Feds and N.L. agree to define “inshore” waters

Posted on December 07, 2023 | By Ashley Fitzpatrick | 1 Comment

 

 

The Government of Canada and Government of Newfoundland and Labrador are settling what’s been a thorny area around potential offshore renewable energy developments. Mainly, the governments have agreed to the basics for defining an “inshore” area around the island of Newfoundland for wind turbine developments, to be regulated by the province.

The area within what’s sometimes referred to as the “jaws of land,” in coastal bays, is already, often referred to as provincial responsibility, for many different legal scenarios. However, for the evolving federal-provincial laws speaking specifically to regulation of offshore wind power projects, the Government of Newfoundland asked the Government of Canada for a clearly stated boundary and affirmation of the province’s powers to govern wind developments nearest the land.

It is different from jointly regulated development, in the way oil and gas resources offshore are jointly regulated offshore Newfoundland and Labrador.

“We did want the formalized recognition that these were our waters to govern,”

—Newfoundland and Labrador Premier Andrew Furey

“We did want the formalized recognition that these were our waters to govern,” Premier Andrew Furey said, taking questions on the agreement during a press conference held in Ottawa.

The MOU was titled as a “Memorandum of Understanding Between the Government of Canada and the Government of Newfoundland and Labrador Regarding Offshore Wind Development” but would cover other renewable electricity projects.

Think of it this way: wherever the coastal boundary is settled, the province can press ahead in the area closest to shore and, as a regulator, treat it like it has onshore wind development. The province will be expected to establish a lands system and set a revenue regime, covering things like land tenure fees and any tax on a company’s wind power capacity. Per the MOU, revenues will flow to the province in the same way as if the development were on land.

Newfoundland and Labrador is likely to draw on recent experience developing a wind-hydrogen fiscal framework, applicable to a wave of proposed wind-hydrogen-ammonia developments featuring proposals for onshore wind farms.

It will also have to look at regulations for any inshore-to-onshore projects, where wind farms could be based in the water with hydrogen-ammonia production or other industrial facilities based on land.

The province has the option to develop whole new regulatory arms, to cover all the needs tied to reviewing and monitoring offshore wind projects within the province’s coastal bays. However, it can also seek to effectively contract the Canada-Newfoundland and Labrador Offshore Energy Board (currently the Canada-Newfoundland and Labrador Offshore Petroleum Board/CNLOPB—in the process of a name change) to take on key regulatory tasks. However, significantly, the bottom line is the Board is not automatically designated as the regulator of wind projects in the newly defined area.

 

Illustration of Specified Bays Intended to be Excluded from the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act for Offshore Renewable Energy

 

The MOU released includes a map showing 16 bays around the island where more precise coordinates (latitude and longitude) for the boundary are being settled and the agreed process for settling the exact location in all areas around the province is stated. The final, exact coordinates will come from professional surveyors appointed by both governments.

The MOU, as written and signed, states the limits of the inshore area will be “implemented through regulations under the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act, as amended by Bill C-49, and the mirror provincial legislation of said Act.” As written in the MOU, it would require passage of those legislative amendments before the House of Commons.

Mentioned in May

It’s all a bit of snaggly bureaucratic work that should help to avoid kerfuffles down the line between the different levels of government on inshore responsibilities and financial benefits. The MOU on the coastal boundary and declaration of responsibilities was first referenced by Furey back in May, during a press conference in St. John’s on the introduction of Bill C-49 and changes to the Accord Acts.

As Atlantic Business Magazine reported this summer, there are layers of change now ongoing when it comes to the Atlantic Canadian offshore area.

It helps to know the “Atlantic Accords” is a common label that includes both the 1982 Canada-Nova Scotia Accord (revised in 1986), and the 1985 Canada-Newfoundland Accord (or, if just one, it’s “Atlantic Accord”). Beyond these political agreements for offshore oil and gas management and revenue sharing, laws were introduced at the provincial and federal levels to give detail and legal life to the agreements. In Nova Scotia, the life-giving law is the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act, while Newfoundland and Labrador has the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act. These are the “Accord Acts.” The Accord Acts dictate everything from the number of appointments to each province’s offshore regulatory board, to permits required and timelines for ministerial decisions.

Given Nova Scotia’s development of gas pipelines and oil and gas work focused on areas closer to shore, that province has already been through the exercise of codifying a boundary for its inshore waters, with exact coordinates, clearly defining where development would not be covered by the Accord Act detailing joint management on oil and gas.

The amendments…. provide a basis for regulation of new renewable developments in truly offshore areas and separates renewable and oil and gas management…

The new “offshore renewable energy area” in both provinces is about development for the supply of clean electricity. The amendments to the Accord Acts proposed in Bill C-49 provide a basis for regulation of new renewable developments in truly offshore areas and separates renewable and oil and gas management, adding details specific to renewables development in offshore Atlantic Canada (though the bill does also include some proposed changes to oil and gas rules in the mix, complicating the ongoing debates).

Bill C-49 received first reading in the House of Commons on May 30 and second reading Oct. 17.  It’s since been referred to the Standing Committee on Natural Resources, for further review, before coming back to the main floor. If the Bill can survive the House and Senate, it isn’t the end of the lengthy process. Given the Accords are “mirror legislation” connecting the provincial and federal governments, the provincial legislatures will have to make matching changes at their end of things.

N.L. and N.S.

It’s unclear how far potential developers might go with any offshore wind project development in both Newfoundland and Labrador and Nova Scotia while the C-49 amendments are unfinished. But the provinces are both encouraging the idea of development.

The Government of Nova Scotia released the first piece of its Offshore Wind Roadmap more than half a year ago now. The roadmap and Premier Tim Houston suggested the province could push to get a start on development in the inshore area effectively right away. On Nov. 22, a press release said that idea was being tabled in favour of hammering out a regulatory framework that would open up more than just the inshore as quickly as possible.

The province has a goal of a call for bids for offshore wind development as early as 2025 and 5 GW of wind power capacity installed offshore by 2030. A second module of Nova Scotia’s Offshore Wind Roadmap is expected to offer another update in the spring.

Apart from clarity around who regulates and who can tax and levy, there are environmental assessments of any proposed projects to consider. A regional environmental assessment for Nova Scotia’s jointly offshore wind area was launched in April 2022. The regional review is still in progress.

A matching approach, with a regional environmental assessment for Newfoundland and Labrador, is underway for the neighbouring province. At latest update, the review is not expected to be complete before fall 2024.


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One response to “Feds and N.L. agree to define “inshore” waters”

  1. This is a destruction of a province and its tourism and inshore fisheries at the least. Let alone interrupting the natural habitat of many endangered species surviving here. All so that someone other than the Newfoundlanders will make billions in profit and we will be left holding the bag!

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