By T. Murray Rankin, Q.C.
The question of whether the federal and provincial moratoria that now apply to offshore oil and gas exploration in the waters of coastal British Columbia should be lifted is perhaps the most controversial issue of our time.
On the one hand, the estimated value of the offshore resources is staggering. For example, in 1998 the Geological Survey of Canada estimated that the Queen Charlotte Basin could contain up to 9.8 billion barrels of oil and 25.9 trillion cubic feet (TCF) of natural gas. The Tofino and Winona Basin likewise might account for 9.4 TCF, and the Georgia Basin (onshore and offshore) up to 6.5 TCF of natural gas. The value of this resource could be as much as US $55 billion for oil and US $40 billion for gas. If accurate, these projections would make offshore oil and gas the second largest industry in B.C., behind tourism at US $8.3 billion annually but ahead of forestry (US $2.2 billion) and all other sectors of the economy.
In the February 1, 2004 speech from the throne, the provincial government stated that it wants the industry to be "up and running" by 2010 - less than six years from today. The province believes that technology has come a long way. Many of the earlier known risks can now be minimized if not avoided completely. There are new and safer ways of conducting offshore activities. "First Nations' rights and interests" will be addressed and First Nations' support obtained. In a similar vein, the Vancouver Sun opined on January 15, 2004, that it is "time to stop stalling on offshore energy". It applauds the new federal natural resources minister, John Efford, for his apparent endorsement of the project. A Pacific Offshore Energy Association has been created chaired by the former mayor of Port Hardy, Ross Hellberg, who states: "People don't realize the amount of jobs offshore energy will bring." 1
On the other hand, environmental organizations such as the Living Oceans Society and the David Suzuki Foundation have been outspoken in their opposition to lilting the moratoria. They assert that research demonstrates that "the wide range of social, ecological and economic concerns related to the offshore oil and gas industry outweigh any potential benefits".2 They also point out that the dramatic economic figures remain unproven. The First Nations in coastal B.C. have also expressed their opposition in no uncertain terms. UBC professor Mary Lynn Young wrote in The Globe and Mail on January 5, 2004, that there will be very few new B.C. jobs in the start-up phase and, even in the best-case scenario, that it would take more than 15 years to develop the industry, with any jobs that were created postponed until long into the future. Environmentalists have noted that unlike Hibernia, which is located more that 300 kilometres off Newfoundland, the proposed B.C. oil and gas development would be located as close as 20 kilometres from shore and that any oil spills would destroy herring spawn areas and important fish habitat in as little as a few hours. They also note that the financial incentives that were provided in Atlantic Canada - grants, tax exemptions and loan guarantees mean that the amount of money invested in creating whatever employment results seems unwarranted. They also note that there are significant gaps in baseline data for species in the Queen Charlotte Basin and point out the serious impacts from seismic testing on fish species, which include mortality of fish with swim bladders, disturbance to the behaviour of fish and marine animals and the possible reduction of fish catch rates. Queen Charlotte Sound and Dixon Entrance are a migration corridor for millions of Canadian juvenile and adult salmon, and this region is said to account for over half of the landed value of all commercial fishery products in B.C.
This article canvasses, in necessarily cursory form, the three key dimensions of the framework of environmental law that underpin any proposal for offshore oil and gas exploration and development in British Columbia. Federalism and Aboriginal rights are the twin components of Canadian constitutional law that are central to this issue. They in turn are reflected in the third important dimension, the overlapping statutory law of environmental assessment.
FEDERALISM
Aboriginal peoples may have regulatory entitlements either flowing from a free standing right to self-government or because of their Aboriginal title, which would include the right to make decisions about the use of land that is subject to Aboriginal title: Campbell v. British Columbia (Attorney General), 2000 BCSC 1123. In addition, resource rights may include a regulatory component: R .v Nikla, [1996] I.S.C.R 1013. However, this section will consider solely the division of legislative authority over the offshore as between the federal and provincial governments. As the very existence of both federal and provincial moratoria demonstrates, both levels of government assert a jurisdiction to make laws in relation to some aspect of offshore oil and gas initiatives. The twin prohibitions underscore the federalism dimension of the legal framework for offshore exploration. Under Canadian federalism, the federal and provincial governments each have been assigned, by the Constitutional Act, 1867, specified classes of subjects over which they are entitled to legislate. This "division of powers", of course, does not neatly fit within the modern world regulation; for example, the field of environmental protection was largely unknown in the mid-Victorian era, when the old British North America Act was enacted by the British Parliament. Section 91 of that Act sets out the federal heads of lawmaking power, while s. 92 outlines those lying within the provinces. Many specific matters fall under each of these heads of power. The heads of power are set out in quite general terms, and the jurisdiction over offshore natural resources is not explicitly enumerated as falling within either government's jurisdiction.
The Territorial Sea and the Continental Shelf
Insofar as the projects contemplated would exploit natural resources in the seabed and subsoil under Canada's territorial sea or beyond (i.e., in the continental shelf) it is only the federal government that has jurisdiction over them. This fact has been made clear by the Supreme Court in Reference re: Ownership of Off Shore Mineral Rights (British Columbia), [1967] S.C.R. 792.
Whereas Canadian territory includes the territorial sea - which extends for 12 nautical miles beyond the low water mark of the outer coastline3 - these waters and the seabed and subsoil below them lie outside provincial boundaries. Thus, it is the Canadian government that owns the land beneath the territorial sea, and only it can authorize exploration and exploitation of its resources: B.C. Offshore Mineral Rights Reference at pages 816-817.
Beyond the territorial sea lies what is called at international law the "continental shelf". It is not owned by any national government. However, under the 1958 Geneva Convention, sovereign coastal states do hold exclusive exploration and exploitation rights over the continental shelf. Since it is only Canada, and not B.C., that is a sovereign state and a signatory to the Geneva Convention, the Supreme Court reasoned that Canada alone holds the rights and obligations enumerated in that convention: B.C. Offshore Mineral Rights Reference at page 821. Beyond the territorial sea is the "exclusive economic zone", which gives Canada sovereignty over, although not ownership of, the natural resources, from the baseline to a distance of 200 nautical miles out to sea. The federal government has property rights and jurisdiction over the territorial sea and seabed, being 12 nautical miles offshore from the "baseline". This baseline is a line drawn along the coastal low water mark and across the indents in the coast. Waters inside this area are termed "the inland marine zone" and there, where most but not all of the oil and gas resources are likely to be located, may be subject to provincial jurisdiction. Within the territorial sea (12 nautical miles out from the "baseline") Canada has absolute ownership of the seabed as well as legislative jurisdiction. In the exclusive economic zone, Canada has sovereignty but not ownership.
Turning to the formal division of powers in the Constitution Act, 1867, Canada's jurisdiction over the territorial sea is explained by s. 91 (1A ) and the residual s. 91 "peace, order and good government power" (the "POGG power"): B.C. Offshore Mineral Rights Reference, at page 816. Section 91 (1A) gives Canada jurisdiction over public property, while the POGG power allows the federal government to legislate with respect to matters not falling under any of the specific heads of power where such laws further the peace, order and good government of the country as a whole. The federal government's legislative authority with respect to the continental shelf is based only on the POGG power, since the seabed and subsoil beyond the territorial sea are not Canadian territory.
Internal Waters
Ocean waters within the low-water mark of B.C.'s outer coastline do not count as the territorial sea. Thus, if offshore oil and gas projects are ever located within these internal ocean waters, they will be subject to joint jurisdiction. The provincial government's ownership of the seabed and subsoil below internal waters was confirmed by the Supreme Court of Canada in Reference re: Ownership of the Bed of the Strait of Georgia and Related Areas (Georgia Strait Reference, [1984] 1 S.C.R. 388 (the "Georgia Strait Reference").4 A majority of the court held that as of 1866, the western boundary of the Colony of British Columbia was the Pacific Ocean off the west coast of Vancouver Island, and that ocean waters east of that boundary belonged to the colony. The province retained the same boundaries upon joining Confederation, and thus the seabed under these internal waters belongs to it, not the federal government: Georgia Strait Reference at pages 426-427, The oil and gas reserves seem more likely to be found within what has been termed this "internal" or "inland" sea of B.C.
In constitutional law, a clear distinction must be drawn between ownership and jurisdiction. In the Georgia Strait Reference, the Supreme Court merely ruled on ownership of the internal ocean's seabed and subsoil. It did not explore the question of which s. 92 heads of power authorize B.C. to legislate over these submerged lands. However, the two most obvious sources of provincial jurisdiction are ss. 92 (13) and 92A. Section 92 (13) grants the provinces legislative power over property and civil rights, whereas s. 92A permits them to legislate with respect to, among other things, the "exploration for non-renewable natural resources in the province" and the "development, conservation and management of non-renewable resources. in the province." Thus, at the very least, B.C. must have the power to assign exploration and exploitation rights with respect to resources located in the internal ocean's seabed and subsoil. In addition, the Supreme Court of Canada last year unanimously reaffirmed that it is constitutionally permissible for a validly enacted provincial statute of general application to incidentally affect matters coming within the exclusive jurisdiction of Parliament: Paul v. British Columbia (Forest Appeals Commission), 2003 SCC 55.
However, the federal government would also have jurisdiction over offshore oil and gas projects located in internal waters. Its authority is more indirect, stemming from the following heads of power:
As a result, should any offshore oil and gas projects be undertaken in internal waters, the proponents would be subjected to the authority of at least two levels of government. The result could be overlapping legislation i.e., two valid laws regulating the same thing or activity, each on the basis of a different head of power. Where this occurs, the courts generally