Question Period Note: Offshore Oil and Gas Exploratory Drilling

Offshore oil and gas activity in Atlantic Canada, including exploratory drilling, is of concern to Canadians given the need for careful management and oversight to protect workers and prevent oil spills. In addition, the dual impact of low oil prices and COVID-19 has resulted in a unified call from offshore industry players and the province of Newfoundland and Labrador for federal assistance during the global pandemic.

• Our government recognizes the economic significance of the oil and gas sector to Atlantic Canada, and we are working to strengthen its competitiveness, support employment growth, and protect our environment.
• The dual impact of low oil prices and COVID-19 has severely affected Canada’s petroleum sector. Our government has announced a number of important financial and regulatory measures that will assist industry as it rebounds from the global pandemic.
• Support for industry has included measures such as tax deferrals, access to liquidity and credit for medium-sized energy companies, and wage subsidies to reduce layoffs including an extension of the Canada Emergency Wage Subsidy through to next summer.
• We have also announced $1.7 billion for the remediation of orphan and inactive wells, a $750 million investment in greenhouse gas reduction with $75 million earmarked for the offshore sector, and $320 million to support offshore jobs in Newfoundland and Labrador.
• Canada has a mature and robust regulatory framework that governs the full spectrum of offshore oil and gas activities, and ensures the highest standards of safety, environmental protection, and management of offshore petroleum resources.
• The offshore petroleum boards have provided strong oversight for more than 30 years – ensuring the safe and environmentally responsible development of Canada’s offshore petroleum resources.
• We will continue to work closely with our partners to support jobs and ensure the sustainable, long-term, lower-emitting future of our offshore.

If pressed on COVID-19 and the need for federal assistance for the offshore sector
• The offshore sector accounts for up to 25% of GDP and 10% of employment in Newfoundland and Labrador (2010-18 average). The sector creates opportunity, generates employment, supports local businesses, drives research and development, and promotes education and training, all while generating and maintaining sustainable infrastructure.
• The uncertainty caused by the COVID-19 pandemic has resulted in the reduced scope of existing projects, and the deferral or outright cancellation of numerous proposed major offshore projects.
• In April, our government announced the $750 million Emissions Reduction Fund designed to keep workers employed and assist firms in preparing to reduce greenhouse gas emissions and in conducting research and development. It included $75 million specifically for investments in the offshore.
• In addition, on September 25, our government announced $320 million in federal support for our offshore sector and workers, which will help projects in the Canada-Newfoundland and Labrador offshore get back on track.

If Pressed on Exploratory Drilling and the Regional Assessment Exemption Regulation
• Our government is committed to maintaining a competitive and sustainable offshore oil and gas sector, while upholding the highest standards of environmental protection.
• The Ministerial Exemption Regulation, announced last June, upholds our commitments and improves the efficiency of the assessment process for offshore oil and gas exploratory drilling projects.
• Exploratory drilling is a short-term activity and the environmental effects are well understood. The Regional Assessment in Eastern Newfoundland affirmed that standard measures can be put in place to avoid, or mitigate, potential negative impacts to the marine environment.
• The Regulation upholds these robust mitigation measures and strengthens necessary compliance conditions in order for proposed projects to be excluded from a project-specific federal Impact Assessment.
• This approach provides industry with the predictability and certainty it has been seeking and ensures Canada’s offshore sector remains competitive, without abandoning our marine conservation and environmental protection objectives.

If pressed on Oil Spills and Safety
• Our government places the highest priority on health and safety of Canadians and the environment.
• Canada’s offshore installations and the equipment and training required to operate them must meet strict regulatory standards that are among the highest in the world.
• We have confidence in the offshore petroleum boards and their ability to ensure safety and environmental protection.
• Our government recently announced $320 million for the offshore sector in Newfoundland and Labrador, which will contribute to important safety improvements, maintenance and upgrades of existing offshore infrastructure, environmental services and clean technology.

If pressed on the need for specific federal support for West White Rose or Terra Nova
• We continue to work closely with the province and companies to establish the concrete steps needed to support these projects. Workers and their families are at the center of all our discussions.
• Our government has worked every day with the province, industry, unions, and investors to sustain the competitiveness of Newfoundland and Labrador’s Offshore.

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