Evidence of meeting #35 for Natural Resources in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site.) The winning word was proposed.
A recording is available from Parliament.
9:25 a.m.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
—and giving consideration to the explanation provided graciously by the officials—
9:25 a.m.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
—showing that they've obviously given thoughtful consideration to this. We're proposing this amendment because in the case of unconventional oil and gas development, which includes offshore development, in each situation you have a different circumstance. We're now moving towards the potential for offshore development in the Arctic. There have been debates about whether or not you need the back-up well immediately. There's the issue of recovery under ice.
We think that what we're proposing is very reasonable, which is that for each application there should be a specific individual assessment. That's not to say in all circumstances it would always vary, but it would give the NEB the opportunity to require the proponent—again it's a private proponent—that is going to be putting at risk public resources to show cause that the liability that's assessed under the legislation is fair and reasonable and that there are no specific circumstances. This gives the power to the National Energy Board to vary that if there are specific circumstances where the operation would be more risky.
9:25 a.m.
Conservative
9:25 a.m.
Liberal
Geoff Regan Liberal Halifax West, NS
Chairman, I'm going to ask in a moment for a comment from the officials, if I may, on the first of the two paragraphs proposed in this amendment. I am certainly concerned about the idea particularly of drilling under the ice in the Arctic where we would not have the capacity to contain or clean up a spill. That would be a huge concern if the government were actually to go ahead and permit that without those kinds of capabilities. Obviously, there are reasons to assess that risk, but I'd like to ask officials what impact this would have on the bill.
9:25 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
Our understanding of this particular provision is that proposed subsection 26(2.3) provides the Governor in Council with the ability to raise the absolute liability amounts. This is the clausing that perhaps ought to have been in the legislation when it was passed in the 1980s. It would have allowed liability to have risen without necessarily amending the bill, if you will, as we're doing today. That was the origin of proposed subsection 26(2.3).
The amendment proposes subsection 26(2.31). It would require that the board review every project, which it currently does. Part of the review that the board does under the Canadian Environmental Assessment Act, 2012, is to establish the understanding of what the environmental considerations are, what the risks are, how they might be mitigated, and what the plan is to address those risks. The element of reviewing each project for the risks would occur today, and does occur today, absent this amendment. The element of the amendment that I think is unique is the element that would then, based on that assessment, provide the power to the NEB to increase the absolute liability amount. If they conducted a review of a project in the Newfoundland and Labrador offshore and determined that this project had a set of circumstances, I'm presuming what would happen under the bill, if this amendment passes, is that they might establish that there ought to be a $1.5-billion absolute liability amount.
I think the policy direction of the bill is that the establishment of an absolute liability amount is a legislative element. It's in the bill and it's legislated. The board does work under the frame—to reinforce the point today—that in any circumstance in which there's an incident, liability is unlimited, and the companies are responsible for those. The board, in the bill as it stands now, does have the ability to suggest and to require that an operator demonstrate more than $1 billion of financial capacity. While the absolute liability amount is $1 billion, that is really just the amount that they would be subject to without fault or negligence. They do have unlimited liability. The board could require a company to demonstrate $3 billion of financial capacity before providing an authorization to proceed. That could be done on the basis of their assessment of that particular project, whether it was in the north or whether it was in Atlantic Canada or elsewhere where there might be an application.
We have provided the board authorities that allow for the requirement of more, but we have not provided in the bill, as you would know, the ability for the board to increase liability. We've left that in the hands of the government of the day.
9:30 a.m.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Mr. Chair, through you to the officials, this raises two questions. Of course, the intent of our amendment is precautionary, in keeping with the precautionary principle, rather than after the fact, after this disaster occurs, and then you're trying to assess liability. This is talking about giving consideration to the level of risk of unconventional projects.
The question for the officials, through you, Mr. Chair, is that when we think about severely risky projects, such as drilling in the Arctic, how did you come up with a figure of $1 billion?
9:30 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
I think I would say that I, like you and hopefully most Canadians, believe that the board, with their expertise and their reviews, is in the business of ensuring that risky projects don't go forward. So should and when a project proposal come forward for drilling in the Arctic, which may or may not occur sometime in the near future, the board will evaluate those projects. They'll have public consultations. They will hold the companies accountable for demonstrating how they plan to deal with incidents, should they occur, including the short drilling season that exists in the north and the standing requirement for a relief well, which remains part of the National Energy Board's requirements.
I'd hope, first off, that risky projects don't go forward. I'd hope that the review projects under the board continue to evaluate projects, as they do today; that there is an appropriate discussion among stakeholders, and that the first nation communities, aboriginal communities, and Inuit and northern communities who would be most affected and impacted would contribute to those discussions; that the board would make a determination independently, based on the science and the evidence, of whether the project should proceed; that, if it should, the board would determine whether or not the financial capacity requirements should be higher than the minimum $1 billion, which is what's required in the legislation once this bill passes, should it pass.
9:30 a.m.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Well, Mr. Chair, it's sounding like the officials like our amendment.
I appreciate that explanation, but it didn't answer my question. I wonder if the officials can provide to the committee members their rationale for the $1-billion limit.
9:30 a.m.
Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources
I think we've testified on this point before. With regard to the $1-billion absolute liability amount, again, liability remains unlimited when a company is at fault or negligent. The difference between the two things is the amount of liability a company is responsible for if it is without fault or negligence. That is the $1 billion. If it is at fault or negligent, it is responsible for an unlimited amount of liability. In the north, as it is in Atlantic Canada, the amount remains unlimited. The $1 billion was not set to establish whether or not a certain project of a certain nature or a certain incident in the north would occur and would be covered by absolute liability. That was not the determination that we used to set the amount.
9:35 a.m.
Conservative
9:35 a.m.
NDP
9:35 a.m.
Conservative
The Chair Conservative Leon Benoit
We'll have a recorded vote on this.
(Amendment negatived: nays 5; yeas 4 [See Minutes of Proceedings])
Now we go to the vote on clause 19 unamended. Shall clause 19 carry?
9:35 a.m.
An hon. member
On division.
9:35 a.m.
Conservative
The Chair Conservative Leon Benoit
(Clause 19 agreed to on division)
(On clause 20)
We have amendment PV-7.
Ms. May, you may to speak to that if you'd like.
9:35 a.m.
Green
Elizabeth May Green Saanich—Gulf Islands, BC
Mr. Chair, this amendment is consistent with the others that the Green Party has been proposing. It comes from the testimony that the committee heard.
I do note and I appreciate Ms. Crockatt's comment earlier that I wasn't able to attend all the committee meetings. For anyone watching, it's because I'm not allowed to be a member of any committee, nor am I allowed to speak before committees except in response to the committee motion passed at this committee and all other committees which summons me at moments like this to present amendments without being able to move them or vote on them. So I'm in a rather unusual position.
Given the opportunity I have, and having looked at the evidence before the committee, I'm trying to pick the salient pieces that can improve the legislation. We heard testimony from Ecojustice, from their lawyer Will Amos, who is quite a distinguished lawyer in the environmental field.
I will digress at this moment, Mr. Chair, to note that three graduates of Dalhousie law school are here at this table: Mr. Regan, Ms. Kellerman, and me.
9:35 a.m.
Green
Elizabeth May Green Saanich—Gulf Islands, BC
I'm sorry, Linda. There are four. Dalhousie law school rules; I'm just saying.
Drawing on my deep legal experience and by osmosis that of all my colleagues from Dal law, I'm presenting an amendment to remove the absolute liability from part 1 of the bill. It was one of the main recommendations in Ecojustice's brief. It's on page 3 of their brief. To accomplish that goal, we would collapse two subsections of the current 26.1 dealing with financial resources that are necessary to pay for the absolute liability limits in (2.2).
I don't think I need to go into further details. The intent of my amendment is clear, and I appreciate the opportunity to present it.
Thank you.
9:35 a.m.
Conservative
9:35 a.m.
Liberal
Geoff Regan Liberal Halifax West, NS
Yes, Mr. Chairman.
I have a question for Ms. May. When I was looking at this last night, I noticed that it says, about two-thirds of the way down, “mines an amount under subsection...”. I suspect that the intention was to say “minus”.
