After several months of anticipation, on January 31, 2025, the Government of Canada, in partnership with the Government of Nova Scotia, announced the coming into force of Bill C-49 – An Act to amend the Canada-Newfoundland & Labrador Atlantic Accord Implementation Act and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act (“Bill C-49”). Bill C-49 amends federal legislation that applies to the Atlantic Canada energy industry in an effort to promote offshore wind development in the region. Within this blog post, we will summarize the amendments and key takeaways.
Summary of Bill C-49 and Bill 471
Bill C-49 includes amendments to the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act and the Canada-Nova Scotia Offshore Petroleum Resources Accord Act, which include the following:
- establishing a land tenure regime for the issuance of submerged land licenses to carry out offshore renewable projects;
- changing the names of the Canada–Newfoundland and Labrador Offshore Petroleum Board and the Canada-Nova Scotia Offshore Petroleum Board to the Canada–Newfoundland and Labrador Offshore Energy Regulator and the Canada–Nova Scotia Offshore Energy Regulator, (respectively, the “Offshore Regulators”) and establishing the Offshore Regulators as the regulatory body of offshore renewable energy projects;
- expanding the current safety and environmental protection regime to include offshore renewable energy projects;
- establishing a regulatory and liability regime relating to abandoned petroleum and offshore renewable energy facilities; and
- providing authority to make regulations to regulate access to offshore infrastructure, including enforcing tolls and tariffs.
Bill C-49 follows the passing of Bill 471 (the Advancing Nova Scotia Opportunities Act) (“Bill 471”) by the Nova Scotia Ministry of Natural Resources and Renewables which included similar amendments, including expanding the mandates of the Offshore Regulators and amending the Marine Renewable-energy Act, to promote offshore wind development.
These amendments highlight an increased focus of the federal government and the provincial governments of Nova Scotia and Newfoundland & Labrador to unlock the potential of offshore wind in Atlantic Canada as another resource to support the Canadian renewable energy industry.
Current State of Offshore Wind in Canada
Canada’s renewable energy sector has seen an increased focus on wind energy generation in recent years, with wind energy being the fourth largest source of energy generation in Canada in GW/h as of 2022 (trailing hydro, oil and gas and nuclear generation).[1] Canada’s onshore wind industry currently produces an installed capacity of over 18 GW of power.[2] In contrast, there are no operational offshore wind projects in Canada and to date only a handful of projects have been proposed or are in very early stages of development, including the 300-400 MW Nova East Wind Project being developed by DP Energy and SBM Offshore.
The passing of Bill C-49 and Bill 471 should position Atlantic Canada as a prime potential target for offshore wind development given high winds and the amount of coastline in the area. Notably, the government of Nova Scotia has announced a plan to offer licences for up to 5 GW of offshore wind by 2030, with the initial call for licences occurring in 2025, which should create significant opportunities for developers.
Key Hurdles for Offshore Wind Development in Atlantic Canada
One of the largest hurdles for offshore wind developers in Atlantic Canada is the cost of building these projects. Offshore wind projects are typically much larger in scale and size than onshore wind projects, which thus require increased capital investment and financing. Notably, the Nova East Wind Project is estimated to have a total cost of ~$2B and some of the largest projects globally have reached total costs in the tens of billions. Developing these projects will require significant investments from developers and investors and/or large amounts of financing from project lenders, who will need comfort that these projects are financeable in Canada. Developers may be able to benefit from governmental initiatives such as the Clean Economy Investment Tax Credits and Smart Renewables and Electrification Pathways Program and Canada Infrastructure Bank funding to help bridge financing or economic issues.
Another key issue will be expanding infrastructure in Atlantic Canada to support these offshore projects. Upgrades to the grid in these provinces will likely be required to support interconnection into these large projects and interprovincial transmission may be required to provide adequate demand.
Learning from the German Offshore Wind Sector
At the end of 2024, Germany had more than 9 GW of installed offshore wind capacity and in 2023 and 2024, new projects totaling around 17 GW were awarded, with more auctions to follow in upcoming years. These developments stem in part from Germany’s ambitious target of 70 GW of installed offshore capacity by 2045 and position Germany as one of the most developed offshore wind countries in the world.
From a Canadian perspective, examining the German offshore landscape can provide valuable insights. Here are three key takeaways:
- Establish A Predictable Tender System: Germany's approach to allocation of offshore areas has undergone several changes over the years, from an initial allocation on a “first-come-first-serve” basis until 2017, to an auction process, which was again adjusted in 2022. These changes led to uncertainty and legal disputes by investors and it is only since 2023 that investors are willing to pay positive amounts for the awards, now however reaching into the billions of Euros. In Atlantic Canada, there have been similar procurement processes for onshore wind projects, including the Nova Scotia Green Choice Program and we would expect that allocation of offshore wind licences in Canada would follow a similar process.
- Introduce Qualitative Tender Criteria: Germany has increasingly considered qualitative criteria in its tender processes, such as environmental requirements or workforce-related criteria. These criteria help shift the focus away from purely financial considerations, which is expected to have a positive impact on future electricity prices. We expect that Canadian governments would also consider imposing qualitative criteria, including involvement or equity ownership of Indigenous communities in these projects, following a broader trend of recent procurement processes in Canada.
- Reliable Grid Connection: In Germany, the transmission system operators (TSOs) are mandated to expand the offshore grid within a specified timeframe. This creates reliability for future wind farm operators and even allows them to claim for compensation in the event of delays.
Takeaways
Bill C-49 and Bill 471 will create significant opportunities for offshore wind developers, investors, lenders and contractors in Atlantic Canada and members of the Canadian renewable energy industry should be keeping track of the upcoming call for licenses in Nova Scotia. It is clear that additional support may be needed from federal and provincial governments to push some of these offshore projects into development, but the commitment from the federal government and provincial governments in Atlantic Canada signals a path forward.
The assistance of Antonius Mann, an Associate in the Corporate and M&A Group in the Frankfurt office of Gleiss Lutz currently on secondment to Stikeman Elliott LLP, is gratefully acknowledged. Additionally, the authors would like to thank Ryan Albaum, articling student at law at Stikeman Elliott LLP, for his contributions to this article.
[1] “About renewable energy in Canada” (Government of Canada)
[2] Renewable Energy - By the Numbers (CanREA)
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