Read Some Day the Sun Will Shine and Have Not Will Be No More Online
Authors: Brian Peckford
It is the objective of this Accord that consensus be sought and
reached between the two governments with respect to fundamental
decisions as defined in clause 25. Where agreement cannot be reached
between governments on a fundamental decision within thirty days
following receipt of the Board’s decision, the following shall
apply:
in the national interest, and subject to clause 26 (b),
the Federal Minister will be responsible for approving a
fundamental decision taken by the Board until a period
when national self-sufficiency and security of supply
are reached, or,
having been reached,
are lost. Once Canada reaches a period in which
self-sufficiency and security of supply are reached, the
Provincial Minister will have the power to approve a
fundamental decision taken by the Board, subject to the
normal exercise of the Government of Canada’s authority
over exports. The determination of whether
self-sufficiency and security of supply, as defined in
clause 28, have been reached will be made in the manner
set out in clause 27; and
the Provincial Minister will be responsible for
approving fundamental decisions taken by the Board
primarily affecting the mode of development as defined
in clause 25 (c), subject to the Federal Minister’s
right to override the Provincial Minister’s approval or
veto if it unreasonably delays the attainment of
self-sufficiency and security of supply.
In the absence of agreement, the determination of whether
self-sufficiency and security of supply as defined in clause 28 have
been attained, and whether a decision by the Provincial Minister has
caused an unreasonable delay in the attainment of self-sufficiency
and security of supply, will be made by a three person arbitration
panel as provided for under clause 5 of this Accord. Both
governments agree to accept the decision of the arbitration panel as
final and binding for the purposes of this Accord.
National self-sufficiency is achieved in any calendar year when the
volume of suitable crude oil and equivalent substances available
from domestic Canadian hydrocarbon productive capacity is adequate
to supply the feedstock requirements of Canadian refineries
necessary to satisfy the refined product requirements of Canada.
Suitable crude oil and equivalent substances are those which are
appropriate for processing in Canadian refineries and which are
potentially deliverable to Canadian refineries.
Security of supply is realized when the achievement of
self-sufficiency as defined above is anticipated in each of the next
ensuing five calendar years, giving full consideration to
anticipated additions to productive capacity, and anticipated
adjustments to refining capacity.
In determining the above requirements, the volumes of crude oils
having the quality characteristics required for the production of
speciality refined products and which are not available from
Canadian sources shall be excluded.
To minimize the regulatory uncertainty faced by
industry associated with potential shifts in the role of Federal and
Provincial Ministers, the determination of self-sufficiency and
security of supply will be fixed for periods of five years. Each
determination shall be conclusive and binding on the parties. For
the first 5-year period, which commences on the proclamation of
legislation implementing this Accord, both governments agree that
the requirement of selfsufficiency and security of supply has not
been met.
In the event of a sudden domestic or import supply shortfall, the
Board will undertake to increase production, if requested by the
federal government, consistent with good oil field practice. In
addition, should Canada’s obligations under the International Energy
Agency (IEA) oil-sharing agreement be triggered, the Federal
Minister would, during the period these obligations continue, be
able to direct the Board to take such measures as are necessary to
comply with Canada’s obligations under the IEA and as are fair and
equitable in relation to other hydrocarbon producing regions of
Canada.
The contribution of petroleum resources from the offshore area to
the achievement of selfsufficiency and security of supply shall be
equitable in relation to the other hydrocarbon producing regions of
Canada.
Where a government exercises its authority under this Accord
with respect to a fundamental decision, the other government may
delay the execution of that decision for a period of three months in
order to give further opportunity to reach consensus.
In the public interest, Ministers may jointly direct the Board
in writin concerning:
fundamental decisions (described in clause 25);
the public review process (clause 34);
Canada and Newfoundland benefits; and
studies and the provision of policy advice.
The Board shall carry such directives into effect.
During the first month of each calendar year
the Board shall provide to both Ministers a plan outlining the
Board’s intentions regarding the areas to be made available for
exploration and development during that calendar year. If, upon
review, it is felt that the proposed plan does not provide for an
adequate level of effort towards the achievement of selfsufficiency
and security of supply, the appropriate Minister as determined under
Clause 26 (a) may reject the plan and inform the Board of the
reasons for so doing and the Board shall bring forward an alternate
plan consistent with these views.
In relation to any prospective development, the Board shall
conduct a public review. If the Board decides that it is in the
public interest, It may waive the holding of a public review,
subject to clause 33 (a). If a public review is conducted, the Board
may:
establish terms of reference and a timetable that will
permit a comprehensive review of the project, including
aspects falling within the retained jurisdiction of the
Federal and Provincial Governments;
name a commissioner or panel, and may request both
governments to confer upon the commissioner or panel
powers of inquiry under the Public Enquiries Act of
Newfoundland and Labrador or the Inquiries Act of
Canada;
name to a panel members proposed by the Federal and
Provincial Governments, in recognition of their
jurisdiction;
require a project proponent to submit a preliminary
development plan, and as needed an environmental impact
statement and a socio-economic impact statement,
including a preliminary benefits plan; and
cause the commissioner or panel to hold public hearings
in appropriate locations in the province and report to
the Board and the relevant Ministers.
Not more than 270 days shall elapse between the receipt of the plan
by the Board and its decision with respect to the plan.
The Government of Newfoundland and Labrador will be
a full participant in negotiations and consultations with the
Government of Canada from time to time in the same manner as the
governments of other producing provinces for the establishment of
the price of oil and natural gas in the offshore area.
The principles of revenue sharing between Canada and Newfoundland
with respect to revenues from petroleum-related activities in the
offshore area shall be the same as those which exist between the
Government of Canada and other hydrocarbon producing provinces with
respect to revenues from petroleum-related activities on land. The
federal legislation implementing the Accord, therefore, will permit
the Government of Newfoundland and Labrador to establish and collect
resource revenues and provincial taxes of general application as if
these petroleum-related activities were on land within the province,
through incorporation by reference of Newfoundland laws (as amended
from time to time), or through other appropriate legislative
mechanisms.
On the basis of the foregoing, Newfoundland shall receive the
proceeds of the following revenues from petroleum related activity
in the offshore area:
royalties;
a corporate income tax which is the same as the
generally prevailing provincial corporate income tax in
the province;
a sales tax that is the same as the generally
prevailing provincial sales tax in the province;
any bonus payments;
rentals and licence fees; and
other forms of resource revenue and provincial taxes of
general application, consistent with the spirit of this
Accord, as may be established from time to time.
The Board shall collect royalties, bonus payments, rentals and
licence fees. These revenues and other offshore revenues referred to
in clause 37 shall be remitted to the Government of Newfoundland and
Labrador.
The two governments recognize that there should not be a dollar for
dollar loss of equalization payments as a result of offshore
revenues flowing to the Province. To achieve this, the Government of
Canada shall establish equalization offset payments. These payments
shall commence on April 1 of the first fiscal year following the
attainment of cumulative production of fifteen million barrels of
offshore production of oil or the energy equivalent production of
natural gas and shall be in two parts.
Offset payments (Part I) will
be made equivalent to the loss in fiscal equalization payments
resulting from any future changes to the floor provisions of the
Federal-Provincial Fiscal Arrangements and
Federal Post-Secondary Education and Health Contributions
Act
, 1977, as amended 1982, with respect to the phaseout
of equalization entitlements, if the changes are detrimental to
Newfoundland. These Part I offset payments will apply for a period
of twelve years from commencement of production. In addition, the
Government of Canada will make offset payments (Part II) equivalent
to 90 percent of any decrease in the fiscal equalization payment to
Newfoundland in respect of a fiscal year in comparison with the
payment for the immediately preceding fiscal year, as calculated
under the prevailing Federal-Provincial Fiscal Arrangements and
Federal Post-Secondary Education and Health Contributions Act, 1977,
as amended from time to time and, taking into account for both
years, the offset component entitlement under Part I.
Beginning in
the fifth fiscal year of offshore production, this offset rate shall
be reduced by ten percentage points and by ten percentage points in
each subsequent year.
The costs and benefits of any Crown share in the offshore area
which may be retained by the Government of Canada will be
established by the Canada-Newfoundland Atlantic Accord
Implementation Act. The costs and benefits thereof will be shared
equitably by both governments.
Crown corporations and agencies involved in oil and gas resource
activities in the offshore area shall be subject to all taxes,
royalties and levies.
The Government of Canada and the Government of Newfoundland and
Labrador hereby establish an Offshore Development Fund. The purposes
of this Fund are to defray the social and economic infrastructure
costs related to the development of oil and gas in the offshore area
in the period before production begins, and to ensure that the
provincial economy is well positioned to reap the economic benefits
of offshore development. This Fund shall be in addition to the
funding provided by the Government of Canada for regional
development and other similar initiatives in Newfoundland.
The Fund
will consist of a $300 million grant, cost shared 75 per cent
federal and 25 per cent provincial. Contributions to the Fund will
be made over a five year period commencing April 1, 1985 on a
schedule to be agreed by Ministers on the basis of project
requirements.
A Development Fund Committee comprised of two representatives from
each of the Federal and Provincial Governments shall be established
to monitor and review the implementation of this Fund.
Both Ministers may propose projects, normally falling within
provincial jurisdiction, for funding. Expenditures will be made by
mutual consent.
The legislation implementing the Accord will establish an oil
pollution compensation regime with respect to absolute liability for
oil spill damages and debris, requiring appropriate financial
security. Together with the relevant provisions of the Canada
Shipping Act that establish the Maritimes Pollution Claims Fund, or
its successors, and any industry-sponsored programs for
non-attributable damages, this shall be accepted as the basis of an
oil spill damage compensation regime that recognizes the various
causes and sources of pollution damage.
This regime shall include provisions to compensate fishermen with
respect to absolute liability for attributable oil spill and
debris-related damages. The Board shall also promote and monitor
industry-sponsored fishermen’s compensation policies for damages of
a non-attributable nature.