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

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, with all due respect to my hon. colleague, I think the question is actually this: do we think that we have to consider the environmental concerns and the impact of environmental disasters as well as the economic benefits of various activities? Do we consider both, or do we decide that we are not going to have any of these activities? The result of the NDP position on this issue would be that we would not have these activities at all. We would not have an offshore sector off Newfoundland and Labrador. Is that really what the NDP wants? They would not answer that question earlier. They would not say that they do not want that, but that is what flows from what they are saying.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I appreciated the remarks from my colleague. I was not at the committee, but I am certainly concerned about the remarks that he made with reference to the committee, which seemed to describe the way that my committee operates too. There is a limited selection of witnesses, and it tries to narrow the focus of the study and not get to some of the broader issues.

In my area, liability would always be a concern, but I have to question the member. Liability is one side of the equation. What is the government doing in terms of prevention? In the fisheries in the gulf and on the east coast, fishermen are greatly concerned and are opposed to some of the exploration for oil development. That development could lead to an economic boom, but they are concerned because they do not believe enough preventive measures are being taken to assure the protection of the environment during that exploration and possibly during the drilling for oil and gas.

Therefore, my question is a broader one. Has the committee looked at those other issues from a preventive side rather than just from the liability side, as this bill seems to purport to do?

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, as the member well knows, the fact is that the current government is not all that interested in prevention in general. We think of its attitude towards criminal penalties. In most cases the Conservatives are much more interested in penalizing people, especially in cases of criminality, than they are in prevention, and this is another example of that attitude.

As I was saying earlier, this is an area that the committee ought to have been able to study to see what is happening in this field and have experts tell us what is going on and what ought to be happening. I know that much more should be happening under the current government in terms of prevention.

However, the fact of the matter is that, again, the scope was restricted so much by the Conservatives in committee. The Conservatives, who have a majority, ended up with a scope so narrow that one was not able to get into it very much, and we had only three days to study the bill.

In the end, though, the question is whether we are better off with a limit of $30 million or a limit of $1 billion. I think the answer is obvious. In the utopian world of the NDP, perhaps it would be unlimited. Of course, then we would not have any of these activities at any rate. It is fine to think of living in utopia, but we do not.

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

Mr. Speaker, there is no doubt that the bill would increase the absolute liability from $30 million to $1 billion, which is a good thing, and it is absolutely welcome. However, the increase would still pale in comparison to the absolute liability of the United States, which has been set at $12.6 billion U.S. That is $12.6 billion U.S. versus $1 billion Canadian.

The member for Halifax West seems to be suggesting that if we increase the absolute liability to any more than $1 billion, we would be killing the industry. However, if the United States can have an absolute liability of $12.6 billion U.S. for their industry, is the member saying that we cannot afford to have that same level of absolute liability set for Canadian waters and waters off Newfoundland and Labrador?

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, this leaves me confused about what the NDP's position is. Is it in fact, as I have heard up until now, that absolute liability should be unlimited, or is it what the member is now proposing, which is the American level is of $12 billion?

This leaves me a bit confused. I am not surprised that I hear a confused response from NDP members on this issue, but I do not think it makes much sense to be unclear in the way that they are on this question.

As I said before, the fact of the matter before us is this: do we vote for a bill that would increase the limit in the offshore of Newfoundland and Labrador from $30 million to $1 billion, or do we not?

In my view, the bill is not ideal, but I have to decide whether it is an improvement and whether to vote for it or not, even if it is not the ideal. I know the NDP love the ideal, but we are not in the world of playing with ideals. We have to make a choice, and we are making the choice to move in the right direction, even if imperfectly.

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

Mr. Speaker, were it not so disappointing, it would be pretty funny to see the hon. member for Halifax West mimicking the Conservatives. It is resignation on his part. He is giving up in the face of the challenge of trying to improve a bill that might have some relevance and a positive impact, but that stops far too short when it comes to the issues in question, whether we are talking about offshore oil development or the nuclear industry.

It is truly disappointing to see him use rhetoric, sophism, to bring everything down to “if you are not with us, you are against us”. If he is going to imitate George W. Bush, then maybe he could use his words. In any case, he could take the time to listen to our arguments to understand and see how woefully inadequate this bill is. That is why we are against it. I would like my colleague to explain why he gave up so quickly and why he is giving in to the Conservatives on a bill that is clearly inadequate.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I would like to thank my hon. colleague for his question.

I respect the NDP's right to take the stance that it has. If I understand correctly, they believe that absolute liability should be unlimited, even if there is no proof that there was any negligence. In my opinion, that would put an end to the oil industry in Newfoundland and Labrador and in Nova Scotia.

I respect their right to that opinion, but I do not agree with them. I believe that when we have the opportunity to improve the situation, by increasing the limit from $30 million to $1 billion, we should approve it. That is my opinion, but I respect their alternative position.

[Kelly Block, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, I will be sharing my time with the member for Wetaskiwin.

I appreciate this opportunity to speak to our government's proposal to modernize and strengthen Canada's nuclear and offshore liability regimes and how these proposed changes will ensure that Canada's safety system for these important industries continues to be world class. Knowing that some hon. members have had questions in this regard, I would like to specifically address the increase in the amount of absolute liability this bill would provide, an amount that not only meets but in many cases exceeds the standards set in other countries.

At the outset, I would like to remind my colleagues of the outstanding safety record of Canada's nuclear industry. We can be proud that it is second to none. Through decades of service, Canadian nuclear technology has a proven record for safety and reliability, a record for safety and reliability that matches or surpasses any in the world.

The regulatory framework for Canada's nuclear industry is similarly highly regarded around the world. It is solid and robust, supported by legislation such as the Nuclear Safety and Control Act and the Nuclear Fuel Waste Act, overseen by the independent expertise of the Canadian Nuclear Safety Commission. Together and with the industry's own commitment to excellence, this regulatory framework and independent oversight continue to assure Canadians that they can rely on our nuclear industry to be a safe, secure, reliable provider of clean electricity.

At the same time, our government is aware that one aspect of Canada's nuclear regulatory regime is not in keeping with international standards.

The existing Nuclear Liability Act has been in place since 1976. While the basic principles underlying the legislation remain valid, the act is almost 40 years old. It, indeed, needs to be updated to keep pace with international trends, including increasing the level of compensation to an adequate level in the unlikely event of a nuclear incident that leads to injuries or damage.

In fact, the liability limit would have been increased already had it not been for the ideological opposition that the NDP has for nuclear. Nonetheless, our government remains focused on establishing a modern liability regime to address potential civil damages that may result from a nuclear incident. That is precisely what Bill C-22 would do.

Bill C-22 would increase the amount of compensation available to address civil damage from $75 million to $1 billion. This amount is not only in line with current international standards, it is in fact significantly higher than the limits set by a number of what might be considered Canada's nuclear peers.

In the United Kingdom, for example, operator liability is currently capped at approximately $260 million, barely a quarter of the absolute liability that would be imposed by this bill. In France, a country with close to 60 power reactors, the operator liability limit is even lower, at about $140 million in Canadian funds. In Spain the limit is about $227 million in Canadian funds, in South Africa it is $240 million Canadian and in Belgium it is $450 million, less than half the liability amount that Bill C-22 would put in place in Canada.

I would also like to remind hon. members that we are talking about absolute liability. That means an operator is responsible for up to $1 billion in compensation for damages that may result from an incident, regardless of the cause, regardless of who is at fault and even if fault is never established or even alleged. This means Canadian taxpayers are not left on the hook. This bill would also require operators to demonstrate that they would have the financial capacity to deliver that amount.

I would remind hon. members as well that Bill C-22 would also serve to implement the provisions of the International Atomic Energy Agency's Convention on Supplementary Compensation for Nuclear Damage. By adhering to this convention, Canada increases its domestic compensation regime by up to $500 million by bringing in significant new funding from the other parties to the convention. In order words, the total potential compensation available in Canada could reach $1.5 billion.

It has been suggested that Canada should follow the example of the United States where nuclear liability limits appear to be higher. In fact, in the United States the individual operator's liability is capped at about $415 million in Canadian funds, again a fraction of what would be the case with this new legislation in Canada. It is true that in the event of an incident that resulted in damages in excess of an operator's liability insurance, the U.S. regime includes a provision for all operators of power reactors in the U.S. to contribute to a compensation fund, $125 million each for the reactors they own. The difference here, however, is that there are more than 100 power reactors in the United States. Such a system is not feasible in Canada where we have only 19 reactors and 4 operators.

In determining an appropriate limit for absolute liability, we must take into account, and this bill certainly does take into account, that liability must be within the capacity of insurers. Bill C-22 addresses the need for operators to provide appropriate compensation without burdening them with exorbitant costs for unrealistic amounts of insurance against events that are highly unlikely to occur in our country.

The $1 billion strikes a proper balance between providing adequate compensation for citizens for a nuclear incident and holding companies to account in the event of an incident. This amount is also well above the liability limit imposed on nuclear operators in many other countries and it is in line with limits that have been proposed in the E.U.

In summary, Bill C-22 would ensure Canada's nuclear liability regime meets the definition of “world class” in every respect, from the type of damages that can be claimed to the time allowed to make claims, to the $1 billion in absolute liability of nuclear operators to pay those claims. I urge all members in the House to support this important legislation.

[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.