PUBLIC REVIEW
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.
PRICING
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.
REVENUE SHARING
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.
EQUALIZATION OFFSET PAYMENTS
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.
CROWN SHARE
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
Crown corporations and agencies involved in oil and gas resource activities in the offshore area shall be subject to all taxes, royalties and levies.
DEVELOPMENT FUND
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.
OIL POLLUTION AND FISHERIES COMPENSATION REGIME
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.
A committee consisting of representatives from the Government of Canada, the Government of Newfoundland and Labrador, the petroleum industry, and the fishery industry will review and monitor these provisions.
MANAGEMENT OFFICES
The Board shall seek to ensure that all companies which operate in the offshore area establish offices in the province with appropriate levels of decision-making. In this spirit, the Government of Canada shall ensure, where possible, that Petro-Canada maintains an office in the province with responsibility for its operations in the offshore area.
The Government of Canada shall establish in the province, where possible, regional offices with appropriate levels of decision-making for all departments directly involved in activities relating to the offshore area.
ECO
NOMIC GROWTH AND DEVELOPMENT
It is the objective of both governments to ensure that the offshore area is managed in a manner which will promote economic growth and development in order to optimize benefits accruing to Newfoundland in particular and to Canada as a whole.
The legislation implementing the Accord shall provide that before the start of any work program for exploration or field development, a plan must be submitted satisfactory to the Board for the employment of Canadians and, in particular, members of the provincial labour force and for providing manufacturers, consultants, contractors and service companies in Newfoundland and other parts of Canada with a full and fair opportunity to participate in the supply of goods and services used in that work or activity.
In its review of Canada and Newfoundland benefits plans, the Board shall seek to ensure that first consideration is given to services provided from within Newfoundland, and to goods manufactured in Newfoundland, where such goods and services are competitive in terms of fair market price, quality, and delivery.
The Board shall also require that any such plans include particular provisions, consistent with the Canadian Charter of Rights and Freedoms, to ensure that individuals resident in Newfoundland are given first consideration for training and employment opportunities in the work program for which the plan was submitted.
Plans submitted to the Board, for the use of goods and services and for employment, including plans for any specified purchases, shall be reviewed by the Board in consultation with both governments which shall advise the Board on the extent to which they provide for full, fair and competitive access. Both governments will attempt to provide a common view to the Board, but where this is not possible, the decision on employment and procurement plans approval shall rest with the Board. The Board shall have the authority to approve such plans subject to the power of joint ministerial direction set out in clause 33.
The appropriate Federal and Provincial Ministers shall conclude a Memorandum of Understanding regarding the coordination of industrial and employment benefits by the Board and with respect to the industrial and employment benefits review and evaluation procedures to be followed by both governments and the Board.
REGIONAL SECURITY OF SUPPLY
Hydrocarbons produced from the offshore area will be made available to Newfoundland and Labrador on commercial terms to meet both total end use consumption and the feedstock requirements of industrial facilities in place on the day that legislation implementing this Accord is proclaimed. Similarly, feedstock availability shall be ensured, on commercial terms, for new industrial facilities in Newfoundland and Labrador, provided such feedstock is excess to feedstock required to meet the demand of presently existing industrial capacity in eastern Canada.
RESEARCH AND DEVELOPMENT AND EDUCATION AND TRAINING
Benefits plans submitted pursuant to clause 51 shall provide for expenditures to be made on research and development, and education and training, to be conducted within the province. Expenditures made by companies active in the offshore pursuant to this requirement shall be approved by the Board.
ENVIRONMENTAL STUDIES REVOLVING FUND
The Environmental Studies Revolving Fund (ESRF) will continue to be considered a national program with a central administration. One Newfoundland member of the Board will be appointed to the ESRF Advisory Board. In addition, the ESRF annual budget will be reviewed by the Board, and the application of related levies in the Newfoundland offshore shall be subject to Board approval.
LEGISLATION
Each government shall, within one year of the signing of this Accord, introduce the legislation necessary to implement the Accord and support it as a government measure.
The legislation implementing the Accord shall replace and supersede the federal Canada Oil and Gas Act and the Oil and Gas Production and Conservation Act and the provincial Petroleum and Natural Gas Act as it applies in the offshore area. All other federal and provincial legislation which is presently applicable to the management of the oil and gas resources in the offshore area will continue to apply.
Notwithstanding clause 58, to the extent that the provisions of the Canada Oil and Gas Act and the Oil and Gas Production and Conservation Act and Regulations are consistent with this Accord, they will be retained in the legislation and regulations implementing the Accord.
Except by mutual consent, neither government will introduce amendments to the legislation or regulations implementing the Accord.
The Government of Canada will introduce in Parliament legislation to extend federal laws to apply to activities in the offshore, and apply appropriate provincial laws, including social legislation such as occupational health and safety legislation and other legislation designed to protect workers.
Federal courts shall be invested with jurisdiction in the offshore area in respect of any matter to the same extent as if the matter had arisen within their ordinary jurisdiction. Provincial courts shall be invested with jurisdiction in the offshore region in respect of any matter arising under the laws made applicable by Parliament to the offshore region to the same extent as if the matter had arisen within their ordinary territorial jurisdiction. For the purpose of this paragraph, the offshore region shall be deemed to be within the territorial limits of the judicial centre of St. John’s as defined in the District Court Act, 1977.
COORDINATION
The Board shall conclude Memoranda of Understanding with the government departments and agencies having continuing responsibilities in the offshore area for environmental and safety regulation and for emergency measures with a view to ensuring effective coordination and minimum duplication.
CONSTITUTIONAL ENTRENCHMENT
The Government of Canada agrees that should the Government of Newfoundland and Labrador achieve the requisite support among the other provinces for the constitutional entrenchment of the Accord that it would introduce a mutually agreeable resolution into Parliament.
TRANSITIONAL
Pending the enactment of legislation implementing the Accord, the Government of Canada and the Government of Newfoundland and Labrador agree to take all possible steps to set up the Board and administer existing legislation within the spirit of this Accord.
Subject to clause 36, interests created before the proclamation of the legislation implementing the Accord shall continue and shall be administered by the Board in accordance with the legislation.
OTHER MINERALS
In the event that exploration, production and development of minerals other than petroleum in the offshore area become feasible in the future, the two governments agree to enter into discussions regarding their exploration, development and production.
AREA COVERED BY ACCORD
The area covered by this Accord is that area below the low water mark lying off the coast of Newfoundland and Labrador out to the outer edge of the continental margin, coming within Canada’s jurisdiction being north and east and south of the appropriate lines of demarcation between Newfoundland, the adjacent provinces, and the Northwest Territories.
Dated at St. John’s this 11th day of February, 1985
BIBLIOGRAPHY
Alexander, David. The Decay of Trade: An Economic History of the Newfoundland Saltfish Trade, 1935–1965. St. John’s: ISER Books, 1977.
Andrieux, J. P. Newfoundland’s Cod War: Canada or France? St. John’s: OTC Press, 1987.
Bannister, Jerry. “Making History: Cultural Memory in Twentieth-Century Newfoundland.” Newfoundland and Labrador Studies 18, no. 2 (2002): 175–94.
Bavington, Dean. Managed Annihilation: An Unnatural History of the Newfoundland Cod Collapse. Vancouver: UBC Press, 2010.
Browne, William J. Eighty-Four Years a Newfoundlander: Memoirs of William J. Browne, Vol. 1, 1897–1949. St. John’s: Dicks & Company, 1981.
Crosbie, John C. No Holds Barred: My Life in Politics. Toronto: McClelland & Stewart, 1997.
Cuff, Harry, and Leslie Harris, eds. Where Once We Stood: The Newfoundland Quarterly 100th Anniversary
Anthology. St. John’s: Harry Cuff Publications, 2001.
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