Evidence of meeting #33 for Natural Resources in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was offshore.
A recording is available from Parliament.
9:05 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Right, so if the liability limit is too low, it will have an impact on the way people operate in the environment, yes?
9:05 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
I don't know if that's true or not. I'd say that they're more likely to operate differently. The reverse may not be true.
9:05 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
Right.
9:05 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
You said that having too low liability limits may affect the behaviour or the operations.
9:05 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
I didn't say that directly. I said that having them too low could leave us with a situation where companies may not have the resources, or we want to make sure they have the resources.
9:05 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Right. If companies don't have the resources, then what happens?
9:05 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
Today or in the future?
9:05 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
Today, they'll be held liable and then taken to court and sued by those who suffer damages.
9:05 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
If fault or negligence can't be proven, what is the liability limit for an offshore spill?
9:05 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
The absolute liability limit today without proof or fault or negligence would be $30 million in the Atlantic and $40 million in the north.
9:05 a.m.
NDP
9:05 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
It will go to $1 billion.
9:10 a.m.
NDP
9:10 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
Indeed.
9:10 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Proving fault and negligence can sometimes be an onerous task for a government. There have been many cases around the world where the public would look at a spill and say clearly that the company is at fault because they screwed up here or here. Through the courts they have subcontractors who have proven to be at fault and they only have a liability regime and so much insurance.
Who picks up the cost of cleanup beyond any liability cap?
9:10 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
I think there is a good example. In the BP case, BP is paying for all of the cost of the related spill. They have pursued the subcontractors that worked with them. I think there were two, three, or four different ones.
9:10 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
They haven't challenged the idea of fault or negligence in that case, right?
9:10 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
No.
9:10 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I'm talking about scenarios in which fault or negligence is challenged by the company.
9:10 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
They would be taken to court.
9:10 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Right, and if the government is unable to prove fault or negligence, what is the liability limit at that point?
9:10 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
I guess it would be rather difficult not to prove fault or negligence when there are a number of parties. Usually the court would proportion the fault or negligence across the parties that were applicable and responsible.
The legislation that we have proposed provides for the operators that are absolutely responsible to $1 billion. They're also responsible for all of their contractors who work for them. We've taken away the “I'm pointing to another party” potential, providing that the licence holder or the main operator is liable, and with fault or negligence and proof of such, it would still hold that they would be liable.