Impact Assessment - Canadian Energy Regulator Bill - Navigation Protection Act
Honourable senators, I rise today to speak to Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts.
At the outset, I would like to thank my colleagues on both sides of this chamber for their thoughtful interventions in this debate.
We have heard every perspective — from Senator Mitchell’s view that this bill is just what is needed, to Senator Black of Alberta, who is decidedly pessimistic about the oil patch’s prospects if Bill C-69 goes forward.
We have heard Senator Boisvenu talk about the infringement on provincial jurisdiction and Senator McPhedran explain the clause requiring energy projects to be subject to a gender-based analysis.
In particular, I would like to congratulate one of our newer colleagues, Senator Simons, on her passionate critique of this bill. I wish I shared her optimism that Bill C-69, while flawed, can be fixed through amendment.
Honourable senators, as we debate this bill, Canada faces an uncertain economic future. The new U.S.-Mexico-Canada trade agreement puts Canada’s manufacturers in the worst competitive position in a generation. The price of many commodities is in a slump and Canadian oil producers have seen their product sell for a fraction of the world price because they can’t get it to market.
Canada has become an increasingly unattractive place to invest. We have seen a collapse in foreign investment in Canada — down 56 per cent in five years, according to Statistics Canada.
The Canadian Association of Petroleum Producers says capital spending on Canadian oil and natural gas projects declined 46 per cent between 2014 and 2017.
An analysis of business investment in 17 industrialized countries from 2015 to 2017 put Canada in second to last place.
Every category of business investment in Canada, except residential housing, has shown a decline since 2014.
About $100 billion of energy projects — yes, $100 billion, have been killed since this government took office.
I know some of my honourable colleagues will say it is because of low energy prices, but that doesn’t explain why investment in the energy sector in the U.S. has increased rapidly in recent years. Canada’s unemployment numbers may look good right now, but we must remember that investments of today lead to the jobs of tomorrow.
Declining investment is not the only challenge we face. Our major competitor and customer, the United States, has sharply cut taxes and rolled back regulations. This will further erode our competitive position.
Faced with these stark realities, we would expect policies from the federal government to jump-start investment, but that is not what we have seen. Instead, we have seen higher taxes, more debt, more regulation and no understanding of the forces that lead to job creation, economic growth and long-term prosperity.
The Minister of Finance had the chance last week to act boldly in his economic statement, yet he failed to do so. In Bill C-69 we have the poster child of bad policy.
I acknowledge that the existing environmental assessment process leaves much to be desired. It is plagued by delays and uncertainty. But shouldn’t new legislation try to fix the problem rather than make it worse?
Provincial governments, industry experts and economists have all come out against this bill.
Ron Wallace and Rowland Harrison, two former energy regulators writing in the September 12 Financial Post, say Bill C-69 would:
. . . at huge cost, disrupt and seriously exacerbate the current regulatory process at a time when . . . stability is central to the Canadian national interest.
They say the regulatory process envisioned in Bill C-69 is:
. . . untested, uncertain and far more complex . . . .
Martha Hall Findlay, a former Liberal MP who heads the Canada West Foundation, says this bill:
. . . has the potential to create more uncertainty rather than less, impose greater timelines, reduce regulatory legitimacy and transparency, and significantly increase the role of political influence and whim. All of which make Canada even less attractive for much-needed investment. . . .
. . . If passed in its current, even amended form, it could set Canada back for many years in terms of attracting investment and overall prosperity . . . .
Saskatchewan’s Minister of Energy and Resources Bronwyn Eyre calls the bill “an existential threat to our competitiveness.”
One of the most damning condemnations came last week from Gwyn Morgan, the founder of oil giant Encana and a true Canadian patriot. Mr. Morgan, writing in the Financial Post, lamented the increasing movement of Encana’s operations to the United States, but noted the company has no choice considering the hostile policy environment in Canada.
Bill C-69 is the final piece in the Prime Minister’s anti-energy crusade, Mr. Morgan said. He said it will:
. . . make the chances of accomplishing resource infrastructure projects seem near impossible to investors.
The reasons for the concern are too many to list, but they include a large number of new, subjective criteria as part of an assessment.
Much has been made of the requirement to assess projects according to the intersection of sex and gender with other identity factors.
**Senator McPhedran did an admirable job of explaining the process. I think the fundamental problem with the list of criteria to be considered in an impact assessment is it is unbalanced. It is heavy on the possible adverse effects of a project but gives little regard to the economic benefits.
Bill C-69 does not explicitly require the consideration of upstream and downstream emissions during the review of an energy project. It is clear from proposed sections 22 and 63 this is the intent.
The review is required to assess:
. . . the extent to which the designated project contributes to sustainability . . .
. . . the extent to which the effects of the designated project hinder or contribute to the Government of Canada’s ability to meet its environmental obligations and its commitments in respect of climate change . . .
Is such an analysis applied to imported oil? Do we examine the extraction process in other countries before importing their oil?
Do we examine the human rights record in Saudi Arabia before importing their oil to Eastern Canada?
Will our virtue-signalling impress China or India, or will it cause U.S. energy industry to change its ways?
Do we consider the uses of imported oil before allowing customers to take delivery?
Of course not.
With Bill C-69, we are applying a standard to our own energy projects that will hurt them in a competitive marketplace, if not kill them outright.
The Canadian Energy Pipeline Association’s analysis of the bill said this built-in in climate change analysis means:
If the goal is to curtail oil and gas production and to have no more pipelines built, this legislation may have hit the mark.
The legislation also allows for participation in the assessment process by members of the public who are not affected by a project. This will give the eco-warriors free rein to delay projects until investors grow tired of waiting and abandon the plan.
Make no mistake, these groups — many foreign funded — will sign up thousands of people to intervene in the process. People who may live hundreds of thousands of kilometres away from the project.
Despite running on to a mind-numbing 392 pages, the bill does not include what kinds of projects are included in the new regime and it does not define a major project. It provides far too much power to the Minister of the Environment, including authority to stop or extend a review at any point, making timelines all but meaningless.
In addition to the power to the minister, Bill C-69 allows the Governor-in-Council to extend the time limit “any number of times.” Faced with this kind of uncertainty, the capital needed to develop major projects will flow to friendlier jurisdictions.
Honourable senators, Bill C-69 is a disaster from beginning to end. As Martha Hall Findlay says:
. . . there is increasing consensus among business leaders, investors, potential investors, think tanks, academics and others that the bill is not . . . fixable.
She believes it should be allowed to die and the government must start again.
I realize this is unlikely to happen, but I’m not optimistic we can improve this legislation in any meaningful way.