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CHARTING a COURSE for GOOD GOVERNANCE of CANADA's EMERGING OCEAN ECONOMY Mcinnes Cooper

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CHARTING a COURSE for GOOD GOVERNANCE of CANADA's EMERGING OCEAN ECONOMY Mcinnes Cooper CHARTING A COURSE FOR GOOD GOVERNANCE OF CANADA’S EMERGING OCEAN ECONOMY Sara Mahaney and Daniel Watt McInnes Cooper Ocean Economy Group September 2017 As published by the Canadian Institute of Resources Law (CIRL) Occasional Paper #61 mcinnescooper.com CHARTING A COURSE FOR GOOD GOVERNANCE OF CANADA'S EMERGING OCEAN ECONOMY McInnes Cooper CONTENTS INTRODUCTION ............................................................................................................................................................ 1 ACKNOWLEDGEMENTS .............................................................................................................................................. 3 PART 1 THE OPPORTUNITY AND THE REALITY ....................................................................................................... 4 The Opportunity for Atlantic Canada ............................................................................................. 4 Emerging Ocean Resource Activities ......................................................................................................................4 Looking Ahead: Oceans-related Science, Innovation and Emerging Technologies ................................................6 Intellectual Property in the Offshore ........................................................................................................................7 The Current State of Aquaculture in Atlantic Canada .......................................................................... 8 Federal and Provincial Regulation of Near-Shore Aquaculture ...............................................................................9 Regulation of Open-Ocean Aquaculture ............................................................................................................... 11 The Current State of Ocean-based Renewable Energy in Atlantic Canada ................................................ 12 Offshore Wind ....................................................................................................................................................... 12 Tidal Regulation: Nova Scotia’s Tidal Regulatory Regime ................................................................................... 12 PART 2 OCEAN RESOURCE ACTIVITIES IN OTHER JURISDICTIONS ................................................................... 15 Offshore Wind ...................................................................................................................... 15 Open-Ocean Aquaculture ......................................................................................................... 19 PART 3 INTERNATIONAL & DOMESTIC FRAMEWORK ........................................................................................... 23 The International Rules: UNCLOS ................................................................................................ 23 Maritime Zones and Coastal States’ Rights .......................................................................................................... 23 Oil & Gas............................................................................................................................................................... 25 Offshore Wind Farms ............................................................................................................................................ 26 Aquaculture ........................................................................................................................................................... 26 The Domestic Rules: Canada’s Constitutional System ........................................................................ 27 Division of Powers under the Constitution Act, 1867 ............................................................................................ 28 Limits on Provincial Territory, Property and Jurisdiction ....................................................................................... 30 International Law and the Provinces ..................................................................................................................... 31 Section 35: The Rights of Canada’s Indigenous Peoples ..................................................................................... 31 PART 4 PROPOSED OCEAN RESOURCE REGULATORY REGIMES ..................................................................... 33 Regulatory Objectives ............................................................................................................. 33 CONTENTS The Case for a Joint Federal-Provincial Solution .............................................................................. 34 Proposed Ocean Resource Regulatory Regimes ................................................................................ 36 Establish joint federal-provincial regulatory bodies through “mirror” federal and provincial legislation. ................. 37 Ensure regulatory consistency across the oceans resources regimes. ................................................................. 37 Ensure regulatory independence, with ministerial review limited to certain fundamental decisions. ..................... 38 The boards should have ongoing regulatory control over operations for the entire project life cycle. ................... 39 Provincial control over revenues from and fiscal-type mechanisms in the offshore area, with employment and industrial benefits flowing primarily to the coastal provinces. ......................................................................... 41 Ensure a clearly defined role with respect to environmental assessments. .......................................................... 43 Ensure a clearly defined role with respect to consultation with Canada’s Indigenous peoples ............................. 44 Require coordination with other applicable departments and agencies. ............................................................... 45 CONCLUSION ............................................................................................................................................................. 47 Figure 1 Danish Offshore Wind Farm Trend Line: Distance over time Figure 2 Danish Offshore Wind Farm Trend Line: Capacity and distance Figure 3 German Offshore Wind Farm Trend Line: Distance over time Figure 4 Dutch Offshore Wind Farm Trend Line: Distance over time Figure 5 Maritime sovereign rights, by zones, under the Law of the Sea Treaty Figure 6 UNCLOS rights and obligations and effects on installations by zone Figure 7 Progression of expected wind turbine evolution to deeper water Produced by National Renewable Energy Laboratory Figure 8 Fish cages in Velfjorden, Brønnøy, Norway Figure 9 Submersible fish pen © McInnes Cooper, 2017. All rights reserved. McInnes Cooper owns the copyright in this document. You must obtain McInnes Cooper’s consent for any form of reproduction or distribution. Email us at [email protected] to request our consent. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it. CHARTING A COURSE FOR GOOD GOVERNANCE OF CANADA'S EMERGING OCEAN ECONOMY McInnes Cooper INTRODUCTION Atlantic Canada is at a turning point. From earliest times, Atlantic Canada’s history and economic development, both its ups and its downs, have been inextricably linked to the ocean, through fishing, transportation, offshore oil and gas or other traditional ocean industries. There is an immediate opportunity for Atlantic Canada to build on its oceans expertise and create a globally competitive ocean and marine resources industry and associated innovation ecosystem. This opportunity can reverse the pattern of many decades of either slow or no growth in Atlantic Canada. However, taking advantage of this opportunity requires the implementation of robust and comprehensive regulatory regimes for the safe and sustainable development of new ocean resources. We propose new regulatory regimes for ocean resource activities in Atlantic Canada, focusing on wind, tide, waves and aquaculture.1 Intertwining renewable energy and aquaculture – two vastly different ocean activities – in a single proposal may seem incongruous. However, a common obstacle hinders the development of both these ocean resource industries: the absence of regulatory conditions permitting their safe and sustainable development outside provincial territory. Despite significant differences between these industries, the same regulatory framework will best overcome this common obstacle: a comprehensive and responsive regulatory regime based on the joint federal-provincial system that has governed Atlantic Canadian offshore oil and gas activities for the last several decades. We first contrast the opportunities, including a look ahead to developing ocean technologies such as remote operated vehicles, remote sensors and data collection, with the current state of the renewable energy and aquaculture industries in Atlantic Canada. We then describe how other countries have created and developed these industries. Next, we review the international and domestic laws necessarily to shape any Atlantic Canadian regulatory framework for ocean resource activities. Finally, we propose a framework for comprehensive and responsive ocean-based renewable energy and aquaculture regimes, including a description of the constitutional mandate for federal involvement, the regulatory objectives of such regimes, and the rationale for channeling benefits to the provinces of Atlantic Canada. Much
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