CEEN 590 Formal Government Processes

1. CEEN 590 Formal Government Processes

2. outline • Overview • Clean Energy Act • Canadian energy governance • Canadian (and BC) government • Aboriginal rights – Idle no More

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. Clean Energy Act •  What are the 5 most important objectives of BC electricity policy? •  What is the definition of self-sufficiency in the Act? • What is the definition of clean or renewable? • How are integrated resource plans developed and approved?

5. CEA - Objectives

6. Self sufficiency "electricity supply obligations" means (a) electricity supply obligations for which rates are filed with the commission under section 61 of the Utilities Commission Act, and (b) any other electricity supply obligations that exist at the time this section comes into force, determined by using the authority's prescribed forecasts of its energy requirements and peak load, taking into account demand-side measures, that are in an integrated resource plan approved under section 4; "heritage energy capability" means the maximum amount of annual energy that the heritage assets that are hydroelectric facilities can produce under prescribed water conditions. (2) The authority must achieve electricity self-sufficiency by holding, (a) by the year 2016 and each year after that, the rights to an amount of electricity that meets the electricity supply obligations, and (b) by the year 2020 and each year after that, the rights to 3 000 gigawatt hours of energy, in addition to the amount of electricity referred to in paragraph (a), and the capacity required to integrate that energy solely from electricity generating facilities within the Province, (c) assuming no more in each year than the heritage energy capability, and (d) relying on Burrard Thermal for no energy and no capacity, except as authorized by regulation.

7. Self Sufficiency in 2007 Energy Plan • self sufficient by 2016, + insurance of 3000 GWh/year by 2026 • result: ensures substantial surplus available for export in almost every year • New Clean Energy Act continued this policy (insurance date moved up to 2020) • 2007 regs: assume “critical water conditions” (in regulation) • 2012: changes to “average water conditions”

8. Clean energy – LNG “cheat” (c) to generate at least 93% of the electricity in British Columbia from clean or renewable resources and to build the infrastructure necessary to transmit that electricity; "clean or renewable resource" means biomass, biogas, geothermal heat, hydro, solar, ocean, wind or any other prescribed resource;

9. 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 Policy

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

11. 5+ Governance Imperatives • The Rich Fuel Endowment: The problem of too many choices • Dependence of US Continental Markets • Divided Political Jurisdiction • Regional-Spatial Realities, and Producer-Consumer Tensions • Environmental Issues • Aboriginal Peoples’ concerns Modified from Doern and Gattinger, Power Switch

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

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

14. Gattinger: energy federalism • The character and dynamics of federal-provincial relations in the energy field Sustainable Energy Policy

15. 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 Sustainable Energy Policy

16. PeriodizationDoern and Gattinger • WW II to 1973: Regulatory Nation- (and Province) Building • energy development as economic development • shift from coal to oil • 1974-1984: The Energy Crisis and Government Intervention • Mid 80s to 2000s: Energy Deregulation, Free Trade, and Sustainable Development Sustainable Energy Policy

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

18. Why history lesson? • Can’t understand current Canadian energy policy and governance without it • Context: • Two most important problems in Canadian politics: Quebec and relations with US • In Canadian federal-provincial relations, energy second only to Quebec Sustainable Energy Policy

19. NEP Enduring legacy “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.”  Prime Minister Stephen Harper, during 2008 election campaign, on Stephan Dion’s carbon tax Sustainable Energy Policy

20. 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 Sustainable Energy Policy

21. 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 Sustainable Energy Policy

22. 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 Sustainable Energy Policy

23. 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). Sustainable Energy Policy

24. 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) Sustainable Energy Policy

25. Backlash Against NEPcbc 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 Sustainable Energy Policy

26. NEP denouement • Beginning in 1982, world oil prices began to plummet Sustainable Energy Policy

27. 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 Sustainable Energy Policy

28. 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 Sustainable Energy Policy

29. Government in Canada • http://www.youtube.com/watch?v=yi1yhp-_x7A Sustainable Energy Policy

30. Parliamentary Government –Executive • executive • governor general (federal) • lieutenant governor (provincial) • Both largely ceremonial • premier and cabinet • 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 • Party rules and system norms make Premier/PM remarkably powerful (Ruff) • Cabinet selection • Party nomination

31. 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

32. Parliamentary Government –Legislature • House of Commons – 308 seats • Conservative (165) – 54% • New Democrat (101) • Liberal (35) • Bloc Quebecois (4) • Green Party (1) • Independent (1) Sustainable Energy Policy

33. Votes and Seats

34. Parliamentary Government –Legislature BRITISH COLUMBIA – 85 SEATS Alberta – 83 seats Progressive Conservatives (61) 70% Wildrose Alliance (17) – 20% Liberal (5) 6% NDP (4) 5% • BC Liberal (49) - 58% • New Democrat (35) • Independent (1) Sustainable Energy Policy

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

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

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

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

39. 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 Policy

41. 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 Policy

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