Bill C-22 (Historical)

Energy Safety and Security Act

An Act respecting Canada's offshore oil and gas operations, enacting the Nuclear Liability and Compensation Act, repealing the Nuclear Liability Act and making consequential amendments to other Acts

Part 1 of this enactment amends the Canada Oil and Gas Operations Act, the Canada Petroleum Resources Act, the Canada-Newfoundland Atlantic Accord Implementation Act and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act (the “Acts”) primarily to update, strengthen and increase the level of transparency of the liability regime that is applicable to spills and debris in the offshore areas.
More specifically, Part 1, among other things,
(a) expressly includes the “polluter pays” principle, which is consistent with the notion that the liability of at-fault operators is unlimited;
(b) increases to $1 billion the limit of liability, without proof of fault or negligence, to which certain operators are subject in the event of a spill or damages caused by debris;
(c) provides that an applicant for an authorization for the drilling for or development or production of oil or gas must demonstrate that it has the financial resources required to pay the greatest of the amounts of the limits of liability that apply to it;
(d) establishes a regime in respect of the development of transboundary pools and fields;
(e) provides for new circumstances in which information or documentation that is privileged may be disclosed;
(f) establishes a legal framework to permit the safe use of spill-treating agents in specific circumstances;
(g) harmonizes the environmental assessment process for projects for which the National Energy Board, the Canada-Newfoundland Offshore Petroleum Board or the Canada-Nova Scotia Offshore Petroleum Board is the responsible authority, as defined in the Canadian Environmental Assessment Act, 2012, with the requirements of that Act, including by establishing timelines for carrying out environmental assessments and creating participant funding programs to facilitate the participation of the public in environmental assessments; and
(h) creates administrative monetary penalty regimes.
Finally, Part 1 makes amendments to remove certain discrepancies between the English and French versions of the Acts, as well as to modernize the language in the Acts.
Part 2 of the enactment repeals the Nuclear Liability Act and enacts the Nuclear Liability and Compensation Act to strengthen the liability regime applicable after a nuclear incident. It also provides for the establishment, in certain circumstances, of an administrative tribunal to hear and decide claims and implements certain provisions of the Convention on Supplementary Compensation for Nuclear Damage. It also makes consequential amendments to other Acts.

Energy Safety and Security Act

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Speaker, I am going to ask the same question of this member as I did of the previous Conservative speaker.

The Conservatives are somewhat delusional in having Canadians believe that they care at all about the environment. They are outliers, not just in Canada, but throughout the world in their inattention to the reduction of greenhouse gases.

Now, the member would have us believe that somehow this legislation is the panacea to protecting our environment.

The previous NDP member asked about liability. It cost close to $8 billion to clean up the Gulf of Mexico after the BP spill. Somehow, she thinks that $1 billion is an acceptable amount to Canadians as a limit of liability.

I would ask her very specifically, because she claims that it is a balance, if she can tell us how the amount of $1 billion was arrived at, when other countries have vastly larger limits and other spills have cost vastly more than $1 billion.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, I think the member opposite, unfortunately, is using the Justin Trudeau model of “budgets balance themselves”. This is the party that—

[Frank Valeriote, Liberal, Guelph, ON]

You cannot mention Justin Trudeau.

[The Acting Speaker, Bruce Stanton]

Order, please. This is just a reminder to the hon. member.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, I am sorry. I apologize.

Greenhouse gases do not go down by themselves. The member opposite should know that the government's record is reducing greenhouse gases. We are more than halfway on our way to meeting our emissions targets, while the greenhouse gas levels went up 30% under the Liberals opposite.

The safety record in the Canadian offshore is absolutely phenomenal. We have a phenomenal track record. We have basically never had a consequential spill on our west coast. On our east coast, I went through the two spills: one was of 1,000 barrels and the other was of 38 barrels.

Believe me when I say that $1 billion is plenty, and it meets the criteria that are being used in other countries around the world, and exceeds them in many instances.

[Dan Albas, Conservative, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, it seems to be that, here in Ottawa, we receive officials from all across the north who are coming here because they want to see that their local input and local priorities can go forward. We have passed many bills in the House to help support development and to help support investment.

Obviously, there are many cases where Canadians want to see increased jobs and growth, but also increased environmental sustainability. The member has brought up many points in her speech that, as she said, strike a balance. For example, there are many opportunities in the north where small hydro projects or small nuclear projects may allow a resource development community to be able to open up new opportunities.

Does the member feel that this piece of legislation would help those kinds of opportunities? Again, these new kinds of plants—for example, nuclear facilities in France—require more updated laws. Would these kinds of opportunities, in the member's estimation, come along with this bill's passage?

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, of course they will, and we heard some very interesting testimony at the natural resources committee recently about how energy development in Canada has actually extended our life spans. It has resulted in the reforestation of much of this country, because we used to take all of our fuel straight off the surface of the earth and cut down all the trees. Now, because of advancements in oil and gas and nuclear, we actually are living in a much greener country and on a greener planet than we used to.

Of course, we cannot go without mentioning our aboriginal Canadian citizens, because we are specifically targeting to work with them. We have been consulting with them and have heard that in resource development, they are often a community that can really benefit from this kind of activity.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, I am thankful for the opportunity to speak in support of our government's proposed new legislation to increase accountability in Canada's nuclear and offshore industries.

Before I continue, I would like to announce to all present that I will be splitting my time with the valued and intellectual member for Yukon, who sits with me on the natural resources committee and does an absolutely amazing job standing up for Yukoners and their natural resource sector and does a much better job than the previous member of Parliament for that region certainly did.

As the Minister of Foreign Affairs has responsibility for Canada's international treaties as well as nuclear non-proliferation policy, he has stressed the importance of bringing Canada into an international nuclear liability convention. This convention would facilitate trade among nuclear power manufacturers while providing for streamlined compensation in the event of a nuclear accident in a country that is a party to the treaty. This is important to Canada, where 15% of electricity is generated by nuclear power. The mix of nuclear, hydro, wind, and solar-powered generation means that 77% of the electricity produced in Canada emits no greenhouse gases. We are number one in the G7 in this regard.

To advance Canada's intention to join an international nuclear liability and compensation regime, the Minister of State for Foreign Affairs and Consular, the hon. member for Blackstrap, signed the convention on supplementary compensation for nuclear damage, or the CSC, in Vienna, in December 2013. I would like to talk about some of those benefits.

With Canada's having achieved that important milestone, let me emphasize that the passage of Bill C-22, the energy safety and security act, would allow Canada to ratify and fully join the convention on supplementary compensation for nuclear damage. I should note that Canada's signature on the treaty has encouraged Japan and South Korea to accelerate their approval processes for joining.

Once one of those countries joins the convention, the combined nuclear power capacity of treaty members will, according to the requirements set by the convention's drafters, be sufficient for the treaty to enter or come into force. This would allow Canada's nuclear trade with the U.S.A. and other treaty member states to flourish. It would establish absolute certainty that liability lies with the operator in the event of a nuclear incident. This clarity would allow manufacturers of nuclear power components and systems in member states to export without the worry of liability that may otherwise impede trade.

Ratification of the convention on supplementary compensation for nuclear damage would offer Canadians two additional pools of international funds for compensation up to $1.45 billion in the event of a nuclear incident. Ratification would also provide exclusive jurisdiction of the Canadian court in the case of a nuclear accident in Canada causing damage internationally. As noted, the convention on supplementary compensation would also channel liability exclusively to the nuclear operator of the site where a nuclear accident occurs, thereby providing business certainty to the many nuclear supply chain companies that add value to the Canadian economy domestically and abroad.

As a treaty member, in the event of a nuclear accident outside Canada, Canada would have its liability limited to $23 million per event, and it would be recovered from nuclear operators in Canada. Taxpayers would be fully protected from any expense. The method of reimbursement to the federal government by the nuclear industry for any amount paid out would be established by regulation prior to Canadian ratification of the convention. This has international importance and consequence.

The convention is aimed at a worldwide liability regime in which all states may participate, regardless of whether they are members of any existing civil nuclear liability conventions or have nuclear installations in their territories.

While the convention is open to all states, those with nuclear installations must also be party to the International Atomic Energy Agency's nuclear safety convention. Canada ratified that convention in 1995 and since then has been a leader in nuclear safety, transparency, accountability, and best practices at the triennial review meetings.

Canada's ratification of the convention on supplementary compensation for nuclear damage would be a favourable response to international calls, led by the U.S. government and the IAEA, for countries to establish a global liability regime. As the world continues to recognize the clean energy advantages of nuclear power, the importance of such an instrument as this only increases, and of course, there are domestic benefits as well.

The convention would also facilitate nuclear development for Canadian provinces, especially Ontario and New Brunswick, which have nuclear power generating programs already.

Within the G7, Canada and Japan are the only members that do not belong to a major international civil nuclear liability regime. This would also be addressed through Bill C-22, and we are confident that Canada's example will help move other countries in the same direction.

This legislation brings Canada up to date with international standards and best practices in the nuclear sector. Our government has made a number of attempts to modernize our nuclear safety system. This is my third Parliament, and I remember the previous iterations of this legislation, and every time, only the NDP opposed improved safety measures.

We on this side of the House support a strong and safe nuclear industry that generates non-emitting electricity. Allow me to quote the Leader of the Opposition. These are the words of the NDP. They are not mine. He stated:

I want to be very clear. The NDP is opposed to any new nuclear infrastructure in Canada.

Canadians know that nuclear energy can be generated safely while supporting jobs for thousands of Canadians. While the NDP will continue to oppose our efforts to improve the safety of this important industry, we will focus on the safety of Canadians and a safe environment. It is time to move this very important initiative to its conclusion.

[The Acting Speaker, Bruce Stanton]

Order, please. Before we go to questions and comments, and I am sure there will be some, it is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Quebec, Consumer Protection.

Questions and comments, the hon. member for Parkdale—High Park.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I take issue with the comments of the member opposite. I first have to say that the NDP's priority is protecting the interests of Canadians and respecting Canadian tax dollars. With that respect comes a real sense of perplexity as to why the government would place a limit on the liability of the oil and gas and nuclear industries. For example, he has just said that the nuclear industry is an incredibly safe industry. If it is a mature and safe industry, then let it pay for itself. Why should Canadians be on the hook for potential liability caused by this mature and safe industry? Other countries have either no limit on liability for these companies or they have limits that are set much higher than those set by the government.

My question for the member opposite is this: why have limited liability? Why leave Canadian taxpayers on the hook for industry disasters?

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, the hon. member who asked me the question left a lot of facts out of that question. For example, she failed to mention that not only is Canada's proposed set target of $1 billion not the highest, but it is also by far not the lowest. There are a number of other countries around the world that have much lower limits.

She also failed to mention that in the United States, for example, which has over five times as many nuclear installations, they have a pooled plan whereby they have individual liabilities for their companies, which when combined form a pooled amount that is far greater than Canada's. We simply do not have that capacity.

The hon. member should have brought up the fact that Japan, before the Fukushima incident, had unlimited liability for its companies. However, no company has the fiscal capacity to deal with a disaster like Fukushima, and the Government of Japan had to step in and deal with it at any rate.

The $1 billion is the right amount. Everyone in the industry who knows what they are talking about accepts it. The only people who do not accept it are the ones who do not know what they are talking about.

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, I want to thank you for giving me a chance to address the bill. It is not that I have not had the opportunity in the past, because I think this is the fifth time this legislation has come forward, and I have been here for at least four of those. It is good to see it finally moving ahead. Through all of those iterations, the NDP has been consistently incoherent.

I want to add to something the member said earlier. Canada does have $1 billion put aside for compensation, and I believe that part of the bill deals with signing the convention on supplementary compensation for nuclear damage, which would bring in another half-billion dollars that would be potentially available if it was needed as well.

I would like to know if the member would address some of the limits we find in other countries to see how Canada's limit of $1 billion straight up and that other half-billion dollars that is available through the supplementary compensation fits with what is going on in other countries. I want to note, as the member did, that the Americans have far more nuclear installations. They have a pool there, but their individual operators are actually liable for less than half of what the Canadian operators would be individually. I look forward to his comments.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, I appreciate the reasoned and logical question from my colleague. We used to sit on the natural resources committee together for a number of years when he was the parliamentary secretary to the minister of Natural Resources. I certainly appreciate his wisdom and guidance and his knowledge and expertise on this file. We should not be surprised that an intelligent question comes from him.

Let me compare Canada's current position in the bill, which is $1 billion. It is in line with international standards. It is significantly higher than the limits set by many of our nuclear peers. In the U.K., the operator liability is currently capped at approximately $260 million, which is basically one-quarter of what we are proposing in the legislation. South Africa is $240 million. Spain is $227 million, and France is even lower, at $140 million.

My finding is that $1 billion is a reasoned approach. We met extensively with many stakeholders who are involved in this. We are protecting the Canadian public and at the same time are not setting such a burdensome insurance or liability regime in place that we would drive business completely out of Canada, especially a clean business like nuclear energy. One would think the Liberals and the NDP would be in favour of non-GHG electrical generation. I am surprised that they would impose caps on these Canadian businesses that would basically drive the businesses out of business, and goodness knows where we would get our clean electricity then.

[The Acting Speaker, Bruce Stanton]

Before we resume debate and the hon. member for Yukon, I would let the House know that more than five hours have passed since the opening round of debate on this question, in which case, all of the interventions from this point on will be limited to 10 minutes for speeches and the usual five minutes for questions and comments.

Resuming debate, the hon. member for Yukon.

[Ryan Leef, Conservative, Yukon, YT]

Mr. Speaker, I have 10 minutes to try to do as much for the issue as my great friend and colleague from Wetaskiwin just did. After listening to him, I probably do not need to say much more. I think he said it all. Even the Liberal Party agrees he did such a fantastic job.

Of the many issues and the many persuasive arguments to support Bill C-22, few matter more to the residents of the Canadian north than the fact that the legislation would protect and defend the Arctic offshore. This is something all Canadians and northerners particularly are genuinely passionate about.

Our government has put the Arctic region higher on the domestic policy agenda than it ever has been before. We are determined to see Canada's north achieve its promise as a healthy and prosperous region that captures the benefits of economic development without harming the Arctic's unique environment.

We envision a north that fully realizes its social and economic potential to secure a higher standard of living and quality of life for today's generation and for those that follow. The vision is articulated in our northern strategy that focused on exercising our sovereignty, enhancing northern environmental stewardship, promoting social and economic development, and improving and devolving northern governance.

Since releasing the strategy, our government has taken action in all four areas, equipping northerners with new authorities, resources and tools that they need to play a central role in the Canadian economy now and into the future.

Less than two months ago, our government's promised Northwest Territories Devolution Act received royal assent, giving northerners control of their own onshore resources and improving regulatory regimes in the Northwest Territories. Bill C-22 is the latest in this long list of initiatives.

As members know, the Arctic's offshore harbours enormous resource wealth, which, if responsibly harnessed, can increase opportunity and prosperity in the Arctic and across all of Canada's north for generations. However, as Bill C-22 makes clear, we are not advocating development at any price. We are instituting important new measures with the legislation to protect the environment and public health and safety. We are putting industry on notice that it will be held to account in the unlikely event of any spill.

Our government recognizes the need for effective stewardship to ensure that future resource development occurs in a way that respects the traditions of first nation and Inuit communities and that ensures the Arctic environment is safeguarded.

To explain how this proposed act would advance these goals, let me first explain the federal role in Canada's Arctic offshore.

Petroleum management in the north is legislated under the Canadian Petroleum Resource Act and the Canadian Oil and Gas Operations Act. Land, royalty and benefit issues are managed by Aboriginal Affairs and Northern Development Canada on behalf of the minister. The National Energy Board administers the Canadian Oil and Gas Operations Act and associated technical regulations.

While offshore oil and gas reserves remain under federal authority, Canada's three northern territories are now strongly engaged in responsible resource management. As I previously alluded to, on April 1 of this year the Government of the Northwest Territories assumed responsibility for onshore land and resource management in that territory. In Yukon, the transfer of land resource management responsibilities occurred in 2003, and we look to future negotiations with Nunavut toward a devolution agreement in that territory.

Devolution gives northerners control over resource development decisions, among other things. As one example, the Northwest Territories devolution agreement provided for the transfer of more than 100 oil and gas licences from the Government of Canada to the territorial government. This included several production licences as well as numerous exploration licences in the Sahtu settlement region, which are attracting industry interest in its shale resources. These new responsibilities allow the territories to take full control over exploration, production, and supply of oil and gas to northern communities and beyond.

Within these areas of federal jurisdiction, Aboriginal Affairs and Northern Development Canada officials work to create the conditions for a positive investment climate that enables the private sector to successfully compete in the north. There is a well-established market driven oil and gas rights issuance process, with an annual opportunity to obtain exploration rights through a competitive process. This process of regular calls for bids increases investment confidence in Canada's frontier lands.

There is widespread agreement on the need for responsible resource development to create jobs and economic opportunity across the north, and a willingness on the part of all parties to work together to achieve this potential. However, confidence in industry's ability to be responsible environmental stewards was eroded with the fateful accident in the Gulf of Mexico in the summer of 2010. This led to the subsequent Arctic offshore drilling review by the National Energy Board, which triggered a federal review of Canada's frontier oil and gas regulatory regime. In turn, this led to the development of the legislation that is before us today.

Informed by the findings of the Arctic offshore drilling review, along with recommendations and the Commissioner of the Environment and Sustainable Development's 2012 fall report, Bill C-22 would take action to ensure that no development would proceed unless rigorous environmental stewardship measures were already put in place.

The energy safety and security act proposes new safety and environmental authorities for Aboriginal Affairs and Northern Development Canada and the National Energy Board to help them better administer oil and gas development in the Arctic offshore. Chief among the improvements, the legislation would raise offshore absolute liability limits from $40 million to $1 billion. This would mean that only companies that have sufficient financial resources to prevent and respond to incidents are active in Canada's offshore.

Bill C-22 would also authorize the use of spill-treating agents when they can be expected to achieve a net environmental benefit. This would create a new tool for operators to use in the response to an offshore spill, should one ever occur.

The legislation would enshrine the principle of polluter pays. This means that in the unlikely event of a spill, any of the damages to species, coastlines, or other public resources could be addressed. Especially important, it would give regulators direct access to $100 million in funds per project or a pooled fund of $250 million, if needed, in case they had to take action to respond to a spill or to compensate affected parties.

The proposed amendments complement the changes to the territorial lands and resource management legislation in the Northwest Territories, which establishes fixed review timelines, monetary penalties for regulatory infractions, and cost recovery regulations. The territorial government is obligated to substantially mirror all amendments in federal frontier statutes to support integration for a minimum of 20 years.

Once passed, the legislation will confirm the Minister of Aboriginal Affairs and Northern Development's authority to order the joint exploration and development of oil and gas fields that straddle federal offshore administrative jurisdiction and other administrative jurisdictions.

Our government has consulted widely on these proposed amendments with territorial governments, the Inuvialuit Regional Corporation, Nunavut Tunngavik Incorporated, and industry representatives, all of whom, by the way, support these measures because they recognize they are necessary and should be in place before any major development in the north occurs, in order to protect the environment and public health and safety.

With approval of Bill C-22, all of these measures will be established prior to any drilling in the Arctic offshore.

Beyond being our government's northern strategic goals, these aspirations are shared by the people in all the communities across all of Canada's north. People are counting on us to pass this important legislation so they can responsibly develop the north's region and utilize and realize its immense energy potential.

Therefore, I call on all parties in the House to join us in supporting this important legislation for the people of the north and indeed the people of Canada.