1. CEEN 590 Formal Government Processes

2. outline  Overview  Greenhouse Gas Industrial and Reporting Control Act  Canadian energy governance  Canadian (and BC) government  Aboriginal rights

3. Overview Governance in 2 stages – Formal procedures – Next week: (informal) processes; actor dynamics Core distinction: – Authority: ability to make rules backed up by coercive power of the state – Power/influence: ability to influence outcomes Today: foundations for authority

4. Greenhouse Gas Industrial and Reporting Control Act https://www.leg.bc.ca/40th3rd/3rd_read/gov02-3.htm https://www.leg.bc.ca/40th3rd/3rd_read/gov02-3.htm 1. What are the GHG emission limits for coal fired power plants and for LNG facilities? 2. What are the options for an emitter if they can’t meet the emission limit? 3.What kind of emission offsets will be allowed?

5. Governance in Context actions – behavioural actions – energy choices by firms, consumers policies – rules produced by government that influence actions – Objectives (increase renewable electricity) – Instruments (renewable portfolio standard) – Settings (10% by 2012) governance – who decides the rules Sustainable Energy Policy5

6. Gattinger: 4 key energy policy imperatives (MESS) 1.Markets – more efficient and competitive 2.Environment – pollution, biodiversity, climate 3.Energy Security – assurance of adequate, safe, affordable supply 4.Social Acceptability – coping with local opposition to projects

7. 5+ Governance Imperatives 1.The Rich Fuel Endowment: The problem of too many choices 2.Dependence of US Continental Markets 3.Divided Political Jurisdiction 4.Regional-Spatial Realities, and Producer-Consumer Tensions 5.Environmental Issues 6.Aboriginal Peoples’ concerns Modified from Doern and Gattinger, Power Switch

8. Governance – 3 Core Questions Who decides? Who participates? At what level of government? (vertical dimension) 8

9. Vertical Dimension – Division of Powers Division of Powers provincial 109 – all lands, mines, minerals, and royalties to the provinces 92 – provincial management and sale of public lands (federal jurisdiction over “Canada Lands”) federal 91 –international and interprovincial trade 91 –tax any mode or means Spending “Indians” Fisheries and navigation General – criminal law – Peace, order, good government What about local government? International government?

10. Gattinger: energy federalism The character and dynamics of federal- provincial relations in the energy field January 15, 2009Sustainable Energy Policy10

11. Four Periods of Energy Federalism 1867 -1930 -- nationalist cooperative 19030-1950s – expansionist collaborative – Energy development as economic development 1960s-mid-1980s – competitive Mid-1980s to present – third-rail January 15, 2009Sustainable Energy Policy11

12. Periodization Doern and Gattinger 1.WW II to 1973: Regulatory Nation- (and Province) Building energy development as economic development shift from coal to oil 2.1974-1984: The Energy Crisis and Government Intervention 3.Mid 80s to 2000s: Energy Deregulation, Free Trade, and Sustainable Development January 24, 2013Sustainable Energy Policy

13. The Enduring Legacy of Trudeau’s 1980 National Energy Program 13

14. Why history lesson? Can’t understand current Canadian energy policy and governance without it Context: 1.Two most important problems in Canadian politics: Quebec and relations with US 2.In Canadian federal-provincial relations, energy second only to Quebec January 24, 2013Sustainable Energy Policy14

15. NEP Enduring legacy January 24, 2013Sustainable Energy Policy15 Prime Minister Stephen Harper, during 2008 election campaign, on Stephan Dion’s carbon tax “It’s like the national energy program in the sense that the national energy program was designed to screw the West and really damage the energy sector. This is different in that it will actually screw everybody across the country.”

16. Prelude to NEP 1957-1961 1959 – National Energy Board Created 1961 – National Oil Policy – two market policy east of Ottawa Valley, cheap imported Venezuela oil Ontario and west, more expensive Canadian oil – delivered by Trans-Canada Pipeline – continental price under umbrella of US protectionism – growing exports to US Rapid growth in oil and gas industry January 24, 2013Sustainable Energy Policy16

17. Prelude to NEP 1973-1980 1973 – OPEC oil embargo – link to global geo-politics: Arab-Israeli War price controls on domestic crude oil and natural gas subsidized consumption by refiners through oil import compensation program (OICP) 1975 – Petro-Canada established – foster resource development – increase federal government information about reserves 1979 – Iranian revolution led to world price doubling – gap between Canadian prices and world prices increased January 24, 2013Sustainable Energy Policy17

18. 1980 Political Economy of Energy in Canada Oil coalition: federal Conservative Party, western provincial governments, and oil industry – rapid convergence to world prices – smaller federal share of revenues – privatization of Petro-Canada – enabling foreign ownership Federal Coalition: federal Liberal and NDP Party, central and eastern provincial governments – slower increase in prices – larger federal share of revenues – strengthening of Petro- Canada – regulation on foreign ownership January 24, 2013Sustainable Energy Policy18

19. National Energy Program October 1980 budget “a centralist, nationalist and interventionist political and policy initiative which at its core was intended to substantially restructure the key relationships of power and the sectoral and regional distribution of wealth in Canadian energy politics” (Toner and Bregha 1984). January 24, 2013Sustainable Energy Policy19

20. National Energy Program 1980 3 goals – security of supply Petroleum Incentive Program (PIP) encouraged exploration and development – Canadianization 50% Canadian ownership by 1990 (from 29%) PIP criteria favoured Canadian firms on Canada Lands enlarge Petro-Canada through acquisitions – interregional equity in price and revenue sharing 8% Petroleum and Gas Revenue Tax (PGRT) January 24, 2013Sustainable Energy Policy20

21. Backlash Against NEP cbc retrospective video cbc retrospective video Universal industry opposition Vehement opposition by Alberta – led by Premier Peter Lougheed – cutback in oil production – cancellation of 2 oil sands projects Compromise of 1981 produced a new pricing system – old domestic oil increased to 75% world price – new conventional oil at world price January 24, 2013Sustainable Energy Policy21

22. NEP denouement Beginning in 1982, world oil prices began to plummet January 24, 2013Sustainable Energy Policy22

23. NEP denouement Oil price decline after 1982 Mulroney Era (Progressive Conservative) begins in Fall 1984 Western Accord effectively dismantled NEP – deregulated oil prices – phased out PGRT January 24, 2013Sustainable Energy Policy23

24. NEP Enduring Legacy Lesson: mistaken federal government overregulation Strengthened Alberta’s anti-Ottawa tendencies Revived as a bogey-man to discredit major federal energy-related initiatives including climate action January 24, 2013Sustainable Energy Policy24

25. Discuss from Gattinger Where did recent idea for a national energy strategy come from?

26. Government in Canada http://www.youtube.com/watch?v=yi1yhp- _x7A http://www.youtube.com/watch?v=yi1yhp- _x7A Sustainable Energy Policy26

27. Parliamentary Government –Executive executive – governor general (federal) governor general – lieutenant governor (provincial) lieutenant governor Both largely ceremonial – premier and cabinetpremiercabinet Premier/PM: leader of the party with the most seats in the legislature Cabinet: selected by the Premier/PM from members of the legislature of the premier/PM’s party 27

28. Discuss from Ruff According to Ruff, why does the Premier/Prime Minister have so much power in the Canadian system?

29. Parliamentary Government – Legislature MP – member of Parliament MLA – members of legislative assembly influence limited by – majority rule – government must have support of majority – party discipline – all members must vote how their party tells them to Party policy set by caucus – in reality by cabinet and especially leader 29

30. Parliamentary Government – Legislature House of Commons – 308 seats – Conservative (161) – 54% – New Democrat (96) – Liberal (35) – Bloc Quebecois (2) – Green Party (2) – Independent (7) Sustainable Energy Policy30

31. Votes and Seats Vote %Seat % Conservative4053 NGP3133 Liberal1911 BQ61 Green40.3

32. Parliamentary Government – Legislature BRITISH COLUMBIA – 85 SEATS BC Liberal (49) - 58% New Democrat (35) Independent (1) Alberta – 83 seats Progressive Conservatives (72) 83% Wildrose Alliance (5) Liberal (5) 6% NDP (4) 5% Independent (1) Sustainable Energy Policy32

33. Parliamentary Government –Judicial Provincial Courts Federal Court of Appeals Supreme Court of Canada Very little role in energy policy except for aboriginal rights 33

34. Parliamentary Government – Forms of Law statute enabling legislation Act of legislature regulation delegated legislation order in council cabinet (informal) lieutenant governor (formal) contracts, permits 34

35. Parliamentary Government – Policy that is not Law Legally required rules are a subset of “public policy” Example: BC Energy Plan documentBC Energy Plan 35

36. Bureaucracy Minister: – Elected politician – Member of cabinet and legislature Appointed Officials Example: BC Ministry of Energy and Mines Mandate 36

37. Essential Elements of Authority Division of powers Head of state PM or premier Cabinet Members of legislature Legislatures Minister Appointed officials Bureaucracies Courts Sustainable Energy Policy37

38. Aboriginal Rights and Title Governments have a duty to consult and accommodate First Nations (Haida) – Not a veto (Haida, Taku) “Free, prior and informed consent” from UN Declaration – Non-binding on signatories – Canada late signatory with condition that FPIC not a veto Obligations involved in accommodate uncertain Sustainable Energy Policy38

39. Supreme Court Tsilhqot’in - infringement The right to control the land conferred by Aboriginal title means that governments and others seeking to use the land must obtain the consent of the Aboriginal title holders. If the Aboriginal group does not consent to the use, the government’s only recourse is to establish that the proposed incursion on the land is justified under s. 35 of the Constitution Act, 1982. (paragraph 76) 39

40. Supreme Court Tsilhqot’in - infringement To justify overriding the Aboriginal title-holding group’s wishes on the basis of the broader public good, the government must show: (1) that it discharged its procedural duty to consult and accommodate, (2) that its actions were backed by a compelling and substantial objective; and (3) that the governmental action is consistent with the Crown’s fiduciary obligation to the group (paragraph 77) 40

41. Supreme Court Tsilhqot’in – new confusion Fiduciary dutyFiduciary duty, in Canadian aboriginal law, simply means balancing aboriginal rights with other interests What the 3 rd condition adds is uncertain, and how this decision changes the balance of rights, is uncertain and will only be clarified by future court decisions 41

42. Hoberg’s hypothesis while the law falls short of granting a right of consent to First Nations, it is now politically impossible for natural resource projects in Canada to proceed if there is significant opposition from directly affected First Nations 42

43. Sustainable Energy Policy43

44. Summary Authority vs power Formal bases for policy in statute and regulation provincial dominance executive dominance Increasing aboriginal power Next week: policy process, actor dynamics