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

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Speaker, the environment is the economy. Nearly two years ago, on May 10, 2013, I stood in the House next to the environment minister to declare what British Columbians and Canadians believe: that the environment is the economy.

Every time we consider whether environmental and economic factors are in balance, we are suggesting that the environment and the economy are in conflict with each other. Some would argue that we must sacrifice one to advance the other. In other words, we tend, wrongly, to start our discussion from the notion that the economy and the environment are at war with each other.

As a member of Parliament, I am increasingly required to consider the impact of industrial projects on the economy and environment, especially in the riding I represent. Throughout the year, conversations at events, in coffee shops, and in the homes of constituents are often related to responsible resource development. Constituents of mine, as individuals and in groups, have consistently expressed their support for Canada's economic success, but have also stood for responsible environmental practices befitting of a riding that many call the most beautiful place on earth.

Some of these proud Canadians include former fisheries minister John Fraser, Carl Halvorson of the North Vancouver Outdoor School based in Squamish, Squamish first nation elder Randall Lewis, and David Bromley, a world-renowned environmental engineer. The environment is the economy. This is the message we Canadians are increasingly taking to our Prime Minister, the natural resources industry, and the environment, fisheries, and other ministers. Bill C-46, the pipeline safety act, shows that our government is listening.

The environment is the economy. This is best illustrated in the context of value-added projects both in the riding I represent and elsewhere in Canada. This government has created a challenging review process for natural resource projects, where proponents have a high standard to meet. They must increasingly show better productivity and value to Canada, with less waste, more efficient use of resources, and a respect for the environment we cherish. These projects have a significant impact on the quality of life in Canada, providing financial and infrastructure inputs. Canada needs these projects.

The automatic reaction of “stop” is a simplistic approach, characteristic of special interest groups that just want to stall projects. This Conservative government believes in the need for continuous improvement in project implementation and impact mitigation. However, we are opposed to the simplistic hands-down rejection by people who would just say no to industry, who forget Canada's entrepreneurial roots, and who would leap to negative conclusions without due process, sound data, or information to support their position.

More and more, we Canadians are learning the benefits derived from a focus on the environment. Specifically, less use of resource inputs such as water, energy, and land has made us more efficient, leading to higher productivity and economic sustainability. As a government, we have emphasised the need for a science-based, independent, objective approval process that keeps us focused on the real objective of less impact, greater efficiency, and sustainability.

This government's focus on these principles has driven a culture of responsibility to improve continuously. The result has been the growth of jobs in the environmental sector, which now supports employment levels that dwarf even the automotive and oil and gas sectors. According to the organization ECO Canada, as of 2013, some 682,000 jobs in Canada are directly related to the environment. The focus on the environment is a change agent, not a simplistic “stop” agent. It is why I continue to say that Canada's environment is our economy.

Our government continues to rely upon independent, objective scientific assessments before approving any project. We saw this approach at work recently in our government's rejection of the Taseko New Prosperity mine project in northern B.C., an ambitious proposal to create thousands of jobs and large economic stimulus, but nevertheless rejected for environmental reasons. Many British Columbians supported the Taseko initiative, but environmental considerations prevailed. As demonstrated by that decision, our government has pledged that natural resource development will only proceed if the project is proven to be safe for Canadians and safe for the environment.

The pipeline safety act would complement a number of measures previously implemented by our government to strengthen pipeline safety, which provided the National Energy Board, for example, the authority to levy administrative monetary penalties and increase the number of inspections and audits.

Bill C-46 would build on this work and provide a world-class regulatory regime for Canada's pipeline sector, while strengthening protection for Canadians and the environment. Bill C-46 addresses three main areas, which are incident prevention, preparedness and response, and liability and compensation.

Today, as a lawyer, I am focusing on the area of liability and compensation, particularly emphasizing the bill's strengthened measures to compensate for environmental damages in keeping with the polluter pays principle.

Under Bill C-46, our government would deliver on the promise to enshrine the polluter pays principle in law, to make it an important foundation for the pipeline safety regime. It would place accountability on industy and protect Canadian taxpayers from having to pay for damages and cleanup costs in the unlikely event of a spill or accident. The polluter pays principle assigns responsibility to the polluter for paying for damage to the environment, as well as the associated cleanup costs.

One of the key features of the proposed law is that it would raise the cap for absolute civil liability up to $1 billion for pipeline owners, even where there is no fault or negligence on the part of the proponent. On the other hand, liability where the pipeline owner is at fault or negligent would remain unlimited. Another key feature is that the legislation would establish the legal right for various parties to seek environmental damages. This would ensure that any damages to wildlife, waterways, or other public resources could be addressed.

The absolute or no-fault liability regime created under Bill C-46 would be one of the most robust and comprehensive in the world. While the U.S. and the U.K. have similar legislation in place, the $1 billion minimum financial capacity, and absolute liability limit would be unique to Canada. Canada would also be unique in having a cost recovered financial backstop model that provides complete coverage for cleanup and damages.

Our country has a world-class pipeline safety system. Between 2000 and 2011, federally regulated pipelines boasted a safety record of over 99.999%.

The natural resources sector is the largest private employer of aboriginal people in Canada. The plan described in the pipeline safety act was developed closely with industry and aboriginal communities to provide training for aboriginal communities on pipeline monitoring and response. This would allow aboriginal people to continue to make important contributions as full partners in the development of our natural resources.

In conclusion, Canada's environment is the economy. This government supports robust processes that take into account all considerations relevant to British Columbians and Canadians: a sustainable environment, value-adding jobs, and thriving economic growth.

Let us put an end to the “stop” mentality, which is characterized by not having sound data, and let us start encouraging open dialogue that considers all of the evidence, starting with this question of pipeline safety.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I would like to thank the member who just spoke and whose riding has a very long name, but one that is very beautiful and evocative.

He mentioned the safety statistics for pipelines. However, it should be understood that there are risks nonetheless. The more pipelines that are built and the higher the volume of oil transported, the greater the risk of oil spills. We cannot overlook these risks because they also affect drinking water, for example.

I would like him to go into more detail about how the government plans to use science and technology, for example, by encouraging innovative projects in this field so that Canada is a leader in safety and how it plans to ensure that we have robust laws that will address the risks associated with the transportation of these goods.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Speaker, I would like to thank my colleague for her question, which I am very pleased to answer.

In fact, greater pipeline safety will also encourage investment in a sector that is extremely important to the Canadian economy.

For example, the oil sands alone support more than 275,000 jobs across Canada. According to the Canadian Energy Pipeline Association, in 2013, pipeline companies invested $6.5 million in aboriginal communities and paid $1.1 billion in property and corporate taxes.

Therefore, the result is not only to increase safety, build on world-class safety, and increase liabilities for polluters beyond anything known elsewhere in the world, but also to encourage investment in a sector that is very much the engine for growth in Canada, which we must do with the best of environmental protections.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, a number of the Conservatives like to stand up and talk about this world-class safety record. I do not think it is fair for the government to assume the credit for either other governments or, more importantly, companies that have long-established responsible attitudes toward ensuring that we have good standards, at least in part. When I look at what is being proposed in the legislation, it talks about 70,000-plus kilometres just on the federal responsibility side. I do not know the actual kilometres, but there are many additional kilometres of non-federally regulated responsibilities for pipelines.

I wonder if the member might want to provide his comment with respect to the National Energy Board's role to align federal and provincial pipeline safety as a whole, because it is not—

[The Deputy Speaker, NDP, Joe Comartin]

The hon. member for West Vancouver—Sunshine Coast—Sea to Sky Country.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Speaker, it is always a pleasure to respond to my colleague's questions.

First, I am sure my colleague would agree that we as Canadians cannot afford a situation where tens of billions of dollars are lost per year because we cannot get our petroleum products to tidewater.

Second, I am sure my colleague would agree that, when looking at the disaster in Lac-Mégantic, we cannot afford to transport those petroleum products by rail or by truck when we have world-class, safe pipelines.

I am sure my colleague would also agree that, if we can continue to build on that great 99.999% safety record of federally regulated pipelines, we should do so. That is what this bill is about. We want to get it passed so we can build on that excellent record.

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

Mr. Speaker, all of my colleagues on this side of the House have talked about the importance of job creation. One of the groups with whom we know we need to work is the aboriginal community, and my colleague talked about that. We know that the natural resource sector employs thousands of people from the aboriginal communities. In fact, more than 13,000 aboriginal people were employed in the energy sector in 2012.

I wonder if my colleague would comment very briefly on what opportunities this would offer to our aboriginal youth.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Speaker, the aboriginal communities would be partners in the wealth creation and resource exploration that this bill would help unfold. I have three world-class aboriginal communities in the riding I represent: the Squamish, the Sechelt, and the Sliammon. Our government works very closely with these communities. That close co-operation is representative of what we would see, as safe pipelines take petroleum securely to tidewater.

[The Deputy Speaker, NDP, Joe Comartin]

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 February 26 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 second time and referred to a committee.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, as always, it is an honour to rise in the House to speak on behalf of my constituents from Surrey North.

Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act would amend the statutory liability regime for federally regulated pipelines in Canada. The bill includes absolute liability for all National Energy Board regulated pipelines, which means companies would be liable for costs and damages, irrespective of fault, up to $1 billion for major oil pipelines, pipelines that would have the capacity to transport at least 250,000 barrels a day. Companies would continue to have unlimited liability when they were at fault or negligent.

The bill is a much needed and long overdue first step toward a true polluter pays regime for pipelines in Canada. The official opposition, the NDP, has been calling on the government to bring in legislation so we have a true polluter pays system.

I think the Conservatives understand what polluter pays is, however they are reluctant to make it happen in Canada. Canadians understand what polluter pays means. Even my children understand what it means. Unfortunately the Conservatives have chosen not to understand its meaning to protect their friends in the oil companies, friends who are damaging the very environment of Canada.

I think Canadians understand what polluter pays means. As I pointed out, my children understand that if one makes a mess, then one cleans it up. It is not for the next generation to clean up that mess, and I will share a story of my children to demonstrate that.

I have two children, a son, Jaron, who is 8 years old, and daughter, Jessica, who is 18. My son is a typical eight year old. He makes a mess, whether it be with his toys, or paint or a lot of other stuff, as it is the case in every Canadian household. Children make messes at home. However, one afternoon there was a huge mess of toys in the livingroom. My wife asked Jaron to clean up the mess he had made from playing with his friends. He looked at her and then looked at my daughter and said that she would clean it up for him. Jessica looked at him and said, no. He had made the mess and he would have to clean it up. Jaron then went running to his mother and told her that his sister would not clean it up. His mom told him that it was his mess and that he would have to clear it up. He understood that. He knew it was his mess and he needed to clean it up.

This is a very basic concept. Whoever makes the mess must clean it up. Unfortunately if the Conservatives' friends in the oil industry make a mess, or if a pipeline erupts or is damaged, they do not expect the oil companies to clean it up. The Canadian taxpayers have to do that. How fair is that? If most Canadians understand the concept of polluter pays, why can the Conservatives not understand that? I think the Conservatives understand it, but they are trying to protect their friends in the oil industry and are putting the liability on Canadian taxpayers.

The bill before us is the first step with regard to the polluter pays, unfortunately the implementation of many of the proposed changes in Bill C-46 are left to the discretion of the National Energy Board and cabinet, or the details are left to regulations.

Bill C-46 leaves considerable leeway for politically motivated decisions and backroom arrangements between operators and the National Energy Board, a regulator that lacks credibility on the pipeline front. We are therefore left with uncertainty as to whether the bill goes far enough.

I come from British Columbia, and we have seen the opposition to the northern gateway pipeline. We know the mess that the National Energy Board has created where legitimate people were not allowed to testify or make their presentations in front of the NEB. The Conservatives have put in so many roadblocks to have a fair process. If we are going to have pipelines, there has to be a clear process in place to ensure that all of the considerations are taken before a decision is made.

The Conservatives have made a mockery of the process, and they have gutted the very environmental regulations that are supposed to protect not only our environment but also our resource sectors in this country. They have failed to take a leadership role to show that some of these projects are viable and that we take into consideration the environmental regulations and guidelines to ensure we have projects protected. Again, the polluter pay system is something that is not foreign to the Conservatives; they choose to be on the side of the oil companies instead of Canadian taxpayers.

Bill C-46, as a first step, makes some important improvements to Canada's liability regime, but the lack of certainty about the degree to which polluters would be required to pay undermines these improvements and leaves uncertainty as to whether the taxpayer would still be on the hook for cleanup costs when $1 billion in fault or negligence cannot be proven.

The amount of $1 billion is a drop in the bucket when it comes to a major oil spill. We have seen oil spills cost much more than $1 billion. There needs to be more to ensure that Canadian taxpayers are not left holding the bag that Conservatives are passing on from their friends in the oil companies to the taxpayers. That is not fair. Canadians expect parliamentarians to ensure that liability stays with the polluter, not with the taxpayer.

When it comes to profits, the oil companies will gladly make sure that they take those profits, and Conservatives actually help the oil companies. If they lose money, that loss is nationalized on the backs of the taxpayers. People in my constituency clearly would not want that to happen. I have talked to many people in my constituency who want a system where we ensure that liability stays with the polluter and not with taxpayers.

I have a minute left, and I could go on in this subject because it is very much a concern to people in my constituency. Basically, there is no doubt that Canada's natural resources are a tremendous blessing and the energy sector is a driving force of our economy. The NDP vision for leveraging those resources to create wealth and prosperity does not sacrifice social or environmental sustainability.

The vision of the official opposition can be summed up in three key principles: first, sustainability, to make sure that polluters pay for pollution they create instead of leaving costs to the next generation; second, partnerships, to make sure that communities, provinces, and first nations all benefit from resource development, and that we create value-added, middle-class, high-paying jobs in Canada; and third, long-term prosperity, to leverage Canada's natural wealth to invest in modern, clean energy technologies that will keep Canada on the cutting edge of energy development and ensure affordable rates into the future.

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

Mr. Speaker, the member opposite noted that this legislation is a step in the right direction, as many of his colleagues have already done. In fact, one even stated that they have been looking forward to legislation like this for some time.

My question will be directly put: Will the member and his colleagues be supporting this legislation?

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, as members know, it is a small step in the right direction.

We have been calling for this legislation for a long time. During the four years I have been here, the Conservatives have failed to see that the polluter must pay. They are more interested in protecting their friends in the oil industry than in actually protecting taxpayers.

This bill does not go far enough. We are hoping for some amendments to be brought in at the committee stage. I hope the Conservatives will accept those amendments to make the legislation better, to protect Canadians and not the oil companies.

At this second reading stage, I will be supporting this bill. However, it is on the condition that we will make this bill stronger so that Canadians are not left with the liability, that polluters are left with the liability. The polluters have to pay.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, my colleague rightly noted that the liability cap at $1 billion is a problem. In Kalamazoo, Michigan, close to where we reside, there was one oil spill into the river there that cost $1.2 billion to clean up.

My question for my colleague is, why is it the liability capped at that rate? If that circumstance took place in our country, for that one incident alone, taxpayers would be on the hook for $200 million.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, the hard-working member for Windsor West is absolutely right.

Who are the Conservatives trying to protect with the $1 billion liability? We all know it costs much more to clean up some of the messes created by oil spills. Conservatives have continued to protect their friends in the oil industry and are burdening future generations with the polluter costs.

We have been asking the Conservatives to ensure that the polluter pays. The very people who pollute the environment and who cause damage to the pristine environment around Canada should be the ones who pay. We should be taking preventative measures. This is something we need to invest in to ensure that these oil spills do not happen in the first place.

Time after time, whether it is on crime prevention or on taking preventative measures to ensure we have a solid network of secure pipelines, Conservatives have failed to invest. If we are going generate the natural wealth we have in this country, we need to ensure that we have secure, safe pipelines in place. Conservatives are not looking out for Canadian taxpayers. As usual, they are trying to protect their oil company friends.