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

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

Mr. Speaker, I would like to know exactly what the NDP's position is on offshore gas development. I am sure the people of Newfoundland would like to know as well.

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

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

I will not hide the fact that the NDP has a perfectly coherent position, regardless of the objections he has to questions about offshore oil development or rail or pipeline transportation.

What the NDP objects to is the government’s complacency and the lack of regulatory mechanisms and inspectors. I am not even talking about the processes involved in bringing a project to completion. Basically, the NDP objects to the overall weak regulatory framework and to the fact that industry is allowed free rein.

Self-regulation is tantamount to living in a fantasy world and refusing to face reality. We must not be naive. We must be demanding and demanding is what the NDP will always be.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I am wondering if the member could provide comment in regard to the liability issue. He talked about the $1 billion not being enough, and I can appreciate why he said that.

The question I have is about our universities. There are universities in Canada that do research, and in certain situations they work in nuclear research activities. To what degree does my colleague believe that those universities should be obligated to get insurance policies?

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

Mr. Speaker, I thank my colleague for Winnipeg North for that question.

The reason why I reacted badly to the comment by my colleague from Don Valley West is that I once worked as a physicist. Absolute safety is pretty much incompatible with the overall Canadian framework of a $1-billion liability ceiling.

However, my colleague from Winnipeg North talked about something else. He compared a heavy industry, the nuclear industry and the electricity generating industry, with a much less powerful research reactor. Liability is also clearly different.

That is why I support this bill at second reading. It is important for us to distinguish properly between activity sectors that are quite different and from that point on, to establish liability scales adapted to each individual sector. For that reason, debate on this bill should certainly not be limited.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, since we are talking about liability, I will point out that a railway accident recently occurred in Quebec. Oil was spilled, and it is amazing to see that no one is being held liable for it.

That is amazing. The moment someone arrives with a bill, no one is there to accept it, and it becomes an embarrassing problem. One of the major weaknesses of this bill is that you have to phone a lawyer before you call anyone to clean up, repair and provide compensation. Something is wrong. People are in trouble because someone did not do their job right, and they have to go looking for a lawyer.

I would like my colleague to tell us about that disconnect, about the fact that we in Canada always have to phone a lawyer before calling someone to clean up.

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

Mr. Speaker, I thank my colleague for his particularly relevant comment.

He has shed light on the fact that when we correct deficiencies in the legal framework, in the legal approach or in the compensation framework, it is often already too late. That is really unfortunate. I entirely agree with my colleague on that point.

The problem is much greater and much more fundamental than the solutions that Bill C-22 will provide. That is why we must clearly go further and, more particularly, expand the measures that should be introduced.

[Earl Dreeshen, Conservative, Red Deer, AB]

Mr. Speaker, I am pleased to speak in support of Bill C-22, the proposed energy safety and security act, which would provide a world-class regulatory regime for Canada's offshore and nuclear industries while strengthening protection for Canadians and the environment. Bill C-22 would ensure accountability from these industries and protection for taxpayers if an incident or spill results in cleanup costs and compensation.

The Governments of Canada, Nova Scotia, and Newfoundland and Labrador have worked together over several years to update Canada's offshore safety regime. Bill C-22 reflects this extensive collaboration by focusing on three main areas: prevention, response, and accountability.

Allow me to summarize a few of the key points in each of these areas.

First, with regard to prevention, the bill would raise financial capacity requirements for offshore operators to a minimum of $1 billion. It also would provide authority for offshore boards to impose fines for regulatory contraventions. In the nuclear sector, Bill C-22 would increase absolute liability for compensation for civil damages from $75 million to $1 billion.

In the area of response, Bill C-22 would implement a number of measures to improve spill prevention and response capability. The bill would provide industry with the option of establishing a pooled fund of at least $250 million, and it would permit the safe use of spill treating agents where there is a net environmental benefit.

As far as accountability is concerned, our government is delivering on its promise to enshrine the polluter pays principle in law. Further, we are also clarifying jurisdictional responsibilities for occupational health and safety in the offshore.

These are not stand-alone legislative improvements. Rather, they are part of a comprehensive and ongoing approach to achieve environmental protection in resource development throughout Canada. Our government has been clear. Projects would only be approved if they were safe for Canadians and safe for the environment.

That is why our government has introduced a series of new laws and regulations through our plan for responsible resource development to strengthen environmental protection. For example, we have worked to ensure that the National Energy Board has the necessary resources to increase pipeline monitoring and inspections, so that companies are held accountable. These measures include increasing the number of full audits of federally regulated pipelines, and we have put forward new, significant fines as a strong deterrent against breaking Canada's rigorous environmental regulations.

Our government's record on ensuring that Canada has a world-class safety regime is proven with each of these measures. Yet the opposition voted against each of these improvements.

Offshore, we have taken major steps to enhance the protection of Canada's marine environment. Our government has increased tanker inspections, required the use of double-hulled ships, and improved the navigation tools and ship surveillance used in our coastal waterways.

In addition, a tanker safety expert panel has reviewed Canada's current system and is proposing further measures to strengthen it. After many consultations with stakeholders and aboriginal peoples on the panel's report, last month the Minister of Transport announced our government's next steps in strengthening Canada's world-class tanker safety system.

Many of these new safety and environmental measures are currently being enshrined in law. For example, Bill C-3, the safeguarding Canada's seas and skies act, would strengthen oil spill response, set new requirements for energy facilities, establish new standards for pollution prevention, and introduce substantial monetary penalties to deal with offences. While our current marine safety regime has served Canada well, these new initiatives would help make Canada's shipping standards truly world class. We are working hard to develop support and enforce these standards.

On our east coast, the Government of Canada shares offshore management with two provinces, Nova Scotia and Newfoundland and Labrador. Offshore oil and gas projects are accordingly regulated by the appropriate offshore board, either the Canada-Nova Scotia Offshore Petroleum Board or the Canada-Newfoundland and Labrador Offshore Petroleum Board.

Each offshore board ensures that operators exercise due diligence to prevent spills from occurring in Canada's offshore. With this in mind, we work closely with these two provinces to update and expand legislation to ensure that Canada's offshore rules are among the strongest in the world.

The accord act gives the offshore boards the legal authority to regulate oil and gas activities. The boards evaluate each drilling application for completeness and compliance with federal regulations. As a result, drilling cannot occur unless the responsible board is fully satisfied that drilling plans are safe for workers and for the environment.

Providing a liability and compensation regime to protect Canadians and create stability for this important industry falls under federal jurisdiction. The Government of Canada has a duty to all Canadians to assume its responsibilities in this area, and we are committed to doing so. Bill C-22 would increase the amount of financial capacity companies operating in the offshore must have to meet all liability obligations and it would increase the amount of the deposit companies must provide prior to receiving an authorization for drilling or production. In other words, before any offshore drilling or production activity could take place, companies would have to prove that they could cover the costs that could result in the unlikely event of an incident.

Canada has long depended on the shipping industry to move products from our coastal ports to world markets. On any given day, about 180 vessels operate in Canada's coastal waters. Energy is a big part of this trade. Each year, 80 million tonnes of oil is shipped safely off Canada's coast. On Canada's west coast, tankers have been moving oil safely since the 1930s.

With the phenomenal growth of the oil and gas industry in B.C. and Alberta, marine shipping on Canada's coast will increase substantially in the coming years. We are preparing for this future growth through our efforts today to bolster Canada's safety regime for the maritime environment. Our government is ensuring that the many opportunities for economic growth and prosperity that Canada's natural resources offer are available to all Canadians throughout the country, including aboriginal peoples. Our government's plan for responsible resource development will help achieve this by creating greater certainty and predictability for project investors while at the same time strengthening environmental protections, as Bill C-22 demonstrates.

In conclusion, these are just some of the ways in which our government is taking action to ensure that Canada continues to have world-class environmental protection in resource development. As all members can appreciate, Bill C-22 would provide a solid regulatory framework to safely govern the offshore and nuclear industries in Canada for decades to come. Bill C-22 would ensure that Canada's vast resource wealth can be developed responsibly by putting public safety and environmental protection first.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I want to thank my colleague for his discourse on this bill, but I think he has missed something. He talked about the offshore regime, but when we examine the bill, we find that almost a third of Canada is covered onshore by a liability regime. In the Northwest Territories, the maximum liability without proof of fault or negligence is $25 million onshore. Therefore, it seems that perhaps he needs to spend a little more time to understand this bill. We should be spending more time in Parliament talking about it, because obviously there are things in it that he has not seen yet.

[Earl Dreeshen, Conservative, Red Deer, AB]

Mr. Speaker, having listened to some of the debate earlier, I recognize the fact that this will be going to committee and there will be more discussion. We can take a look at the absolute liabilities we have. We have talked about the Atlantic offshore and the $30 million there for absolute liability and the $40 million in the Arctic, where the member comes from. It is clearly unacceptable that this is the rate it is. With Bill C-22, we would raise that so that it would cover the kinds of concerns people have.

There are a couple of points I would like to mention to the member.

With regard to Canada's responsibilities and the way it handles regulations, I remember that about six or seven years ago, when I was just getting started in politics, I had a chance to talk to some individuals. These people had been around the world, and they said that the best place for regulations and protection of the environment is Canada. The only place that came close was Australia, and that was because it was taking the regulations Canadians had.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I want to pick up on the member's comments regarding the issue of liability. He stated that the government would be open to amendments. A member from across the way heckled, saying, “always open for amendments”, but that is not what we have witnessed from the government over the years.

We in the Liberal Party have indicated that the principle of the legislation is good, and we are encouraged by it, but we believe that it needs to be strengthened. There are certain amendments we believe would provide more strength and would improve the legislation.

I wonder if the member could provide further comment on the degree to which he believes the government is actually open to listening to what opposition members might have to say in regard to amendments.

[Earl Dreeshen, Conservative, Red Deer, AB]

Mr. Speaker, we have gone through numerous consultations with various groups to come up with the proposals we have. Again, here we are at second reading taking this to committee so that things can be discussed and we can bring in different types of witnesses and hear what they have to say.

I believe that when we hear what the witnesses have to say, we will see how the consultations we have had are reflected in the way the legislation has been crafted. I believe members will find that after it goes through the committee stage, we will have a great bill coming back from there too.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, it is a pleasure to join the House tonight in the debate on Bill C-22, a bill the NDP believes should at least get to the committee so that we can hear from the experts and witnesses who know something about this issue of liability when it comes to nuclear projects as well as about what happens in the offshore.

I need to make some passing comment on what my friend just said recently about Canada's state of regulatory protection for the environment and for communities. Systematically, often through omnibus bills, these massive bills the government has been using, it has been pulling out and destroying pieces of that very same environmental protection law the government says is the best in the world.

The government keeps ripping out pieces of the environmental protection laws we have in place, such as the Fisheries Act and the Canadian Environmental Assessment Act, and then continues to say that it must be the best in the world. Then it rips out some more and says that its is global-leading environmental protection. Then the government rips out some more and says that it must all be great. That is, of course, not the case. The government has been enabling the speedy approval of oil and gas projects over the last number of years with very little public oversight of any little stipulations.

We can all recall that it was the Prime Minister who got up after getting elected to government and said that within a short time, Canada would become a global energy superpower. That was in 2006. Eight years on, how are the Conservatives doing? Oh, my goodness; they are yelling at the U.S. president because they do not like his delay. They cannot get Enbridge northern gateway past the communities and gain the social licence they need. They have controversies on every single energy project they propose and demand that Canadians just accept them.

When Canadians raise any questions, this is the government's approach to this point when it comes to oil and gas projects. It calls Canadians who raise objections foreign-funded radicals. The Conservatives call them enemies of the state. This is the Conservative attempt to woo Canadians to oil and gas development in Canada. It has had the opposite effect.

It is no wonder that the oil lobby, CAPP, the Canadian Association of Petroleum Producers, just a couple of weeks ago broke away from the Conservatives' public relations strategy, because it was toxic. It was hurting the industry so much that it said it could no longer be associated or in line with the Conservatives' strategy when it comes to speaking to the public. It is going to go its own way. It took them a number of years, but the oil lobby is pretty smart and has a lot of money.

Let us talk about the specifics of the bill. This is of incredible importance to me because I represent northwestern British Columbia, and we are in the target zone. We are ground zero for a bunch of the Conservatives' more misaligned schemes when it comes to energy development.

Liability and limited liability, as in this bill, are of great interest to us. There is a curious thing I hear, both from progressives and from very conservative constituents, when it comes to who pays the costs when there is an oil disaster. Both from the right and the left, there is a curiosity as to why there is a liability placed over top of oil companies at all.

When a limit is put on the liability to which a company is exposed, what the government is effectively saying is that the company can be sued, but only up to a certain point, and beyond that, there is cap and it cannot be held responsible or made to pay compensation beyond that cap.

One would wonder, of all the industries in the world, why the oil and gas industry would be the one to receive what is in effect a subsidy from the public. It is a subsidy because any cleanup costs beyond that cap are picked up by the Canadian public.

It makes no sense. It does not happen to other industries, except for nuclear, which is also included in this bill, but it happens for oil and gas. Why is that? It is because the oil and gas industry has really good lobbyists. One told me a funny little joke the other day. I guess it is a joke within the oil lobbyist circle. He said that when the oil lobby wants the Conservative government to know it wants something, it does not phone; it just rolls over in bed and whispers in the government's ear.

While I thought that image was a little disturbing, it seems to be true. When it comes to the Conservative government, whatever oil wants, oil gets.

With the liability question that is front of us, let us take nuclear for just a second. Let us step away and look at the process we are under. We see that this bill, which has massive implications for the Canadian people, is under time allocation. That means that the government has decided to restrict the debate.

All through the back and forth on this restriction of debate, the Conservatives have said that they want to show up to work, and yet the Conservatives have missed 11 speaking spots so far. That is 11 shifts they have not shown up for.

In most Canadian workplaces, if workers have a shift that they do not show up to, there would be some sort of consequence. I know that as an employer, I would be somewhat suspicious of employees who said they wanted to work hard and yet did not show up to work, and so be it.

On nuclear liability, for example, the Conservatives previously attempted to raise the liability cap to $650 million, and the New Democrats were the only ones in this House—and I remember, because I sat on the committee—who said that $650 million might be a little low. We suggested $1 billion just as a good place to start. The Conservatives and Liberals at the time said that was outrageous, that we would kill the nuclear industry in Canada, that we would make it unaffordable, that it was irresponsible.

Then Fukushima happened. Does it not often seem an unfortunate reality that significant and painful disasters have to occur before governments suddenly snap awake and realize? As of today, current costs of that one disaster in Japan have hit $58 billion.

The Conservatives will wave this bill around and say they are being tough and that $1 billion is just an extraordinary amount of money for a company to hold. However, when things go wrong at a nuclear plant, they go really wrong. People die and get exposed to radiation, and all sorts of serious consequences happen to people in the area.

The idea that the public would pick up the cost beyond $1 billion is one that we found questionable. We raised this before, and the Conservatives and the Liberals said it was a terrible idea. Then suddenly they adopted that terrible idea. They now call it a great idea. I guess that is how ideas transform from “terrible” when they come from the opposition to “great” when they come from the government.

Let us move over to offshore oil and gas liability, because that is also discussed here.

To put it in context, the cost of the massive and disastrous spill that happened in the gulf as a result of BP's actions is at somewhere near $28 billion in damages so far. I was just looking this up online, and some of these estimates may double or triple that amount, approaching $70 billion in compensation for damages because it was such a terrible thing. One of the regions the government wants to drill in is the high Arctic and the Beaufort, and one of the stipulations that sits on the books in Canada right now is that the company that is drilling must have the capacity to drill what is called a “relief well” in the same season.

It was only a relief well, as people will remember, that was ultimately able to stop that terrible disaster in the Gulf of Mexico. The workers tried absolutely everything to stop the oil from coming up, but it was only by drilling a second well and then going below where it was being released that they were eventually able to get enough cement and solids in there to be able to cap it.

In the Arctic, the oil companies came to the current government and very quietly and secretly said, “Let us get rid of that stipulation”. Why did they want to get rid of the stipulation in the Arctic in particular? It was because having the capacity to drill a relief well in the same season is not possible. The government and industry know that, yet they want to drill in the Arctic.

This is a strange irony that because of the results of climate change and inaction from governments like this Conservative government, we have seen Arctic ice melt and recede at an incredible pace. More of the Arctic is becoming exposed, which has a compounding effect. As we all know, the more ice retreats, the worse the situation gets.

The Conservatives' reaction to such a disaster and its impact on such a sensitive region as the Arctic was to celebrate. They said, “Now we can go and drill. Is that not so exciting?”, thereby adding insult to injury by pulling more oil up out of the ground. We know we have left behind all the cheap, accessible, and relatively safe oil in the world. We have moved over. We are now dealing with very expensive and much more dangerous oil that is harder to get at.

It is unfortunate that it requires a disaster, a significant news event that people cover from around the world.

The idea that we maintain is that if the profits are being held and enjoyed by the private sector, then why, for goodness' sake, would the risks be taken on by the public? The Conservatives want to privatize the profits but socialize the risks.

We argue this on the issue of temporary foreign workers and we will argue it on this issue as well. The free market has a call and response. The oil game is sometimes a bit of a risk and a roulette wheel, and if the companies want to play this game, if they are going to risk our environment, our communities, and our economy, then they should bear the cost of that risk. The public should not be picking up the tab.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I am very glad to have an opportunity to put some questions to the hon. member for Skeena—Bulkley Valley because, unlike the hon. member for Red Deer, I suspect he may have read Bill C-22 and knows there is nothing in the bill that has anything to do with tankers or a safety regime for shipping oil in tankers. I mean no disrespect to the hon. member for Red Deer. I think he was handed a speech he had not written that spoke to a lot of measures that have nothing to do with Bill C-22.

The tanker methods and measures that were mentioned by the hon. member for Red Deer, such as double-hulled tankers, which are not in Bill C-22, have been required globally since 1978. I think there should be a statute of limitations on how often this administration can announce a global standard that has existed since 1978, but which, by the way, is not mentioned in Bill C-22.

Let us talk about Bill C-22, which is a regime for liability for drilling in the offshore. That is what it is about. It sets limits that, as the hon. member for Skeena—Bulkley Valley has pointed out, will do absolutely nothing to deal with a major disaster such as may happen if they go ahead and drill a deepwater oil well called Old Harry in the Gulf of St. Lawrence, where no one should be drilling for oil.

I want to ask my hon. colleague one specific question, because I find it fascinating. On page 35 of Bill C-22, we find this wonderful statement about violations of the act. It states, “The purpose of the penalty is to promote compliance with this Act and not to punish”.

What does he make of that?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, that statement buried within the bill tells us that certainly the Conservative government would never want to punish anybody in the oil sector. If people happen to donate to an environmental charity or be part of a social justice group, they would all be looking for punishment from the Conservatives, but if they are in oil, they are okay.

The association to risk is what is important here. If people could go to a casino and gamble knowing that no matter how much they gambled, they could only lose $100, it would probably influence the way they gambled. They would bet lots of money, knowing that there was no way for them to lose more than this maximum amount.

I do not suggest that drilling for oil is exactly like going to Vegas, but it has some similar qualities. The oil companies will say it is a one-in-a-thousand chance. They are into risk, but if a cap is placed on that risk, it encourages behaviour that we do not want, which is high-risk behaviour.

Finally, the member made the point that a lot of the Conservatives' speeches are about tanker traffic and pipelines and so on. What the Conservatives are doing is so obvious that it is a bit unseemly. They are trying to soften the ground for the announcement that is coming with respect to Enbridge and the northern gateway. That is what this is about. They want the public to believe that somehow double-hulled tankers are going to save the day. They have been in place for more than a generation, and suddenly the Conservatives are going to talk tough on oil. No one is going to believe them, because it is not true.

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

Mr. Speaker, I have a couple of oil spill examples for the member that he could maybe comment on.

One oil spill, of course, was Lac-Mégantic. The railroad that was licensed to operate by the government was licensed to operate on the basis of $25 million in liability. That is all it was required to carry to have a licence. It was clearly not enough. We know the result: the taxpayer is on the hook for the rest.

The other example is a gentleman in Fredericton, New Brunswick, who several years ago bought a home which, he discovered, had a leaky oil tank in the back yard that had been leaking through the town. The several million dollars in damages were entirely the responsibility of the homeowner. There was no liability cap. There was no government paying the bill. That is the reality of what goes on with oil spills in Canada: an individual is in big trouble, but companies are okay.