Federal government to approve controversial Bay du Nord oil project

The federal government will formally approve the Bay du Nord offshore oil megaproject after markets close at 4 p.m. ET, CBC News has learned from multiple sources who are not authorized to speak publicly.

CTV was first to report the news.

Bay du Nord has been panned by environmental activists and climate scientists, who say it flies in the face of the federal government's climate goals.

The project has also caused disagreement within Prime Minister Justin Trudeau's Liberal cabinet. In February, Radio-Canada reported that cabinet members from Quebec, Ontario and British Columbia were opposed to its approval.

The Newfoundland and Labrador government has fiercely championed the project, with Premier Andrew Furey lobbying fellow Liberals for months. 

"I think there's an imperative that we really look to the federal government to ensure that this is going to be approved," he told reporters in late March.

Norwegian oil company Equinor and its partners plan to develop the oil field at the Flemish Pass, about 500 kilometres east of St. John's. Bay du Nord will be the first project to move the offshore oil industry into such deep waters, with drilling more than a kilometre underwater. 

Their plan is to use a massive floating production, storage and offloading vessel, commonly known as an FPSO, capable of producing up to 200,000 barrels daily.

The project will be Newfoundland and Labrador's fifth offshore oil field in production, and will begin producing as early as 2028.

​Bay du Nord — seen as an economic lifeline to Newfoundland and Labrador, whose economy has been dependent on offshore oil royalties and labour — has been years in the making. ​

Equinor deferred the project in 2020 after oil prices plummeted in the early months of the COVID-19 pandemic, but announced it was forging ahead in 2021. The company says the project will produce about 300 million barrels of oil, generate $3.5 billion in government revenues, and create thousands of jobs. 

Federal Environment Minister Steven Guibeault's decision on whether Bay du Nord would proceed was originally scheduled for December, but was delayed until March 6. 

Guibeault missed that deadline too, and the federal government said it needed more time to assess whether the project is likely to cause "significant adverse environmental effects."