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

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, before I respond to my colleague's question, I would like to talk about something I did not have time to address.

I think this is a very important point because it is causing a great deal of concern. I am talking about the minister's responsibility. This bill gives the minister discretionary power. I believe the Conservatives are giving themselves far too much discretionary power. Discretionary power means that the minister can do whatever he wants, when and how he wants, simply because he decided to do so. In this case, we are talking about $1 billion, unless the minister decides not to enforce that limit and sets whatever limit he wants, such as $500 million, for example.

The question is about the $1 billion in a situation where the company is not responsible. One day there might be oil exploration in the Arctic. As everyone knows, the Arctic is an unknown and dangerous place. Some companies have even backed away from Arctic oil exploration because they believed it was too risky. This does not mean that companies would be negligent in their approach. It is a risky place, even if one is not negligent. There is a risk of oil spills that could cost tens of billions of dollars, so $1 billion is not enough. Even if companies are not negligent, the risk is still there. Who will cover that risk? Taxpayers will; the people of Drummond will.

[Dan Harris, NDP, Scarborough Southwest, ON]

Mr. Speaker, I thank my colleague for his speech.

He just spoke about ministerial discretion, which is in the bill. However, he did not really have an opportunity to say why we should perhaps be concerned about these types of discretionary powers.

Could taxpayers in the ridings of Drummond and Scarborough Southwest be obliged to pay more if the minister decided that $1 billion was too much in a given situation?

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I thank my hon. colleague from Scarborough Southwest for his excellent question and the remarkable job he does in the House representing his community.

It is very worrisome because there is a growing number of these small measures that increase discretionary power in Conservative legislation. There is a $1 billion cap, as was mentioned earlier. However, even if the company is not negligent, the risks are high. The risks are high in the Arctic offshore. If there is a spill, it will not cost $1 billion. It will cost many billions of dollars over many decades. For that reason, it is important to our ridings and the people we represent that we oppose this bill and the minister's discretionary power.

I am pleased that my Conservative colleague said earlier that this bill has some flaws and that it must be improved. I hope he will be one of the first to fight for improvements in committee. I am going to follow the committee's discussions to make sure that my Conservative colleague does his job, because clearly the bill has flaws.

As for the minister's discretionary power, it serves no purpose. It is not necessary. Why would he have this power? It is completely useless. I hope that the committee will take away this discretionary power and that the bill will be improved because, fundamentally, it is necessary.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I would like to congratulate the hon. member for Drummond on his excellent speech. He is a great source of information on the environment, and he works very hard on this issue. I want to commend his work, and I tip my hat to him.

I am pleased to speak today to Bill C-22, which would amend the law concerning Canada’s oil and nuclear operations. We are supporting this bill at second reading so that it will be sent to committee for in-depth study. We hope that the government will agree to work on improving the bill, as it desperately needs it. Clearly, our support at third reading will depend on the government's willingness to make much-needed improvements to the bill.

Bill C-22 references the polluter pays principle explicitly to establish that polluters will be held accountable. However, after researching this principle, I came to the realization that the bill does not adequately enforce it. For example, the nuclear liability limit is being increased from $75 million, which is quite insufficient, to $1 billion. It is a small step in the right direction, but it is not enough.

The polluter pays principle is based on the idea that the polluter pays. It is not complicated. Creating a $1-billion cap means that if a disaster were to happen, taxpayers would foot the rest of the bill, through no fault of their own. They will have to pay for that, in addition to suffering the health and environmental consequences. A bit later, I will share some statistics on that.

Another thing that bothers me about liability is the minister's discretionary power. I am sick and tired of seeing that in bills. MPs have a responsibility, but they can and should get help from experts in every field. We are talking about the environment and natural resources. These experts have dedicated their lives to researching the subject, so I do not see how the minister can set a cap without taking their opinions into account. That bothers me.

I do not understand why the government is always trying to grab more power. This is not the first time the government has tried to give a minister discretionary power in a bill. When will this stop? This is something we need to talk about because it is a real problem.

There is one positive aspect to the bill in terms of liability in the nuclear industry: it extends the limitation period for submitting compensation claims from 10 to 30 years. That is good for people who develop the kind of latent illnesses that are frequently linked to the nuclear industry. It is about time the government did this, but is it retroactive? Perhaps one of my colleagues opposite can answer that question during the time for questions.

As for liability in the oil and gas sector, this bill updates the Canadian liability regime for offshore oil and gas development to prevent incidents and ensure rapid response should a spill occur. Once again, it is about time the government took this important step.

This is all very nice on paper, but enforcement has to be strict. That is what the minister should be responsible for, not exercising a discretionary power to decide the extent of a company's liability for an incident.

That would be worthwhile, it seems to me.

The limit of liability for oil development goes from $40 million in the Arctic and $30 million in the Atlantic to $1 billion. That is a very small step in the right direction, and it is still clearly insufficient.

As I mentioned earlier, taxpayers should not be footing the bill. When I say taxpayers, I mean those who make financial contributions to society, but I also mean all citizens of all ages and in all situations. They should not be footing the financial bill, nor paying the price in terms of the environment, their health and their integrity. They should not be paying for incidents related to this kind of energy. We know full well that other sources of energy exist, renewable ones, in which greater investments could be made. For the nuclear industry and the oil industry, the polluter pays principle could apply.

I am thinking about biomethanization, for example. It provides an incredible source of green energy. If my colleagues opposite would like to come to my riding to visit the biomethanization plant in Sainte-Hyacinthe, I would be happy to welcome them. It is very interesting. Wind energy can also be used, as Quebec is doing. These are sources of energy that we can also embrace.

Now I would like to go back to the subject of financial liability. A billion dollars may seem like a spectacular amount, but it is very little. In Germany, for example, absolute liability is currently $3.3 billion per plant. With the paltry $1 billion that appears in this bill, Canada is far behind that. In the United States, the figure is $12.6 billion U.S. In Japan, there was a tragic nuclear disaster in 2011. The cost has been estimated at $250 billion. If a similar disaster happened in Canada, taxpayers would therefore have to pay $249 billion. Personally, I do not see the logic in that. In 2010, there was an oil spill in the Gulf of Mexico. The costs of the disaster are constantly rising, as they are in Japan too. The costs could exceed $250 billion. Mexico has already spent $42 billion, but it is not over yet.

I feel that we have to ask ourselves some serious questions. What do we want as a society? To what extent do we want to protect our citizens? To what extent do we want taxpayers to pay and keep on paying?

I also think it is important to point out that Canada is not immune to disasters. The thing I find particularly worrisome about this bill is that there is no mention of prevention. There is just what I call harm reduction or amortization of costs. That is all we find in the bill. It says that if x happens then we will do y. Nonetheless, the bill does not include specific measures for adequate prevention. What should we be doing every day to avoid a similar disaster and to make sure that people will not have to pay the financial, health and environmental costs?

This week marked a very sad anniversary. Today is the 25th anniversary of the Exxon Valdez oil spill along the Alaskan coast. It has been 25 years and the repercussions are still being felt. Nature still has not recovered.

Under the circumstances, I do not understand how the government can introduce bills that contain only half-measures to oversee activities that have catastrophic consequences for our environment and our health. It is worrisome.

I wonder when we will have a real bill that promotes green energy, truly advocates and enforces the polluter pays principle, focuses on prevention and actually protects people and our environment. I think that will come sometime after 2015.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, the member's speech demonstrated that she has not really looked at the bill and that she certainly does not understand it.

The member talked about liability. The reality is that this legislation proposes $1 billion absolute liability, which means whether companies were at fault or not they would have to pay up to $1 billion for cleanup. However, there is also unlimited liability. It is still there, unlimited liability for companies, so if they are found to have been negligent in any fashion, any costs would have to be covered by the company, and those costs could go well above and beyond $1 billion. The member certainly did not indicate that she understood that. Maybe the member had not got to that part of her speech, or maybe she just decided not to include that in her speech. Does she understand that is the situation?

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I did not understand the bill. I do not understand anything. I am a nitwit.

Let us be serious. We are talking about the environment and about potential disasters. This is a matter of protecting Canadians and their health, and the accountability of nuclear energy and oil development companies. Now is not the time for playing politics, but for deciding what we really want. We want green energy, yes, but we also want to protect Canadians from possible disasters.

I think my colleague quite simply does not want to hear what we are trying to criticize.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I listened to my colleague's speech carefully, and I would like to ask her a question directly related to the statement we heard in a previous question having to do with a minimum of $1 billion. That amount is a joke when we consider the magnitude of disasters that occur worldwide.

How can the hon. member explain this approach by the Conservatives, who are trying to tell us that there is $1 billion in protection, while the same bill gives the minister the power to lower the cap for that protection, if necessary, for vague, unknown circumstances?

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, that is actually a problem. In wanting to pass the buck to taxpayers, by giving discretionary authority to the minister and by imposing such a cap, the government is showing that it is unable to make companies truly accountable.

I do not understand where these figures came from. What really happened elsewhere has not been properly considered. I do not understand why the government is trying to tell us that there is $1 billion in protection, when the minister could decide to reduce it.

I do not know why we are in this situation, when incidents are occurring. We should be passing a responsible bill that makes companies accountable.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, I am delighted today to speak to Bill C-22. In my presentation I will answer some of the questions that I have asked of the members across the floor and that they have completely avoided answering; the first one being that, under this legislation, companies would have absolutely unlimited liability. If the cost of cleanup, for example, is $10 billion and if the company is found to have been negligent in some fashion, it would be responsible not only for the $1 billion absolute liability but also for the unlimited liability of $10 billion. The member across the floor, and in fact the last two members, completely refused to acknowledge that, even when questioned on it. I do not mind criticism on legislation, and in fact I appreciate it, if it is fair criticism based on reality. However, that is not what has happened and I am somewhat concerned by that. So in my presentation I will answer some of those questions.

I would like to speak to the offshore aspect of this bill. It does of course cover nuclear liability as well.

I will be sharing my time with the hon. member for Renfrew—Nipissing—Pembroke, and I look forward to hearing her presentation.

As most hon. members know, the importance of the natural resources industry in Canada's economy cannot be overstated; it is extremely important. When we take the direct and indirect impacts into account, the natural resources sectors represent nearly 20% of Canada's GDP and employ 1.8 million Canadians. Together, the energy, mining, and forestry industries produce an average of $32 billion a year in government revenue to fund things like education, health care, and other social programs, including seniors' pensions.

These numbers suggest one thing, that the development of our natural resources sectors is central to the goal of improving the lives of Canadians right across this country. The critical social programs that benefit Canadians—including health, education, and public pensions, as I mentioned—are all partly funded and sustained by government revenues gained from our natural resources sectors. Our willingness to invest in our natural resources sectors provides continued opportunities for Canadians to live a high quality of life.

We are discovering more opportunities to invest in natural resources, specifically in the energy sector, particularly in Atlantic Canada where there are more than 8,000 people working directly in the offshore sector. As we continue to expand the offshore industry, we will open up even more opportunities for employment. This means more Canadians will be able to provide for their families and invest in their future.

“Future” is the key word here. In fact, at our natural resources committee just today, we are carrying out a study on the cross-country benefits of the oil and gas sector, and in our committee today we had the mayor of Saint John, as an example, expressing the importance in Saint John, New Brunswick, of the oil and gas sector. We had the head of the economic development group there, who expressed very clearly the importance in New Brunswick of the oil and gas sector. They also expressed the potential future if resources in Atlantic Canada and in Newfoundland and Labrador are developed completely. There are many real positives coming from this study, and it is exciting to hear the benefits across the country and the potential benefits into the future.

We cannot do that without also considering the future of our environment, and we all agree with that. That is why, under our plan for responsible resource development, our government intends to ensure that the expansion of offshore resources is done safely and responsibly. It is why we are introducing Bill C-22, new legislation to increase the safety and accountability of Canada's offshore regime. We can say with confidence that our offshore regime is already extremely strong. Companies operating in the offshore are strictly monitored today, even before this legislation.

In the two offshore areas in Atlantic Canada, both the Canada-Newfoundland and Labrador Offshore Petroleum Board and the Canada-Nova Scotia Offshore Petroleum Board ensure that no offshore development proceeds unless rigorous environmental protections are in place. It is already there.

Our government believes that industry must be accountable in the event of an accident. We have been working together with our two partners, our provincial governments in Newfoundland and Labrador and Nova Scotia, to establish an offshore regime that is not only strong but truly world class and world leading. When I speak about holding industry accountable, I am referring to the polluter pays principle, which has already been acknowledged by members in the House as being something they support. I think we all do. This principle holds industry liable for environmental damages incurred in the unlikely event of an incident offshore.

The industry is already subject to unlimited liability, which is what I was talking about, if the parties are found at fault or negligent in the case of an incident. We would not be changing that legal fact with this legislation. What we would be entrenching with Bill C-22 is the principle of increasing the amounts of absolute liability. Absolute liability ensures that operators have the resources for the cleanup costs of an accident or damages to others, regardless of fault or negligence. Right now absolute liability is set at $30 million for the industry operating on either of the two Atlantic offshore areas. That applies to the nuclear sector as well. It is set at $40 million elsewhere in Canada's offshore. Under Bill C-22, the minimum would be set at $1 billion for all areas of the offshore, bringing us in line with international standards, and in most cases exceeding them. That is absolute liability. Some members who have spoken to this legislation have not differentiated or understood that there is the $1 billion absolute liability and also unlimited liability, which would go beyond that in the case of negligence and that type of thing.

With the passing of this legislation, companies operating in the offshore would be subject to among the highest absolute liability thresholds in the world. To ensure compliance with this new standard of liability, companies wishing to operate in these areas must show proof of financial capability equivalent to their absolute liability. It is not some airy-fairy thing; rather, it is based on a careful review of the companies involved.

As part of the assessment, the regulator must be assured that the company has the financial assets to cover the $1 billion absolute liability requirement. We would also require the operators to provide regulators with rapid and unfettered access to at least $100 million that may be used in the rare case of an incident.

Industry would also have the option of setting up a minimum $250 million pooled fund. Operators could choose to use membership in such a fund to serve as their financial responsibility. This would ensure that all companies have the capacity to respond quickly in the unlikely event of an incident. Bill C-22 would also provide the offshore boards, which regulate these operators, with the increased authority and infrastructure to ensure the standards are upheld.

I would like to close by saying that our offshore industry is expanding rapidly, providing Canada with more opportunities than ever before. Canada is well placed to benefit from these opportunities. However, our government is committed to doing so in a responsible and safe fashion. That is the way we are approaching the development of all natural resources. Because of that, Canada is viewed as a country that has the regulatory regime that could be a standard that other countries strive to meet.

I welcome any comments or questions from members across the floor.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Mr. Speaker, listening to the member say that unlimited liability is a good situation in the case of negligence sort of begs this question. What is his definition of negligence? If there is a huge oil spill and an agent or employee of the company caused that problem, does that mean the company is negligent, or is negligence, in his definition, simply the case where a company does something on purpose that is wrong or goes bad?

I wonder if he could expand on what he means by negligence.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, this is second reading of the bill, which is a general look at the legislation, but the situation is such that the company itself is liable for the actions of the contractors. So the $1 billion absolute liability and the unlimited liability actually do apply to contractors working for the companies, and the companies themselves are held accountable. I think that issue is covered. It was a good question.

[Scott Andrews, Liberal, Avalon, NL]

Mr. Speaker, I welcome the comments by the member, especially when he talks about Newfoundland's offshore and the some 8,000 people who work on the offshore. Again, I am going to ask the question that I asked earlier.

First, I would compliment the government and the Newfoundland and Labrador Offshore Petroleum Board for implementing most of the recommendations of Justice Wells' inquiry into the Cougar flight crash. However, when are the government and the Offshore Petroleum Board going to implement all the recommendations, not just some of them, from this inquiry? Some of these recommendations are even outstanding from the Ocean Ranger disaster in the east. There are still some recommendations that need to be implemented. Recommendation 29 is one of them, which calls for an independent Offshore Petroleum Board safety regulator. These are very important recommendations coming from a very serious accident in our offshore. When is the government going to implement all of the recommendations?

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, the member's question is a good one and a very important one. It is rare that all of the recommendations of any inquiry are accepted by government, but I believe there is only one or maybe two items from that study that the government is not including in this legislation.

However, the judge who carried out that review came before committee and indicated that in reality what we are doing with this legislation really does the job. So there are other ways of doing the job than exactly through the recommendations the judge and the review presented. He made that very clear. He said that he had made that recommendation, but that the problem was being solved and the situation was being dealt with in another fashion.

I would argue that all of the concerns of the study have been dealt with in this legislation.

[Colin Carrie, Conservative, Parliamentary Secretary to the Minister of the Environment]

Mr. Speaker, my colleague started by dealing with some of the misinformation he heard in some of the speeches today. In my community of Oshawa we have many people who are employed in the nuclear sector, for example, which has been proven to be a very safe form of electricity generation.

We hear the NDP's job-killing policies and the fearmongering that goes along with issues such as pipelines and their talk today about Fukushima and the nuclear sector. Why does he think the NDP members have to rely on fearmongering in their speeches and debates?

[The Acting Speaker, Conservative, Barry Devolin]

The hon. member for Vegreville—Wainwright, a short answer please.