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Special to The Telegram—Fredericton
Nova Scotia says it is going for a first round knockout in its fight with Newfoundland over a patch of seafloor believed rich in hydrocarbons.
The province told an arbitration hearing in Fredericton Monday the issue regarding a marine boundary between Nova Scotia and Newfoundland was settled long ago.
“For Nova Scotians, this proceeding is not about where boundary lines should be, or about who should draw them,” Premier John Hamm said. “We believe these questions were resolved to the satisfaction of all parties almost 40 years ago.”
That “a-deal-is-a-deal” theme forms the heart of Nova Scotia’s case before the panel charged with arbitrating a boundary dispute between the two provinces.
Nova Scotia maintains the boundary was set in 1964, bisecting the Laurentian sub-basin, a 60,000-square-kilometre structure found in the deep water south of the Grand Banks.
The sub-basin is believed to hold up to 10 trillion cubic feet of natural gas and 700 million barrels of oil, the equivalent of three Sable projects and one Hibernia combined.
Phase one
The hearings are being held in two parts and Nova Scotia doesn’t want it to get past the first round.
In the first phase, the panel must decide if — as Nova Scotia insists — a boundary was established by the four Atlantic premiers in 1964.
If the panel rules there is no boundary — as Newfoundland insists — then the hearing moves to phase two to draw the new line. Hamm said if the panel rules there is no line, it will have a mess on its hands.
“Challenging the 1964 agreement affects not only the Nova Scotia-Newfoundland and Labrador boundary, but all agreed boundaries of the East Coast provinces,” Hamm said.
“Atlantic Canada has depended on the stability of the boundaries.”
But Newfoundland’s lead counsel, University of Ottawa law professor Donald McRae, said Nova Scotia is overstating that danger.
“I don’t think that there is any concern that’s a serious question at all,” he said.
Currently, Nova Scotia has the bulk of what one provincial official called the sub-basin’s “sweet spot.” Newfoundland doesn’t recognize that boundary and wants another drawn that runs further south.
At stake is the ability to control the pace of development in the area, and to garner the bulk of the billions of dollars in revenue that would flow should oil companies hit paydirt.
The dispute has held up exploration in the area. Nova Scotia officials said Newfoundland already has 65 per cent of Atlantic Canada’s offshore in its control.
Moving the line would take about 15 per cent of Nova Scotia’s much smaller holdings, they said.
In his opening address, Nova Scotia lead counsel Yves Fortier said the evidence clearly shows the boundary is legal.
“It’s not a proposed line, it’s not a purported line, it’s not a Nova Scotia’s line,” Fortier said.
“It is the line.”
McRae questioned Nova Scotia’s interpretation of the past.
“There was a proposal made by the provinces to the federal government which rejected it and now Nova Scotia wants to resuscitate and turn it into a boundary 40 years later,” he said.
Newfoundland attacked
Fortier, who has to leave the hearings for two days because of an unexpected commitment, spent a large portion of his strongly-worded address attacking Newfoundland’s wish to expand the panel’s ability to consider a wider range of legal precedent.
The panel’s terms of reference were set by the federal government after the two provinces failed to reach agreement.
Fortier said that expansion should not happen.
“The panel’s hands are manacled,” Fortier said outside the hearing.
Throughout his address, Fortier continually used what McRae diplomatically called “colourful language” in his attack on Newfoundland’s case.
Fortier variously accused Newfoundland of having “tunnel vision,” of “setting up straw men” and of “grossly exaggerating.”
Nova Scotia will present the remainder of its case today while Newfoundland opens on Thursday.
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