. We have heard from other witnesses as we have been around the country that we need to strengthen language in the bill around science, scientific integrity, scientific analysis. But I do not think anybody has given us much language around specific amendments.

You referenced a report that some of your organizations that you have partnered with had written about strengthening the language around science. And I am wondering if you have the text of that, could you share it with the clerk, could you read to us? What would you have us do to give to you the assurance that scientific credibility is given its due weight in the process?

Mr. Butler: Thank you for your question. I mean my main frustration with IA or EA over the years has been the quality of the document that the whole process centres around and that is it quantity but not quality. It is pages and pages of description without much analysis, without, I would, say good peer-reviewed science.

So finding a way to make the document that should ultimately be the guide to the project, more scientifically credible, is crucial.

And we had some early proposals in our submission to the expert panel that toured the country that the government appointed. I am happy to share our submission. I think at that time we were still exploring how the process could be improved, but when I reread the expert panel’s recommendations on science, I thought they were very good.

So I think if you are looking for guidance on how to make the act stronger with respect to science and make science a key part along with traditional knowledge, be it Indigenous knowledge or community knowledge, then the expert panel which is a distillation of 1,000 presentations, I think that is a good place to look.

The Chair: Senator Carignan.

[Translation]

Senator Carignan: My question is about the composition of the list recommended by the board. I’m trying to understand your concern about bias. Looking at your list, I see that the word “oil” appears on it. I know that the mandate and composition of this board is based on an agreement between Canada and Nova Scotia, that the members are appointed by both governments and that they have a mandate for environmental analysis. So there is an expertise that has developed within this organization. People will be appointed by this office or, in any case, will be on a list.

However, there are the provisions of clause 2 that indicate that appointees must not be in a conflict of interest and must maintain an appearance of bias. I’m a little uncomfortable with this question. I’m trying to find a balance between seeking the expertise of an individual or group without necessarily giving the appearance of bias. I have difficulty with the fact that the board is recommending a list of members to be selected by the minister. The members selected must not be in a conflict of interest. So it can create a fear of institutional bias, from the public perspective. What do you propose? Ultimately, the minister will have to choose someone. Is it better to proceed as illustrated by The Globe and Mail this morning, when the Prime Minister makes a choice after considering potential contributions or support?

[English]

Ms. Fitzgerald: I have a few responses. I just think it is dangerous to make an analogy between Indigenous rights holders and the fossil fuel industry.

[Translation]

Senator Carignan: However, it is in the legislation. The body that will decide, according to the legislation, could be indigenous groups, which are considered a body. They could do an impact assessment and measure the impact on indigenous rights. It is set out in the legislation....

The Chair: Senator Carignan, let the witness answer the question.

Senator Carignan: It’s dangerous to make an analogy, but that’s what’s stated in the legislation. I’m taking it as it is; I didn’t write it.

[English]

Ms. Fitzgerald: With Indigenous peoples, I think we in Canada are in a process in acknowledging reconciliation and the truth of history that they are the rights holders. I hope the role of the fossil fuel industry is a different one on this land.

That is why I think it is appropriate. Actually it is not even in place as far as the expert panel recommended with regard to the bill.

One must be very careful making a parallel between Indigenous rights holders and the fossil fuel industry. It is a very different legal standing. I would hope in the process of reconciliation that is acknowledged by the entire Senate.

You asked with regard to fairness. What would be a good list for the minister to use to select unbiased panellists I think is the heart of the question.

Before I go to answering that, you talked about fairness. I don’t know the story, but apparently the federal government has appointed or cherry-picked a new commission, it sounds like from what you are suggesting.

We feel the same way with regard to offshore boards and their role. They will pick people whether or not it is conscious. It is not about individuals. It is about being part of a process, a system and learning. By being part of an industry that is what you know and that is where you are most expert and comfortable. This would be all people. It is called regulatory capture.

We saw that with the pipeline assessment of Energy East. It blew up in the face of the government because that regulatory capture became too flagrant. It did not pass the sniff test for Canadians.

We would not want to see that happen again on review panels for offshore oil and gas. It was a regulatory fail from all perspectives whether or not you wanted that pipeline to go ahead.

One of the best panels I have seen selected independent experts linked to universities. They had expertise in planning, ocean environments and geology. This was the Digby Quarry panel. They were selected from independent academic institutions. With that, as you were mentioning, there could be seats for Indigenous rights holders as well if acceptable to those communities.

That would be the gold standard. It would achieve the level of credibility the government says it is trying to achieve here.

The Chair: Do you want to add something?

Mr. Butler: We recognize the expertise of the regulator, but there are ways to integrate their expertise into the process without putting them on the panel. We have other regulators like Transport Canada, DFO and Environment Canada. They are regulators that are not on the panel.

There is more I would like to say on that topic, but I will stop.

Senator Woo: Let me get to the heart of your recommendation to reduce the power of the offshore boards on review panels.

We actually heard a rather curious recommendation from one of the oil companies yesterday, saying that projects in the offshore should not have mandatory review panels but should be allowed to go through the Impact Assessment Agency itself as an option. I want you to comment on that idea. It is a curious recommendation because it seems to go against their interests.

On your point about consistency, which is a fair one, one could argue that having two offshore board members out of the five on the review panel is in fact consistent with what the rest of the bill is trying to do with CNSC and with the new NEB. The chair issue is separate. The NEB are advocates, calling for the possibility of somebody from the new NEB to be the chair of that review panel. That would be consistent as well.

To the extent that we already have the possibility of CNSC and NEB members in a minority position on review panels for their projects, why would we not have a minority of C-NSOPB and C-NLOPB members in those review panels?

Mr. Butler: Our colleagues in the rest of the country are more comfortable with the situation. That does not make it any easier for us to accept here, given our experience with the petroleum boards. This is actually an increase in their influence over the process.

I would say that allowing a petroleum board member to chair a panel is inconsistent. I would encourage this committee to make an amendment so that is not allowed. If your argument is to be consistency, you need to use that argument all the time and not be inconsistent in your use of the consistency argument.

Lisa Mitchell pointed out to me the other scenario. There could be two petroleum board appointees on a panel and a third industry person on the panel, perhaps with an oil and gas industry background. This would result in a majority of members on the panel.

If the purpose here is to make EA credible and to try to generate greater social licence, regardless of who are these individuals, that will not help.

Senator Massicotte: I certainly share your comments that this is the most significant challenge we have in our generation. The consequences are immensely serious, and I am a bit discouraged by our little progress so far.

Be that as it may, let me talk to you about an issue though. Obviously, markets are determined by supply and demand. I want to seek your comment, but, in my opinion, it does not change one iota of CO₂ in the air if we import our oil and gas, as Quebec does to a large agree, or we produce it locally. Therefore, whether nor not we build another pipeline will not change our situation on global CO₂.

We should do more but not on the supply side. In other words, everybody talks about supply but I say that is irrelevant. What is relevant is that we have to reduce consumption, which means the government should do a lot more to discourage us or to encourage us to find innovation to consume a lot less CO₂.

Would you agree with that?

Mr. Butler: I think it is everything. I would say that it is.

Senator Massicotte: So what if you build or do not build? Do you think we will have a shortage of oil and gas in the world? In other words, on the supply side, if you are convinced that the world will not run out of oil and gas, it makes no difference whether we increase the supply of oil and gas from the oil sands, let’s say. Therefore that issue is irrelevant.

What is relevant is that we have to reduce our consumption of CO₂.

Mr. Butler: Maybe my colleague wants to jump in here. I think it is both a question of supply and consumption. We have to tackle it at all ends.

I appreciate your acknowledgement of science. We should acknowledge the critical situation we are in and try to do everything we can to address it.

If you live in Nova Scotia, you will know about coastal flooding. I was in a fish shop two days ago and the guy was telling me that in the silver hake trawls they are now finding fish they have never seen before, such as John Dory and other species from southern waters. We are really seeing the impacts here.

Senator Massicotte: Let me be specific. Let’s say Trans Mountain and let’s say we build it or do not build it. If we build it, maybe some Canadian consumers will consume that oil and gas. If they do not consume it, I suppose, with the world supply, we will just ship it in as we are doing currently in Quebec to a large part.

Mr. Butler: That is the argument that what we do here does not make a difference because they are building more coal plants in China. We will never solve the problem if we take that attitude. Somebody has to lead.

Ms. Fitzgerald: It would be rare on a global issue as important as climate change, if you think of the other global issues where Canada is active internationally, for Canadians to throw up their hands and say, “We can’t play a role.”

Senator Massicotte: I do not recommend that though.

Ms. Fitzgerald: What we do does matter. By shifting supply, we are helping our communities with the challenge ahead and hopefully helping those workers that will be affected through just transition plans.

I think we also send a strong signal to what we want in this world. We are actually part of a global movement that is shifting this way.

I do not think pointing fingers is the way to solve any problem. I am so proud of some of the things Canada has done internationally to help with global crises. This is one where what we do does matter.

Senator McInnis: I join with Senator Mercer and Senator MacDonald in welcoming all the senators to Nova Scotia. It is nice to see the sun breaking through. It is nice to see you, Mark Butler. I have talked to you on the phone in the past on issues, and I truly appreciate what both of your organizations do.

Here in Nova Scotia, and, of course, in Newfoundland, we have vast oil and gas resources. I have the figures back in my office in Ottawa, but there are huge amounts of resources which will ultimately be produced.

I could predict pretty much what you were going to say this morning. I know who you are and what you represent, and I appreciate what you do. At the same time, I think you will all agree that we have natural resources and we do need an economy. All of us today should also recognize that we need a protected environment.

I do not want to make this too general, but I want to hear from particularly your two organizations. Where is the reasonable ground to meet this? We have to produce and do what we can with the natural resources we have particularly in the energy sector. Where is the ground from where we can go forward?

Ms. Fitzgerald: I guess the ground would be meeting and exceeding our existing climate targets. Unfortunately we are not in a place where we can say we are doing it as Canadians. I think it would be looking to that. Assessments show time and time again that the emissions from the oil and gas sector are a great hindrance to achieving those targets.

We are here to talk about Bill C-69. Incorporating a good assessment of the climate impacts in what we are doing would be a step in that direction, I would argue.

You said there are huge amounts of resources. There are also huge amounts of renewable resources in our energy efficiency resources. I was at a presentation yesterday that was ostensibly about fracking in Nova Scotia. The most exciting part of what I heard was about solar. There are tons of other things we should be doing that is about the economy.

Climate assessments are showing time and time again that the economy will be devastated by climate change. We have to meld those two goals. This bill is a step in that direction if it remains strong.

Mr. Butler: I am very passionate about this topic. I care a lot about the prosperity of Nova Scotia. I see our job is not just to hug trees but to hug people. We need to care about both.

If Nova Scotia cannot make the transition away from fossil fuels, I question if any jurisdiction can do it. We have abundant resources here. They are not just fossil fuels, but tidal, wind, small-scale biomass and even some hydro.

We can do it here. I think that is the direction we should be heading in and I think that is where prosperity lies.

There was a billion dollar offshore proposal. It was not oil and gas; it was Beothuk wind. In the end it did not go ahead. I am not sure of the reasoning. I would love to know why. It was a billion dollars and it was not oil and gas. It was the wind. It was offshore. It was European pension money coming in looking to develop wind offshore.

Those are the kinds of opportunities I think we should be pursuing. Those projects should go through a rigorous environmental assessment too to protect the environment and industries that currently rely on the ocean like fishing.

Senator Patterson: First of all, let me say that I am delighted to be in Nova Scotia. I was counsel for the Ecology Action Centre in 1972 on the Quinpool Road project. Hopefully I have some credibility with you guys.

For Ms. Fitzgerald, I have a real quick question. Seismic blasting every 10 to 14 seconds for days, weeks and months. Which is it? Days, weeks or months? What other evidence are we going to get today?

Ms. Fitzgerald: I think you are going to be hearing from Dr. Hal Whitehead, a professor at Dalhousie University who is an expert in marine mammals.

It depends on the project. Perhaps it is a really short-term project, but it tends to be weeks or months. It depends.

If you look at the maps of seismic planned for Newfoundland and Labrador and for Nova Scotia in particular, there is a nine-year plan that would entail blasting over a large swath of the entire Scotian Shelf. It is large geographic areas over time.

Senator Patterson: Both of you have advocated, to my surprise, a reduction in the role of offshore boards. I understand there are some concerns about the board appointment process.

I believe that Nova Scotians should be looking at the impact of development and protection of the environment in their waters.

On the role of a life-cycle regulator on a panel, we heard from the Nunavut Impact Review Board, where I come from, about this issue of balancing roles as an impact assessor, licensor and life-cycle regulator.

NIRB said that the way our system was designed meant that things had less certainty during environmental assessment. When they are on the ground and projects are actually operating, the precautionary approach we take yields new information that allows us to adjust in terms of approval, as needed, as the project goes ahead.

We have many instances where that has become necessary when something that in theory seemed like a good idea and then, when it goes to licensing, does not work as expected. We go to an alternate means of still allowing the project to go ahead and protect the environment.

I would like to ask a question of both of you. Would it not be important for life-cycle regulators to have familiarity with the project and use their knowledge of the project, the promises made in the assessment phase and their expert knowledge to manage potential issues as they occur throughout the life of a project? That is the logic of it.

With all respect, university professors will not have knowledge whether the promises made in impact assessment were actually realized during the life of the project.

Ms. Fitzgerald: I guess I would argue that sequential learning from experience is not happening with regard to environmental assessment now. In the offshore in particular we are not learning from past mistakes.

It would be appropriate if there were a requirement. For instance, if we have learned from past projects that there is methyl mercury contamination downstream from mega hydro, then what do we know for future assessments? If we know that when you try to attach to a well in nine-metre waves there might be a major spill, perhaps we should have some regulations about that.

I am not seeing that happening with the offshore petroleum boards frankly. Definitely, with regard to seismic blasting, we have a code of practice right now but we do not even have regulations for that.

I am not seeing the learning from science or the learning from experience. International experts evaluated what happened with the BP spill in the Gulf of Mexico. They looked at what is happening here in Canada and said that the risk assessment was 10 to 100 times off what it should be, from what they can tell from looking at our assessments.

It is inadequate. If that sequential learning is to happen, it would be best housed in the Department of Fisheries and Oceans, the Environmental Assessment Agency and the Impact Assessment Agency, whatever it is renamed, and not within the boards with regard to protecting the environment.

As we have tried to convey, the boards have expertise with regard to the industry. They have way less expertise with regard to meeting our climate targets and protecting our obligations to the environment, endangered species, Indigenous people and endangered species.

The Chair: Could you please send us the BP report on the comparison with the gulf?

Ms. Fitzgerald: Yes.

The Chair: Thank you very much.