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.

Speaker's Ruling

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, I would like to read a quotation to the member.

The Canadian Nuclear Safety Commission requires that there be, at most, a 0.01% chance of any given nuclear reactor having a nuclear accident with core damage. For the 10 reactors in the Toronto area, a simple calculation demonstrates that this probability, over five years, is 10 times 5 times 0.01%, or 0.5%.

The probability exists. How can the member say that there is no risk to Canadians?

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, as I said, this act would modernize safety and security for Canada's offshore and nuclear energy industries. It would ensure a world-class regulatory system as well as strengthen safety and environmental protections. It builds on Canada's strong record and would ensure our energy sector could thrive. The $1 billion absolute liability would place Canada's regime squarely among those of its peer countries.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, when looking at issues of liability, even though $1 billion in liability is certainly more money for which the nuclear industry would have to be responsible than in previous bills, the reality is, as we know from nuclear accidents, that $1 billion will not begin to cover the cost of a large-scale nuclear accident in Canada.

Initially, it was put forward as an excuse for holding it to $1 billion as a liability cap that if it were not there, it could affect provincial electricity rates. However, through questions on the order paper I had it confirmed that it would not affect provincial electricity rates to remove the cap.

I would like to ask my friend, the hon. parliamentary secretary, this. Would it not be more prudent to have no cap at all and to ensure that the nuclear industry, under the polluter pay principle, pays the full cost of the accident we hope will never happen, but could in fact happen any day in our country?

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, again, what we are talking about is absolute liability that will be paid in the event of an incident.

Operators will be expected to carry insurance to cover the costs of any incident should it occur. The $1 billion absolute liability will place Canada's regime squarely among those of its peer countries.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, the hon. member just said that the $1 billion absolute liability will put us “squarely among those of its peer countries”. However, the $1 billion pales in comparison to the absolute liability in the United States of $12.6 billion.

How can the member say that this puts us squarely among our peer countries when there is a difference of $11 billion or $12 billion? What is the member talking about?

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, it is not correct to say that the liability limit is $12 billion in the United States, as the member continues to assert.

The United States' system is very different from that of other countries. In fact, the operators' liability is capped at $375 million of insurance. In the event of an accident resulting in damages exceeding the liable operators' insurance, all U.S. operators, 104 reactors, would also contribute up to $125 million for each reactor they operate, which would make available a compensation pool of a maximum of $13 billion should it be required.

This type of pooling system would not be feasible in Canada given that we have far fewer nuclear reactors.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, I hope you had a great summer. It is nice to be back and to see all my colleagues here in the House. I trust that everyone had a great break. It is nice to see that we picked up right where we left off, in the spirit of co-operation here in the House.

I am pleased to participate in this important debate on Bill C-22. While it is not a topic around the barbecue circuit in my riding, be assured that it is very important that we discuss this. The bill is important, because it seeks to increase safety and accountability in Canada's offshore and nuclear liability regimes.

Most hon. members would know that Canadians are very fortunate. Canada has an extraordinary wealth of natural resources that other nations can only envy. In an increasingly energy-hungry world, we are among the world's leading energy producers of crude oil, natural gas, and uranium. With our vast energy resources, Canada is well positioned to play a leading role in meeting the world's future energy needs.

As the International Energy Agency has told us, traditional energy sources like oil and gas will continue to be the dominant energy source for many years to come. However, the world energy map is changing dramatically. In fact, global energy demand is expected to increase by about 40% from 2010 to 2035, with much of that new demand coming from Asia.

World energy demands are on the rise, and Canada has an enormous supply of energy to meet these demands. Growing energy demands in the Asia-Pacific and the developing world are ushering in a new era of energy use and opportunity for our great country. There are hundreds of major resource projects currently under way in Canada or planned over the next 10 years. They are worth approximately $675 billion in investment. That means hundreds of thousands of jobs for Canadian families, jobs in every sector of our economy and in every corner of our country.

With these opportunities on the horizon, our government is working to increase Canadian trade and investment and to expand Canada's energy infrastructure. That is why I would like to talk about the government's responsible resource development plan.

Our government's plan for responsible resource development is helping to ensure that Canada can seize these new opportunities and others to come. Our plan is sending a strong message that Canada is open for business and has a modern, efficient regulatory system. We have set firm beginning-to-end timelines for project reviews. Where provincial review processes meet federal requirements, we can get projects moving faster by eliminating the unnecessary duplication that has weighed down project reviews in the past. Our streamlined approach is providing clarity and predictability for project proposals. It is making international investments in Canada's natural resource sectors much more attractive. In a nutshell, it means that new projects and proposed infrastructure will be reviewed and approved to come on stream in a timely manner so that Canada can sharpen its competitive edge.

However, our plan is not just about developing resources efficiently. It is about developing them responsibly. Simply put, we will not approve any project unless it can be done safely. Let me assure members that we are committed to developing Canada's natural resources while strengthening our environmental protection. We firmly reject the notion that we cannot do both. Through our actions, we are proving that we definitely can.

Over the past year, our government has initiated a series of new measures to ensure the safe development of our natural resources. Through our plan for responsible resource development, we have introduced new enforcement mechanisms, including monetary penalties for non-compliance with environmental requirements. Oil and gas pipeline inspections have increased by 50% a year, and comprehensive audits of pipelines have been doubled.

While our government focused on increasing safety measures for our energy sector, what did the opposition do? They voted against more pipeline inspections, against implementing fines for companies that break the law, and against doubling the number of pipeline audits. That is truly a record of shame.

As part of our commitment to responsible resource development, our government promised Canadians that we would take action to maintain a world-class liability regime in Canada's nuclear and offshore energy industries. We have been clear: projects will only be approved if they are safe for Canadians and safe for the environment.

One of the key features of Bill C-22 is that it would raise the absolute liability limits in the offshore and nuclear sectors to $1 billion, bringing Canada's offshore and nuclear liability limits in line with similar regulatory regimes, such as in the United Kingdom, Norway, and Denmark.

As hon. members are aware, Canada's liability regime was founded on the polluter pay principle. With Bill C-22, we are fulfilling our commitment in the Speech from the Throne to enshrine this principle in law. This means that Canadian taxpayers would be protected in the unlikely event of a spill or accident. With the passage of this legislation, companies operating in Canada's Atlantic and Arctic offshore areas would be subject to one of the highest absolute liability standards in the world.

Canada's nuclear safety record is outstanding. In fact, there has never been a claim under Canada's Nuclear Liability Act. We have robust technology, a well-trained workforce, and stringent regulatory requirements. However, as a responsible government we must ensure that our security systems are always up-to-date and able to respond to any incident. That is why we are demonstrating our commitment by introducing legislation to strengthen Canada's nuclear liability regime.

Ultimately these measures are all about the same thing: acting responsibly by protecting Canadians and protecting our environment. This legislation would provide a solid framework to regulate the offshore and nuclear liability regimes in Canada to make them truly world-class. It would send a strong signal to the world that Canada is a safe and responsible supplier of energy resources and that Canada is also open for business.

Unfortunately, the NDP wants to shut down Canadian businesses by opposing the nuclear industry. As the leader of the NDP said, “I want to be very clear. The NDP is opposed to any new nuclear infrastructure in Canada.” That is not a responsible position.

The bottom line is that our government will not take any lessons from the opposition. We will focus on what matters to Canadians: ensuring that resource development is done responsibly and creating jobs, growth, and long-term prosperity for all Canadians.

I urge the NDP to abandon its reckless position and encourage all members to support this important legislation.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I would like to thank the member for his speech.

However, I will not hide the fact that I have many questions and concerns that he did not address.

My question is about a very specific topic, and that is damages associated with non-use value. This is an important principle that has been raised during debate on this bill. We can always quantify the economic value of a natural area, but we also need to look at other damages. There could be significant repercussions for communities.

With respect to marine areas, we were had by the Conservatives when they focused protection measures solely on commercially viable species, which overlooks the richness, the diversity and the complex interrelationships in a marine environment.

I would like to hear the hon. member's thoughts on the government's deliberate failure to include non-use value. It seems quite problematic to me. It is a huge loophole that companies could exploit.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, the member is asking me a question in regard to changes made to the Fisheries Act, and the House is currently debating Bill C-22, which is nuclear and offshore liability changes we are proposing.

The reality is that everything under the absolute liability regime would be covered when it comes to the polluter pays principle. That would mean damages to people, damages to property, and damages to the environment. All of it would be covered under absolute liability. That is what the word “absolute” means. It is unfortunate that the hon. member does not understand that word.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I said earlier in my remarks on the bill that members on the Conservative side are only interested in one side of the equation, or they were in committee when we studied this legislation, but it is also true of the NDP and its position on the bill.

Does my hon. colleague not think that we ought to consider what tax revenue comes to Canada and its provinces from these industries? What revenue is there for Canadian workers who have salaries in the nuclear sector or in the offshore oil and gas sector? What revenue is there for pensioners who have pension funds or mutual funds that invest in these sectors?

We heard from the minister that going to $1 billion for absolute liability would increase the cost of insurance for these companies by eight or nine times. Could the member tell us if he knows what the NDP's plan of unlimited absolute liability would do to the cost of insurance for the companies in this sector? What would be the impact on these sectors?

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, rare is the day when I have a colleague in the Liberal Party asking me to help him beat up colleagues in the NDP. However, I will take the bait, because here is what the NDP is proposing.

The NDP and the Green Party simply do not want nuclear facilities in Canada. I will answer my colleague's question directly. My understanding is that raising liability to $1 billion would cost the average household a couple of dollars a year on its utility bills to cover it. However, if we were to move to unlimited liability and the vast amount of liability being proposed by other parties, it would result in a hefty increase to those premiums. Ultimately, as we all know, regulated utility industries are regulated to the point where they will make a profit. That is the way those systems are set up, and those costs will be passed on through those energy utility boards in the various jurisdictions to those consumers. That much we do know.

It is a responsible approach to go to $1 billion of unlimited liability for the offshore sector for oil and gas and for nuclear liability. We have seen from various countries around the world that we are in line with what everyone else is doing. We are going to protect our environment but also not place an unreasonable burden. We will strike that right balance not only to protect taxpayers but to ensure that there is money left over on the kitchen table at the end of the month.

[The Deputy Speaker, Joe Comartin]

Before resuming debate, I understand that there is a motion from the member for Leeds—Grenville.

The House resumed consideration of the motion that Bill C-22, 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, be read the third time and passed.

Energy Safety and Security Act

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Mr. Speaker, it is a pleasure to be back in the House after working in the constituency all summer. I am glad to see my colleagues' smiling faces around, all ready to co-operate as we move forward into this session.

I am pleased to rise today to speak to Bill C-22, an act respecting Canada's offshore oil and gas operations, and enacting the nuclear liability and compensation act. I will be splitting my time with the member for St. John's East whom, I am sure, will have lots to say about how the bill would affect Atlantic Canada.

I do have an admission to make. George Bush has been very influential in my life, and I somehow cannot seem to get nuclear and nucular straight sometimes, so I beg your indulgence, Mr. Speaker, if I do accidentally misspeak. I promise that is as far as I will go toward copying Mr. Bush.

I also thank the member for Hamilton Mountain for her hard work on the bill. She is an outstanding member of Parliament and also a great leader within the NDP. She has led the natural resources committee since taking over recently very well, so I thank her for her work.

Although we supported the bill at first reading, we did so with the hope that the committee would accept some of our amendments, would listen to the witnesses, listen to what we had to say on our side. Unfortunately, we will not be supporting the bill at third reading because we did not really feel we were listened to. We put forward 13 amendments, which we thought would improve the bill quite a lot, but the Conservatives rejected all 13 of those amendments.

I was formerly a member of the natural resources committee and quite enjoyed my time there. I found my colleagues on both sides to be open to suggestions, willing to bring in witnesses who were not partisan, and really conciliatory. I quite enjoyed my time in that committee. Even sometimes they would accept motions from the opposition parties for study, which I thought was quite good of them.

I do not actually think that the rejection of these amendments came exclusively from the members of the committee. It was probably from the PMO. As we know if we have been on enough committees in the House, no matter what kind of debate we are having or what kind of witnesses we hear from, we do have dictums that come from central office to say what exactly will show up in bills. Again, it is sad that this happens.

In fact, I think that perhaps this is related to the bill. There is a member of the natural resources committee from Saskatoon—Humboldt who has a private member's motion where committee chairs would have much more freedom over the content of their reports and also the committee agenda. I am proud to say I jointly seconded that motion and support it as it moves through the House, hopefully to enactment. That bill points out what should happen in committees.

However, I do think the members of the natural resources committee are reasonable on all sides and would do a very good job if they were freed from the constraints of the Prime Minister's Office. I really do not fault the natural resources committee for rejecting all our amendments, but we know that the all-seeing eye that is the PMO has probably made this happen.

My second comment about the bill is that it is all about energy, once again. It seems that all the time of the natural resources committee was spent talking about energy usage and disposal all across Canada. I find that this not only engages the natural resources committee but also the industry committee, which I have also sat on.

We have had many bills tabled in the House that specifically deal with how we use energy in Canada. This one is no exception. This one is about how we extract oil and gas or how we use nuclear power and what happens in the event of accidents. It is tied in to our consumption and usage of energy. It shows us a sliver of the complexity of energy usage in Canada.

For example, just to outline a little bit of what is included in the bill, it updates Canada's nuclear liability regime to specify the conditions to compensate victims following an incident at a nuclear power plant and the levels of liability of operators. That is needed. Every country in the world that uses nuclear power has to have these kinds of provisions. It is a needed step forward but a very small part of Canada's energy portfolio.

The second is dealing with oil and gas exploration off the coast. The measures in the bill are supposed to explain what happens in the event of an accident, so they are important. This is off the Arctic and Atlantic waters.

There are important issues that are dealt with in the bill. Although we know it has been tabled five times and finally coming through the House, whether it will make it all the way to the end I do not know. However, it is too bad that it was rushed through at this stage and none of our amendments were taken.

Part of our problem with the bill is that it does not really uphold the idea of polluter pays. It does discuss this notion but it does not really deal with polluter pays when it comes to the nuclear energy sector. For example, there are provisions in the bill, as I understand it as I was reviewing it again this morning, that allow the minister to make adjustments as to how much a company or operator would have to pay in the event of an accident. It does not mandate an inclusive consultation process for specific projects.

In my riding where this is not specifically related to oil and gas but the industry, when there is no proper consultation there are problems with getting the social licence from the local community. Therefore, whether it is pipelines, drilling offshore, or dealing with nuclear energy, if there is no proper consultation there will never be social licence and there will be problems.

We have had a pipeline rupture in my community in 2007. Because there was not an inclusive system in terms of how we deal with pipeline spills, there are still ripples within the community and real resentment toward the company for these types of accidents.

The other problem with the bill is that it removes company liability for oil spill chemical dispersants. That is also a problem because if we think that we have to clean up the oil and we use something that is as bad as oil or even worse, then there is no liability for the companies and we think that is a problem. I think the folks listening at home or reading what we propose would say that these are things that are worth including in the bill, but of course they have been rejected.

Our 13 suggested amendments were consistent with the principle of polluter pays, including the removal of the liability cap, which reduces taxpayer liability. As we have seen, these offshore spills, the BP spill in the gulf in the United States is a recent example, can run into the billions of dollars for cleanups. The liability cap right now is far below the costs of such a cleanup. Our amendments also included the principle of sustainability by adding non-use value damages, which are important to consider.

When I think about what we are debating here, what we are talking about, what is going through on this third reading, it is the whole idea of how we deal with energy in Canada. We do not have a comprehensive plan. Most countries in the world have a national energy strategy. They have not only a long-term view of what should happen in the country but also a comprehensive view, which is thematic. For example, in the United States energy security is probably the key principle of its national energy strategy and everything kind of falls from this key principle.

We have a sliver of a bill that deals with a very small component of our overall energy plans in this country. Unfortunately, it is not very comprehensive and non-inclusive. It is kind of a shallow vision instead of what we really need for Canada, which is a large vision. That is what people will get when they elect an NDP government in 2015.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I thank my hon. colleague from Burnaby—Douglas for his important presentation. I share his concerns about the nuclear industry.

There has been no industry that constitutes such a giant white elephant in terms of its fiscal impact on Canadians. Contrary to what we heard earlier from a Conservative colleague, this industry has gobbled up about $40 billion in taxpayer subsidies. Removing the cap would not affect provincial electricity rates in any provinces that still use nuclear energy.

The reality is that, there but for the grace of God go we, every single event that occurred at Three Mile Island had previously happened in Ontario nuclear plants but not all on the same day and at the same reactor. Human error is always the biggest risk. As more reactors are brought on stream, the promises made when they are built are never fulfilled. We are always told they are going to be reliable and then we find that retubing is required or that the Point Lepreau reactor in New Brunswick is over budget, as always, or that it takes much longer than the government thought it would take. The government of the day in New Brunswick that approved retubing Point Lepreau ignored the recommendations of its own public utilities commission to do so. It ignored the advice, by the way, of the current leader of the Green Party of New Brunswick, David Coon, who clearly said more money would be wasted.

It is interesting to hear Conservative members defend an industry that has gobbled up things that they usually would have opposed, massive subsidies to something that simply cannot bear market forces.

I would ask my hon. colleague if he would not agree to just removing the cap on liability and making this industry pay its own way if, God forbid, we ever have a nuclear accident.