August 10, 2023

The Atlantic Accord Agreement 2019: What it Means for Newfoundland and Labrador

The Atlantic Accord Agreement 2019 has been making headlines across Canada, but what does it mean for the province of Newfoundland and Labrador? This agreement, which was signed between the federal and provincial governments, represents a significant change in how offshore oil and gas revenues are shared between the two levels of government.

The agreement, which was signed in 2019, replaces the previous agreement that was signed in 2005. It ensures that Newfoundland and Labrador will receive a minimum 25% share of offshore oil and gas revenues, with the potential for this share to increase in certain circumstances. The agreement also provides for a review of the revenue-sharing arrangement every five years, which will allow for changes to be made if necessary.

One of the key changes in the Atlantic Accord Agreement 2019 is the elimination of the “cap” on the amount of money that Newfoundland and Labrador can receive from offshore oil and gas revenues. Under the previous agreement, the province was limited to receiving a maximum of $10 billion over the lifetime of the projects. This cap has now been removed, which means that the province stands to benefit significantly if the projects are successful.

Another important aspect of the agreement is the creation of a new joint management committee that will oversee the development of offshore oil and gas projects. This committee will include representatives from both levels of government, as well as industry representatives, and will be responsible for ensuring that the projects are developed in a safe and sustainable manner.

The Atlantic Accord Agreement 2019 has been widely praised by politicians and industry leaders in Newfoundland and Labrador. Premier Dwight Ball has described it as a “game-changer” for the province, while industry group Noia has called it a “positive step forward” for the offshore oil and gas industry.

However, the agreement has also been criticized by some who argue that it does not go far enough in addressing the concerns of Indigenous communities and ensuring that they receive a fair share of the revenues. There are also concerns about the environmental impact of offshore oil and gas development, particularly given the risks involved in drilling in deep water.

Overall, the Atlantic Accord Agreement 2019 represents a significant change in how offshore oil and gas revenues are shared between the federal and provincial governments. While it is not without its critics, it is widely seen as a positive step forward for the industry and for the province of Newfoundland and Labrador. As the industry continues to develop, it will be important to ensure that the benefits are shared fairly and sustainably.