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

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, I am very excited to be getting up to speak on Bill C-22.

The energy safety and security act should actually boost Canadians' confidence in what is already a very world-class safety and regulatory regime for our offshore and nuclear industries.

Bill C-22 is important, and it is important to the marine environment that we all love. It demonstrates here today, with concrete proof, that our government is committed not only to protecting the safety and security of Canadians but also to protecting our environment.

Let us make no mistake: we are the only party in this House of Commons that is looking out for our environment and for our sustainable energy development. This energy development pays many of our bills, bills for education, pensions, and health care, things that vastly increase all Canadians' quality of life.

As we have said, under our responsible resource development plan, the development of our natural resources will proceed only, and I highlight this, if it is safely done in a way that is safe for Canadians and safe for our environment.

I want to give a little background.

Management of offshore oil and gas in this case is carried out jointly by the Government of Canada, the Province of Nova Scotia, and the Province of Newfoundland and Labrador. The Government of Canada has been working very co-operatively with these two provinces to create a really strong offshore safety system for oil and gas exploration and operations, and it is world class.

That is not just rhetoric. In fact, an independent consultancy group, PFC Energy, rated Canada, the U.K., Norway, and Australia as the world leaders in offshore regimes, in contrast to what the NDP was trying to feed us a few minutes ago.

This is based on our unique combination of extensive regulations and processes. Bill C-22 is going to take those even further. The energy safety and security act reflects the continued collaboration with the provinces and really strengthens regulations in three main areas. Those are prevention, response, and accountability.

Today, given my limited time, I am going to focus on response, and pollution response specifically.

Bill C-22 enhances our response capability by adding what we are calling a new tool to the emergency response tool kit in the very unlikely event of a spill. That tool is spill-treating agents.

I will address what spill-treating agents are, why they are a very effective response option, and the stringent safeguards this bill puts in place so their use is environmentally safe.

I am sure all members in the House would agree with me on one thing, which is that in a world-class response regime, it is critical to have the capability to respond in the most effective way possible if there is ever an incident. A key component of Bill C-22 involves giving responders the very best technology and scientific advancements available so that they can have that swift and effective response.

Spill-treating agents are scientifically determined to be the best way to mitigate the environmental effects if there is a spill. Of course, our aim is to prevent any spills, and Canada does have an excellent track record. In fact, the vast majority of spills are under one litre. That is right: under one litre. I think it is important that Canadians know that so they can put this issue in context.

Our largest spill, regrettably, was 1,000 barrels at Terra Nova in 2004. The next-largest Atlantic Canada spill was just 38 barrels. That lets people know what we are dealing with here.

No spill, of course, is one we want to see, but when used appropriately, generally within the first 12 hours, spill-treating agents can reduce the impact of an oil spill on the environment. When these substances are applied to the oil spill, they change the behaviour of the oil so that they can help control the path that the spill is going to take and they can mitigate the effects of the spill on the coastal or marine environment. They will also assist in the natural process of biodegradation.

Spill-treating agents are not new. In fact, they are an accepted part of the offshore oil and gas safety regime in a number of countries with regimes similar to Canada's, including the United States, the United Kingdom, and Norway.

At present, spill treating agents are not used here in Canada, but in 2013 the tanker safety expert panel, an independent panel that was commissioned by Transport Canada, recommended that the government approve the use of these spill treating agents. Therefore, with this bill today we are accepting that recommendation. We believe it really does make sense. I should stress that these agents would only be used if their use would result in an overall net environmental benefit.

With that in mind, there are four conditions we have put in place in the bill. These agents could only be used if the conditions are met. First, the spill treating agent must be on an approved list prescribed by the government. Second, the spill treating agent must be included in the operator's spill contingency plan, which must be approved by the offshore regulator before the operator begins operations. Third, the regulator's chief conservation officer, who is an individual with a wide range of powers, has to determine that the use of the spill treating agent is really likely to achieve this environmental net benefit. Fourth, the spill treating agent has to be used in conjunction with the regulations and conditions that are imposed by the chief conservation officer I just spoke about.

I will just explain these conditions in a bit more depth. The first condition states that the spill treating agent has to be on a prescribed list. The minister of the environment, not the minister of natural resources, would actually establish this list based on scientific evidence regarding the potential for these agents to provide an environmentally beneficial effect. It is setting that bar very high.

The second condition is built into the operating licence. Every operator has to submit a contingency plan in order to actually obtain an operating licence. If the operator wants to use a spill treating agent, it has to be included in that plan. The regulatory bodies here are the Canada-Nova Scotia Offshore Petroleum Board and the Canada-Newfoundland and Labrador Offshore Petroleum Board. Unless one of these two boards determines that the use of the spill treating agent is likely to achieve this net environmental benefit, it would not be accepted as part of the spill contingency plan.

The effect of all this is to require really careful consideration of whether the spill treating agents are actually appropriate and environmentally beneficial, both at the front end of the planning process, as well as later on in the planning process when an event might actually happen. This planning would also allow for informed decisions to be made quickly, because in the event of a spill we want to act fast, so that we can contain it.

The third condition, that the offshore board has to determine that the use of the spill treating agent must be likely to achieve an environmental net benefit, is a way to verify that the response options that are put into that plan at the beginning are actually going to be appropriate on the scene, as every spill has different conditions. It would be assessed on both ends. There are a lot of variables that can be present at the time of a spill that might make the agents appropriate or not. They are things like waves and tides and how much the product might be dispersed.

The fourth and final condition is that the spill treating agent would have to be used in accordance with the regulations and any additional conditions that are imposed by the chief conservation officer. This gives some flexibility to further fine tune the conditions on the scene as our use of scientific and technical know-how evolves.

In conclusion, spill treating agents are part of a comprehensive toolkit of spill response techniques. Responders have indicated that they want them in their toolkit. Currently, the mechanical techniques they are using that we are most familiar with, booms and skimmers, can be quite effective but superior results can often be gained by using these spill treating agents.

Bill C-22 provides numerous checks and balances, which I have gone through, to ensure they would only be deployed when their use would be of a net environmental benefit. The commissioner of the environment and sustainable development, in his fall 2012 report, supported these measures.

Bill C-22 is one more reason Canadians can have confidence that their government is diligently protecting all of our interests in developing offshore oil and gas and protecting our environment every step of the way. I ask my hon. colleagues opposite to join us in supporting Bill C-22 at second reading so it can move on to committee.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, I know that the member for Calgary Centre dealt primarily with oil and gas, but my concern is about the nuclear side of this bill.

One of her colleagues earlier suggested that the amounts proposed in this bill would bring Canada in line with Europe. However, our limitation would be $1 billion for a nuclear accident, while the U.S. limitation is $12.6 billion and Germany, Japan, Sweden, Finland, Denmark, Austria, and Switzerland have unlimited liability. There is no liability.

Is putting a liability cap on something that is potentially so dangerous not a way of subsidizing an industry? Is that not a negative consequence for the Canadian taxpayer?

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, I am very surprised to hear the NDP worried about the taxpayer, but I am delighted to answer the question.

I have a particular interest in the nuclear industry, because I covered it as a natural resources reporter. I can tell members that this $1 billion is the right balance between providing adequate compensation for citizens if there is a nuclear incident and also holding companies to account.

We are moving to the polluter pays model. This limit is well above the liability limits that are being imposed on nuclear operators in many countries.

The NDP is never happy until it can actually shut down all of our industry in Canada.

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Speaker, I am going to ask the same question of this member as I did of the previous Conservative speaker.

The Conservatives are somewhat delusional in having Canadians believe that they care at all about the environment. They are outliers, not just in Canada, but throughout the world in their inattention to the reduction of greenhouse gases.

Now, the member would have us believe that somehow this legislation is the panacea to protecting our environment.

The previous NDP member asked about liability. It cost close to $8 billion to clean up the Gulf of Mexico after the BP spill. Somehow, she thinks that $1 billion is an acceptable amount to Canadians as a limit of liability.

I would ask her very specifically, because she claims that it is a balance, if she can tell us how the amount of $1 billion was arrived at, when other countries have vastly larger limits and other spills have cost vastly more than $1 billion.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, I think the member opposite, unfortunately, is using the Justin Trudeau model of “budgets balance themselves”. This is the party that—

[Frank Valeriote, Liberal, Guelph, ON]

You cannot mention Justin Trudeau.

[The Acting Speaker, Conservative, Bruce Stanton]

Order, please. This is just a reminder to the hon. member.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, I am sorry. I apologize.

Greenhouse gases do not go down by themselves. The member opposite should know that the government's record is reducing greenhouse gases. We are more than halfway on our way to meeting our emissions targets, while the greenhouse gas levels went up 30% under the Liberals opposite.

The safety record in the Canadian offshore is absolutely phenomenal. We have a phenomenal track record. We have basically never had a consequential spill on our west coast. On our east coast, I went through the two spills: one was of 1,000 barrels and the other was of 38 barrels.

Believe me when I say that $1 billion is plenty, and it meets the criteria that are being used in other countries around the world, and exceeds them in many instances.

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

Mr. Speaker, it seems to be that, here in Ottawa, we receive officials from all across the north who are coming here because they want to see that their local input and local priorities can go forward. We have passed many bills in the House to help support development and to help support investment.

Obviously, there are many cases where Canadians want to see increased jobs and growth, but also increased environmental sustainability. The member has brought up many points in her speech that, as she said, strike a balance. For example, there are many opportunities in the north where small hydro projects or small nuclear projects may allow a resource development community to be able to open up new opportunities.

Does the member feel that this piece of legislation would help those kinds of opportunities? Again, these new kinds of plants—for example, nuclear facilities in France—require more updated laws. Would these kinds of opportunities, in the member's estimation, come along with this bill's passage?

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, of course they will, and we heard some very interesting testimony at the natural resources committee recently about how energy development in Canada has actually extended our life spans. It has resulted in the reforestation of much of this country, because we used to take all of our fuel straight off the surface of the earth and cut down all the trees. Now, because of advancements in oil and gas and nuclear, we actually are living in a much greener country and on a greener planet than we used to.

Of course, we cannot go without mentioning our aboriginal Canadian citizens, because we are specifically targeting to work with them. We have been consulting with them and have heard that in resource development, they are often a community that can really benefit from this kind of activity.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, I am thankful for the opportunity to speak in support of our government's proposed new legislation to increase accountability in Canada's nuclear and offshore industries.

Before I continue, I would like to announce to all present that I will be splitting my time with the valued and intellectual member for Yukon, who sits with me on the natural resources committee and does an absolutely amazing job standing up for Yukoners and their natural resource sector and does a much better job than the previous member of Parliament for that region certainly did.

As the Minister of Foreign Affairs has responsibility for Canada's international treaties as well as nuclear non-proliferation policy, he has stressed the importance of bringing Canada into an international nuclear liability convention. This convention would facilitate trade among nuclear power manufacturers while providing for streamlined compensation in the event of a nuclear accident in a country that is a party to the treaty. This is important to Canada, where 15% of electricity is generated by nuclear power. The mix of nuclear, hydro, wind, and solar-powered generation means that 77% of the electricity produced in Canada emits no greenhouse gases. We are number one in the G7 in this regard.

To advance Canada's intention to join an international nuclear liability and compensation regime, the Minister of State for Foreign Affairs and Consular, the hon. member for Blackstrap, signed the convention on supplementary compensation for nuclear damage, or the CSC, in Vienna, in December 2013. I would like to talk about some of those benefits.

With Canada's having achieved that important milestone, let me emphasize that the passage of Bill C-22, the energy safety and security act, would allow Canada to ratify and fully join the convention on supplementary compensation for nuclear damage. I should note that Canada's signature on the treaty has encouraged Japan and South Korea to accelerate their approval processes for joining.

Once one of those countries joins the convention, the combined nuclear power capacity of treaty members will, according to the requirements set by the convention's drafters, be sufficient for the treaty to enter or come into force. This would allow Canada's nuclear trade with the U.S.A. and other treaty member states to flourish. It would establish absolute certainty that liability lies with the operator in the event of a nuclear incident. This clarity would allow manufacturers of nuclear power components and systems in member states to export without the worry of liability that may otherwise impede trade.

Ratification of the convention on supplementary compensation for nuclear damage would offer Canadians two additional pools of international funds for compensation up to $1.45 billion in the event of a nuclear incident. Ratification would also provide exclusive jurisdiction of the Canadian court in the case of a nuclear accident in Canada causing damage internationally. As noted, the convention on supplementary compensation would also channel liability exclusively to the nuclear operator of the site where a nuclear accident occurs, thereby providing business certainty to the many nuclear supply chain companies that add value to the Canadian economy domestically and abroad.

As a treaty member, in the event of a nuclear accident outside Canada, Canada would have its liability limited to $23 million per event, and it would be recovered from nuclear operators in Canada. Taxpayers would be fully protected from any expense. The method of reimbursement to the federal government by the nuclear industry for any amount paid out would be established by regulation prior to Canadian ratification of the convention. This has international importance and consequence.

The convention is aimed at a worldwide liability regime in which all states may participate, regardless of whether they are members of any existing civil nuclear liability conventions or have nuclear installations in their territories.

While the convention is open to all states, those with nuclear installations must also be party to the International Atomic Energy Agency's nuclear safety convention. Canada ratified that convention in 1995 and since then has been a leader in nuclear safety, transparency, accountability, and best practices at the triennial review meetings.

Canada's ratification of the convention on supplementary compensation for nuclear damage would be a favourable response to international calls, led by the U.S. government and the IAEA, for countries to establish a global liability regime. As the world continues to recognize the clean energy advantages of nuclear power, the importance of such an instrument as this only increases, and of course, there are domestic benefits as well.

The convention would also facilitate nuclear development for Canadian provinces, especially Ontario and New Brunswick, which have nuclear power generating programs already.

Within the G7, Canada and Japan are the only members that do not belong to a major international civil nuclear liability regime. This would also be addressed through Bill C-22, and we are confident that Canada's example will help move other countries in the same direction.

This legislation brings Canada up to date with international standards and best practices in the nuclear sector. Our government has made a number of attempts to modernize our nuclear safety system. This is my third Parliament, and I remember the previous iterations of this legislation, and every time, only the NDP opposed improved safety measures.

We on this side of the House support a strong and safe nuclear industry that generates non-emitting electricity. Allow me to quote the Leader of the Opposition. These are the words of the NDP. They are not mine. He stated:

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

Canadians know that nuclear energy can be generated safely while supporting jobs for thousands of Canadians. While the NDP will continue to oppose our efforts to improve the safety of this important industry, we will focus on the safety of Canadians and a safe environment. It is time to move this very important initiative to its conclusion.

[The Acting Speaker, Conservative, Bruce Stanton]

Order, please. Before we go to questions and comments, and I am sure there will be some, it is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Quebec, Consumer Protection.

Questions and comments, the hon. member for Parkdale—High Park.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I take issue with the comments of the member opposite. I first have to say that the NDP's priority is protecting the interests of Canadians and respecting Canadian tax dollars. With that respect comes a real sense of perplexity as to why the government would place a limit on the liability of the oil and gas and nuclear industries. For example, he has just said that the nuclear industry is an incredibly safe industry. If it is a mature and safe industry, then let it pay for itself. Why should Canadians be on the hook for potential liability caused by this mature and safe industry? Other countries have either no limit on liability for these companies or they have limits that are set much higher than those set by the government.

My question to the member opposite is this: why have limited liability? Why leave Canadian taxpayers on the hook for industry disasters?

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, the hon. member who asked me the question left a lot of facts out of that question. For example, she failed to mention that not only is Canada's proposed set target of $1 billion not the highest, but it is also by far not the lowest. There are a number of other countries around the world that have much lower limits.

She also failed to mention that in the United States, for example, which has over five times as many nuclear installations, they have a pooled plan whereby they have individual liabilities for their companies, which when combined form a pooled amount that is far greater than Canada's. We simply do not have that capacity.

The hon. member should have brought up the fact that Japan, before the Fukushima incident, had unlimited liability for its companies. However, no company has the fiscal capacity to deal with a disaster like Fukushima, and the Government of Japan had to step in and deal with it at any rate.

The $1 billion is the right amount. Everyone in the industry who knows what they are talking about accepts it. The only people who do not accept it are the ones who do not know what they are talking about.

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, I want to thank you for giving me a chance to address the bill. It is not that I have not had the opportunity in the past, because I think this is the fifth time this legislation has come forward, and I have been here for at least four of those. It is good to see it finally moving ahead. Through all of those iterations, the NDP has been consistently incoherent.

I want to add to something the member said earlier. Canada does have $1 billion put aside for compensation, and I believe that part of the bill deals with signing the convention on supplementary compensation for nuclear damage, which would bring in another half-billion dollars that would be potentially available if it was needed as well.

I would like to know if the member would address some of the limits we find in other countries to see how Canada's limit of $1 billion straight up and that other half-billion dollars that is available through the supplementary compensation fits with what is going on in other countries. I want to note, as the member did, that the Americans have far more nuclear installations. They have a pool there, but their individual operators are actually liable for less than half of what the Canadian operators would be individually. I look forward to his comments.