Controversial projects C-69 and C-48 will become law, the day after the Senate apply the ban on offshore oil from the Arctic


OTTAWA – The Senate passed two controversial natural resource laws on Thursday night, just a day after quietly approving a third law that strengthened the ban on oil exploration in the Canadian Arctic, nullifying any future oil and gas development in the region .

The C-48 bill, which would legally impose a moratorium on oil tankers in the north of the country, is expected to receive real approval after it was accepted at a third reading in the Senate on Thursday. Bill C-69, which would review the environmental review process for major projects, also went through a third reading. Its passage enshrines the laws of Canadian law, ending more than a year of strong opposition from the natural resources sector and some provinces.

"This phase of the battle is over," said Independent Senator Doug Black, who opposed the C-69, in a final speech before the final vote on the bill.

Both bills are widely seen as a counterbalance to the Liberal government's decision on Tuesday to approve the Trans Mountain expansion pipeline, part of an effort by Prime Minister Justin Trudeau to accommodate environmental and economic concerns.

The approach was met with some criticism on both sides. Industry lobby groups applauded Trans Mountain's expansion approval, which could cost up to $ 9.3 billion for some estimates, but said it was not far enough to satisfy its concerns about C-69s and C-48s.

Environmental groups and some First Nations communities supported the bills, but vehemently opposed the expansion of the pipeline. On Thursday, the Coldwater Indigenous Band joined two other First Nations communities to denounce Trans Mountain's approval in Ottawa, saying the project threatened to contaminate a critical freshwater aquifer near the community. The Squamish Nation and the Tsleil-Waututh Nation in B.C. also pledged to appeal the Ottawa decision through legal means.

The approval of the C-69 and C-48 on Thursday could raise doubts that Trans Mountain will meet its construction schedule in the summer, a delay that would prolong the discount on heavy Canadian oil that has reached billions in lost revenue for energy producers and governments.

Senators conducted a month-long study of the C-69, which lobby groups in the oil and gas industry have argued will attack the energy sector, preventing major infrastructure projects from being built. The failure in recent years to build major export pipelines, such as Trans Mountain, Keystone XL and Line 3, has seriously undermined investor confidence in the industry, they say, and has weakened Canada's broader economy.

The C-48 bill, which bans legislation prohibiting the mooring of oil tankers in communities in the north of the country, was also seen by some as a targeted attack on Canada's oil and gas sector.

The Senate has passed more than 229 amendments to the C-69, the most important of any government legislation in decades. The House of Commons rejected 130 of these recommendations, including most of the industry-inspired changes tabled by conservative senators. It also accepted 62 amendments and modified 37 others.

The C-48 bill was approved only with modest changes, despite the efforts of some senators to create a so-called "corridor" that would allow tankers to dock in some designated areas.

Pro-pipeline supporters protest against Project C-69 in Calgary on March 25, 2019.

Gavin Young / Postmedia News

Meanwhile, senators on Wednesday approved the less well-known C-88 law that, among other things, amends the Canadian Petroleum Resources Act to enshrine a moratorium on oil exploration in the Arctic.

Trudeau announced in December 2016 a moratorium on offshore oil exploration in all waters of the Arctic, which the federal government did not enforce through legislation, but simply rejected any new bids for permits or exploration licenses, effectively shutting down any possible extraction of resources in the region.

The updated legislation now provides the federal government with the right to apply the moratorium on drilling based on "Canadian interest", but does not explicitly define how the threshold will be reached.

Crown and Indigenous Affairs Minister Carolyn Bennett said the prime minister had implemented the ban on offshore oil as part of a broader belief that the risk of spillage in ecologically sensitive waters was too great.

"He has to consider the risk of a leak," she said in a testimony in the Senate on June 18.

Some multinational energy companies, including Royal Dutch Shell, have already considered drilling programs in the United States and the Canadian Arctic, but have not yet committed large capital to such efforts due to high exploration and production costs as well as regulatory delays. past.

Senators applauded certain aspects of the bill, which would effectively freeze licenses in the North, while reimbursing major resource companies that bought exploration rights in the region that they can not run now. Companies with exploration licenses in the Canadian Arctic include Imperial Oil, BP, ConocoPhillips Canada, Chevron Canada and Franklin Petroleum Canada.

Meanwhile, construction of the Trans Mountain expansion may begin in September, according to Ian Anderson, the CEO of the Crown corporation that operates the current pipeline. You can reach the conclusion as early as 2022, he said.

Ottawa approved the bill on Tuesday after a ruling by the Federal Court of Appeals last year blocked the construction of the pipeline.

The federal government has bought existing assets from the pipeline for $ 4.4 billion and is now planning to triple its existing capacity to 890,000 barrels per day.

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