EnergyBC

Constitutional Jurisdiction and Ownership

The ownership of the waters landward of the Queen Charlotte Islands remains a point of contention between the federal and provincial governments. In Canada, jurisdiction over ocean waters belongs to the federal government. When offshore exploration in BC began in the 1960s, the federal government granted permits in Hecate Strait. Provincial permits were not granted. By 1963, Shell Oil was granted permits from both levels of government although no progress was made on the government ownership issue.

In November of 1967, the Supreme Court of Canada ruled in favour of the federal government in regards to ownership of the offshore oil and gas resources of BC. The federal government then proposed administration boundaries to all ocean bordering provinces a short distance from the shoreline in 1968. Provincial governments would retain jurisdiction landward of these boundaries while collecting half of the revenue earned from any ocean resources. The BC government did not agree to the boundaries and maintained its claim on ocean resources (Petro-Canada, 1983). Shortly afterwards the federal government imposed the 1972 moratorium on offshore exploration in the BC area. This moratorium was a result of several factors: Jurisdictional conflict, public concern over the environmental hazards of transportation of hydrocarbons, and the potentially environmentally damaging effects of hydrocarbon resource exploitation. The jurisdictional conflict remains unsettled to the present day.

The SFU Report (2004) has summed up the current jurisdictional situation: "Respecting federal-provincial constitutional jurisdiction over offshore areas, Supreme Court of Canada cases have determined that the federal government has, vis-à-vis British Columbia, exclusive legislative authority regarding all waters and seabed areas west of Vancouver Island and the Queen Charlotte Islands. The waters and ocean floor between Vancouver Island and the mainland have been held to be within provincial jurisdiction. There is legal uncertainty regarding federal-provincial jurisdiction over the waters and sea floor between Vancouver Island and the Queen Charlotte Islands (Queen Charlotte Sound) and the waters and sea floor landward of the Queen Charlotte Islands (Hecate Strait).”

Consequently, if offshore oil and gas projects were located within these internal ocean waters, activities would be subject to the authority of at least two levels of government. The result could be two overlapping, valid laws regulating the same activity. Where this occurs, the courts generally allow both laws to co-exist. Only if there is a truly unavoidable conflict between the two will they uphold the federal law at the expense of the provincial statute. This is known as the “paramountcy doctrine."

Even if any proposed offshore oil and gas development were to be exclusively subjected to federal jurisdiction, federal-provincial cooperation would still be expected. In 1984 the Supreme Court of Canada unanimously decided that resources beneath the territorial waters off of Newfoundland belonged to the Government of Canada, however, Newfoundland and Nova Scotia subsequently negotiated agreements with the federal government in which both levels of government share decision-making authority over, as well as profits from, offshore resources (see Regulation).

In terms of ownership rights, regional or local levels of government have no direct authority over offshore resources. However, it is obvious that coastal communities might stand to gain substantially from the potential economic benefits as well as suffer most directly from potential environmental hazards associated with resource development. Thus community leaders and residents have been invited to several public hearings hosted by the federal and provincial governments to voice local concerns and opinions. The Federal Consultation Process is just one of many review bodies to solicit input from communities regarding their feelings towards potential development.

There is also the pressing issue of First Nations land claims over the territories surrounding the Queen Charlotte Islands and the waters therein. Treaty negotiations are continuing at the provincial level. Several tribes have expressed opposition to offshore development which they see as a potential disruption to traditional ways of life.

Some credit from above text to Review of Offshore Oil and Gas Development by Simon Fraser University, 2004, Should B.C. Lift the Offshore Moratorium? by D. Marshall, 2001 and British Columbia Offshore Hydrocarbon Development: Issues and Prospects, by the Maritime Awards Society of Canada, 2000.