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

[Jack Harris, NDP, St. John's East, NL]

Mr. Speaker, it is a bit complicated in one sense, but the insurance principle is basically that we spread the risk. The more people who share the responsibility, the easier it is to manage the risk. That is the basis of insurance.

Why should there not be liability for people who happen to be suppliers? If they are excluded from liability, then that seems to be a problem. We believe that they should be included in the responsibility for accidents. If they are participating in that industry, they should participate by bearing some of that risk themselves.

The House resumed from September 15 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.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, I will be sharing my time with the member for Sarnia—Lambton today.

Mr. Speaker, I am pleased to join in the debate today on an extremely important piece of legislation: the energy safety and security act. The act would ensure the continued safety and security of Canada's offshore oil and gas and nuclear energy industries, helping to make a world-class regulatory regime even better while strengthening protection for Canadians and the environment.

Bill C-22 would modernize Canada's laws to ensure accountability in these industries and to protect taxpayers if a serious incident resulted in cleanup costs and compensation.

Our government has made a firm commitment, under our plan for responsible resource development, that no major resource project will proceed unless rigorous environmental protection measures are in place. Bill C-22 reflects this commitment by strengthening safety and security in Canada's energy sector by focusing on prevention, response, accountability, and transparency.

The energy safety and security act would give Canada one of the strongest liability regimes in the world, providing a solid framework to regulate Canada's offshore and nuclear industries into the future.

The legislation would also support the responsible promotion and development of our offshore and nuclear industries, which are essential to Canada's economy.

I would first like to speak about the strong regulations we have in our nuclear sector.

Canada has a proud and distinguished history in the development and application of nuclear technologies for peaceful purposes. Canada has been involved in almost every aspect of the nuclear industry, from uranium mining and processing to the development of our CANDU reactors for clean power generation to the production of medical isotopes. As well, in many aspects of nuclear science, including our regulatory regime, we have been world leaders.

The task of overseeing Canada's safety in the nuclear sector falls to the Canadian Nuclear Safety Commission, or CNSC, Canada's nuclear regulator. As hon. members are aware, the CNSC is independent with respect to licensing and regulatory matters. It reports to Parliament through the Minister of Natural Resources.

Our government places the highest priority on the protection of health, safety, security, and the environment in relation to nuclear activities in Canada. That is why we have ensured that the Canadian Nuclear Safety Commission has the resources it needs to do its mandated job.

The CNSC's compliance and enforcement system includes a number of enforcement actions, such as increased regulatory scrutiny, licensing, decertification, and prosecution. As part of our government's plan for responsible resource development, the CNSC has received an additional tool to ensure safety and environmental protection in Canada's nuclear sector: the Administrative Monetary Penalties Regulations. These new regulations authorize the use of financial penalties for violations of the Nuclear Safety and Control Act.

Our Canadian nuclear industry is strong. Unlike the NDP, our government is committed to taking the necessary steps to make it even stronger. If the NDP had its way, it would shut down the nuclear industry entirely, putting 17,000 highly skilled Canadian workers out of work and bankrupting Canadian businesses. This is obviously unacceptable

The government supports a strong and safe nuclear industry, and Bill C-22 further demonstrates our commitment to nuclear safety.

A key feature of Bill C-22 is the $1-billion protection it would provide. In the case of Canada's nuclear industry, we would be strengthening the liability regime to increase the amount of compensation available for civil damages from $75 million to $1 billion

Canadians can be assured that the CNSC would continue to diligently oversee all aspects of the Canadian nuclear industry to ensure that public health, safety, and security, as well as the environment, were protected.

I would now like to briefly touch on other parts of the bill that deal with the offshore.

Bill C-22 would also apply to oil and gas companies operating in the offshore, where we would be raising the absolute liability to $1 billion from its current levels of $30 million in the Atlantic offshore and $40 million in the Arctic.

With these measures, the energy safety and security act would reinforce, in unprecedented fashion, the polluter pays principle, which would protect Canadian taxpayers.

As hon. members know, on our east coast there are two independent offshore boards: the Canada-Newfoundland and Labrador Offshore Petroleum Board, and the Canada-Nova Scotia Offshore Petroleum Board. The accord acts give these boards the legal authority to regulate offshore oil and gas exploration and development activities.

Members of the offshore boards have professional expertise in various disciplines, including environmental protection, law, economics, engineering, and business. They are supported by highly qualified management teams and staff with extensive experience, including in the fields of environmental protection and safety. Each board ensures that operators exercise due diligence to prevent offshore spills. As a result, drilling cannot occur unless the responsible board is completely satisfied that drilling plans comply with federal regulations and are safe for workers and the environment.

With this in mind, we have worked closely with Nova Scotia and with Newfoundland and Labrador to update and expand legislation to ensure that Canada's offshore regime continues to be world class. Offshore installations and the equipment and training required to operate them must meet strict regulatory standards that are among the highest in the world. The Offshore Health and Safety Act, which received royal assent last spring, will further strengthen Canada's safety regime by giving the offshore industry a clear occupational health and safety framework that is enforceable by law and is free of jurisdictional uncertainty.

Bill C-22 would mean that companies operating offshore would have to have the financial capacity to meet the higher liability obligations. Before any offshore drilling or production activity could take place, companies would need to prove that they could cover the financial liabilities that could result from a spill. This legislation would also establish a cost-recovery regime for the operations of the offshore boards, oblige new requirements for transparency, and create new enforcement tools, such as administrative and monetary penalties.

In conclusion, our government knows that economic prosperity and environmental protection are not mutually exclusive. We are committed to protecting the safety of Canadians and the safety of the environment. Through our plan for responsible resource development, we have taken action to ensure that Canada's vast resource wealth can be developed responsibly by putting public safety and environmental protection first. With the passage of Bill C-22, Canada would have in place one of the most modern, efficient, and stringent offshore safety regimes in the world.

Our world-class standards are supported by strong environmental laws. We have worked closely with the governments of Nova Scotia and Newfoundland and Labrador to modernize this legislation to make Canada's already world-class safety regime even better.

Bill C-22 is yet another example of our government's commitment to being a leader in safety and environmental protection while ensuring that all Canadians benefit from the jobs, opportunities, and economic growth created by Canada's natural resources. I urge the New Democrats to stop their ideological opposition to resource development and urge all hon. members to allow the passage of Bill C-22.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I want to reflect on the importance of offshore activities on the east coast, the number of jobs that have been generated, and the economic wealth that is being created because of the amount of exploration and drilling that is taking place.

The government is bringing forward legislation that would have a significant impact on the activities in that region. I am sure the member is sensitive to the fact that a number of stakeholders would want to participate in any discussion on legislation of this nature. Can the member indicate to the House to what degree the government has actually worked with different stakeholders in bringing forward this legislation?

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, our government absolutely works with stakeholders across the country, especially in these areas that are affected to make sure that the plan works for everybody. We understand that natural resource development is key for our country and has been since Canada started as a nation. Absolutely, we will continue to consult with stakeholders, as we have in the past, to make sure that it is a good plan for everybody.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I listened to my colleague's speech.

In his opinion, why have the Conservatives done nothing to comply with international standards before now? This bill will not allow us to catch up to our international partners. The Conservatives often brag that they want to be more like the United States, but the American government has adopted an absolute liability regime of $12.6 billion U.S.

Why, then, do the Conservatives not want Canada to adopt a regime that offers at least the same amount of protection as the U.S. regime? They are always saying that Canada is ahead of the United States, so why are they not showing leadership and attaining or surpassing the level of protection in the United States?

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, we have nothing to be ashamed of on this side of the House. Absolute liability of $1 billion is significant, and there are further measures to capture more funds if it goes beyond that.

Canada is one of the top countries in the world in terms of the environment and developing natural resources. We care about them. I am from British Columbia. People in my province want to make sure that we can balance both, but we absolutely need natural resource development, as a country, to continue to prosper.

Again, $1 billion in absolute liability is significant and is among the top in the world.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I listened with interest to the member's comments on this bill. I know that he and his party are great advocates of the free market. I wonder why, in this case, they are putting forward a bill that relieves the nuclear industry of some of the pressures of the free market by, in a sense, subsidizing the risks involved in that industry. Why should the nuclear industry, just like any other industry, not bear the full cost of the risk? Why should the public pick up this expense for the nuclear industry?

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, I am not sure I fully understand the question. In my speech I mentioned that we went from a $75-million liability to $1 billion. To me, that is a dramatic increase in liability for the proponent. I see it as quite an improvement to what existed before.

Again, Canada has nothing to be ashamed of. We care about the environment and resource development, and we will continue to do so.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Speaker, my friend who previously spoke about liability for the nuclear industry was quite right in saying that we have gone from $75 million to $1 billion. I wonder if my friend could expand a little further. Among countries that have nuclear reactors, we recently saw with Fukushima that the government of Japan essentially took over the nuclear industry in that country because of the billions of dollars involved. I think it is now in excess of $12 billion.

Could my friend tell the House about the procedure in circumstances where liability exceeds $1 billion? I wonder if he could talk about it coming back to the House so that the government could ensure that the industry complies with the additional costs.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, the shift from $75 million to $1 billion in absolute liability is significant, but there is also a requirement that any proponents that go beyond that have to come up with the difference.

I would like to state again how important the nuclear industry is to Canada. It supports 17,000 jobs for Canadians and their families. We support the industry and want to make sure that it is environmentally sound but also competitive.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, I would like to thank the member for Prince George—Peace River for sharing his time with me.

It is my privilege to speak to Bill C-22, the energy safety and security act. This legislation would ensure continued world-class safety and security for Canada's offshore oil and gas, and nuclear energy industries. It would enhance regulation and ensure that development is done in a manner that is safe for Canadians and safe for our environment.

Our government has been very clear, taxpayers should not be liable in the highly unlikely event of an incident in either of these industries. It is the company that must be held liable. The bill would deliver on the promise made in the Speech from the Throne to enshrine the polluter pays principle into law. As well, it would fulfill our commitment to provide $1 billion in protection to Canadians by raising absolute liability limits in both these sectors. Absolute liability holds the company responsible regardless of fault.

Canada has an enormous wealth of natural resources that generate significant economic benefits for Canadians. It is not an exaggeration to say that the resource sector is the cornerstone of Canada's economy. Natural resources account for nearly 20% of our gross domestic product, and 50% of our exports.

In fact, the energy, mining and forestry industries provide over $30 billion a year in revenue to governments, money that supports critical social programs such as health care and education. Furthermore, 1.8 million Canadians currently work in the natural resource sectors or in industries that service these sectors. Put another way, one in 10 Canadians work directly or indirectly for the natural resources sector.

Natural resource jobs are in every part of Canada from coast to coast to coast. Today, more than 30,000 aboriginal people work in energy, mining and forestry jobs throughout Canada, making the natural resources sector the largest private sector employer of aboriginal people.

There is true potential for massive investments in resource sectors in every region across Canada. It is estimated that hundreds of major resource projects are currently under way in Canada or planned over the next 10 years, worth approximately $650 billion in investment.

These investments will generate enormous economic growth and create hundreds of thousands of well-paying jobs in communities across Canada. Responsible resource development achieves the right balance to unleash the potential of our resource sectors to create high-value jobs across Canada while strengthening safety and environmental protection.

The legislation before us today will strengthen the growth of Canada's energy sector, and will protect Canadians and the environment. With respect to Canada's booming offshore oil and gas industry, the economy of Atlantic Canada has been truly transformed.

Over the past 15 years, Nova Scotia offshore oil and gas production has generated over $2.4 billion in government revenues and annually supports some 750 jobs. At the same time, Newfoundland and Labrador production has generated over $9.2 billion in government revenues and provides over 12,800 direct and indirect jobs annually.

Every stage of offshore petroleum activity, from exploration to production, is subject to strict regulations and oversight by the Canada-Nova Scotia Offshore Petroleum Board, and the Canada-Newfoundland and Labrador Offshore Petroleum Board.

Canada's environmental record is strong, and we are making it stronger by focusing on what matters to Canadians: jobs, economic growth and long-term prosperity. Our government manages Canada's offshore oil and gas resources jointly with the provinces. We worked in collaboration with Nova Scotia, and Newfoundland and Labrador to develop these changes.

Bill C-22 would hold companies to account in the case of an incident. By fulfilling our promise in the Speech from the Throne and enshrining the polluter pays principle into law, we are ensuring the continued success of offshore development.

In the Atlantic offshore we are increasing absolute liability from $30 million to $1 billion. We are also increasing the offshore absolute liability in the Arctic from $40 million to $1 billion. This means that companies are responsible for damages up to that amount, regardless of whether they are at fault for the incident. As is currently the case, we would continue to maintain unlimited liability where fault or negligence is proven.

Additionally, companies would need to demonstrate that they have $1 billion in available financial capacity. The bill would make companies responsible for their product and require them to pay for any damage caused. The bill would also strengthen the transparency of our safety regime by giving the public access to emergency planning, environmental plans and other documents filed with regulators. We feel strongly that the public deserves access to this important information and we will make sure that they have it.

Through our government's actions, oil and gas companies operating in the Atlantic and Arctic offshore would be subjected to the highest safety and liability standards in the world.

As my colleagues have mentioned, the energy safety and security act would also strengthen Canada's system for nuclear liability. It places Canada in line with internationally accepted compensation levels and significantly increases the operator's absolute liability for civil damages from $75 million to $1 billion. This increase brings Canada in line with modern western nuclear power generating countries.

This is an important aspect for Canadians because they want to be assured that nuclear power generated in Canada is done safely. Of course, the safety and security of this sector is paramount to the bill and I am proud that we are taking steps to update the liability limits for nuclear.

It is unfortunate that the NDP continues to oppose thousands of jobs in the nuclear sector and the non-emitting electricity generated by nuclear power. I do not need to remind Canadians of the importance of our energy sector. Most willingly acknowledge the huge role that it plays in our national economy and many Canadians would even suggest Canada is blessed with an abundance of resources. The question is why any responsible party would attempt to minimize or negate the importance of one of the most important players in the energy sector, the nuclear industry, as it relates to the overall economic well-being of Canada.

While other parties refuse to support hard-working Canadians or the creation of high-paying jobs across the energy sector, our government is moving forward to ensure that we have world-class safety standards for the benefit of all Canadians, which will in turn lead to even better economic opportunities for all.

In conclusion, the energy safety and security act offers Canada a solid, modern framework to regulate the offshore and nuclear liability systems in Canada for decades to come. Despite the divisive nature of the debate against Canada's development of our various natural resources, the truth that many Canadians realize is that economic prosperity and environmental protection can both be achieved.

Canadians trust our government to grow the economy, create jobs and responsibly develop Canada's resources.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the member is quite right in her assertion of just how dependent Canada is on our natural resources, which employ a good number of people from every region of our country. She also put emphasis on our aboriginal and first nation communities. There is no doubt there is a great deal of reward economically.

My question is with regard to the idea of having a social contract related to the development of our natural resources, and therefore, being able to have sound environmental laws, but along with that, ensuring that there is a sense of working with the public as a whole. When we look especially at some of the pipeline issues, we have found that the government has fallen short on getting that social contract with Canadians.

Could the member provide some thoughts as to why she believes the government has not done as well on that aspect of developing our natural resources?

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, I am pleased to respond to that member's question.

We need to remember that Bill C-22 would do four important things. It would raise the absolute liability for companies operating in the Atlantic offshore. We talked about that. It would also raise it in the Arctic. It would amend the agreements that are in place with both the Canada-Nova Scotia Offshore Petroleum Board and the Canada-Newfoundland and Labrador Offshore Petroleum Board. In the nuclear sector, it would increase the absolute liability amount to $1 billion. It would also take steps to replace the 1976 Nuclear Liability Act.

There are other things that this bill would do. Coming from an area such as Sarnia-Lambton, I am well aware of the importance of the energy sector to our economy and the safety and environmental issues that are inherent in that energy sector. I am also well aware of pipelines. We probably have an inordinate number of pipelines in my area, far more than in any other area in this country.

Bill C-22 also puts in place some other measures that would provide an improved response, a stronger accountability and greater transparency. Therefore, I am looking forward to all members supporting the bill and getting it passed quickly.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, of course a $1 billion liability seems like a lot. It is an improvement.

Nonetheless, my colleague surely knows the estimated cost of the 2011 nuclear disaster in Fukushima. In case she does not remember, I will remind her that it is $250 billion. There is a huge difference between a $250 billion liability and a $1 billion liability, a $249 billion difference, to be exact. The federal government would have to subsidize the rest of the repairs and upgrades, and that means it would fall to Canadian taxpayers and the people of Drummond. I do not think the people of Drummond would be pleased to learn that.

How will my colleague explain to her constituents that if there were ever a nuclear disaster like the one in Fukushima, it would be up to Canadians to pay $249 billion?