Two of the three options the federal cabinet is considering for the Bay du Nord offshore oil development tear up the 1985 Atlantic Accord between the Government of Canada and the Government of Newfoundland and Labrador.
The fact cabinet is even considering anything except leaving the development decision to the Government of Newfoundland and Labrador makes it clear the 1985 agreement is dead except for the formality of getting rid of it.
The 1985 agreement settled decades of fighting over which of the two governments would control development of offshore oil and gas resources. The Supreme Court of Canada ruled on a reference question that the offshore beyond the three mile limit for Newfoundland and Labrador lay exclusively in federal jurisdiction. But the 1985 Accord delivered a commitment by the Progressive Conservatives under Brian Mulroney to allow coastal provinces to treat offshore resources as if they were on land, and therefore within provincial jurisdiction.
To do that, the Accord created a joint federal-provincial management board to decide on development and production. The federal and provincial governments retained their exclusive jurisdiction over federal and provincial matters, but notice that in section 22, the federal exclusive power is limited to issues generally applicable across Canada and *not* related to offshore exploration and production. That’s a job for the offshore management board, with the provincial government taking the lead on royalties and local benefits. The only time the federal government would take the lead is if the country’s oil supply was threatened.
The federal intervention in the Bay du Nord project would violate the Accord if the federal government were to decide to reject the application or reject it and then blackmail the province into cutting other offshore production. Those are two of the three options currently debated in Ottawa and leaked to Radio-Canada last week by one of the factions inside cabinet. The third one – approval of the project – is the only option that preserves both the letter and the intent of the landmark 1985 agreement.
According to Radio-Canada, the federal environment minister is looking at three options: “approve, refuse or negotiate with Newfoundland and Labrador.” According to Radio-Canada, in exchange for an approval, Ottawa could demand that the province limit oil production in the future or that it put an end, purely and simply, to oil exploration after Bay du Nord. Newfoundland and Labrador could also commit to ending the operation of other oil rigs that are currently in operation in a few years that permits will expire in early 2030.” [continues below…]
Not surprisingly, Premier Andrew Furey is dismissing the debate completely, claiming to NTV that the report is just a rumour and that the provincial interest is strongly represented by Seamus O’Regan. Furey also said he speaks regularly to his “federal colleagues” and tells them how important the project is.
Furey’s version doesn’t stand up, though. In last year’s cabinet shuffle, Prime Minister Justin Trudeau demoted O’Regan and put two environmental activists in charge of both environment and natural resources. ORegan’s influence is clearly on the wane.
And the anti-oil message from the new and promoted ministers was clear last fall. Natural resources minister Jonathan Wilkinson, himself a former environment minister told The Star last fall that “the goal [of federal policy] is to show the world that Canada, as a major oil-producing country, can successfully transition to a clean economy in the coming years.” The new environment minister was more blunt. Guilbeault “has already discussed the Liberals’ promise to impose a cap on emissions from Canada’s oil and gas sector — starting in 2025 — with officials in his department.” Bond Papers pointed this out in a column last November. Guilbeault said:
We’re not putting a cap on the emissions of the cement sector or the steel sector or aluminum or forestry. We’re putting a cap on oil and gas because it is 25 per cent of our emissions.
Far from having a tough decision, as Radio-Canada put it, Guilbeault seems pretty clear in his intention. And, since the federal government isn’t willing to start a political fight with Saskatchewan or Alberta over oil production, it needs another, easy political target to set the example.
Enter Newfoundland and Labrador, where the new Premier is unquestioningly loyal to the federal agenda and desperate for a financial bail-out to deal with the Muskrat Falls project and years of chronic overspending. On a junket with Trudeau to the climate conference in Glasgow last fall, Andrew Furey told a British reporter that “we need to move away” from coal, gas, and oil in order to meet “the Prime Minister’s aggressive targets” for carbon emission cuts.
That sounds nothing like the story he told local reporters but it is the one interview we know he did with non-Canadian media. It’s telling that Furey was completely in line with the federal messaging with no talk at all of further development of local oil and gas. He even started the interview by describing the effect climate change was having on the oceans off Newfoundland and Labrador.
No talk of balance. No mention of how low-carbon oil and gas developments could be useful to Canada during a transition from oil and gas to other energy sources. Those are the things he told the local audiences. The international audience – and Furey’s colleagues in Ottawa – got a completely different message, one that was perfectly in line with the federal government’s messaging.
Other federal politicians from Newfoundland and Labrador didn’t think it was a rumour. St. John’s east member of parliament Joanne Thompson, who chairs the Liberal caucus from Newfoundland and Labrador in the House of Commons, issued a statement on Friday. She called on the federal Conservative MP from this province and the House of Assembly “to stand united” in support of the project.
This isn’t new and it isn’t down solely to Furey. In 2005, on the 20th anniversary of the Accord, former provincial energy minister Bill Marshall told a public meeting that he thought politicians in the province didn’t understand what the Accord represented. As it turned out, Marshall was right. Danny Williams and more recently Dwight Ball look on the 1985 agreement as merely the name for hand-outs from Ottawa. They let everything else slide in the offshore as they signed development deals that compromised the provincial government’s role as regulator and, in Ball’s case, rolled over meekly on Bill C-69 and the creation of a new federal energy regulator.
While Williams made a lot of noise before finally caving, Furey’s claim there is nothing to see in this federal controversy is in line with the more recent subservient approach taken by first Dwight Ball and now Andrew Furey when dealing with the federal government. The two still add up to the same thing, which was Williams’ goal in 2004: a permanent dependence on federal government hand-outs. That’s exactly the opposite of what generations in the province fought for before that, regardless of party stripe. Everyone bristled when John Crosbie scolded Brian Peckford or Clyde Wells for daring to “bite the hand that fed” them - as Crosbie once put it - any time they objected to federal policies. Well, it looks like we are back there.
Since Williams’ time, popular opinion among elites in St. John’s has been more concerned with keeping their entitlements flowing than about self-government, responsibility, and provincial control of the province’s future. They are not even issues worth noticing. The modern crowd, like the elites of the 1920s, would sacrifice anything – including self-government – to keep their entitlements flowing. They even support development of Gull Island, regardless of the cost to the province and the lack of markets, which is why both Ball and Furey have been enthusiastic champions of the last great boondoggle on the Churchill River.
What Marshall was pointing to in 2005 was the province’s strategic goal to have decisions affecting an industry on which the province relied made in the province rather than by people who could not pronounce the name of the place properly let alone look the people in the eye whose lives they would alter fundamentally. The news last week confirmed the worst. Not only has the federal government already taken de facto control of the offshore from Newfoundland and Labrador but local politicians had no interest in stopping them. The locals were willing to let the federal government decide the province’s future, as long as they got to make a performative - that is, meaningless – public display for the project (the Pea Seas), against it (The NDP), or no display at all, in the Premier’s case.
No one mentioned the 1985 Accord’s provisions and the right of the province to control its own future. The province remains heavily dependent on oil revenues even as people shift to green fuels. How the province makes that shift is as important as the shift itself. That’s why decisions about how the province changes course should come exclusively from Newfoundlanders and Labradorians not be forced on the half millions residents of the province simply because Newfoundland and Labrador is at a disadvantage and Wilkinson and Guilbeault are political cowards. There’s a reason why they are not tackling Alberta or Saskatchewan. The reason has been occupying downtown Ottawa for most of the last month with impunity.
Not one local politician rejected the blackmail option openly described in the CBC story. That’s the one where the federal government would greenlight the project but then force the province to kill it or some other project instead, likely in exchange for a federal handout. Be most concerned about that. It won’t be presented that way in the publicity stunt announcement, but it would be worthwhile for people to pay attention now in the event White Worse, Terra Nova, or Hibernia die in the wake of a Bay du Nord announcement a few months down the road.
The 1985 Atlantic Accord is dead.
Every politician interviewed last week said so.
And they don’t give a damn.
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