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

[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.

[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.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, before beginning my speech, I would like to mention that I will be sharing my time with the excellent member for Saint-Hyacinthe—Bagot.

I will address a number of issues in my speech. First, I will summarize the legislation. Those who have been listening to CPAC for a few minutes or a few hours already have a general idea of Bill C-22, which we are debating at present.

This bill proposes a more thorough review of nuclear liability and liability in offshore oil and gas exploration. The amount of absolute liability must increase from $75 million to $1 billion for the nuclear sector and from $40 million to $1 billion for the offshore oil and gas sector.

It is a step in the right direction and a good start. We will obviously support this bill at second reading so that it can be referred to committee, where we can make some improvements to it. I was pleased to hear my colleague who spoke before me say that this bill is not perfect. At least he agrees with me and there will be improvements to make in committee. What is more, I hope he will sit on the committee and make some improvements. It would be truly appreciated. He seems to be very familiar with this issue. If he does not sit on the committee, perhaps he could give his colleagues a short briefing on this.

The first thing people need to realize is that we would not have such a problem with this bill if the Conservatives had passed the sustainable development bill introduced by my hon. colleague from Brome—Missisquoi. I do not know what the Conservatives have against sustainable development, but they voted against the excellent bill introduced by the member for Brome—Missisquoi, under which all new bills would be subject to the Federal Sustainable Development Act.

Sustainable development encompasses the economy and social and environmental considerations. Bill C-22 is a step in that direction. Unfortunately, it still does not fully respect the spirit of sustainable development. That is why we must refer to a speech that will go down in history, the speech the leader of the opposition and member for Outremont delivered to the Economic Club of Canada in Ottawa on a prosperous and sustainable energy future for Canada.

In this plan, he mentions the three key components of sustainable development, in other words the economic, social and environmental aspects. It is important for people to understand.

Three aspects need to be considered in Bill C-22, including sustainability. Sustainability means the polluter pays the bill for pollution instead of handing the bill to the next generation. The problem here is that the Conservatives are saying that this bill is based on the polluter pays principle, but that is not true. It is true that the polluter will have to pay a little more, but not much. Again, the taxpayers will be paying the lion's share.

I will provide some examples a little later. Members might fall off their chairs when they see the huge costs a nuclear or oil-related disaster can rack up. They will be shocked. They seem to be comfortably seated in their chairs, so it should be alright.

The other element that depends on our energy future strategy is the partnership with the first nations, the provinces and environmental groups. It is what we call social licence. The important thing is having social acceptability for value-added jobs here. Unfortunately, the Conservatives are exporting most of our jobs. Long-term prosperity is also important.

What I mean is that the government introduced a bill that looked good at first glance. However, we are quickly realizing everything it entails. In reality, the bill masks a lot of other things that the government has done that harm our economy. That is right: they harm our economy.

What have the Conservatives done to harm our economy? They have scuttled environmental legislation, such as the famous Canadian Environmental Assessment Act. There are now bills that will be passed and challenged and that will not have social acceptability.

For example, the Enbridge line 9 project was approved without social acceptability. This will pose significant problems because there is no reliable, safe and strong environmental legislation. This is important. The NDP will ensure that there is better legislation that will allow us to know where we are going.

I will now provide some figures. My colleagues should brace themselves. I am not kidding.

In 2010, a major oil spill occurred in the Gulf of Mexico. So far, the cleanup costs have been estimated at $42 billion. Under Bill C-22, BP would pay $1 billion. Who would pay the remaining $41 billion? Taxpayers. That is not in line with the polluter pays principle. It is a gross injustice if the polluter pays $1 billion and the people pay $41 billion. There is no way we can accept that.

Take, for example, nuclear accidents. There was one at the Fukushima nuclear power plant in 2011. The Government of Japan currently estimates the cleanup and repair costs at $250 billion.

Under this bill, the polluter would pay $1 billion. Who would pay the remaining $249 billion? Canadians. Payments would be spread over several generations, because that amount cannot be paid today, just like that.

In 2012, the Commissioner of the Environment and Sustainable Development published a report on environmental liabilities. I actually asked the Minister of the Environment a question when she testified on the issue before the Standing Committee on Environment and Sustainable Development. At the time, she was new to the field, but she has now done her homework. I will see her again soon at a meeting of the same committee, and I will be able to ask her the same question again.

Environmental liabilities now amount to several million dollars. Who is supposed to pay for environmental liabilities? The public purse. In other words, Canadians, the people of Drummond. In Saint-Edmond, a municipality close to Drummondville, many people are concerned because of the contaminated site there. The government is not getting the cleanup done.

In a nutshell, this is a good bill at first glance, but the polluter pays principle has not been applied in the slightest. In addition, I did not even get to say that the responsibility of the minister must be removed from the bill. I will talk about that during questions and comments.

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

Mr. Speaker, I am very pleased to have the opportunity to debate Bill C-22, the energy safety and security act, and to share my time with the hon. member for Saskatoon—Humboldt.

This bill would modernize and increase accountability in Canada's offshore and nuclear industries. As hon. members know, it is no exaggeration to say that the offshore petroleum industry has literally transformed economies in Atlantic Canada. Over the past few years, this vital industry has created thousands of high-paying jobs and spinoff industries. It has also generated billions in revenues for provincial governments to invest in social programs that are essential to Canadians.

Over the past 15 years, Nova Scotia offshore production has generated over $2.3 billion in government revenues. Today, the industry generates close to $190 million of expenditures and supports approximately 770 direct jobs. On an annual basis, over the period between 2003 and 2007, the offshore petroleum sector's contribution to Nova Scotia's GDP was 3%.

In Newfoundland and Labrador, over the same 15-year period, offshore production has generated over $9.2 billion in government revenues. Today, the offshore oil and gas industry in Newfoundland and Labrador contributes approximately 28% of the provincial GDP, spending over $3.2 billion annually and providing 7,374 direct jobs. In 2010, through direct and indirect and spinoff effects, the industry accounted for over 12,800 jobs. That is 5.8% of provincial employment through responsible offshore resource development.

It is clear that exploration and development of the offshore is translating into tangible benefits for the people of these provinces, and these benefits will continue to grow.

Our regulatory and safety regime in the Atlantic offshore area is already strong. Over the past year, our Conservative government has introduced a number of measures to ensure the safe development of our natural resources under our responsible resource development plan. We have initiated new enforcement mechanisms, which include fines for non-compliance, with stated environmental requirements. This includes inspections for oil and gas pipelines, which have been increased by 50% annually. We have also doubled the number of comprehensive audits of pipelines.

Another example is the new mandated measures for oil tankers, which will ensure the safe transportation of energy resources through our waterways. These measures include the safeguarding Canada's seas and skies act, as well as the creation of an expert panel to review Canada's current tanker safety regime, which will propose ways to improve safe transportation.

Building on these measures, our Conservative government is taking steps today to strengthen its robust offshore liability regime and make it even stronger. As I have said many times, our Conservative government will ensure that no development proceeds unless it is safe for Canadians and safe for the environment. We have been working closely with the Governments of Nova Scotia and Newfoundland and Labrador to update and expand both accord acts to ensure that Canada's offshore regime for oil and gas exploration remains world class.

Companies operating in Canada's offshore have an excellent track record. Every stage of offshore petroleum activity, from exploration to production, is subject to stringent regulatory obligations and oversight by either the Canada-Nova Scotia Offshore Petroleum Board or the Canada-Newfoundland and Labrador Offshore Petroleum Board. Companies must have regulator approved safety, emergency response and contingency plans, and regulators will not allow any offshore activity unless they have determined that the environment and the safety of workers will be protected.

Bill C-22 focuses on protecting the environment and taxpayers in the highly unlikely event of a spill.

The Commissioner of the Environment and Sustainable Development has found that the offshore boards are operating with due diligence. However, he has recommended enhanced financial assurance for environmental risk. Our government has committed to study his report and make the necessary changes. The changes contained within Bill C-22 build on the commissioner's advice as well as lessons from international best practices. Our overall objective is to have a world-class offshore regime.

As the House knows, Canada's liability regime is founded on the polluter pays principle.

First, we are proposing to enshrine the polluter pays principle in legislation and to maintain unlimited liability when an operator is found to be at fault.

Second, our government will also increase the absolute liability to $1 billion, from $30 million in the Atlantic offshore and $40 million in the Arctic offshore. This means that fault or negligence does not have to be proven for that amount.

Third, we will require that operators demonstrate at least a $1 billion financial capacity to ensure they have sufficient funds if an incident were to occur. Currently the regulators require proof of an operator's financial capacity in an amount between $250 million and $500 million. We intend to raise the minimum financial capacity to $1 billion, in line with operators' absolute liability. Regulators may require higher amounts if deemed necessary. This increase will bring our country in line with comparable regimes, such as Norway, Denmark, the U.S., and the U.K. We are ensuring that companies have the financial wherewithal to meet their liabilities if needed.

Finally, we will require that operators provide regulators with rapid and unfettered access to at least $100 million that may be used if needed.

These are just some of the ways we are ensuring Canada is among the strongest liability regimes in the world.

We are also creating the ability for regulators to impose administrative and monetary fines as an additional tool in ensuring industry's compliance.

We are increasing transparency by allowing the boards to make emergency environmental and other documents public.

We are creating the ability to use spill-treating agents.

We are creating the basis for boards to recover costs from industry.

Our government is committed to ensuring the safe extraction of Canada's offshore resources, while at the same time protecting our environment. Raising the absolute liability for companies operating in the offshore will go a long way towards achieving that goal.

As the offshore industry continues to grow and develop, we must ensure it is done in a responsible manner. That is why I urge all hon. members in the House to support Bill C-22.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, I would like to begin by congratulating my colleague on his recent appointment as Minister of Natural Resources. I know that he brings to it thoughtfulness and sincerity and that he will be a pleasure to work with.

This is an important bill, because it deals with important issues that are sometimes difficult for average working Canadians to understand. Therefore, it is important for us to keep it simple. In my remarks this morning, I am going to try to explain to Canadians why this is so very important in the architecture of energy for Canada going forward, a theme I am going to return to in a few moments.

First, we know that this bill would update the safety and security regimes for Canada's offshore and nuclear energy industries. How would it do that? It would expressly include the polluter pays principle, a notion perfected in the 1980s that is now increasingly finding implementation in Canada and around the world. It is the notion that the entity that generates the pollution is responsible for its cleanup and is responsible for liability as a result of the pollution. That is an important and positive thing to be including in the bill.

It would also increase liability limits to $1 billion, and it would do so without proof of fault or negligence, or as we say in the legal profession, strict liability. The polluter would be held strictly liable for whatever occurred on its watch with respect to pollution of that kind. That is a very big step for Canada to be taking and is one that we will be exploring, I know, in greater detail in committee.

Part 1 would amend the offshore petroleum regime. That is the exploitation of oil and gas in our waterways, off Canadian soil. It would try to enhance incident prevention, our response capacity to problems, and of course, liability and compensation. It would primarily update and strengthen the liability regime applicable to spills and debris in offshore areas. This is very important. This question of response capacity and incident prevention, we now know, is extraordinarily important. We have seen two recent examples in the last several decades that have, frankly, focused the minds of Canadians and citizens all over the world who have watched them.

One, of course, was the terrible tragedy of the Exxon Valdez, how that occurred, and the remedies that flowed from that major oil spill along the coast of Alaska, the effects of which are still being felt and the cleanup of which is still being executed. As our American friends like to say, there have been “learnings”, things we have learned from that tragedy that have led to improvements, such as the widespread use of double-hulled ships for oil and petroleum products.

The second, more recent incident was the terrible spill in the Gulf of Mexico at the BP wellhead. For Canadians who were watching or reading, this was so significant that we now know that with prosecutions, fines, settlements, and compensation, the costs for the Gulf of Mexico incident are now well over $42 billion and counting. This is a very significant amount of money for the corporation involved. There are long-term effects. There are long-term human effects, long-term economic effects, and I would argue, perhaps longer-term ecological effects. We are entering unchartered territory in many regards, because the science does not always exist to confirm just how long term that ecological damage is. Therefore, it is important for us to examine this question of response capacity and incident prevention in committee.

It does, however, raise the question of why the Conservative government has rushed through Beaufort Sea exploration licences. Why is it, in full knowledge of the fact that we do not have the technology to deal with a spill in the Beaufort, that the government has rushed these licences through? It has been forewarned both by industry and by third parties. It has been raised on the floor of this House and raised in committee repeatedly.

The Arctic Ocean is a very shallow ocean. It is also an extremely rough body of water, and there is no known booming system to contain an oil spill should it occur during this phase of exploration and, ultimately, during exploitation. I do not know why the government is allowing the licences to go forward. In fact, it was fast-tracking them several years ago, and now, several years later, it is trying to take corrective action to enhance response capacity. We will have to look at that at committee, particularly, as I say, since there is no known response capacity for a spill in those waters.

The second thing this bill would do, in part 2, is amend the nuclear regime, the way we oversee our nuclear energy sector. It would establish greater legal certainty and enhance liability and compensation in the event of a nuclear accident. Many speakers here have raised the spectre of a nuclear accident. Of course, this is very worrisome. Of course, this is something we need to learn from internationally. The bill would provide for the establishment, in certain circumstances, of an administrative tribunal to hear and decide claims. It would implement certain provisions of an international treaty, the Convention on Supplementary Compensation for Nuclear Damage.

Here I would like to stop and speak about this question of our nuclear regime in Canada and what has been happening around nuclear power in Canada over the last eight years, since the arrival of the Conservative government.

For about 57 years, Canada led the world, through Atomic Energy of Canada Limited, in the production of nuclear power capacity, the export of that capacity, and the physics underpinning that technology. It was a world leader, not only in the generation of power but also, linked to it, in the production of medical isotopes. This is extremely important going forward, and this bill would have a bearing.

There was a time when Canada supplied 65% of all the medical isotopes in the United States. It furnished our own medical isotopes here in Canada and exported widely around the world. Why is that so important? It is because medical experts tell us that the future of medicine is in what they call personalized medicine. Personalized medicine is going to require the significant, expanded use of nuclear medicine, without which we will not be able to take our medicine and our treatment as human beings to the next iteration, the next level. Isotope production is going to be critical for Canadians. It is also going to be critical for the rest of the world.

As China, India, and other parts of the world become more affluent, there is no doubt in our collective minds, I am sure, that those parts of the world are also going to require greater access to nuclear medicine. What has Canada done with that opportunity and that knowledge in front of it?

Several years ago, the Prime Minister's director of communications was involved in a well-orchestrated rollout with respect to the future of Atomic Energy of Canada Limited. It was the same individual who now heads up Sun TV for Mr. Péladeau, the separatist owner of a major news network. As an aside, I would love to hear from the Sun journalists who for years have been attacking all sorts of different folks with respect to their views, but I have not seen a single commentary from these leaders of the Sun regime on the majority shareholder of their corporation.

We had that same person, the former director of communications, come out in the hall here and run down the asset, Atomic Energy of Canada Limited. I remember the words and I remember the day, because I was so absolutely stunned when he came out and said that Atomic Energy of Canada is a $12 billion sinkhole.

That was, of course, deliberate, because it is a Conservative strategy to run down a state-owned asset that they want to dispose of. Lo and behold, the vast majority of AECL was dumped in a fireside sale of $100 million to SNC-Lavalin in Montreal, thereby compromising Canada's future, in my view, with respect to nuclear power plants and with respect to producing medical isotopes and obtaining a certain share of that marketplace.

Today, as we speak, there are over 120 requests for proposals being considered worldwide for new nuclear power plant installations. That is the reality. Is Canada prepared? Is AECL actively bidding? Are we ready to conquer some of those markets?

I would say no, not when the Prime Minister's director of communications is dispatched to describe our state-owned nuclear energy company as a $12 billion sinkhole.

Furthermore, as I just put to my colleague from the NDP, in committee we will have to look at the energy mix going forward. We will have to look at how nuclear power will fit with renewable power and other forms of power, for example geothermal, which in my view is an energy source we have barely begun to tap, particularly in a northern Canadian context. It is highly economic to be using geothermal in our north, but we are not investing very much at all.

Here I would agree with my NDP colleague: we are not putting the needed resources into public research and development in our energy future, whatever that mix is going to be.

Finally, on the nuclear regime side, it is important for all members to understand that very unfortunately, given the global consumption of water, 70% of the world's fresh water is used today in agricultural production. It is the same statistic in the United States. As American northeastern cities drop in population and as the United States builds ever-larger cities in its dry southwest, we will see even more pressure on fresh water, which of course is giving rise to all kinds of new economic opportunities, unfortunately, in the desalination of water.

The only form of energy we know thus far that is economic in desalination is nuclear. Are we going to tell the world that it cannot have access to water? I do not think so, not given the pressures that we know are coming and knowing what we know now about climate change. We will come to the place of climate change in an energy discussion in a second.

It is very important for us to examine this question of the nuclear regime in a broader context. This is not just a technical amendment bill; it has to be examined in the context of both the Canadian situation and the international markets that I alluded to just a moment ago.

For example, we know that the liability cap in the nuclear sector is going to go from $75 million to $1 billion. That is a very significant jump. This brings Canada in line with the promises it made when we signed the international Convention on Supplementary Compensation for Nuclear Damage in December 2013. In a sense, we are simply moving to ratify what we signed on an international level.

In the offshore oil and gas sector, the absolute liability for companies operating in the Atlantic offshore will increase from $30 million to $1 billion, and in the Arctic from $40 million to $1 billion. Operators will have to earmark $100 million specifically for spill response. That is a quantum, a number that I think deserves to be examined much more closely.

It is $100 million earmarked for spill response if, as I said earlier with respect to the Beaufort, that technology actually exists, which we know it does not in that context. It is $100 million when the BP spill in the Gulf of Mexico is $42 billion and counting. I do not think that is a serious number.

On this question of satisfactory protection, we will have to hear from experts. It is linked, of course, to the insurability of some of these actions and whether or not there is insurance to be drawn down on top of the $100 million specifically earmarked.

There are other questions that have to be asked, as the proposed legislation raises several issues.

For example, would the bill make it far more expensive for offshore energy companies to operate off the Atlantic and Arctic coasts by raising their financial liability, by forcing them to have more money on hand, by increasing the funds they must have on hand for disaster response specifically? In that case, by how much would the cost be increased? What do the corporations have to say about that? I think it is important for us to hear the answer.

Is $1 billion adequate in the Arctic, where environmental conditions make spill response efforts very challenging? Is $1 billion realistic, as we rush through these exploration licences, as has been done by the government?

Here is another question. Why does the bill provide for ministerial discretion to reduce absolute liability levels to below the legislative level of $1 billion? Why would we do this? What would be the implications of this provision?

In fairness, there has been a trend since the Conservatives came to power eight years ago of vesting more and more power in ministers or in the cabinet. Nowhere has that been more egregious than in the case of decisions rendered by the impartial, arm's-length National Energy Board. Now, all of a sudden, as a result of the government's power grab, a decision rendered by a third party, outside-of-government group of experts with quasi-judicial processes and expert evidence is not good enough, because if it is not in line with the government's views or the Conservatives' priorities, they can undermine the entire process with a stroke of a pen. In fact, they can overrule the entire process. This is unusual, but it has been happening over and over for eight years in different sectors.

Here, again, we see it slipped into the bill. I think the government has to explain to Canadians why that is. Why would the minister have the power to say that it is not $1 billion but $229, or zero, or there is a delay in payment? What are the implications of this provision as we go forward with another concentration of power in a single minister?

We know that the bill is the culmination of many years of discussion with respect to operator liability that, objectively, started under the previous Liberal government. For that, I want to commend all of those departmental officials who have been involved in helping to craft the bill and who helped to lead those discussions and reconcile competing views. They should be congratulated for their hard work. We are only as good in this place as the work provided by those officials. In many respects, we stand on their shoulders.

The second thing the bill does is address recommendations to raise liability limits from the 2012 report of the Commissioner of Environment and Sustainable Development. Need I remind the House that this is another office created by the Liberal government?

There are some very positive changes in the bill. We look forward to seeing it get to committee. We are looking forward to hearing from the experts on many important questions.

Bill C-22 is a good building block in what I hope will become an adult conversation on Canada's energy future, because in eight years we have not had an adult conversation. We have been fixating on a single pipeline or some other construction project, as opposed to examining what our energy future looks like, what the mix looks like, the extent to which we are integrated in the North American context, and where we are going with greenhouse gases, a term I have not heard uttered here today. To talk about energy, which the bill addresses, without talking about greenhouse gases is irresponsible.

In closing, I am looking forward to seeing Bill C-22 in committee and getting more information and more evidence with a view to improve it.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I am pleased to rise today as the newly appointed NDP critic for energy and natural resources to lead off our caucus' participation in the debate on Bill C-22, which has the less than pithy title of 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.

I would be remiss if I did not say a few words first about my predecessor in this portfolio, the member for Burnaby—New Westminster. I owe him and his staff a huge debt of gratitude for their incredible work on the full range of files that fall under the rubric of energy and natural resources. I stand on their shoulders as we move forward on the important questions of resource management and energy security in our country. I wish the government House leader the best of luck in dealing with the member for Burnaby—New Westminster in his new capacity as NDP House leader.

The government House leader and I were elected at the same time, and I know we both fondly remember the MP for Burnaby—New Westminster's time as our trade critic. We will both remember his tenacious fight against the Panama free trade agreement, which he successfully prevented from being passed on a number of occasions. Without telling tales out of school, I can say he always reminded us in caucus meetings that the bill was a bill that we had to “go to the wall on”, even if it meant sitting past the regular adjournment dates of the House. In each of those instances, he had the full support of our caucus.

Now he is our House leader. I imagine there will be many more instances where he will exhort us to go to the wall. We will follow his lead as unconditionally now as we have in the past. I bet the government House leader is as excited as I am about that. Yikes, I can see him scurrying off now to draft more pre-emptive time allocation motions.

Oh well, those are strategic battles for the days ahead. For now, I am pleased to say that on Bill C-22, the government will have our support at second reading, so that at least we can get the bill to committee and pursue expanded liability there.

However, let me not get ahead of myself. I should first lay out, for those people who may be watching this debate on television today, what this bill is all about. As it stands now, if there is a significant oil spill or nuclear accident, the federal government could be left responsible for damages and cleanup costs in the billions of dollars because there are caps on the liability of reactor operators and companies operating offshore. Increasing those caps would reduce the federal government's exposure and therefore protect Canadian taxpayers. That is what Bill C-22 attempts to do.

It must be noted at the outset that we are only dealing here with costs to the government. The bill does nothing to address the prevention of spills or nuclear accidents, and therefore, both communities and the environment remain highly vulnerable in case of an accident.

Let us look instead at what the bill does address, beginning with the sections that deal with offshore oil and gas liability. Currently, the government and taxpayers are exposed to the financial downside of a catastrophic offshore oil spill by weak liability regimes that cap operator absolute liability at $40 million. Distinct liability regimes govern different aspects of oil and gas development, from pipelines, to rail transport, to offshore drilling. Each regime is in need of fundamental reform.

The oil spill liability reforms in Bill C-22 are limited only to the offshore industry. The government's proposed $1 billion cap for offshore drilling would apply to no-fault liability, while operators would continue to face unlimited liability should they be found to be at fault or negligent. Companies would also be required to demonstrate to the regulators their financial capacity to cover $1 billion in cleanup costs, should they become necessary. Additionally, the bill increases coverage for exploratory drilling operations offshore, production operations, the loading of tankers for transport, and undersea pipelines, such as a natural gas line from Sable Island to the mainland in Atlantic Canada.

However, here is one of the kickers in the bill. It provides for ministerial discretion to reduce absolute liability levels to below even the paltry legislated level of $1 billion. This discretionary provision could undercut the advantages of the legislated increase in the absolute liability limit contained in Bill C-22. It would leave the door wide open for the reduction of absolute liability levels for certain projects as a form of economic incentive for oil and gas development that the government wishes to encourage. Given the Conservative's poor track record in protecting Canada's public interest, this aspect causes us grave concern.

Before my colleagues across the way accuse me of fearmongering, let me just point out that many industry observers adopt the position that operators should face unlimited absolute financial liability for oil spills, as is the case in some other countries, including Norway and Greenland.

Let me just remind members that the offshore BP Gulf oil spill of 2010 is expected to cost as much as $42 billion for total cleanup. That is right. Given the liability limit of $1 billion, that spill alone would leave the government, and therefore taxpayers, on the hook for $41 billion.

Does the government really believe that Canadians should hold the risk for these private companies? If asked, I suspect it would respond with a resounding no.

As this bill proceeds through the legislative process, we might want to reflect on the fact that a German bank, for example, has completely stopped financing offshore oil projects in the Arctic. A spokesperson said:

The further you get into the icy regions, the more expensive everything gets and there are risks that are almost impossible to manage.

Remediation of any spills would cost a fortune.

In part, of course, that is because there is no oil spill response capacity to address a sizeable well blowout or a large scale spill in Arctic waters.

As Martin von Mirbach from the World Wildlife Fund put it:

...there is currently insufficient knowledge and inadequate technology and infrastructure to safely carry out drilling in Canadian Arctic waters. More time is required to address these gaps....

He concludes on a more optimistic note by suggesting that:

...this necessity can become a virtue if at the same time we collectively invest in the research, planning, infrastructure, and dialogue that are the key characteristics of responsible stewardship.

Truthfully, I am not holding my breath. I do not think there are very many Canadians who believe that responsible stewardship ever has been or will be a priority for the Conservative government, but I would love to be surprised. Regardless, the questions raised by Mr. von Mirbach must be explored further with both him and other stakeholders when Bill C-22 finally gets to committee. Not to follow up on those questions would be extremely irresponsible.

Let us leave that for the next stage of the legislative process. For now, let me move on to highlighting the nuclear liability piece of the bill. Here, the impetus for legislating a change lies in the fact that the existing liability limit of $75 million was created to support the industry in the 1950s. It is so low that international courts simply would not recognize it. Therefore, to boost foreign investment in nuclear power in Canada, a legislative change was needed. That process began in 2008, and this is now the fifth time that the Conservatives have brought in a bill to try to deal with its woefully inadequate liability scheme.

To its credit, this bill does propose to increase the maximum liability for operators of nuclear installations for damage resulting from a nuclear accident. It proposes to increase it by more than the earlier iterations of this bill. Whereas the Conservatives once thought that an increase from $75 million to $650 million per nuclear installation would suffice, Bill C-22 would raise it to $1 billion. That is certainly a step in the right direction, but even this limit seems shamefully low when we consider the consequences of a nuclear accident.

As Greenpeace bluntly points out:

...the current nuclear liability conventions are intended to protect the nuclear industry, and do not offer sufficient compensation to victims.

From the beginning of the use of nuclear power to produce electricity 60 years ago, the nuclear industry has been protected from paying the full cost of its failures.

Governments have created a system that protects the benefits of companies, while those who suffer from nuclear disasters end up paying the costs.

It is for precisely that reason that even the Fraser Institute, which no one would accuse of being a left wing think tank, is arguing for more draconian action. Joel Wood, senior research economist at the Fraser Institute, had this to say on nuclear liability gaps:

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

In other words, both Greenpeace and the Fraser Institute agree that the bill before us today continues with the tradition of protecting corporations, rather than protecting Canadian citizens.

Let us look at the liability caps and evaluate them. It seems obvious that the total liability would not be able to cover a medium-sized accident, never mind a catastrophic one. A nuclear accident would cause billions of dollars in damage in personal injuries, death, and contamination of the surrounding areas.

The Japanese government is now saying that the cost of the nuclear disaster at the Fukushima Daiichi plant will be over $250 billion.

According to the director of environmental governance for the Pembina Institute, a major accident at the Darlington, Ontario nuclear plant east of Toronto, near my riding of Hamilton Mountain, could cause damage in the range of an estimated $1 trillion. One billion dollars does not even come close to being adequate, and taxpayers will be on the hook for the difference. The U.S. on the other hand has a cap of $10 billion. Germany, which has experienced the fallout of the Chernobyl meltdown, has an unlimited amount. Many other countries are also moving in that direction of an unlimited amount of liability.

Does the government really believe that Canadian lives, properties, and communities are worth less than those of our U.S. and European counterparts? Judging by this legislation, one would think the answer is yes.

Perhaps more than anything else this legislation and the debate around it highlight the outrageous costs and potentially devastating risks of nuclear energy, particularly when we compare it to greener, more sustainable alternatives. For example, the Three Mile Island incident outside Harrisburg, Pennsylvania in 1979 was a relatively minor nuclear accident, but cost an estimated $975 million for the cleanup and investigation. To put the absolute enormity of these costs into context, for the cost of cleaning up Three Mile Island, 1,147,058 100-watt solar panels could have been bought and assembled.

The total subsidies for Canada's pseudo nuclear company, AECL, from 1952 to 2000 were approximately $16 billion. This money could be spent investigating safer methods of energy.

But the enormous costs do not just apply when things go bad. The planned construction of the Fermi 3 plant in Michigan will cost an estimated $10 billion U.S. and take approximately six years to complete. The price of wind power on the other hand is dropping fast and can even be had for as low as 11¢ per kilowatt hour right now. Imagine the cost savings to taxpayers and the lower electricity bills for seniors and hard-working families if we could shift to cheaper, safer, and more sustainable power. On top of the financial expenses, nuclear energy in general is extremely unsafe both for the environment and human life.

There can be no doubt that Canada needs a greener approach to power. In fact, statistics show that Canada ranks 11th in a poll measuring wind power capacity. If Canada expects to be seen as a leader in the world, we need to compete in the field of clean renewable energy.

That is a topic I would love to go on about at some length, but with only a few minutes more available to me here in this debate, I will return to the text of the bill before us today and highlight a few other changes the bill entails.

If the bill passes this time, Bill C-22 would allow Canada to ratify the convention it signed in December 2013 called the International Convention on Supplementary Compensation for Nuclear Damage. That convention would establish nuclear civil liability treaty relations with the U.S., which is already a party to the convention. Important here is that this provides access to supplemental compensation from an international pool of up to $500 million, if that were ever needed by convention participants.

Domestically, the bill would expand the range of damages that could be claimed, and it would triple to 30 years the length of time a person can wait to make a claim for latent illnesses. While this is an improvement, it is clearly not enough.

The Chernobyl disaster is already more than 25 years in the past, and the other report on Chernobyl done by two British scientists in 2006 predicted there would be between 30,000 and 60,000 excess cancer deaths, while the International Physicians for Prevention of Nuclear Warfare estimates that more than 50,000 cases of thyroid cancer are still to be expected. Obviously, in light of this evidence, the 30-year statute of limitations is something that we on this side of the House would want to examine more closely in committee.

A few other points about Bill C-22 are also of note.

First, I would point to a provision that is missing entirely from this legislation. Bill C-22 does not cover any accidents outside of the nuclear plant setting. Oil and mining companies and medical facilities use radioactive materials as well, but they are not liable for any accidents related to their use or disposal. That is a gaping hole in this legislation, a hole that we must try to fill at committee. Either we are serious about protecting Canadians or we are not. I certainly know whose side I am on.

While I am on the topic of reviewing the bill in committee, let me remind my colleagues on the government side of the House that the Canadian Environmental Law Association had requested the federal government to undertake a meaningful public consultation on how the Nuclear Liability Act should be modernized to acknowledge lessons from the Fukushima disaster. Instead, Natural Resources Canada has been privately consulting Canadian nuclear operators on how to revise the NLA. This behind-closed-doors consultation with industry is completely unacceptable. The NLA transfers the financial risk for reactor operations from industry to Canadians. It is imperative, therefore, that Canadians be consulted.

The former minister of natural resources, who now serves as the Minister of Finance, did promise that there would be plenty of time for consultation with the public. He said:

Once a new bill is introduced, members of Parliament will have the opportunity to call witnesses before committee to provide comment and debate the legislation line-by-line.

I trust that the new Minister of Natural Resources will honour his colleague's commitment and will not cave in to his House leader's draconian predisposition to shut down all debate. But as always, the proof will be in the pudding, and I do not expect we will get a clear answer on that here today.

Returning to the bill itself, I do want to point out a few other provisions. The bill does set up a quasi-judicial claims tribunal, which, if needed, will handle damage claims in the event of an accident.

Second, the bill stipulates that only half of the $1 billion liability coverage for nuclear operators will have to be covered using traditional insurance. Operators will be allowed to put up other forms of financial security for the remaining $500 million.

Third, it is the Government of Canada that will provide some of the coverage for lower risk nuclear facilities, such as smaller research reactors.

Last, it bears pointing out that the bill mandates a review of liability amounts at least once every five years. While the five-year review is certainly an important safety valve giving Parliament the opportunity to re-evaluate the adequacy of the $1 billion liability limit down the road, I think it is important that we do our level best to get it right the first time. It is our job as legislators to protect the interests of Canadian.

Frankly, if the government is so convinced that nuclear power is a mature industry, then it is an industry that can and must pay for itself. Instead, the bill is just one more corporate handout by making taxpayers liable for nuclear risk. Taxpayers should not be on the hook for subsidies to nuclear energy over other renewable power sources. Other countries certainly seem to agree with me on that and have decided that their citizens deserve much higher protection in the event of a nuclear accident. Why will the Conservatives not offer Canadians that same protection?

I will wrap up by reiterating my bottom line on the bill. First, if the government truly believes in the polluter pays principle, then taxpayers should not hold the risk for these energy projects.

Second, if we measure risk correctly and assign liability, then industry will improve its safety practices, reducing the likelihood of catastrophic accidents.

Third, we have to study global best practices and ensure that the federal government puts Canadians first.

Fourth, the Canadian government should prepare a comprehensive assessment of the risks posed by nuclear power plant operations in Canada, and the opportunities for reducing that risk and the accompanying risk costs and risk reduction costs.

Fifth, we must engage publicly with a wide range of stakeholders to discuss risks and options to improve nuclear liability in Canada. We must have comprehensive public hearings on the bill.

Sixth, we must review the liability regime regularly moving forward to make sure that our laws are up to date. It is completely unacceptable that successive Conservative and Liberal governments have waited decades to address this. Canadians deserve so much better than that.

I would just conclude by saying that while the bill before us today talks about who will clean up after an accident, what Canadians really deserve is a government that puts their interests first. That means a government that understands that what we need is an offshore and nuclear liability regime that focuses on ensuring that these kinds of disasters never happen in the first place. That is real leadership and the kind of leadership Canadians can expect when they elect an NDP government in 2015.

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

Mr. Speaker, to begin, I would like to congratulate my colleague on his new role. I hope that bringing new blood to cabinet might result in a new approach.

I would like to hear the minister's thoughts on one point. We know that many of the government bills stealthily confer additional discretionary powers on various ministers.

The same thing is being done with Bill C-22. In fact, the bill provides for ministerial discretion to reduce absolute liability levels to below $1 billion. The level is being increased from $75 million to $1 billion, so it seems like a tremendous step in the right direction. However, a few lines later, we note that the minister can make changes at his discretion.

What does the minister think of that measure, which allows him to rule unchecked?

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, let me begin by congratulating the member for Kenora for becoming the Minister of Natural Resources. I certainly look forward to working with him, not just on Bill C-22, but on all of the files in the portfolio.

I do regret that the minister started his new career by pointing fingers at the NDP for ostensibly holding up bills in the past, in particular this bill on nuclear liability, when in fact that is a bit of revisionist history. I would remind the member that the truth is that the Prime Minister killed his own legislation, in 2008, when he ignored his own fixed election date, and, in 2009, when he prorogued Parliament. He let Bill C-15, the predecessor of Bill C-22, sit around for a year, until the 2011 election.

Let me move on to a question this morning. I am pleased to see that while we have been revisiting this bill for the fifth time, the government has actually increased the liability limit from $650 million to $1 billion. However, there are a number of countries that believe there ought not to be a cap on liability at all. Some of those countries include Germany, Japan, Sweden, Finland, Denmark, Austria, and Switzerland, all of which have unlimited liability when it comes to nuclear power plants.

I believe, and I think my NDP colleagues all believe as well, that liability has to be strong enough so that a nuclear or offshore disaster never happens and that operators put the best safety measures into place.

I wonder whether the minister would, first of all, comment on why the government chose to limit liability at just $1 billion and, second, whether he would be agreeable in committee to looking at expanding that liability limit to be more in line with other international standards.

[Greg Rickford, Conservative, Minister of Natural Resources and Minister for the Federal Economic Development Initiative for Northern Ontario]

moved 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 second time and referred to a committee.

Mr. Speaker, I want to take this opportunity to thank my constituents from the great Kenora riding for their support over the past almost six years and in this capacity to serve them as the minister responsible for natural resources.

I want to take this opportunity today to highlight our government's action on energy safety and security in Canada's offshore and nuclear energy industries.

Our government is determined to maintain a world-class liability regime in Canada's offshore and nuclear energy industries.

We are responsible for ensuring the safety and protection of Canadians and our environment. We are committed to authorizing only development that can be done safely.

One of the key elements of the legislation would raise the absolute liability limits in both the offshore and nuclear sectors to $1 billion. These changes would bring Canada's offshore and nuclear liability limits in line with the international community. This important measure would be proactive action to ensure that if there were an accident, taxpayers would not be on the hook.

For oil spills, these changes would help further strengthen safety and security to prevent incidents and ensure a quick response in the unlikely event of a spill.

In our Speech from the Throne, we were clear. We will enshrine the polluter pays principle in law. We also committed to increasing the required liability insurance and setting higher safety standards for companies operating offshore.

Bill C-22 would achieve these goals.

Regarding the management of Canada's offshore oil and gas industry; as we know, Canada's booming offshore oil and gas industry has transformed the economy of Atlantic Canada. The offshore industry has pumped billions of dollars into Canada's economy and provided thousands of employment opportunities. Offshore development is currently one of the fastest-growing sectors in Canada. Right now, there are five major projects currently producing in the Atlantic offshore.

As my hon. colleagues know, Canada's environmental record in the Atlantic offshore is already very strong.

Our responsible development plan strengthens environmental protection by focusing resources on reviews of major projects.

Our government has put forward new fines to punish those who would break Canada's rigorous environmental protections. We have also increased the number of inspections and comprehensive audits of federally regulated pipelines. What is more, we are bringing in tough new measures for oil tankers, to ensure the safe transport of our energy resources through our waterways. These measures include the introduction of the safeguarding Canada's seas and skies act and the formation of an expert review panel to examine Canada's current tanker safety regime and propose ways to strengthen it. Building on these measures, our government is taking important, tangible steps today to make our already-robust offshore liability regime even stronger.

As many of my Atlantic Canadian colleagues know well, the Government of Canada shares the management of the Newfoundland and Labrador offshore area and the Nova Scotia offshore area with both of the respective provincial governments. Offshore oil and gas projects, therefore, are regulated by either the Canada–Nova Scotia Offshore Petroleum Board or the Canada–Newfoundland and Labrador Offshore Petroleum Board. Each board ensures that operators exercise due diligence to prevent spills from occurring in Canada's offshore. With this in mind, we have worked closely with these two provinces to update and expand legislation to ensure that Canada's offshore rules remain world-class.

Regarding the key changes to offshore liability, this legislation would ensure that the liability limits reflect modern standards. The current offshore petroleum regime specifies that operators have an absolute liability for up to $30 million. Given the value of the resource and the capacity of those who develop it, all members can agree that this amount needs to be raised. That is why we would increase the benchmark by 33 times its current level to an absolute liability limit of $1 billion. Doing so would bring Canada in line with similar regimes in Norway, Denmark, and the United Kingdom.

We also need to ensure that companies operating in the offshore have the financial capacity to meet these and their obligations. Before any offshore drilling or production activity can take place, companies must prove that they can cover the financial liabilities that may result from a spill. Typically, the financial capacity requirements can range from $250 million to $500 million, with $30 million to be held as a deposit to work in the Atlantic offshore and $40 million to work in the Arctic. This deposit is held in trust by the offshore regulator as a letter of credit, guarantee, or bond.

With these legislative amendments, the minimum financial capacity would be raised to $1 billion, in line with operator’s absolute liability. Regulators may require higher amounts if deemed necessary and, in addition, we would increase the amount of funds to which operators have unfettered access to $100 million per operator. Industry would also have the option of setting up a minimum $250 million pooled fund, and operators could choose to use membership in such a fund to serve as their financial responsibility. We would also establish a cost-recovery regime for regulatory services provided by the offshore boards. I am pleased to say that the companies operating in Canada's Atlantic and Arctic offshore would be subject to one of the highest absolute liability standards in the world.

Regarding the nuclear industry, the second important part of this legislation focuses on updating the absolute liabilities for nuclear energy. In fact, it is one of the main reasons that our electricity supply is one of the cleanest in the world; 77% of Canada's electricity mix is non-emitting. Our government recognizes the importance of the industry to the Canadian economy. The industry generates nearly $5 billion a year in revenues and provides jobs for more than 30,000 Canadians. This is the number of jobs that the New Democrats want to destroy with their anti-nuclear position. We know that nuclear energy can be generated safely. In fact, Canada's nuclear safety record is exemplary and there has never been a claim under Canada's Nuclear Liability Act.

Our nuclear industry has sound technology, a qualified workforce and stringent regulatory requirements. However, as a responsible government, we must ensure that our security system is up to date and able to respond to any incidents that may occur.

The responsibility for providing a liability and compensation regime, a solid framework to protect Canadians and provide stability to this important industry, falls under federal jurisdiction. The Government of Canada, then, has a duty to all Canadians to assume its responsibilities in this area, and we are committed to doing so.

Although the basic principles underlying Canada's nuclear liability legislation remain valid, the Nuclear Liability Act is nearly 40 years old. It needs updating to address issues that have arisen over the years and to keep pace with international developments. Bill C-22 serves to strengthen and modernize Canada's nuclear liability regime. The proposed legislation is a major step forward in modernizing this act. It puts Canada in line with internationally accepted compensation levels and clarifies the definition for compensation, spelling out exactly what is covered and the process for claiming compensation.

This bill is the culmination of many years of consultations involving extensive discussions with major stakeholders, including Canada's nuclear utilities, the governments of nuclear power generating provinces, and the Nuclear Insurance Association of Canada. This is the fifth time that this nuclear legislation has been introduced, and I hope my hon. colleagues recognize the critical need for finally passing this legislation in a timely manner.

Let me be clear. If it had not been for the past filibustering by the NDP, the nuclear liability limits would already have been updated. It is my sincere hope that New Democrats will have a more reasonable approach this time around to modernizing nuclear liability. Bill C-22 significantly improves the claims compensation process, increases the financial liability of nuclear operators for damages, and provides greater legal certainty for the nuclear industry in Canada.

Like the offshore sector, under Bill C-22, the nuclear industry will also see an increase in the amount of operator liability, which would go from $75 million to $1 billion.

A liability of $1 billion balances the need for operators to provide compensation without burdening them with exorbitant costs for unrealistic insurance amounts, amounts for events that are highly unlikely to occur in this country. It is critical to remember that liability must be within the capacity of insurers, otherwise taxpayers would be held accountable for the cost. The $1 billion strikes that balance between protecting ratepayers and holding companies to account in the event of an accident.

Let me assure all hon. members that the new legislation will maintain the key strengths of the existing legislation. Most importantly, it will mean that the liability of the operator will be absolute and exclusive. There would be no need to prove fault, and nobody else would be held liable. Our government would also provide increased coverage for lower-risk nuclear facilities, such as small research reactors at Canadian universities.

Bill C-22 also features other key improvements.

First, Bill C-22 will broaden the definition of compensable damage in order to include physical injury, economic loss, preventive measures and environmental damage.

Second, it would extend the limitation period for submitting compensation claims. The limitation period for bodily injury claims, for example, would be expanded from 10 to 30 years. This would help to address latent illnesses that may be detected many years after an accident or incident. This is another way that our government is continuing to protect Canadians.

Finally, Bill C-22 will establish the authority to implement a simplified process for dealing with claims that can replace the regular court proceedings if necessary. This would allow Canadians to submit their claims more quickly and effectively.

Our government is taking concrete steps to address important issues for the nuclear sector. This includes responsible management of legacy waste; restructuring of Atomic Energy of Canada Limited, AECL; and promoting international trade.

When it comes to nuclear power, we are talking about a global issue that knows no borders. I am very proud to announce that Bill C-22 will also serve to implement the provisions of the International Atomic Energy Agency's Convention on Supplementary Compensation for Nuclear Damage.

My colleague signed the convention and tabled it in Parliament in December. The convention is an international instrument to address nuclear civil liability in the unlikely event of a nuclear incident.

By adhering to this convention, Canada will bolster its domestic compensation regime by up to $450 million by bringing in significant new funding. This would bring the total potential compensation in Canada up to $1.45 billion.

Joining this convention also reinforces our commitment to building a strong global nuclear liability regime. It is important that Canada's legislation is consistent with international conventions, not only financial issues, but also in regard to what constitutes a nuclear incident, what qualifies for compensation and other matters.

These changes will help establish a level playing field for Canadian nuclear supply companies, which welcome the certainty of providing their services in a country that is a member of the convention.

Given that our closest neighbour, the United States, is already a member of the convention, our membership will allow the two countries to establish civil liability treaty relations.

Korea and Japan have also signalled their intention to sign the convention. Once Canada becomes a member, the convention will be one step closer to becoming a reality.

In conclusion, these are just some of the ways that our government is ensuring that Canada is amongst the strongest liability regimes in the world. Bill C-22 provides a solid framework to regulate the offshore and nuclear liability regimes in Canada.

Although an offshore or nuclear incident is highly unlikely, we have to be prepared to deal with such incidents, which could result in cleanup, liability or other costs. Bill C-22 seeks to help prepare for that possibility. Its legislative provisions focus on the responsible promotion and development of our offshore and nuclear industries, which are essential.

In closing, I urge all honourable members to support this important piece of legislation.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I thank the hon. whip for the opposition for her very kind comments about the abilities on this side of the House with regard to procedure. Of course, I am only as good as the team that I have.

However, I will say that one thing I have tried to outline and to make clear over some period of time is that the use of time allocation is very distinct from the use of closure. We have chosen an approach in this government to use time allocation as a scheduling device to set an amount of time that we believe is appropriate for debate on any particular issue, which, as the hon. member in her own comments confirmed, in some cases results in even more time being allocated than is necessary for debate.

One of the benefits, though, is that the time does not have to be used. If all speakers complete their discussion of the subject, the debate can collapse and we can move on to other matters. So, really, no time is to be lost from that approach. It is a very positive thing, one that allows certainty for the benefit of all members about how much debate we will have, when votes will happen, and when decisions will be made. That is the most important thing for us in our work up here: making decisions and getting the job done.

As for this morning, I know that the NDP keeps seeing conspiracies and ghosts behind curtains, particularly the House leader for the NDP, who has that concern.

I think everyone knows that the only time one can move these time allocation motions—and we do not need to have a great command of the Standing Orders to know this—is at the start of government orders, at the start of the day. So I really had no choice.

However, the committee had considerable flexibility, which it did exercise. There was no conspiracy. There was no obstruction.

I hope that the opposition House leader will take the benefit of the two weeks to calm down, hopefully look around, see that there are no people waiting behind every curtain and every tree, out to get him, and that some of the conspiracies he imagines are simply not there. It will lower his blood pressure. It will make his life much more comfortable, in total.

I know that the opposition whip will share that advice from me, with him.

This afternoon we will continue debating Bill C-20, Canada-Honduras Economic Growth and Prosperity Act, at second reading.

Tomorrow, we will conclude the second reading debate on Bill C-25, Qalipu Mi'kmaq First Nation Act.

Then, we will return to our constituencies, where we will have a chance to reconnect with our real bosses.

When we return on Monday, March 24, the House will have the seventh and final allotted day. At the end of that day, we will consider the supplementary estimates, as well as interim supply, so that these bills will be able to pass through the other place before the end of our fiscal year.

The government's legislative agenda for the balance of that week will focus on protecting Canadians. Tuesday, March 25 will see us start the second reading debate on Bill C-22, the energy safety and security act, a bill that will implement world-class safety standards in the offshore and nuclear sectors. That evening we will finish the debate on the motion to concur in the first report of the foreign affairs committee respecting the situation of Jewish refugees.

On Wednesday, March 26, we will consider Bill C-5, the offshore health and safety act, at report stage and third reading. This bill will complement legislation already passed by the provincial legislatures in Nova Scotia, and Newfoundland and Labrador, given the shared jurisdiction that exists in the offshore sector.

On Thursday, March 27, we will have the fourth day of second reading debate on Bill C-13, the protecting Canadians from online crime act. Through this bill, our government is demonstrating its commitment to ensuring that our children are safe from online predators and online exploitation.

Finally, on Friday, March 28, I hope that we will be able to start the second reading debate on Bill C-17, the protecting Canadians from unsafe drugs act, also known as Vanessa's law.

[The Chair, Conservative, Leon Benoit]

Thank you and thank you to all the witnesses for what was an all too short time today. Dr. Chakhmouradian from the University of Manitoba, Mr. Neatby from Avalon Rare Metals, Dr. Schreiner from Saskatchewan Research Council, and Chief Paul from the Eagle Village First Nation, thank you to all of you. We do have your presentations translated, so we have that to refer to.

We will end this meeting, but just before we finish and go on to our next meeting, I would just like to remind all members of the briefing at 11 o'clock on the Energy Safety and Security Act. The full name is a long handle, but you know what it is, Bill C-22. I encourage you all to come, so that we're as well prepared as we can be as we go into debate and eventually receive the bill.

Again, thank you very much to all the witnesses.

This meeting is adjourned.

Energy Safety and Security Act

[Joe Oliver, Conservative, Minister of Natural Resources]

moved for leave to introduce 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.

(Motions deemed adopted, bill read the first time and printed)