They sold the shop
Feds and province combine to gut 1985 Atlantic Accord
“Let me go on record to say I am disgusted to learn of your support for a bill which violates the key tenants in the Atlantic Accord,” former Premier Brian Peckford wrote to the members of the House of Commons and Senators from Newfoundland and Labrador who supported passage of Bill C-49 and its amendments to the 1985 Atlantic Accord.
Peckford described the Accord as “Federal Provincial Legislation [sic], fought for so hard by so many and marked really the first time in our history where we as a people of the Province were able to retain a major say over its development and reap major benefits.”
“I wish to record my utter disgust concerning your recorded vote in the House of Commons for Bill C-49 on May 2, 2024. In so doing you have betrayed your Province,” Peckford wrote, singling out member of Parliament Clifford Small and Senator David Wells, who were, Peckford said, “heroic in their efforts to oppose this bill.”
Peckford is upset about a new clause that gives the federal Cabinet the sole power to block an offshore development. The new section allows Cabinet to block a project “for the purpose of protection of the environment” but that power was supposed to belong to the joint offshore board.
Basically, that clause gives the federal government the power over the Newfoundland and Labrador offshore it tried to get through the Impact Assessment Act but failed when the Supreme Court of Canada found that it violated the Canadian constitution. The IAA also violated the Accord.
And, as Peckford points out, that new section breaks the 1985 agreement that gave the power to approve or disapprove of offshore projects to the joint management board.
Thing is, the provincial government approved of the changes otherwise they wouldn’t happen. A key clause in the 1985 agreement prevents any changes to the deal without agreement of both governments. In this case, the provincial government signed away the 1985 deal’s key power for reasons that it hasn’t explained yet. Likely, it was a trade for a small cheque. Just as Danny Williams used to say, all principle converts to cash.
Bill C-49 goes further than that, however. On top of changes to the oil and gas provisions, C-49 introduces a new regime to deal with offshore wind developments. That one slid by largely unnoticed but it gives the federal government a new ability to control huge tracts of the offshore it doesn’t own.
In its decision on a 1983 reference on offshore resources by the Government of Newfoundland and Labrador, the Court of Appeal in St. John’s broke down control of the offshore into three zones recognized by international law. The continental shelf - everything beyond the 12 mile limit - fell under federal control, according to the Court of Appeal decision and that was all the 1984 decision by the Supreme Court of Canada on a federal government reference question dealt with.
But the seabed beneath the Territorial Sea and inland waters - that’s the area inside the baselines used to determine the Territorial Sea - belong to Newfoundland and Labrador for the purposes of Section 92 of the Constitution Act, 1867. The federal government started an appeal of the 1983 decision but abandoned it. That means that - legally - all the seabed landward of the outer edge of the 12 mile limit remains legally the territory of Newfoundland and Labrador.
Well, it did until the Government of Newfoundland and Labrador gave away control of the seabed for renewable energy inside the 12 mile limit on many parts of the shore to the offshore board with no compensation from Ottawa. The bays contained in a memorandum of understanding signed by Ottawa and St. John’s in December 2023 already legally belonged to Newfoundland and Labrador before the deal.
What’s fascinating about this entire exercise is that both federal and provincial governments misunderstood what happened in the 1980s. In fact, as Senator Wells noted in his remarks to the Senate at one of the final stages of debate on this bill, Senator Fabian Manning noted that the ownership of the offshore was settled in 1984. Lawyers for the federal government, in Parliament, and in the provincial government have said the same thing.
But they’re wrong.
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The federal government’s reference to the Supreme Court of Canada was about the continental shelf and specifically described Hibernia. As the Court noted in its 1984 decision - Reference re Newfoundland Continental Shelf - the “significance of the limitation [in the reference by the Government of Canada] to Hibernia is that it excludes consideration of the territorial sea, [that is], waters adjacent to Newfoundland, within formerly three and now twelve nautical miles thereof.” [pp. 90-91]
The 1984 decision also notes that there had been a decision by the Court of Appeal in Newfoundland and Labrador the year before:
The Newfoundland Court of Appeal, in Reference re Mineral and other Natural Resources of the Continental Shelf (the Newfoundland Reference) (1983), 145 D.L.R. (3d) 9, answered the question in respect of a three mile territorial sea in favour of Newfoundland, but answered the question in respect of the continental shelf against Newfoundland. The Attorney General of Newfoundland has filed a Notice of Appeal in respect of the continental shelf and the Attorney General of Canada has filed a Notice of Appeal in respect of the territorial sea. Nothing further has been done to bring these appeals before this Court.
Accordingly, the Newfoundland Court of Appeal’s decision is not actually before this Court in the present reference. The Court of Appeal’s decision, however, was rendered on February 17, 1983, the week before this Court’s hearing on the present federal reference. Much of the oral argument in the present case was directed toward the reasons of the Newfoundland Court of Appeal since, in respect of the continental shelf, the identical issue is raised. We therefore think it proper in these reasons to comment on the reasons of the Court of Appeal insofar as they relate to the continental shelf. [pp. 91-92]
The Supreme Court only dealt with one of three parts of the offshore in other words. Meanwhile, both the federal and provincial governments abandoned their appeals of 1983 with the signing of the Atlantic Accord in 1985. That dealt only with oil and gas. Both governments were interested in oil and gas and since the only known and likely reserves were on the continental shelf - that is, beyond 12 miles - neither bothered with the appeal of the 1983 decision since both courts agreed the continental shelf belonged to the Government of Canada. For the Government of Newfoundland and Labrador, allowing the offshore board to manage the seabed for oil and gas it owned according to the Court of Appeal was an easy trade since it gained control of the far larger oil and gas resources of the continental shelf.
There’s no way to make the offshore implementation laws passed in St. John’s and Ottawa become more than they are either, that is to cover more than oil and gas. The Canada-Newfoundland and Labrador Atlantic Accord Implementation Act says in its first sentence that this is an “Act to implement an agreement between the Government of Canada and the Government of Newfoundland and Labrador on offshore petroleum resource management and revenue sharing and to make related and consequential amendments.” That doesn't erase the 1983 decision.
Senator Wells introduced an amendment and worked with his colleagues to cut a deal that wiped out the new sections Peckford talked about. Unfortunately, the Senate majority of Independents (Liberals) voted down the amendment at Third Reading in the Senate. They had backing from Newfoundland Conservative Senators too.
Even though the Accord is now demolished for all practical purposes, Wells’ amendment is all the more significant an accomplishment because he got as far as he did. Every other Senator except Wells and member in the Commons - except Cliff Small - swallowed the nonsense that the federal government already owned the whole of the offshore beyond the low water mark. Lawyers who were involved in the original cases - representing different parties in the case - all gave the same interpretation of what the province owned and didn’t own as the one that given here. No one else apparently asked them. And so what was so hard won is now lost through neglect and ignorance.
All the same, Senator Wells persuaded a majority of his colleagues for a brief moment, including Senator Rosa Galvez, an ardent environmentalist. It may have only lasted for a while and it may not have survived the reconciliation stage anyway - that’s when differences in the Senate and Commons versions of the bill are sorted out - but Wells did manage to get something. At least he tried.
It’s also noticeable that the entire oil and gas industry in Newfoundland and Labrador also ignored the implications of C-49. Energy NL used to be the champion for the provincial energy industry but on this bill, they were strangely silent. The oil and gas associations, the mining industry association, and others interested in wind energy, and industrial and economic development also supported a deal with their silence that works against their interests and provincial interests.
As a result of the changes in C-49 and the provincial give-away of huge chunks of the offshore that it owned already, developers will now face two different sets of rules and two different sets of higher costs depending on where they want to build any alternate energy project like wind, solar, or tidal. If they want to develop projects onshore and offshore, they could face two difference sets of rules and costs on the same project! It’s absurd. It’s ludicrous to make development of renewable energy *harder* and more costly than it is but that’s what the two governments have done with lots of complicity.
Brian Peckford is right: the provincial government here sold the shop. There’s more than 162,000 square kilometres of seabed inside 12 miles of the coast around Newfoundland and offshore Labrador. It doesn’t give the provincial government any control of federal jurisdiction but for things like energy - until now - and mining and other seabed resources the provincial government could do way more.
Unfortunately, as regular readers know, for the past 20 years, government after government, regardless of partisan stripe, has looked on the Accord as a way to squeeze a few pennies from Uncle Ottawa and they are prepared to give-away anything for a pittance with the help of other provincial and federal politicians and the province’s business leaders. In the case of C-49, it’s hard to see what they got besides hoodwinked, scammed, and taken for a ride. And the rest of us are all the poorer for it. We can only imagine what sort of a horror show the looming Churchill deal will be.
Related:
Danny Williams and the Philosopher’s Stone: Converting principles to cash
Where were the Provincial Conservatives during this? All the way to a Third reading in the Senate and nothing but crickets from the 5th Floor