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, Minister of Natural Resources and Minister for the Federal Economic Development Initiative for Northern Ontario]

Mr. Speaker, members can imagine how thrilled I am to have my colleague not only stand up for her province but represent her ministry so well. It has not been involved in the debate thus far that I can recall, but she understands as a member of Parliament for the prairies that pipelines offer a unique solution that other forms of energy transportation cannot.

The squeeze on the mining sector, grain farmers, and the forest sector right now is immense. It is going on in Canada, and it is being grumbled about and will arise a little later this winter in the midwestern United States.

This debate is right. The fact that we can bring in a piece of legislation that protects the interests of miners, the forest sector, and grain farmers is one thing, but this piece of legislation also represents the best available technology. We are giving the National Energy Board those considerations through this piece of legislation. That is something that this member is a bar-none expert on. She mentioned a few aspects in her speech, but I consider her an expert on getting innovation from the bench to the marketplace.

When it comes to pipeline integrity, to safety, and to detection, and to the elements of this bill, which are prevention, preparedness, and response, I would like to give her an opportunity to expound on other examples of Canada leading the way in technology and innovation in pipeline safety and security as a strategic business unit of the energy sector.

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

Mr. Speaker, as my colleague knows, this is an area that is near and dear to my heart. Prior to entering politics, I worked at the University of Calgary in its research services division, where I was pleased and thrilled to work with some of the best minds in the world in terms of clean technology and public policy with regard to this area.

With regard to my portfolio, we had the Alberta Innovates Technology Futures. We partnered with the Government of Alberta to start the Materials and Reliability in Oil Sands research and development consortium to develop innovative coatings and welding techniques that would reduce wear and corrosion on pumps, pipelines, and other equipment.

I could go on and on, because we are seeing that as government puts forward strong, stable, balanced regulation, industry is responding. Industry is also proactively looking at their corporate social responsibility mandate in ensuring that those technologies are being adopted. It is a really cool pull into the market that has been created both by strong government legislation as well as by expertise in western Canada. It is a great thing to see.

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

Mr. Speaker, I thank my colleague for her very interesting speech.

We are talking about the fundamental polluter pays principle. She talked quite a bit about balance. I would like to know what she thinks as a member of Parliament and a member of cabinet about the government's reasons for introducing such legislation, which affects oil pipelines but not other products like natural gas or solvents, which can also be transported via pipeline.

I would also like to know why she thinks the bill, if it is amended, would only affect pipelines transporting more than 250,000 barrels of oil a day and not those that transport 100,000 barrels, for example.

Why does the government's plan have this limit?

[Michelle Rempel, Conservative, Calgary Centre-North, AB]

Mr. Speaker, I was trying to listen in French. If I understood my colleague's questions correctly, he asked why we have this legislation and why it affects this and not other materials.

Certainly we want to ensure that the bill would have a very positive impact on high-volume pipelines, which are regulated very well. We also want to work with smaller operators to ensure that the regulations are not too onerous on them, while also reflecting a high degree of health and safety requirements.

I think the bill gets that right, but I should mention that it is not just about looking at the pipeline. The bill also reflects some of the things we have put in place to ensure that the build-out is safe. Changes we have made to the Canadian Environmental Assessment Act, as well as making the environmental assessment process more robust through the RRD process, are very good things.

I should also mention that we increased the budget to the National Energy Board in 2012 by $13.5 million and in 2014 by $28 million for increased audits and project reviews so that we could have that high degree of safety in the build-out as well.

We have a very robust piece of legislation that Canada can be very proud of, and I hope that my colleagues will vote to send it to committee.

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

Mr. Speaker, I am pleased to rise to speak to Bill C-46. I am even more pleased about the fact that this is the first bill on natural resources that I have the honour to debate in the House as the official opposition critic for energy and natural resources.

This is an extremely important issue, particularly because of the various challenges we are currently facing and the projects that are under way. In my riding, the energy east project will pass through Témiscouata. It is a major project. Clearly, there are many other major projects all over the country that are directly affected by Bill C-46, which seeks to make the transportation of oil via Canada's pipelines safer.

The government asked us how we are going to vote at second reading. I can confirm that we are going to support the bill at this stage. We are not doing so because the bill is perfect, and in the next few minutes I will have the opportunity to explain the problems with this bill that the Standing Committee on Natural Resources should work on.

In our opinion, this bill is a good first step. Finally, after putting so much pressure on the government, we are truly pleased that the government is willing to reinforce the polluter pays principle, not just in words but also in the legislation.

As my colleagues no doubt know, since our leader, the member for Outremont, took over the reins of the New Democratic Party, he has spoken at length about this country's need to enforce the polluter pays principle, not only in the area of natural resources but also in all of our country's industrial and economic sectors.

He has also spoken about the need to take into account external economic impacts, for example the cost of the pollution caused by various industries, in order to reflect the actual cost of production, not only from an economic perspective for the consumer or the producer, but also from an environmental perspective and from the perspective of how it could affect large communities.

On this side of the House, we recognize the importance of the oil and gas industry across the country. We know that this industry accounts for approximately 7% or 8% of Canada's GDP and that it has an impact not only on the western part of the country, but also on regions such as Quebec and Ontario. However, if we want to enshrine the polluter pays principle in law, we will have to do so in a consistent and comprehensive manner.

In describing the bill, which is what I plan to do for the next few minutes, we realized that the generally positive points might not go far enough, such as establishing no-fault liability. Thus, at the end of the day, all companies could be liable in the event of a disaster. Even if it is not the company's fault or if negligence is not proven, the liability could be as high as $1 billion, depending on the amount established by the National Energy Board, by cabinet or by the governor in council.

While the $1 billion is positive when you consider that there is currently no implicit responsibility in Canadian legislation or regulations, it does minimize and water down the polluter pays principle. Even if the company is not at fault, it is nevertheless a question of a pipeline built and operated by a company that must eventually take full responsibility for it. We are therefore faced with the following problem: even if there is no fault assigned, taxpayers could end up bearing financial responsibility.

If a disaster occurred that cost more than $1 billion in cleanup and environmental costs, some of that burden could be placed on taxpayers through the government. We see this as one of the bill's weaknesses.

If we really want to remain true to the polluter pays principle, we need to follow through on the reasoning and make the company fully responsible.

Clearly, if the pipeline has a defect and the company is not responsible and a third party is, liability could be placed on the third party. However, if there is an operational issue and the company is responsible for the pipeline, then it must be fully responsible for any damage caused and for all environmental costs.

However, if the company is found to be at fault or negligent, under the bill, costs and damages could be much higher. This amount would be determined by either the governor in council or the National Energy Board.

We support the fact that this legislation will finally hold companies responsible for abandoned pipelines. Beforehand, the responsibility was implied but not necessarily very clear. My colleague from Edmonton—Strathcona mentioned in her speech that this is a serious problem in Alberta, where there are many abandoned oil wells connected by equally abandoned pipelines. These abandoned infrastructures pose a problem, because most of the time, the companies that owned them no longer exist, which creates legal uncertainty regarding cleanup costs.

It is therefore good that the responsibility of companies for these underground pipelines in Canada, even after they stop operating, is explicitly stated in this bill, because we are talking about major projects and companies that are relatively stable economically and financially.

How can we ensure that the companies will assume these costs? Under the bill, any company that is operating a pipeline that matches the standards set out in the bill, namely pipelines that have the capacity to transport at least 250,000 barrels of oil per day, must have liability coverage of up to $1 billion. Once again, we support that. This money will be used to ensure that the company is immediately liable in the event of an incident and will also serve as a deposit in case a pipeline ceases operations, so that the company remains responsible for any potential cleanup costs or costs associated with subsidence, for example.

The bill thus provides for protection against any damage that could result on the land under which a pipelines passes. It is perhaps minimal compared to the growing costs associated with these pipelines but it is still a recognition of the company's responsibility.

It seems like I am praising the government, but we have to acknowledge the progress that has been made in pipeline safety and the positive aspects. For example, the bill authorizes the National Energy Board to establish a pipeline claims tribunal for claims following a pipeline leak or disaster.

It used to be extremely complex and onerous for a land owner to get compensation for a major pipeline spill. The legal system is very complex and there are a lot of costs up front for a person who suffered damages.

This bill includes a provision authorizing the National Energy Board and the governor in council, at their discretion, to establish an administrative tribunal following a disaster in to order hear and compensate the parties who feel adversely affected by the disaster. This is progress because it will make the administrative process easier—if the National Energy Board and the governor in council use their discretion wisely, that is.

Those are the positive aspects of this bill as I see them. This is progress, and it is why we are voting in favour of this bill at second reading. We could then consider the bill further in committee and propose amendments to improve these provisions, which seem more watered down than they could be.

As far as the bill's flaws are concerned, we can name three. First, I mentioned several times the issue of the discretion of the National Energy Board and the governor in council, or cabinet.

It would have been preferable to provide greater certainty in this bill and give it more teeth, if you will, so that some elements would be triggered without relying on the National Energy Board or the Governor in Council to provide good governance or wise decision making.

In fact, a number of these tools that, in principle, should improve the safety of pipelines are not guaranteed. Their application will be at the discretion of the National Energy Board and the Governor in Council. We all hope that will happen, but it will be determined on a case-by-case basis with no guarantees.

Furthermore, we really wanted the government to understand that pipeline safety impacts not only the transport of oil, but also the transport of natural gas and other products, such as solvents used in the oil sands. Quite often, the bitumen is treated in one area and the solvent, after being separated from the bitumen, is reshipped to the extraction site. These solvents are highly toxic and very dangerous. It would have been good for such a bill to cover the transport of these products, whose risk to the environment is similar to that of oil.

Furthermore, it is hard to understand why the government limited its new safety standards on pipeline transportation to pipelines that transport more than 250,000 barrels a day. Why did it not impose these standards and new restrictions on pipeline transportation safety on all interprovincial pipelines that fall under the jurisdiction of the National Energy Board and the federal government?

Yes, it is a step in the right direction that the government is now applying, even partially, the polluter pays principle. That is why we will support the bill. It is also an important issue for the government and the industry, because it is a question of confidence in the industry. I can speak from personal experience, because one of the main concerns in my riding and in Quebec as a whole, given what I have heard about the energy east project, has to do with transportation safety with respect to rivers, waterways and watersheds, among others. That is a big concern that recently came up in a Harris-Decima survey of Canadians' views on the transportation of oil and gas, either by rail or by pipeline. Less than half of Canadians have confidence in the pipeline transportation system.

Lots of people talked about social licence. That is why it goes without saying that for the in-depth study and to reassure people that transporting oil by pipeline will not have a negative impact on their community, there must be elements in place to ensure safety and rapid response in case of a disaster. There must also be a mechanism in place to ensure that companies pay adequate compensation for all environmental disasters that occur on private property or even on public property. The government should have gone in that direction.

One could even argue that they took too long to go in this direction because it has been some time now since the government was reminded of its responsibility for pipeline safety and the safe transportation of oil and fossil fuels in general. It should have taken action on this long ago, and many members of society have criticized it for that, not just environmentalists, but also communities directly affected by that transportation, be it underground or by rail.

If we look at all of the projects, some will certainly be influenced or affected by this bill. It could help the communities that are stakeholders in this. I am talking about energy east, of course, and northern gateway is another one that is affected. This might enable communities to look at this from another angle.

We should not necessarily expect the government to have carte blanche when it comes to getting its projects approved by the communities. It can take a positive approach, or a relatively positive one in this case, but communities have still expressed a lot of concerns. I am not talking just about municipalities; I am talking about aboriginal communities too. For example, in the case of northern gateway, Kitimat could be severely affected if there is a disaster, and that has been brought up a number of times. The government seems unable to reassure that community. The government should have a responsibility to intervene directly in talks about pipelines with first nations; that should not be left up to the company. The government, which has a responsibility toward first nations, should be able to get involved in these matters.

It refuses to do so. As a result, these projects have no social licence. Ultimately, not only is the government doing nothing to increase safety standards, but according to most experts, it is also limiting consultation periods as well as the effectiveness of the environmental assessment process. It has sped up the process to supersonic speeds. I am using that language because, in the case of the energy east project, the National Energy Board has only 15 months. In fact, the deadline for intervening or even commenting on the energy east project in Quebec is March 3, which is next week. The problem is that TransCanada, which of course is the company behind the energy east project, has not yet even decided if there will be an oil port in Cacouna. Rumour has it that the route could change significantly. Apparently, Cacouna could be replaced by Baie-des-Sables, Bécancour or Lévis, for example. It is not clear if plans have been finalized, but the board seems to think that it has to act immediately because of the extremely tight deadlines that were imposed by the federal government's legislation.

The same thing goes for the issue of environmental assessment, given that there used to be separate processes. The National Energy Board dealt with the pipeline itself while environmental issues went through a separate process. To address some of the shortcomings, the government obviously could have changed the two processes to try to increase their effectiveness. However, in the end, by merging the processes and handing responsibility over to the National Energy Board, the government did not do the industry any favours, quite the contrary. These days, there is a lot more resistance to these projects, precisely because the process seems extremely inadequate for people who want to intervene and for those who are affected and worried and are feeling dismayed about how quickly everything is moving. In the case of energy east, we are talking about a major project involving 1.1 million barrels that the board has to handle in 15 months.

We are talking about the polluter pays principle, the federal government's responsibility, and the principle whereby the federal government should ensure the best provisions for the industry. These provisions are not just intended to make shipping and economic expansion easier. The government also has a responsibility to ensure that the economic, regulatory, and legislative conditions governing the oil and gas industry are stable enough to ensure long-term consistency. The companies and industry need to know that their economic environment is secured for the long term. At present, given how the government operates and the changes that were made, the companies are right to question the merits of the government's policies.

In the case of Bill C-46, the measures are a step forward in pipeline safety. That is why we support the bill. However, there is still some uncertainty when it comes to ensuring that natural resource development, which is important to Canada's economy, could grow responsibly and sustainably, as we gradually transition Canada's economy to one that is based more on renewable energy, of course.

[Paulina Ayala, NDP, Honoré-Mercier, QC]

Mr. Speaker, this bill mainly tackles the problem of the polluter pays principle, but not other matters. I am worried about that. We are going to support the bill so we can discuss it.

Today in Le Devoir, there is an article about the municipal revolt against energy east:

At least 75 cities have voiced concerns about the TransCanada pipeline....The mayor of Mascouche...is not mincing words...“We do not want this project. That is clear.”

Canadians are worried about protecting many people's wells and also about protecting the environment. I hope that this flaw in the bill will be corrected. Communities must be consulted and mobilized in a significant way. If oil companies really want to obtain public approval, Canadians must have the assurance that these projects are sustainable and that approval processes are open and fair.

How can we harness these resources in a sustainable manner while protecting the environment and fostering the creation of value-added jobs in Canada? I would like my colleague to elaborate on this because it is not really addressed by the bill.

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

Mr. Speaker, I would like to thank my colleague from Honoré-Mercier for her question. The issue of social licence is important. Projects such as energy east would have no social licence without any real consultation. TransCanada and the National Energy Board held consultations and set up booths in the various municipalities and communities that are affected. However, they must do more. There must be real dialogue with the municipalities and communities, which have the impression that TransCanada and the National Energy Board are just trying to convince them.

Take for example, the liquefied natural gas or LNG industry, which still has it merits. A company that I will not name wanted to set up an LNG tank, following one of the three diagrams prepared by the engineers. When these three options were proposed to the public, people identified weaknesses in the two options that were the cheapest for the company. The third option did not seem to present any problems. The company therefore submitted the third project, even though it was more expensive, and set up the reservoir.

This community therefore had its say before the project was carried out. These people did not feel as though the company was trying to convince them to accept the least expensive option. Accordingly, social licence was easier to obtain. This bill also makes it easier to obtain social licence because it responds to some of the concerns that municipalities and communities have about the responsibility of companies. However, it does not address all of their concerns.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the importance of our national pipelines is incredible in the sense that Canada has been blessed with natural resources, whether it is the oil sands or natural gas. However, to get products to market, we do not have very much in terms of options. It is either pipeline development, if we are going to be expanding, or rail. I think most Canadians would rather see it go through pipelines, which is something the Liberal Party of Canada would also like to see.

The member has already made reference to this, but I would like to reinforce it. It is important, as we look toward potential growth and the delivery of these commodities, that we have consultations with the public as a whole, particularly first nations and other communities, to get what is often referred to as a social licence to proceed.

Could the member comment on how critically important it is that we get that social contract?

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

Mr. Speaker, I thank my colleague from Winnipeg North for his question. It is a very important one.

The concept of social licence is fundamental to the first nations, which are involved in these processes, but often not as a partner. More often than not, they are pressured on the projects, whether it is political pressure or pressure from the companies.

As I mentioned in my speech, I also agree that the oil and gas industry is hugely important to Canada's economy. This is evident not only in the west but also all across Canada. I was pleased to see that the bill included the two primary means of transportation: pipelines and rail transportation. In both cases we need regulations to keep everyone safe and to hold the companies involved accountable, whether we are talking about pipeline operators or, in the case of rail transportation, rail operators.

We know that the government introduced another bill to make companies more accountable. We will study its merits, as we are currently studying the merits of the provisions to increase the accountability of pipeline operators. We will also study the merits of the provisions for the environment and for landowners who could be affected by a spill and who have concerns.

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

Mr. Speaker, we know that Canada has a world-class pipeline safety system. In many respects, no other country in the world has legislation that is as comprehensive. For example, while the United States and the United Kingdom have similar legislation in place, the $1-billion minimum financial capacity and absolute liability limit are unique to Canada.

Alongside these measures, Canada's pipeline safety system already transports 99.999% of product safely, as was mentioned earlier. With this in mind, I would ask if the member opposite supports what can fairly be described as the best pipeline safety system in the world.

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

Mr. Speaker, I thank the Parliamentary Secretary to the Minister of Natural Resources for her question. We have both served on the committee together.

I would not necessarily use such laudatory and glorious language. Nevertheless, we will support the bill at second reading because it really is a good step forward. However, nobody should make the mistake of thinking that this is a pure and complete application of the polluter pays principle.

The reason is that if there is an absolute liability of $1 billion without having to prove fault or negligence on the part of the company, and if the disaster or catastrophe costs more than $1 billion, taxpayers—the government—could be affected and forced to pay part of the cost. According to the polluter pays principle, those costs should be covered by the company, which must take every precaution to minimize the risk of a disaster. Even though this is a positive step in that direction, it is not a complete application of the polluter pays principle.

When it comes to statistics, I do not necessarily want to talk about the ones that the government likes to bring up. However, other studies indicated that in the case of TransCanada and energy east, the company would be unable to locate leaks amounting to less than 1.5% of the flow. Now, 1.5% can add up to millions of litres along the length of the pipeline, so that is a huge amount of oil that could cause significant damage and affect individuals.

I do not necessarily want to get into statistics, but it is important to look at this kind of study, respond to it, and determine whether the statistics are wrong. If the study is correct, then we need to be able to address that concern. That would improve and optimize the safety of the pipelines we are talking about.

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

Mr. Speaker, I am delighted to speak today on the government's new pipeline safety act. I will be splitting my time with the new member for Whitby—Oshawa.

During this debate, all members have reminded us of the great importance of Canada's energy infrastructure. We heard how Canada's pipeline network functions as a vital energy highway, delivering oil and natural gas to our homes, our businesses and industry, and supplying energy to all forms of transportation. While the New Democrats would prefer to deny this fact, it is clear that we all benefit daily from the energy that Canada's pipelines carry. We rarely think about this key infrastructure because, quite frankly, there is rarely a problem with it because it is so safe.

Canada has a vast network of federally regulated pipelines—in fact, over 73,000 kilometres. Those are just the federally regulated pipelines across this great country. In addition, 70 pipelines deliver oil and natural gas across the Canada–U.S. border every day safely and reliably.

In 2013, Canada and the United States' energy trade was the largest in the world, at some $140 billion that year. That is far more than total trade between any other two nations on earth. Today, historic volumes of Canadian energy are being supplied to the United States. In fact, Canada and the United States have dramatically reduced their oil imports from offshore. I think most of us in the House would agree that that is a good thing. At the same time, oil imports from each other are at record highs, contributing to greater North American energy security and economic growth in both countries.

As large as Canada's pipeline network is, the United States' pipeline system is even larger. According to the Pipeline and Hazardous Materials Safety Administration, an agency of the U.S. Department of Transportation, there are over 2.6 million miles of pipelines in America moving oil and natural gas throughout the United States. The American pipeline network is more than 50 times the length of the United States interstate highway system, which really makes the point that it is a tremendously huge system and a very safe one as well. Again, since pipelines have proven to be the most efficient, safest, reliable, and energy-efficient way to transport oil and gas, we rarely think about these energy highways and the fact that they link most communities throughout North America.

When it comes to pipeline safety, Canada's record is outstanding. Our pipelines are among the safest in the world. Between 2008 and 2013, 99.999% of the oil and products shipped by federally regulated pipelines arrived safely. Canadians can and should be proud of that record. Instead, I hear criticism and doubt from the members, particularly the NDP across the aisle. We have seen the conversion on the road to Damascus, as it were, of the Liberal members opposite. I am happy to see that they have got on board, after seeing that it is something they absolutely have to support.

Moving that same amount of oil by road or rail would require 15,000 tanker trucks or 4,200 rail cars every day, and would consume more energy and cause higher greenhouse gas emissions. The choice to move these products by pipeline is clearly the right one. There is no doubt about that, and I honestly do not think anyone in the House would deny that truth.

When it comes to safety, Canadians demand and deserve the very best. We want our communities to be safe, and we want the environment to be protected. That is why the pipeline safety act is so important. In short, we understand that public safety and environmental protection are necessary conditions for energy development. The pipeline safety act is one more way in which we could continue to build public confidence in our 73,000 kilometres of pipelines.

Bill C-46 would build upon Canada's already impressive pipeline safety record by focusing upon three key areas: prevention, preparedness and response, liability and compensation.

Bill C-46 would include preventive measures that would clarify the rules and responsibilities of pipeline owners to prevent pipeline incidents, increase safety for Canadians, and provide better environmental protection.

The bill would require companies operating major oil pipelines to have $1 billion in financial resources at their disposal, with sufficient resources always on hand to ensure an immediate and effective response.

We would enshrine the polluter pays principle in law so that polluters, not Canadian taxpayers, would be held financially responsible for the costs of damages that any incident might cause.

We would introduce absolute or no-fault liability so pipeline operators would be held responsible, even when fault or negligence has not been proven. That is an important point that I think has been somewhat missed, even though we have had quite a bit of debate on the legislation.

For companies operating major oil pipelines, the amount for absolute liability would be set at $1 billion.

Of course, our first priority is to prevent spills from happening in the first place. That is why we are proposing amendments to the National Energy Board Act that would build upon other recent improvements our government has implemented. These include increasing the number of inspections and audits conducted each year and giving the National Energy Board the authority to levy monetary penalties.

As well, we would ask the NEB to provide guidance on the use of the best available technologies in pipeline projects. This would include materials, construction methods, and emergency response techniques. As a result, the National Energy Board, one of the most respected energy oversight bodies in the world, would be involved in all stages, including new construction of pipelines.

We are proud of Canada's safety record with pipelines, but we have no intention of resting upon our laurels. There is no room for complacency when it comes to the safety of Canadians or the safety of our environment. Bill C-46 would reflect our government's commitment to doing even better, in spite of the fact that the record of pipeline companies is already impeccable.

We also understand the importance of consulting with Canadians, including with aboriginal peoples who are often living closest to where our natural resources are found. That is why, beyond this new legislation, our government is also taking an inclusive approach to safety and resource development. We are deeply committed to working directly with aboriginal peoples throughout Canada, in all aspects of pipeline safety operations, including planning, monitoring, incident response, and related employment and business opportunities.

The Government of Canada has a constitutional duty to consult with aboriginal communities whose aboriginal and treaty rights may be adversely affected by a proposed project, and we are doing that. We believe that aboriginal peoples must be partners in everything we do, from ensuring the safety of our pipeline system, to protecting our marine environment from incidents, to sharing in the benefits of developing our resources. That is why our government is determined to forge ahead with a strong and lasting partnership with aboriginal peoples in the responsible development of our resources and our pipeline safety system.

We have seen the NDP continuously vote down all of our increased pipeline safety measures, and Canadians know they simply cannot rely upon the NDP to prioritize their safety or the environment. Canadians can trust our government. With Bill C-46, we would be making Canada's world-class pipeline safety system even safer.

I urge all hon. members, from both sides of the House, to support the truly effective proposals put forth by this legislation. I look forward to hearing the rest of the debate on the bill.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

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

I wonder whether he could provide more details about a measure I would have liked to see in the bill. I am not sure if it is there, which is why I am asking him.

One of the big concerns in Sherbrooke is the fact that when a company is responsible for an oil spill, or a spill involving some other product that is harmful to the environment, the company usually goes bankrupt. It no longer has any resources and can therefore dodge its environmental responsibilities. In the end, taxpayers are the ones who end up covering the cost of repairing the damage.

Does the bill contain any measures for situations where companies can shirk their obligations following an unfortunate spill, no matter where in Canada it occurs?

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

Mr. Speaker, when it comes to major pipeline spills, the average cost of the cleanup is between $5 million and $20 million for major spills. For smaller spills, it is much less.

The bill proposes $1 billion in absolute liability where no fault would have to be proven, and companies would have to have the resources available to cover the cost of the cleanup to that extent. Further, if it turned out that they were found liable and the costs were somehow above $1 billion, which is hard to understand when it is now between $5 million and $20 million for major spill cleanups, those companies would still be responsible for the full cost of the cleanup.

It is in the bill; it is clear and it is substantial. Many would argue that the government may be going a little too far with this. I have heard that concern. We will certainly have to be conscious of the smaller companies when it comes to the $1 billion absolute liability, but I do believe that it would be taken care of.

The member does not have anything to worry about when it comes to companies covering the cost.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, I thank my colleague for his speech. We worked together previously in the Standing Committee on Natural Resources.

I have a question that relates to this bill and the whole question of pipeline safety, because it is impossible to distinguish pipeline safety from the transportation of oil by rail. As the member knows, as chair of the natural resources committee, on present courses, if all of the pipelines that we are contemplating building are built—one to the west, one to the south, which appears to be on permanent hold, and one to the east—in nine years from now, based on the plans to continue exploiting fossil fuels from our oil sands, we will have 1 million barrels a day in excess oil capacity that will not be transported by pipeline.

Can the member help us understand how the government sees this question of pipeline safety and this incredible risk of longer trains carrying many more cars with oil? We saw what happened at Lac-Mégantic. We saw another explosion last week in the United States.