Bill C-46 (Historical)

Pipeline Safety Act

An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act

This enactment amends the National Energy Board Act and the Canada Oil and Gas Operations Act in order to strengthen the safety and security of pipelines regulated by those Acts.
More specifically, the enactment, among other things,
(a) reinforces the “polluter pays” principle;
(b) confirms that the liability of companies that operate pipelines is unlimited if an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline that they operate is the result of their fault or negligence;
(c) establishes the limit of liability without proof of fault or negligence at no less than one billion dollars for companies that operate pipelines that have the capacity to transport at least 250,000 barrels of oil per day and at an amount prescribed by regulation for companies that operate any other pipelines;
(d) requires that companies that operate pipelines maintain the financial resources necessary to pay the amount of the limit of liability that applies to them;
(e) authorizes the National Energy Board to order any company that operates a pipeline from which an unintended or uncontrolled release of oil, gas or any other commodity occurs to reimburse any government institution the costs it incurred in taking any action or measure in relation to that release;
(f) requires that companies that operate pipelines remain responsible for their abandoned pipelines;
(g) authorizes the National Energy Board to order companies that operate pipelines to maintain funds to pay for the abandonment of their pipelines or for their abandoned pipelines;
(h) allows the Governor in Council to authorize the National Energy Board to take, in certain circumstances, any action or measure that the National Energy Board considers necessary in relation to an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline;
(i) allows the Governor in Council to establish, in certain circumstances, a pipeline claims tribunal whose purpose is to examine and adjudicate the claims for compensation for compensable damage caused by an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline;
(j) authorizes, in certain circumstances, that funds may be paid out of the Consolidated Revenue Fund to pay the costs of taking the actions or measures that the National Energy Board considers necessary in relation to an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline, to pay the costs related to establishing a pipeline claims tribunal and to pay any amount of compensation that such a tribunal awards; and
(k) authorizes the National Energy Board to recover those funds from the company that operates the pipeline from which the release occurred and from companies that operate pipelines that transport a commodity of the same class as the one that was released.

Pipeline Safety Act

[Greg Rickford, Conservative, Kenora, ON]

moved that the bill be read the third time and passed.

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

Mr. Speaker, it is an honour to rise today on behalf of our government to open debate on the pipeline safety act at third reading. Canadians can proudly look at this legislation as another significant step our government has taken in advancing responsible resource development. That is because we stand on the threshold of a generational opportunity to harness our vast energy wealth. We have a unique opportunity to cement Canada's place in the world as a secure, reliable, and responsible producer and supplier of energy. However, we can only take advantage of these opportunities if we choose to make them happen and if we are willing to think big and act accordingly. The stakes could not be higher.

Despite lower world oil and gas prices, we know that the long-term outlook for Canada's energy sector is bright. According to the International Energy Agency, global demand for energy will increase by one-third by 2040. Again, according to the IEA, 74% of this demand will still be met through fossil fuels. Countries such as China, India, and other emerging nations are fuelling this thirst for energy. Even developed countries, like those in the European Union, are eager to diversify both the types of energy they use and who supplies it to them.

Canada is perfectly positioned to seize this moment in time to create the quality jobs, the economic growth, and the long-term prosperity Canadians want for themselves and for their children. We have some of the largest known reserves of oil and gas in the world, the blue chip companies with the wherewithal to bring these reserves to market, the clean technologies and exciting new innovations to do so in ever more sustainable ways, and the world-class pipelines to transport our oil and gas safely and reliably. In fact, as I have proudly noted many times, between 2008 and 2013, 99.999% of the oil, gas, and other petroleum products transported through the federally regulated pipelines in Canada arrived safely. This is an extraordinary record, and most countries would be satisfied that it was enough. However, our government always strives to do even better. Our target is zero events. That is why our focus is on maintaining a world-class and even world-leading pipeline safety system.

As many members know, the National Energy Board was established back in 1959, with a very clear mandate to regulate international and interprovincial pipelines, power lines, and energy trade. Now, some 56 years later, the board is overseeing approximately 73,000 kilometres of pipelines that transport over $100 billion worth of natural gas, oil, and petroleum products every year.

It is important to note that the independent National Energy Board is responsible for the review of new pipeline proposals. The NEB's work is based on an exhaustive study of the science and on extensive public consultations to determine if a project is in the overall Canadian public interest. Furthermore, the board can impose enforceable conditions and has important powers to ensure that pipelines are built and operated in a safe manner. For example, it can issue administrative penalties to pipeline companies and reduce the amount of product allowed through its pipelines, or even shut them down entirely.

However, the board's role does not end with reviewing applications and setting conditions. It also oversees the entire life cycle of a pipeline, from concept to construction, from operation to eventual abandonment. To perform these duties and responsibilities, the NEB conducts ongoing audits, inspections, and emergency exercises. Some 300 such compliance actions were conducted in 2013 alone.

At the Standing Committee on Natural Resources, we heard from a variety of witnesses who support our legislation. For example, the members of Canada's Building Trades Unions take immense pride in their work to ensure construction of the safest pipelines ever built. Other experts, lawyers, and members of the National Energy Board also appeared before the committee and voiced their own support for our goals. There is widespread agreement that the pipeline safety act is an important step in our efforts to maintain the most rigorous pipeline safety regime in the world.

The result is a bill that would inspire even greater confidence in our existing national network of pipelines and that would ensure broader public assurance for new ones coming on stream.

All Canadians from coast to coast to coast should find comfort in this proposed bill. They can rest assured that the energy that fuels their cars, heats their homes, and goes into producing their home electronics and household products will continue to be delivered through the safest energy transportation system possible. Anything less would be unacceptable to Canadians and to our government, period.

This is why the pipeline safety act is built on three key pillars: incident prevention, preparedness and response, and liability and compensation.

Looking first at prevention, our government understands that responsible resource development demands that we take every measure and precaution we can to prevent incidents from ever occurring, and we do. That is why we have proposed amendments to the National Energy Board Act that would build on the steps we have already taken over the past two years. Our goal: to further improve the transparency and operation of the board under its enabling legislation.

We have already increased the number of inspections and audits the board conducts each year, and we have given the board the authority to levy administrative monetary penalties. Our new legislation would add to the current preventive measures.

In addition to clarifying the board's audit and inspection powers, the legislation would also provide greater clarity on when to seek the board's permission before disturbing the ground near a pipeline. This added clarity would help to prevent potentially life-threatening accidents and avoid damage to both property and the environment.

Prevention also depends heavily on the design and construction of our pipelines. That is why the minister has recently asked the National Energy Board to provide guidance on the use of the best available technology in pipeline projects. This includes materials, construction methods, and emergency response techniques.

Second, the pipeline safety act would ensure a robust response in the event of an incident. The legislation would require pipeline operators to have a minimum level of financial resources and to keep a portion of these resources readily accessible for rapid response.

The bill would also allow the Governor in Council to give authority and resources to the NEB to take control of an incident response or cleanup. The NEB would take control if, in exceptional circumstances, the company was unable or unwilling to do so. This means that the government would provide an initial financial backstop to ensure that the NEB had the resources it needed, when it needed them, to complete the cleanup.

In addition, and in the unlikely event that the NEB had to take control of an incident response, the government would also be able to establish a pipeline claims tribunal. Setting up this tribunal would streamline the claims process. In either case, the legislation would provide that all costs and expenses would be recovered from the industry should the board ever have to step in and take charge.

This leads me to the third pillar: enshrining the polluter pays principle in law. We fundamentally believe that polluters, and not Canadian taxpayers, should be held financially responsible for any costs associated with an incident, responsible whether the polluters are at fault or not. For companies operating major oil pipelines, this absolute, no-fault liability would be $1 billion. However, let us be clear. The liability would remain unlimited in instances where they were at fault. It is a new standard that would leave no doubt or wiggle room, no doubt for Canadian taxpayers and no wiggle room for pipeline operators.

The pipeline safety act would also allow the government to go after operators for damage to the environment over the entire lifecycle of a pipeline. This would include even after a pipeline had been abandoned.

The absolute or no-fault liability regime created under the bill would be one of the most robust and comprehensive in the world. In addition to actual losses, all types of damage to the environment resulting from oil spills would be covered by the enhanced regime.

Under Bill C-46, three broad categories of damage could be claimed. The first would cover claims for loss or damage incurred by any person as a result of a spill, including loss of income and future income. In the case of aboriginal peoples, for example, it would include the loss of hunting, fishing, and gathering opportunities.

The second category would cover the cost and expenses incurred by the federal government, a provincial government, aboriginal governing bodies, or any other person in taking action in response to a spill. This would include recouping the costs incurred in responding to or mitigating the damage from an oil spill.

The third category would cover claims by the federal or provincial governments for the loss of what is referred to as the non-use value relating to a public resource that is damaged by a spill. Non-use value means that the federal government or a provincial government could bring a claim for damage to environmental assets that are valuable to Canadians and future generations.

The concept of non-use value was first introduced for environmental offences by our government in 2009, and Bill C-46 is consistent with those measures. It is also consistent with the amendments we have introduced to Bill C-22, the energy safety and security act, for the offshore oil and gas regime, which also would allow governments to claim for the loss of the non-use value of public resources.

In many ways, these provisions mirror similar steps our government has already taken to strengthen marine, rail, and offshore safety. As part of our plan for responsible resource development, we have been strengthening environmental protection, enhancing aboriginal engagement, and modernizing our regulatory review of major resource projects. Our overriding goal has been to eliminate duplication and to provide investors with predictable beginning-to-end timelines for projects, all the while creating jobs and growing the economy.

This is an ongoing process. It demands constant attention and continued diligence, which is why our economic action plan 2015 contains new measures and investments to build on this momentum.

There are many items I could highlight from our balanced budget, but let me start by saying what is not in it. I know that what the opposition was hoping to see in our budget was a carbon tax. Both the Liberals and the NDP have been clear that they intend to put a tax on everything Canadians buy, from gas to groceries to electricity. We have been clear. We will not introduce a carbon tax.

We are very proud of the targeted investments proposed in economic action plan 2015 that are particularly noteworthy for today's debate. The first is $135 million over five years to support project approvals through the major projects management office initiative. We are proposing to make this investment because the development of our natural resources deserves both scrutiny and careful stewardship. Our processes and systems need to be modern and nimble, reflecting the views and needs of citizens and industry alike.

The second item is a commitment of $34 million over the same period of time to continue consultations with Canadians on projects assessed under the Canadian Environmental Assessment Act.

Third, we are proposing to provide $80 million over five years to the National Energy Board to support greater engagement with Canadians and enhanced safety and environmental protection.

Through these investments, we will continue to deliver the kind of responsible resource development Canadians have come to expect from their government, development that is critical to our government's economic plan to create jobs, growth, and long-term prosperity for all Canadians.

The fact is, Canada's natural resource sector represents 19% of our economy. It accounts for more than half of our merchandise exports and supports 1.8 million jobs directly and indirectly. Canada's natural resource sector is also one of the leading private employers of aboriginal people, and let us not forget that natural resource firms have contributed approximately $30 billion per year in revenue to governments, revenue that builds hospitals and highways, schools and subways.

In short, our resource industries are critical to the strength of our economy, the quality of our lives and our aspirations for the future.

As recent geopolitical events have shown, energy is also playing a critical role in national, continental and indeed global security. Our government recognizes that Canada is in a unique position to meet the world's energy needs, but just importantly we also have a responsibility to contribute to global energy security.

That is why, between 2005 and 2014, Canada's crude oil exports grew by 81%. That is almost 1.3 million barrels per day. Our exports expanded beyond North America to reach new markets around the world. Indeed, since 2013, Canada has been shipping oil into markets from Spain and Ireland to Chile and Hong Kong. In Italy, for example, our exports accounted for 3.4% of that country's total crude oil imports in 2014, as measured by volume.

With the European Parliament's fuel quality directive confirming that oil sands crude is as environmentally responsible as other sources, we expect exports to continue to grow. Canadian exports help nations diversify their sources of energy. They help reduce their dependence on unreliable suppliers and help bolster their energy security.

To continue to play that important role in global energy security, Canada must expand its ability to get its products to market. Pipelines are the safest, most secure and most reliable way of doing so.

As we expand our ability to export, this legislation will set the standard for pipeline safety, charting a new path to good-paying jobs and sustainable growth across the country for generations to come. I urge all members of this House to join our government in continuing to support this legislation.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, here is my question for my hon. colleague: Why do this bill's provisions cover only pipelines that transport at least 250,000 barrels of oil a day?

In the Lac-Mégantic tragedy, a smaller company unfortunately caused unimaginable damage. I do not see why this bill excludes pipelines that transport 150,000 or 200,000 barrels a day. If an accident or a spill happens, they could cause as much damage as a pipeline transporting 250,000 or 300,000 barrels a day.

Why does the government think that communities that would be affected by a spill from a smaller pipeline do not deserve the same protection as a community that would be affected by a spill from a pipeline transporting 250,000 barrels a day? I would like my hon. colleague to explain why that is not covered in the bill.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, as I stated earlier in my remarks, there is widespread agreement that Bill C-46 is an important step in our efforts to maintain the most rigorous regime in the world, the most safe regime, a regime that already has a safety record of 99.99%. Bill C-46 will bring even greater confidence to our network of pipelines and ensure public assurance for new pipelines being built. The provisions in Bill C-46 mirror steps our government has taken to strengthen marine, rail and offshore safety.

The provisions that the member has been asking for, in terms of pipelines that will see less than 250,000 barrels flowing through them, will be captured in regulations.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the Liberal Party critic had the opportunity to speak on the legislation and expressed just how important it is that we get this job done right. At the end of the day, Canada's economy and environment are potentially of great benefit if, in fact, we get it right.

The question I have for the minister is this. If we look at the last number of years, the government has not been successful in building consensus, whether it is the social contract with Canadians dealing with the environment and pipelines, or dealing with the provincial governments, in particular, the Alberta and B.C. and other jurisdictions, to bring people together. The pipeline issue and the security of it is of critical importance, but it also seems that the government has not been effective in being able to pull it all together.

Can the member provide some feedback as to why she believes we have had to wait as long as we have to get this legislation and the impact that has had on discussions with the potential expansion of our pipelines?

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, again I will reiterate that there is widespread agreement that Bill C-46 is an important step in our efforts to maintain the most rigorous pipeline safety regime in the world.

The government has worked closely with provinces and territories, aboriginal communities, environmental groups, insurance companies and industry in the development of this legislation. I am very confident that this legislation appropriately addresses the concerns raised during these consultations.

[Lois Brown, Conservative, Parliamentary Secretary to the Minister of International Development]

Mr. Speaker, my colleague spoke a bit in her speech about the opportunities that this legislation would provide for the people of our aboriginal communities. I wonder if she would like to expand on that just a little more for the House.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, as I have said, our government's priority is to continue to create jobs, grow the economy and create long-term prosperity for all Canadians, which includes our first nations peoples. First nations have made and will continue to make important contributions as a full partner in the development of our natural resources. Our plan would provide training for aboriginal communities specifically, for example, when it comes to monitoring and response. As I mentioned, we asked to hear from aboriginal communities on this very important piece of legislation and there has been widespread support.

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

Mr. Speaker, I would like to point out to my distinguished colleague that one of the serious problems in Canada and the world is that the companies doing business in Canada are the same companies that are responsible for the Exxon Valdez spill and for destroying a river in the United States.

When people who have been consistently polluting other places say that they will be careful not to cause pollution in Canada, there is a credibility problem. It is all a matter of credibility and we do not trust those companies.

Moreover, safe transportation is all well and good, but there is also the matter of jobs. If I, Mr. Giguère, was told that 15,000 jobs were going to be created in my province's refineries, I would be on board with that. However, what we are being told is that we are going to have to assume 100% of the transportation risk, that there will be no contingency fund and that no jobs will be created. In Quebec, only 15 jobs were created to build the pipeline across the province. We are assuming all of the risks but seeing very little of the profit.

As a result, the government does not have any credibility. I am asking it to do something other than pass a law that imposes a 250,000-barrel limit on companies and simply requires them to be careful. That is not enough. A contingency fund must be created.

I am therefore asking my colleague to tell us something that will really assuage Canadians' fears.

[The Deputy Speaker, Joe Comartin]

Before I recognize the parliamentary secretary, I must inform the member that it is not appropriate to use proper names, as he just did, when addressing the House.

The hon. parliamentary secretary.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, perhaps the best way to answer that question is to go back and restate that the absolute or no-fault liability regime created under this bill would be one of the most robust and comprehensive in the world. All types of damage to the environment resulting from an oil spill would be covered in this legislation.

Three broad categories could be claimed. These are claims for loss or damage incurred by any person as a result of a spill; costs and expenses incurred by the federal government, provincial government, aboriginal governing body, or any other person taking action in response to a spill; and claims by the federal or provincial governments for the loss of what is referred to as the non-use value relating to a public resource that is damaged by a spill.

I did speak to what we mean by “non-use value”. This means that the federal government or provincial government can bring a claim for damage to environmental assets that are valuable to Canadians and future generations.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, in my capacity as the critic for natural resources, I am pleased to rise in the House at third reading to debate Bill C-46.

This bill moved to report stage very quickly, because clearly, the parties did not really have a chance to properly present their case, especially the independent members in the House.

At the Standing Committee on Natural Resources, the Conservatives imposed a motion similar to the ones it imposed on all committees, since it has a majority on all committees of the House of Commons, whereby, and I am paraphrasing, when the committee clerk receives an order of reference from the House in relation to a bill, the clerk must write to each member who is not a member of a caucus represented on the committee to invite the member to send a letter to the chair of the committee, in both official languages, stating any proposed amendments to the bill subject to the order of reference. During the clause-by-clause, the chair of the committee will allow a member who proposed an amendment to make brief comments in support of it, although the member cannot join in the debate or vote.

That is how the committees always operate, and the Standing Committee on Natural Resources is no exception.

We essentially believe that these manoeuvres violate the rights of independent parliamentarians or members who belong to a parliamentary group and who are nonetheless elected just like any other member.

The big book of procedure tells us that it is the House, and only the House, that designates members and associate members of these committees as well as the members that represent the House on joint committees.

The Chair has already established that that is a fundamental right of the House. As for the committees, they have no power in that regard, especially since the rules specifically state that an MP who is not a committee member may not vote or move motions.

Report stage was usually the opportunity for these members to have their amendments heard, to debate them and to participate in the vote. Instead, practically everything is now managed, debated and voted in committee, sometimes even in camera.

This is a very important change in the functioning of the House and it greatly affects the rights of members and their ability to properly carry out their duties of representing their constituents and holding the government to account.

However, despite everything, I must highlight the work done by my colleague, the member for Saanich—Gulf Islands, who had two amendments passed despite this unfair and undemocratic government tactic.

Bill C-46 establishes a liability regime for federally regulated pipelines in Canada, and although this regime leaves many questions unanswered, the existing legislation does not provide for much of a regime.

The NDP proposed some 20 amendments at report stage, many of which were virtually the same as those proposed by my colleague from Saanich—Gulf Islands. That is why I am pleased that these requests were heard. We must understand that she was not able to propose her amendments at report stage. She was asked to present her amendments in committee, which is what generally happens. She came to do so and she got just one minute for each of her amendments.

This is a systematic problem at committee stage. Committees should be a place for debate, so that we can identify the strengths and, especially, the flaws of each bill. However, this Conservative government's method is something completely new to Parliament, and it is undermining our ability to properly debate bills.

In the case of the amendments that passed, the government tried to make first nations members believe that the addition of a definition about them to the bill was a show of good faith and openness on its part.

Like other levels of government, aboriginal governing bodies will be able to sue companies connected to pipelines for recovery of reasonable costs incurred in managing a spill on their land.

I think this is a major collective victory. It shows not only that aboriginals are full-fledged nations, but also that there is a will to treat them as such. As I said, the parties were on the same wavelength and proposed many similar amendments that targeted the same flaws in Bill C-46.

In short, Bill C-46 is a first step toward integrating a real polluter-pays principle into federal pipeline regulations.

However, entrenching that in law is not the end of it. We also have to make sure that the provisions of the law respect its principles.

The NDP voted in favour of the principle underlying Bill C-46 because that step forward was better than the status quo.

I must nevertheless point out that at least one witness gave very engaging testimony during the committee's study of Bill C-46. Ian Miron of Ecojustice described this bill as a step forward, just as we have done. He also said that it was more of a “polluter might pay” principle than a polluter pays principle. The reason is that Bill C-46 is highly discretionary. It makes a number of tools available to the National Energy Board and the government, but they have complete discretion when it comes to using those tools. The lack of absolute regulations, if I can put it that way, means that this legislation does not fully respect the polluter pays principle. It means that the principle will apply if the National Energy Board and the government want it to.

These regulations and this liability regime will now be governed by the National Energy Board, which has an especially important role to play given that Canadians' trust and their sense of safety with respect to infrastructure and the regulations in place will depend on how well the board fulfills its mandate.

The report published in 2013 following a comprehensive study by the Standing Senate Committee on Energy, the Environment and Natural Resources clearly states that those two concepts go hand in hand:

If an accident occurs, there must be trust that the “polluter pays” principle, a principle applied to all modes of transport, is backed by concrete action. Social license is earned when citizens have trust in emergency and spill response capabilities, based on clear plans for well-organized recovery and rehabilitation of the environment, as well as a means for compensating for damages.

Even the president and CEO of the Canadian Energy Pipeline Association at the time, Brenda Kenny, suggested in the study that, “it is not enough in today’s climate to obtain a regulatory license or permit in order to proceed with energy projects”.

This illustrates how important it is for businesses and the industry to have public confidence. This was corroborated by the testimony in committee of a representative of Canada's Building Trades Unions, who said he agrees with the polluter pays principle, which indicates to us that the unions and workers truly understand that environmental protection and robust protection, prevention and accountability standards are ironically the things that are going to help them keep their jobs.

For a culture of safety to take hold, there needs to be interaction between common values and beliefs on one hand, and the structures and oversight mechanisms of an organization on the other hand, with the aim of producing standards of behaviour. Unfortunately, we are way off the mark. With its bills and regulations, the government has done nothing but cause the public to lose confidence not only in the industry, but also in the key regulators. If the oil companies want public approval for the pipelines, then Canadians need assurance that these projects are sustainable and that approval processes are open, rigorous and fair. That is clearly still not the case, and this bill will not change much, unfortunately.

In fact, only 27% of Canadians believe that the Government of Canada can respond effectively to an oil spill at sea, and only 32% share the same view for spills on land. The English Bay oil spill in Vancouver in early April should serve as an example of the government's readiness to respond. Civil society groups and environmentalists have been saying for years that Canada is not prepared for a major oil spill. The 2010 Kalamazoo spill in Michigan was a turning point for the oil sector. New standards were established and discoveries were made about how oil from the oil sands behaves, which requires new standards for research, prevention and response.

The problem is that instead of working with the utmost transparency, the board encourages corporations to be secretive. According to the 2013 Senate report:

By regulation, every pipeline company is required to submit Emergency Response Plans (ERPs) on a facility-by-facility basis and the ERPs must be approved by the NEB. These plans require companies to assess the risk of a spill and outline the details of a response. They must be up-to-date with corresponding emergency manuals and must be reviewed regularly. On June 26, 2013, the federal government announced that it would require ERPs to be more accessible to the...

[The Acting Speaker, Barry Devolin]

Order.

The member for Rimouski-Neigette—Témiscouata—Les Basques will have nine minutes when the House resumes consideration of this bill.

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The House resumed from April 30 consideration of the motion that Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, be read the third time and passed.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I am happy to have another chance to speak on the slightly amended version of Bill C-46, the pipeline safety act and of course, this is legislation that would amend the National Energy Board Act and the Canada Oil and Gas Operations Act, with the idea of strengthening the safety and security of federally regulated pipelines in Canada.

In fact, this legislation is long overdue and represents some progress. The Liberal Party recognizes that pipelines are a critical part of our energy infrastructure. We know that Canada must always strive to have the safest pipelines in the world. In fact, we have many thousands of kilometres of pipelines within Canada transporting both oil and gas and sometimes other products, but mainly those two, and they form an important part of our economy. People use those products every day in a variety of ways, so those pipelines play an important role and it is vitally important that they be safe.

However, we do not believe that we have to make a choice between protecting our environment and growing our economy. We have to do both. That is an important responsibility. Across this country, Liberals support projects that offer responsible and sustainable ways of getting our resources to market, while at the same time respecting indigenous rights, protecting our natural environment and earning the trust of local communities.

In fact, approximately 1.4 billion barrels of oil cross provincial and international borders every year. It is important that legislation like Bill C-46 clarifies the audit and inspection powers of the National Energy Board which regulates federal pipelines.

I should point out that many of the pipelines in Canada are not federally regulated because they are within the boundaries of a province, but they do not cross boundaries of a province or international boundaries between Canada and the U.S.

As we heard recently at the Standing Committee on Natural Resources, Bill C-46 implements a number of measures under the headings of prevention, preparedness and response, and also liability and compensation.

Prevention, of course, is critical as we must make every effort to ensure that a spill does not occur in the first place, obviously. The bill includes some sentencing provisions for environmental damages as well as additional audit and inspection powers for the National Energy Board. Of course, this raises the question of whether the NEB will do the job it is supposed to do. That would be a concern for members going forward as we watch whether the powers it is given in the bill are utilized properly.

Hopefully, the government will ensure the the NEB has the necessary resources to carry out these audits and inspections because a number of stakeholders said they were concerned about it. I am concerned about it after the recent budget. There is a question whether it has enough funding.

In fact, the NEB indicated that funding for several programs related to pipeline safety will be sunsetting in the next few years. It is up to the government to bring forward sufficient funds for the NEB to do the job of protecting Canadians and ensuring that these pipelines are operated in a safe manner. I think that needs to change.

In the event of a spill, Canadians need to have confidence that pipeline companies and the National Energy Board will respond in an appropriate manner. Bill C-46 would require companies operating pipelines to hold sufficient financial resources to cover any potential costs associated with a spill. Companies would also be required to hold a minimum level of accessible financial resources to ensure immediate response to a spill happening and that they have the financial capacity to do that. That is an important measure and I certainly support that.

Also, in exceptional circumstances, where a company is unable or unwilling to act, the NEB would have the authorization to take control of a spill response and it would have the authority to compel reimbursement of costs associated with a spill because if the NEB is incurring costs at the expense of the taxpayer, it should be reimbursed by whoever is responsible for the pipeline in general.

It is the company operating it that is going to be liable and that is why under this legislation absolute liability is provided for. In other words, whether or not negligence was provided, if a company is the owner-operator of that pipeline, it will be responsible for it. That is very important.

Finally, with respect to liability and compensation, the bill invokes the polluter pays principle with the goal of holding major pipeline companies liable for costs and any actual losses or environmental damages resulting from a spill. It includes a set of new measures which provide for no-fault or absolute liability set at a minimum of $1 billion for major oil companies, and the legislation contains the number of provisions relating to the abandonment of pipelines.

Bill C-46 seeks guidance from the National Energy Board on the application of the best available technologies for pipeline construction and operations. It also sets out how government will be required to work with aboriginal communities and industry to develop a strategy to better integrate aboriginal peoples into pipeline safety, including planning, monitoring, incident response and related employment and business opportunities.

While I noted earlier that Bill C-46 is a step in the right direction, that does not mean that no concerns were expressed about this particular bill. We have seen concerns raised over the potential impact of leaving many of the proposed changes in Bill C-46 to the discretion of cabinet and the National Energy Board. The Union des producteurs agricoles raised several points in a written submission, including their concern about the definition of “ground disturbance” in the legislation and how this will impact the cultivation of crops like alfalfa. They also expressed concern about whether the timeframe for claims should be tied to the time when a leak is discovered or the time when it occurred. Obviously, I believe that it should be tied to the time when the leak is discovered.

Ecojustice lawyer Ian Miron testified regarding the shortcomings in the legislation. He called for more guidance around the assessment and calculation of damages for the loss of non-use value in relation to public resources. Mr. Miron also suggested that, as drafted, the bill is best described as polluter might pay as opposed to polluter pays, as the government is suggesting.

Mr. Martin Olszynski of the law faculty at the University of Calgary offered suggestions to strengthen the wording of the bill with regard to environmental damages. Mr. Olszynski said that the federal cabinet should be required to make regulations setting out a process for environmental damages assessment within a prescribed timeframe.

Unfortunately, the Conservatives failed to put forward any amendments during the clause-by-clause consideration of Bill C-46 and they killed all but two of the amendments tabled by opposition members.

One of the amendments, which was adopted, will mean that an aboriginal governing body would be able to be reimbursed for expenses they may incur in responding to a spill. I think that is a good amendment.

Without that amendment, the category of entities that could get reimbursed for reasonably incurring expenses in relation to a spill, in other words for a cleanup, were limited to “Her Majesty in right of Canada, or a province or any other person”.

That would not include an aboriginal first nation and in my view it would also not include a municipality either. That is why there was, in fact, another amendment proposed to add the word “municipality” to that list, but I suppose the government side was not authorized. It did not have the green light, we might say, to say yes to that change, which would have been harmless and a good one.

The question of whether or not the province is authorized or the municipality, since municipalities are creations of provinces, is not clear at all. It might have been a very good clarification to have in the bill. Unfortunately, I am afraid the Conservatives did not support that.

The second amendment deals with a section of the bill which said that the NEB may recover funds to compensate those affected by a spill. In this case, the word “may” was changed to “shall”, another good change. At least there was some minimal accommodation and I suspect members opposite on the Conservative side would incorrectly and falsely claim that they were completely flexible on our amendments.

I know that the Minister of Natural Resources is fond of pointing out that between 2008 and 2013 more than 99.999% of oil transported in federally regulated pipelines was moved safely. That is a great record. Our pipeline companies deserve recognition for this achievement. However, we also need to look to the future. We need to take every step possible to continue to prevent spills, to put in place the proper measures to efficiently and effectively clean up spills, and to assign appropriate liability when spills do occur.

Canada must have the safest pipelines in the world. We need to ensure that this pipeline safety act is designed to achieve that goal.

The NEB has been given increased regulatory control over 73,000 kilometres of pipelines that transport more than $100-billion worth of oil, gas, and petroleum products across Canada annually. That is a lot of pipelines and a lot of value to our economy and also a lot of concern about the impact that would have on our environment if it was not dealt with properly.

Bill C-46 would build on previous moves, giving the NEB the authority to increase the number of pipeline inspections and doubling the number of yearly safety audits.

The NEB has also been asked to provide guidance on the best available technologies for pipeline construction and operations. Obviously, that is why we are hoping that the NEB will be given the resources to do that job and that it will do it properly. We will have to keep an eye on that. That is, I think, one of the important responsibilities of this chamber. It is to keep an eye on that and watch the statistics as time goes on.

We have seen measures that set out how the government is supposed to work with aboriginal communities and individuals to develop a strategy to better integrate aboriginal peoples and pipeline safety operations, including in planning, monitoring, incident response, and related employment and business opportunities.

Clearly, these and other measures in Bill C-46 signify a much-needed overhaul of the liability regime for federally regulated pipelines. The no-fault liability, the additional authorities given to the NEB, and the measures for abandoned pipelines are welcome, and the Liberal Party will therefore support the legislation.