The Legal Continental Shelf: The Surprising Canadian Practice Regarding Oil and Gas Development in the Atlantic Coast Continental Shelf

Abstract

Actions of the Government of Canada and the governments of Nova Scotia and Newfoundland and Labrador, such as interprovincial delimitation of the continental shelf, exclusive exploitation of continental shelf resources, and exclusion of all or part of the revenues generated by these resources from equalization calculations, create the impression of provincial ownership of the continental shelf. This is not the case. In fact, contrary to widely held views, the continental shelf belongs to no one. International law does not grant coastal states sovereignty over the continental shelf. Instead, it grants sovereign rights to explore and exploit the continental shelf. These rights, born of a process of political compromise, belong to the federal government. Consequently, the most common argument for excluding non-renewable resources from equalization calculations (namely, that they belong to the provinces) cannot apply to continental shelf resources. The Canadian practice regarding oil and gas development in the Atlantic coast continental shelf is, from both a legal and political standpoint, all the more surprising given that the Canadian federation is said to be held together by the principle of equalization.