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

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I would like to touch on the lengthy time that bills have been before the House. In fact, the last bill, Bill C-15, received first reading in 2010 and then sat for a year on the order paper without ever being brought forward.

I always find it ironic that when the New Democrats want to get up and debate the substance of a bill that could have profound implications for taxpayers because of this $1 billion in it instead of the real liability, we are somehow accused of dragging our feet. It is really the government that has been dragging its feet, and governments before it.

It is important. I keep talking about due diligence. It is our due diligence to study bills that are before the House and ensure that we have the best possible bill. That is our role as parliamentarians.

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, it is my pleasure to speak in support of Bill C-22, the energy safety and security act.

My colleagues on our side of the House have done an excellent job explaining this legislation, so I would like to explain the role of the federal government in overseeing Canada's nuclear sector.

As has been made clear today, Canada has an excellent record of safety for both the offshore oil and gas and the nuclear sectors. The government places top priority on health, safety, security and the environment in relation to nuclear activities in Canada. It has established a comprehensive legislation framework, which focuses on protecting health, safety, security and the environment. It consists of the following: the Nuclear Safety and Control Act, the Nuclear Energy Act, the Nuclear Fuel Waste Act and the Nuclear Liability Act. Our government supports the generation of nuclear power because it is an important component of a diversified energy mix, and contributes to the fact that 77% of Canada's electricity comes from non-emitting sources.

When properly managed, nuclear energy can contribute effectively and significantly to sustainable development objectives. For that reason, the Canadian nuclear industry is a very important component of Canada's economy and energy mix.

According to a study by Canadian manufacturers and exporters, the industry directly employs 30,000 Canadians and, through its suppliers, generates another 30,000 jobs. The industry generates nearly $7 billion in economic activity, pays $1.5 billion in federal and provincial taxes, and exports $1.2 billion in goods and services.

Through our responsible resource development plan, our government provides support to a strong and safe nuclear sector. For example, our government has taken strong action by ensuring a strong regulator; updating our legislative framework; responsibly managing legacy waste; restructuring Atomic Energy of Canada Limited, AECL; and building international relationships.

The Canadian Nuclear Safety Commission, CNSC, is Canada's strong, independent nuclear regulator. The mission of the CNSC is to regulate the use of nuclear energy and materials to protect health, safety, security and the environment, and to respect Canada's international commitments on the peaceful use of nuclear energy.

The Nuclear Safety and Control Act, which established the CNSC in May 2000, provides a modern regulatory framework that mirrors the latest scientific knowledge in the areas of health, safety, security and environmental protection.

In addition to the policy and other responsibilities of Natural Resources Canada, the following departments contribute to a whole-of-government approach to promoting a safe and secure nuclear sector both here at home and abroad.

The Department of Foreign Affairs and International Trade promotes bilateral and multilateral nuclear co-operation and safety, as well as the implementation of non-proliferation and disarmament agreements. Through this action, our government enhances security and well-being by promoting the peaceful and safe use of chemical and nuclear technologies, and ensures the compliance with the international commitments such as the comprehensive nuclear test ban treaty and the Chemical Weapons Convention. It also assists in the development of relevant international law and guidance, such as conventions established under the auspices of the International Atomic Energy Agency and the Nuclear Suppliers Group regime.

Health Canada is responsible for protecting Canadians from the risk of radiation exposure. It is responsible for the federal nuclear emergency plan and supports the comprehensive nuclear test ban treaty. Health Canada's activities are managed by the Radiation Protection Bureau. It contributes to maintaining and improving the health of Canadians by investigating and managing the risks from natural and artificial sources of radiation.

Additionally, Transport Canada promotes public safety during the transportation of dangerous goods. The Transportation of Dangerous Goods Directorate is the leading source of regulation, information, and advice on dangerous goods transport for the public, industry, and government employees.

Industry Canada fosters the growth of Canadian businesses in making Canada more competitive internationally. The growth of the Canadian nuclear energy industry is the responsibility of the manufacturing and processing technologies branch, which focuses on competitiveness, international trade, technology, and investment.

All of this is to say that Canada has a very strong nuclear industry with independent regulatory oversight and strict safety standards. We are proud of this record, but we recognize that we must do more for Canada to be in line with international standards. That is why we have put forward Bill C-22, which takes significant steps to increase the absolute liability of the nuclear industry.

This legislation will also broaden the number of categories for which compensation may be sought and improve the procedures for delivering compensation. Furthermore, the bill permits Canada to implement the international convention on supplementary compensation for nuclear damage, or the CSC.

Canadian ratification of the CSC would create a treaty relation with the United States addressing liability and compensation for damages arising from trans-boundary and transportation nuclear incidents. By joining this convention, Canada would benefit from significant added pooled funding for compensation, up to another $130 million to $500 million.

While our government's support of a strong and safe nuclear industry is clear and well documented, the NDP members oppose everything to do with this sector. They oppose the hard-working Canadians who rely on non-emitting nuclear energy for their livelihood and they reject our attempts to raise the absolute liabilities on it to a level that is up to date.

While the NDP would prefer that the nuclear industry remains subjected to liability limits that are over 30 years out of date, we will continue to work toward increasing this important aspect of our safety system.

The leader of the NDP reaffirmed his party's position when he said, “I want to be very clear. The NDP is opposed to any new nuclear infrastructure in Canada”.

That is certainly not our government's position, and we are very proud of it. We will continue to work toward a stronger, safer, and more secure nuclear industry for the benefit of all Canadians, and I look for the support of both sides of the House tonight in achieving that end.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Mr. Speaker, could my colleague give me his opinion on the total amounts of liability?

Does he think it makes sense for the committee to look at a potential amendment to include an indexing formula for the amounts, so that they are indexed annually to the inflation rate? Does the member think we could avoid having to review this issue if we set the appropriate amount to cover expenses and it is indexed over the years to adjust to the cost of living and the cost of workplace accidents?

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, throughout the day today we have had a tremendous amount of debate on this issue. The bill updates outdated liability limits. For instance, 1976 was the last time an update on the bill was presented. At that point in time, it was some $75 million of liability coverage, which has now been expanded to $1 billion.

I thank my hon. colleague for the question and I appreciate that the opposition members have indicated they will support the bill going to committee. That is a good first step and I applaud them for it, but the important aspect of this bill is the $1 billion. We have heard a lot of discourse over the course of the day about whether that is enough or not. The amount has to be sustainable, and by setting it at $1 billion, I believe our government has achieved that goal in a responsible way.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I am wondering if the member would comment further on an issue that many Canadians are concerned about, and that is our environment. We have environmental assessment processes that governments and companies looking to invest all have to abide by. Could the member provide some commentary as to how the legislation would obligate Ottawa, provinces, and other stakeholders to take a more coordinated approach to environmental assessments?

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, it is important to recognize that throughout the course of the day we have talked about regulatory oversight. Clearly there is a well-established relationship between the federal government and the provinces and all the various agencies and ministries that I outlined in my presentation. I would be happy to read that for him again if he wishes.

The bottom line is that the government would establish a level of oversight and regulation through this bill that would represent good business and good governance in ensuring that we operate a safe and responsible nuclear industry.

Clearly, our history is good. It is strong. We have not had any major accidents, and that is a good thing. However, the reality is that we all have to be conscious of our environment. Some of my colleagues spoke earlier about families and next generations. I am as concerned about that as they are. I believe that the regulation, the oversight, and the governance provided in this bill clearly meet that demand.

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

Mr. Speaker, I want to thank my colleague for his speech, particularly since it included a lot of the international component of nuclear regimes.

There are many different ways of regulating this particular industry. I know from some of the reading that I have done that 75% of France's power, I believe, comes from nuclear power. It has a variety of newer types of nuclear power generators that allow it to have energy security while reducing greenhouse gas emissions.

We have heard a lot of questions tonight about the $1 billion operator liability limit that is in the legislation as it stands. Could my colleague provide some context by giving us a better understanding of what the standards are internationally? Could he enlighten the House on that subject?

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, that is a great question, because it brings into context a more global approach to who is doing the right thing.

A $1 billion operator liability compares well with other countries. In the United Kingdom, operator liability is currently capped at approximately $260 million, barely a quarter of what we are proposing. In South Africa, operator liability is $240 million. In Spain, it is $227 million. France is even lower, at $140 million. We would suggest those are irresponsible levels. We have taken a very responsible approach.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Mr. Speaker, I am going to begin my speech, although I feel like responding to the member for Don Valley West by saying that we cannot compare different systems. He cited the example of European countries that have completely different levels of financial liability.

They are indeed systems that are implemented differently. As the parliamentary secretary said, compared to Canada, those countries have nuclear energy generation levels that are completely different in percentage terms. Consequently, these are not valid arguments because we are comparing apples to oranges. I will come back to that.

Bill C-22 is definitely headed in the right direction, but it does not solve all the problems. In particular, it provides for only $1 billion of financial liability for private nuclear power generation companies, whereas the costs incurred as a result of nuclear disasters far exceed that amount.

Why is this subject of particular interest to me? It is because I was living in western Europe at the time of the Chernobyl nuclear disaster in 1986. My colleague from Saint-Lambert was living there too, and she also experienced the famous radioactive cloud. The authorities explained to us that it did not cross borders because it obviously did not have a passport. In reality, however, the radiation affected not only Ukraine at the time, but also much, if not all, of western Europe.

When the civilian facilities were built to generate power, no one ever anticipated a disaster of that magnitude. There can be no comparison with military nuclear consequences, but those consequences were disastrous and unpredictable.

Furthermore, the populations in the immediate exclusion zone were not the only ones that suffered stress at that time. People died from radiation, but those who were within a slightly wider circle also developed diseases. In particular, there were birth defects, which were a real problem in Ukraine in the 1990s. Several thousand children, if not tens of thousands, were born with deformities or defects. That was an extremely traumatic experience in Europe.

We obviously will not ignore the nuclear disaster that occurred in Fukushima in 2011. We must therefore consider the level of technology when talking about these nuclear safety problems. In 1986, according to the experts, while it was predictable, although not understandable, that a natural disaster might occur in facilities that did not have adequate safety levels, there was no level of deterioration in Japan, the third-largest civilian nuclear power in the world, that could have suggested a disaster of that magnitude.

I heard the argument made by the member for Don Valley West, and I congratulate him for taking the trouble to speak to us, unlike his Conservative colleagues, who seem to have left this place.

That argument, which can be summed up by the words “strong and safe nuclear energy industry”, to quote the member, does not hold water, and this is why there is insurance. The reason behind insurance is that unforeseen or unlikely events happen. However, they happen because a series of human errors will have consequences that are totally unthinkable and that have a financial impact that goes far beyond what might have been imagined.

Of course, the amount of $1 billion will be discussed. Its arbitrariness is quite astonishing, because we know that in the case of Fukushima, the estimates are in the order of several hundred billion dollars. With regard to the Chernobyl disaster, I was reading on the site of France’s Alternative Energies and Atomic Energy Commission that it was impossible to put an exact figure on the scope of the disaster because it spanned a decade. For some disasters, it is even impossible to quantify their full financial impact. This is my answer to the Conservatives’ main argument.

I was interested to note another argument the Conservatives used in previous debates. That argument was that we should be able to compare ourselves with different countries in millions of dollars. The example they gave us was that of European countries, where the level of financial liability for France, for instance, is $140 million.

In reality, this is a perfectly fallacious argument, because the level of liability must increase in value according to how nuclear energy production is organized in a given country. The example of France, which I know personally, is that of a country where 75% of current electricity production comes from nuclear plants. Furthermore, in the 1990s, this percentage rose to 85% or 89%. At one point, the country's energy policy was based almost solely on its nuclear capability.

The way in which things are organized was that the state was the major shareholder, through the French Atomic Energy Commission, which was the owner of a private company that was called Framatome at that point and became Areva in the early 2000s. However, the level of government involvement is still in excess of 70%.

Imagine if a disaster happened involving Areva, the private company. The government, with a 70% stake in this private company, would take full responsibility for the consequences, not only with regard to cleanup, but also with regard to compensation for the victims.

We can see that the context is completely different because in this case we do not even have to wonder whether it is fair or unfair that the taxpayer should take part in insuring an industrial risk, since the industrial risk is not really a private industrial risk. In fact, a specific country decided at one point to be the owner of the primary source of electrical energy.

This discussion of the comparison between $140 million and $1 billion is completely distorted. I totally reject this argument. This argument is fallacious and intended solely to make comparisons and give Canadians the impression that they would be protected in the event of a nuclear accident, while in reality when the company involved is a private company that is completely independent from the government, the government says clearly that it is not involved in the production of energy and that it would therefore not have to suffer the consequences or compensate the victims if a problem arose.

I see that I am running out of time. I will stop here and take questions from my colleagues.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I would first like to congratulate my colleague on his speech. He recalled a very dramatic and tragic event that occurred in Europe and affected all the neighbouring countries. It was a famous cloud that unfortunately had devastating effects on the health of many people.

The consequences cannot be quantified, and they have a horrible effect on people's lives and health. My colleague spoke about pregnancies and birth defects, not to mention all the blood cancers caused by nuclear radiation.

My colleague also mentioned the $1 billion limit, an artificial limit. As he explained, costs have mushroomed, and an artificial limit of $1 billion is not going to—

[The Acting Speaker, Conservative, Barry Devolin]

Order.

The hon. member for Saint-Jean.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Mr. Speaker, I understand quite well the gist of my colleague’s question.

Having lived through this terrible experience, even though I was not near the actual site of the accident, I know how emotional this is for my colleague.

What we are dealing with, in my view, is the concept of privatization of benefits and nationalization of risks. When a government is prepared to assume or nationalize risks, then it also nationalizes benefits. We cannot have both, that is, on the one hand, nationalization of risks and, on the other hand, benefits for private corporations that do not pay to assume risks.

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

Mr. Speaker, I listened to the member opposite. He talked about how the absolute liability level of $1 billion is not enough. He talked about the industry in France, where the absolute liability limit is about $120 million. He thinks it should be raised there. Well, we are talking about Canada.

Clearly, what the member wants to do is close down the nuclear industry in Canada. It is a green industry. The NDP talked about how it supports green industries, so I would like to ask the member if he agrees with his leader, who said:

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

The member for Winnipeg Centre said:

Somewhere out there Homer Simpson is running a nuclear power plant... We do not want to see the Darlington nuclear power plant doubled in size. We want to see it shut down.

These members are clearly against the nuclear industry, yet they claim to be in favour of green energy. I would just like to ask the member if what his party wants to do is shut down nuclear energy entirely and the tens of thousands of jobs that go with it.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Mr. Speaker, I do not recall saying that I wanted to see an end to everything nuclear. I will reread my notes and the House of Commons Debates. I do not believe I said that.

Nor can we say that the nuclear industry is green because that is not the direction we want to take. A number of countries have decided to phase out their nuclear industry. Germany is one such country. Its goal is to shut down all of its nuclear power plants by 2021. In the meantime, its nuclear plants are still operational.

I do not believe that the NDP holds a Manichaean view that everything should either remain operational or be shut down. All we are doing is discussing a particular issue, namely the level of financial liability of a private industrial activity in Canada. I was merely saying that no comparison can be made with the economic and legislative reality of other jurisdictions where electricity generation is fully nationalized.

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

Mr. Speaker, I would like to start with a preliminary comment. I find it incredible that our country's federal government has taken so long to address risk management, internalize costs and protect the public interest.

In his speech about nuclear energy, the hon. member for Don Valley West said that safety is a top priority. However, it is all relative, given that liability is limited to $1 billion. As he said, Canada's nuclear industry is mostly privatized. The Conservative vision, which the Liberals support, is clearly behind the times when it comes to the future of Canada's nuclear industry. The Conservatives' shoelaces are untied and they are about to trip over them without realizing that they are going to crash to the ground.

The government is seriously going to have to take the time to listen to what the NDP is saying, in order to understand the real issues in the debate we are engaged in right now. Obviously, I would point out another paradox that borders on the ridiculous and in fact is so ridiculous, it enters the realm of caricature. Today, the government imposed a time allocation motion on a bill that has been sitting on the shelf and was even torpedoed by the Prime Minister when he failed to abide by the fixed election date law in 2008. The bill sat on the shelf for years, and catching up got put on hold for decades before the government corrected one obvious flaw, only in part and relatively clumsily.

There is nothing to prevent me, like all of my New Democrat colleagues, from supporting the bill at second reading. We will at least have a base to work on, somewhat wobbly though it may be. In cabinetmaking, when a table is wobbly, you can always try to level it, particularly if you have some expertise and a degree of skill. You have to make sure it is solid and the dishes will not fall off.

In the second part of my speech, I am going to focus on the nuclear industry. The nuclear industry needs to assume its responsibility completely. I do not think that comment will generate debate. To start with, it is a matter of the public interest. I would hope that everyone will agree that the safety of the Canadian public as a whole is absolutely non-negotiable, in spite of a few somewhat nonsensical comments from government members.

We also need to learn from the various events that have taken place in the past in various parts of the world. Based on that, we have to draw the following conclusion: in the Canadian context, setting the limit at $1 billion will be insufficient to cover the cost without requiring that the government invest large amounts of taxpayers’ money to deal with certain potential accidents. Zero risk does not exist anywhere. If I take my car out tomorrow, I assume a share of the risk, for which I pay through my insurance. However, the risk must be completely assumed by the industry. That is a very basic question of how a market operates. We are talking about internalizing the costs associated with the risk to be assumed. It is a very simple principle. Plainly, understanding how a market functions in economics is an insurmountable obstacle for many government members.

There is also the issue of the competitiveness of the Canadian nuclear industry. It must be viable and exportable, and our Canadian businesses must be able to compete and offer their skills and expertise by having optimal conditions on our domestic market, no matter the area of activity, whether it involves the design, construction, operation or development of certain parts of the systems in the nuclear industry.

We are not the only ones talking about this. This is a concern shared by experts in different fields about both the nuclear and the oil and gas industries. I will first quote Joel Wood, senior research economist at the Fraser Institute, who had this to say about the absolute liability cap:

Increasing the cap only decreases the subsidy; it does not eliminate it.

The subsidy is obviously a concept that I hope my Conservative colleagues will be able to grasp. I hope that they will be able to follow my logic. However, I am not very confident that they will since the Conservatives manage to confuse collective savings with the Canada pension plan and a tax, for example, which shows that the government has a very limited understanding of very important social issues.

Mr. Wood goes on to say:

The Government of Canada should proceed with legislation that removes the liability cap entirely rather than legislation that maintains it, or increases it to be harmonious with other jurisdictions.

When speaking of other jurisdictions, as the member for Saint-Jean said, we are speaking about foreign examples that are comparable in terms of the development of the nuclear or oil and gas industry.

Let us take a look at oil and gas development. One of the first elements is rather strange. In fact the bill deals strictly with offshore development, and does not deal with the entire issue of oil and gas development and transportation. We are already wondering why the government took a slapdash approach.

Earlier, I attended a meeting of the Standing Committee on Finance, where I was filling in for my very esteemed colleague from Rimouski-Neigette—Témiscouata—Les Basques for the clause by clause study of the bill.

During the period for questions and comments on omnibus Bill C-31, which I would remind the House is a monstrous bill that is impossible to study in the context of our work in the House or on committee, I raised some very serious concerns that the riding of Beauport—Limoilou has about the transportation of dangerous goods by rail. Bill C-31 was compromising, possibly even severely compromising, the regulations in that area.

Unfortunately, in Bill C-22, we are going to, yet again, end up partially correcting past failings and massive negligence by the Liberals and Conservatives. There is a reason we see them working so hard on joining forces to try to stop us. We saw that earlier this week with the conditions put on the debates scheduled to take place between now and the end of June.

We cannot look at this type of activity separately or in isolation, using a piecemeal approach, without understanding all this might entail for our society, our citizens, the environment and even for industry. It is truly deplorable to see the government improvising so easily and providing hollow, ready-made answers that do nothing to address the legitimate concerns that Canadians might have.