This bill was last introduced in the 41st Parliament, 2nd Session, which ended in August 2015.
Greg Rickford Conservative
This bill has received Royal Assent and is now law.
This is from the published bill. The Library of Parliament often publishes better independent summaries.
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.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.
The Deputy Speaker NDP Joe Comartin
The hon. member for Saanich—Gulf Islands still has 3 minutes and 30 seconds for questions and comments.
Bruce Hyer Green Thunder Bay—Superior North, ON
Mr. Speaker, I would like to ask the member if she is familiar with the work of scientists, technicians, and academics on double-walled pipelines with sensors in between, which are close to being spill-proof. Of course, they are not mentioned in this bill, but an increasing number of experts feel they are necessary to prevent the kinds of problems to which the member has already referred.
Elizabeth May Green Saanich—Gulf Islands, BC
Mr. Speaker, speaking to Bill C-46 relating to pipeline safety, I thank my colleague in the Green Party, the member for Thunder Bay—Superior North.
There have been a lot of advances in the technology, particularly for double-walled pipelines. None of the current pipelines being proposed across Canada are double-walled. There is no question that if there are two walls with sensors between each of the two walls in a pipeline and sensors to detect leaks, that it is far more likely to operate a system where leaks are less frequent. It would be a significant improvement on the safety measures for the currently proposed pipeline.
What I want to stress, as I did in my speech, is that the Green Party opposes any of the currently proposed pipelines, whether they are heading west or east or south or potentially north, any pipeline determined to deliver raw bitumen to tidewater, to ship overseas, carrying the very dangerous mixture, the very environmentally damaging mixture of bitumen mixed with dilbit. That is something we would oppose.
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, I would like to thank the member for Saanich—Gulf Islands for her speech.
There are categories of liability in the event of a spill. If fault or negligence is proven, there is unlimited liability; if it is not proven, liability is limited to $1 billion.
I would like my colleague to tell us more about the problems this could create, because there would obviously be a legal process to determine liability, which, in my view, would delay compensation.
Elizabeth May Green Saanich—Gulf Islands, BC
Mr. Speaker, I thank my colleague for his question.
The $1 billion cap is really a problem because there is the possibility, and even the probability, of pipeline disasters where the costs would exceed $1 billion. For example, there was the Kalamazoo River disaster in Michigan caused by Enbridge. More than four years later, the river is still polluted.
Dilbit spills, as far as we know, cannot be cleaned up, at any cost, and the attempts so far to clean up in Kalamazoo have exceeded the $1 billion cap set out in Bill C-46. That means that whatever is left over in terms of cost within Canada would be absorbed by the Canadian government, Canadian taxpayers.
I know that Conservative members have pointed out that the Kalamazoo, Michigan spill occurred in another country, but it was still caused by a major Canadian company.
Craig Scott NDP Toronto—Danforth, ON
Mr. Speaker, I am honoured to be rising to speak to Bill C-46, an act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act. We know the bill deals with the whole question of liability for pipeline spills.
My riding of Toronto—Danforth is a very strong environmental riding. The environmental consciousness of the average citizen is exceptional. Constituents are very concerned about the serious environmental risks associated with pipeline projects in Canada, including oil spills. It is also important to say they also understand that pipelines are directly tied to the facilitation of accelerated oil extraction and oil export that is at cross purposes to the urgent need to fight climate change, the single most important challenge the world faces and, indeed, the single most important challenge that we have faced for decades without acting properly on it.
Many also realize the particular risks of localized pollution of diluted bitumen once it spills in any form, whether from a tanker or from a pipeline, as the member for Saanich—Gulf Islands has been emphasizing in today's debate. My constituents have very little faith that the government is taking steps in general to ensure that these kinds of environmental concerns are thoroughly addressed. They need to know that the environment is being protected and that necessary preventive and response measures are going to be put in place.
Of course, I take these concerns seriously. When it comes to major resource projects like pipelines, the NDP believes that proper community consultation, respect for the rights and title of aboriginal peoples, and rigorous environmental assessments are the bedrock of any kind of viable sustainable development approach. This has not been the approach taken by the government, by and large, in the review, for example, of northern gateway, Kinder Morgan and Keystone XL, and in the same flawed process that was applied to Line 9 and is now being applied to Energy East.
The legislation we are debating today is, however, a step forward. Bill C-46 seeks, among other things, to ensure that some polluters will be absolutely liable for harm caused by a pipeline spill, including environmental damage, what is termed in the bill as non-use harm. The bill includes absolute liability for all National Energy Board regulated pipelines. That means companies would be liable for costs and damages, irrespective of fault, up to $1 billion for major oil pipelines, which are pipelines that ship or transport more than 250,000 barrels of oil a day. Where there is fault, including negligence, there is no cap, and that is a good feature of this bill. For those under 250,000 barrels a day, it is left to regulation. Therefore, there is lack of clarity as to what the liability cap will be for smaller operations.
It is a good start, as I have said, and that is why, of course, I will support it at second reading. From what I have heard, most of my colleagues, if not all of them, also will be. We need to send it to committee for further study and amendments, and this is exactly the kind of bill where there will be real expertise brought to bear from across the spectrum. I honestly hope the committee will have enough hearings to go into the finer details of the bill to get it right. There seems to be a cross-party consensus that it needs to be done right, by and large, and it is not the kind of bill that should be overly politicized.
We in the NDP have long been consistent in our position that companies, corporations, and not taxpayers and not citizens who call on the public treasury for other government programs, should cover the cost of pollution. The bill is long overdue as a first step toward a polluter pays regime for pipelines in Canada.
There are some other specific provisions I should briefly point out by way of being somewhat laudatory of what the government has put forward in Bill C-46. One is that aboriginal governments, termed “any Aboriginal governing body”, in the bill, are treated similarly to other governments, municipal, provincial and federal, in terms of the role they play in cleanup and being compensated for any kind of cleanup they have to do. Other powers and rights are given to them as well, and that is something.
Additional remedies, as part of the judgment that a court can give under offence provisions in the National Energy Board Act, include such creative possibilities as ordering the creation of scholarship funds for environmental studies. This is written into the bill.
Interim compensation is possible as one of the orders from the new pipeline claims tribunal, which can be called into being in cases of so-called designated companies. The system set up by the bill would have the ability to access as much of the pooled liability reserve funds as the National Energy Board would deem needed in the case of designated companies. Therefore, when a company is sharing a pooled fund, to ensure it has enough money, it is not just its share of the pooled fund that can be accessed, but the entire fund, at least on my reading.
Also, in terms of the kinds of fines that come with the offence provisions that already exist in the National Energy Board Act, there are a number of new headings under which aggravation of damages could be sparked, or what kind of extra factors would mean higher fines. One of the aggravating factors is where there is evidence that shows that the corporation allowed the spill to happen essentially as part of an economic calculus in order to save costs, in order to make more money.
All of these things are to be commended in the bill. There are, however, more than a few problems.
The first problem has been mentioned a few times, and that is setting the limit on liability in cases of so-called non-fault at $1 billion, which may not be sufficient. The member for Saanich—Gulf Islands has already indicated clearly that we know it has already cost more than $1 billion for the cleanup in the Kalamazoo River area. We also know the cleanup has not actually worked and to some extent the attempt goes on, whether a real cleanup will ever be possible given the nature of diluted bitumen.
Second, much of the bill is heavily laden with regulatory and discretionary provisions. An awful lot of power is given to the cabinet and the National Energy Board to set out detailed regulations. This includes, for example, that this new pipeline claims tribunal exists in the act in a very general way. The Governor-in-Council, however, would be given the power to make regulations on virtually everything to do with this tribunal, including in subclause 48.47(a) “prescribing the terms and conditions of appointment of its members”. There is nothing in the act—we have nothing to look at—to know what kind of tribunal this would be. Where are these members going to come from? How are they going to be appointed? How do we know this tribunal will be a fair and adequate replacement for the courts, for example, in the stream of cases that might go to it? There is actually a lot of room for manipulation of that pipeline claims tribunal by virtue of so much being left out of the act.
Other problems are more in terms of how things are left to regulation, even as the act has taken care to ensure some things cannot be regulated. For example, it appears from my reading that the Governor-in-Council cannot prescribe higher amounts than the $1 billion on a company-by-company basis. It is allowed to say yes for a certain kind of pipeline that carries much more than 250,000 barrels per day that the liability limit should be more than $1 billion. However, it cannot do that on a company-by-company basis, although it would be specifically allowed to do it on a company-by-company basis for pipelines involving under 250,000 barrels. Therefore, if there is a company that is notorious for having problems, notorious for non-compliance, notorious for being a greater risk and yet still is in the game so to speak, there seems to be a prohibition on treating that company differently. There is a kind of formal equality idea here, which is a problem.
In terms of the amount of cash on hand that a company has to keep in order to cover liability, the National Energy Board is not required to ensure that the money on hand includes enough money for any potential loss of non-use value, which is code in the bill for environmental damage relating to a public resource. This is part and parcel of a couple of features we discussed earlier in questions and answers in relation to an earlier speech. There are a couple of areas in which, although the act starts out by saying so-called “non-use value”, environmental damage is covered as one of the three major heads of damage that the bill's liability provisions are meant to go to, but there are other provisions in the act that seem to claw that back.
In conclusion, this is a good start for sure, but at the same time it is a bill that needs close scrutiny in committee. It is the kind of scrutiny that will be very easy to understand in terms of what is necessary to improve the bill. I hope all parties will gather together to do that.
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, I appreciate a number of the comments the member has made.
The Conservatives will often talk about the safety record of our pipelines. One of the things I have come to know over the years is that Canadians see the value of the transportation of our oil and gas through pipelines, but at the same time they do have an expectation, justifiably, to ensure there is a high sense of security and safety related to the pipelines. To that extent, it is good we have the legislation before us.
The member might want to provide some comment on living up to the expectations that Canadians have as a whole when it comes to protecting our environment and so forth, when we talk about the whole issue of pipeline security.
Craig Scott NDP Toronto—Danforth, ON
Mr. Speaker, as far as I understand, from one set of figures that I have, Canadians have differential confidence in different means of transporting oil. Twenty-nine per cent feel confident that rail is safe. After Lac-Mégantic, we know why that figure is so low. Thirty-seven per cent believe that oil tanker transport is safe, which is still low. Closer to 50% think pipelines are safe. It is absolutely true: part of the premise of the question is that there is some sense that Canadians understand that pipelines, as compared to other methods, may be safer.
At the same time, I want to emphasize one thing that again the member for Saanich—Gulf Islands has been emphasizing. Diluted bitumen is a very different commodity from other forms of oil, whether it is semi-processed or more refined. The specific problems that can be caused by spills of diluted bitumen have to make that kind of transportation by any means, but especially by pipelines, across anything resembling environmentally sensitive areas a special consideration.
When we throw into that the idea that refining at source or upgrading enough at source—that is in Alberta—is itself going to add so much more to the value of the economy in Alberta, such that less has to be taken out of the ground in order to generate the same revenues, there seems to be a good case to be made for the fact that pipelines should not be used in what is ultimately a rip and strip and ship understanding of getting bitumen out of Alberta at all costs.
There are ways for a transition to a post-carbon economy—keeping as much of that in the ground as possible while allowing higher value-added oil to come out of Alberta—to be achieved as we are moving toward that greener economy.
Anne-Marie Day NDP Charlesbourg—Haute-Saint-Charles, QC
Mr. Speaker, the member for Toronto—Danforth spoke about how important the environment is to him and his constituents. The people of Charlesbourg—Haute-Saint-Charles feel the same way.
They care about the environment and about protecting it. The Conservatives seem to be the only ones lagging behind in responding to disasters. They take one step forward after a disaster happens. There have been three recently in northern Ontario.
Does the member not think that public safety should be a higher priority for the current government? Should this government not act more quickly and better protect Canadians?
Craig Scott NDP Toronto—Danforth, ON
Mr. Speaker, we really need to focus on the participation and role of the people in the communities these pipelines are going through and of the people in the communities where the oil is extracted.
It is also important to note that Bill C-628, introduced by our colleague from Skeena—Bulkley Valley, deals with this very topic, which is the need to give people and communities a stronger voice in the environmental assessment process.
Charlie Angus NDP Timmins—James Bay, ON
Mr. Speaker, it is always an honour to rise and speak on behalf of the people of Timmins—James Bay, and speak on the issue of Bill C-46, the so-called pipeline safety act, the amendment to the National Energy Board Act. As I rise today, back home there is great concern in my region about the third derailment in this past month in our region. There were two tanker derailments in the small community of Gogama, one at Hornepayne. Twenty-nine cars carrying heavy crude went off the tracks. A number of them are still burning out of control in the Mattagami River right now. The Mattagami River runs from that part of northern Ontario right through the heart of the city of Timmins, through communities like Smooth Rock Falls up into the Missinaibi and the Moose rivers in James Bay. A huge drainage area of 37,000 kilometres is affected.
This heavy crude is burning in a fish habitat very close to the community of Mattagami First Nation and very close to Gogama. We need to look at these issues in terms of government policy. We saw the horrific tragedy at Lac-Mégantic this past summer and we saw the failed safety measures. We saw the promises that have been put in place allowing companies to look after themselves, that somehow Canadians would be better protected in this privatized world and that if we let corporations look after themselves without oversight, everything will be fine. Many good people in Lac-Mégantic died because of that.
If the train had derailed just a few kilometres from where it did, not into the river but into the community of Gogama, we could have had a repeat of Lac-Mégantic. For all of us across so much of Canada and across the north, our communities are built on the rail lines. Across the street from my house, the Ontario Northland carries its heavy duty sulphuric acid from the smelter in Rouyn-Noranda. In fact my street address is Mileage 104, on the railway line. We are so closely tied to the issues of safety.
I speak of that in terms of the huge economic impact the oil industry has on our country. It is a huge driver, but also we need to start addressing the growing environmental impact to make sure that there is a balance. There will be some people who say “we will not ship by rail anymore, let us get the pipelines through and once the pipelines are through, we will not have to worry anymore”. The problem is the lack of a long-term vision of the government where, as my colleague from Toronto—Danforth said, they only believe in the rip-and-ship philosophy.
There is something fundamentally, economically wrong when the vision of our national economy is to take raw bitumen out of the ground, ship it 2,000 kilometres to a port in Quebec so it can be shipped off to China or someplace else to be processed. That is an abomination. That is not an economic plan. The people who carry the risk are the people living along that pipeline because the government stripped all the environmental protection acts, stripped the Navigable Waters Act so that the need to have the shut-off valves along the rivers does not exist anymore.
We are told that somehow this is in all our interests. I see oil industry ads all over Ottawa say “It's your oil, it's our oil, let's do the right thing”. It is not our oil. It should be Canada's interest. No, it is our risk. The benefits are going to the Koch brothers in the U.S. They are going offshore. Ask any northerner at the pumps, for all the damage they suffered in the economy lately, when have they ever had a break on gas prices. We never had one.
We need to look at this. There are some good things in the bill about issues of liability. I ask people back home about the processes that are in place to protect the public. If I look at the National Energy Board, I do not feel much comfort. I guess if I were an oil lobbyist, I would feel great. If I were a big Suncor or Sunoco, I would think the National Energy Board is good. Energy east is a major project that is happening. The public has a right to participate because if we talk about moving bitumen through pipeline, there needs to be public buy-in and they have to understand what is at stake.
The National Energy Board needs to hear from the citizens about what is at stake. However, citizens do not get to write a letter to the National Energy Board. They have to get approval to write a letter in order to be able to write a letter. The National Energy Board does not accept unsolicited letters. People have to apply and then it will decide whether or not their opinion counts. That is not how to build public trust. That is not social licence. The National Energy Board will decide whether the letters will be posted or whether to outright refuse them.
Therefore, granting or refusing a project application impinges on whether or not there is a direct effect on the interests of the person, the degree of connection between the project and the person, the likelihood of severity of harm that a person is exposed to, and the frequency and duration of a person's use of an area near the project. I am trying to interpret what that means. Maybe if I live right on top of the pipeline I get to go to the hearings to say whether or not I like it. If I am like the citizens of Timmins, in the case of the Gogama derailment, if I am part of the larger population of 37,000 square kilometres who has been impacted by this present derailment and if it was a pipeline blowout, would any of those people be allowed to speak at the National Energy Board hearings?
The issue we are dealing with here with crude, with oil, are about a national vision that says that there is no point processing and upgrading in our own country where we can create value-added jobs and ensure the great gifts we have in terms of resources of oil, gas and mineral production. There is no national vision to upgrade, to make sure there is value added, so we are taking less out of the ground because we would see more in our economy. However, we are being told that somehow we should trust the pipeline agenda because the government has turned our country into a petrol state and, like all petrol states, it is corrupt. We see its attack on birdwatchers, on environmental organizations, on anyone who speaks up against its agenda.
We are supposed to believe that bitumen is just like oil, but it is not. I am looking at Bill C-46 that talks about a $1-billion liability, which was surpassed in terms of the damage that Enbridge did to the Kalamazoo River. It is still being ordered by the Environmental Protection Agency to go back and fix the damage it did to the Kalamazoo River. It may not ever be able to fix the damage it did to the Kalamazoo River because it did not have the proper oversight.
I am thinking of a pipeline running through northern Ontario like the train that ran through Gogama. If there is a blowout and it is carrying bitumen, is there enough protection in this bill to offset the billions of dollars in damage that would accrue? If this northern gateway pipeline had ever gone through and it was blowing bitumen out through the B.C. mountains, how would anyone be able to get to that? When one drives up through the mountains in B.C., sometimes there are trucks at the bottom because it was too difficult to get down to the trucks that went off the edge. How would we be able to somehow get the bitumen off those rivers? That is why President Obama rejected Keystone, contrary to the demands of the Liberal Party and Conservative Party leaders. He said it was not in America's interests to take the risk without the benefit.
Therefore, I am looking at where we need to be as an economy. Our natural resources are vital to us but there has to be social licence. It has to be done safely and with the long-term implication that if companies will be moving products like bitumen out of the ground they are doing it in a safe way. They failed with our rail. We have had too many accidents and we need accountability there. However, if we are supposed to trust that this bill would protect us on pipelines, when we see the collusion of the oil interests and the Conservative government, I do not believe them for a moment and I do not think Canadians do either.
We are interested in this bill and want to bring it to committee, but there is a bigger issue with respect to environmental accountability that has to be addressed by this nation.
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, the member makes significant reference to rail, and points out the many deficiencies. His colleague just gave some percentages in terms of what Canadians really believe. It is clear that there is a great deal of concern related to safety in regard to the shipping of oil and gas products via train. However, it is nowhere near the same concern in regard to pipelines. Canadians as a whole tend to give more support to its transportation through the pipelines.
My question for the member is related to trains. If the marketplace here in Canada or abroad is, as is being projected, continuing to grow in its demand, what are the member's thoughts in terms of train transportation of this natural resource versus pipeline? If he wants to add on the issue of the security component, that would be nice.
Charlie Angus NDP Timmins—James Bay, ON
Mr. Speaker, it is interesting that up to this point in Canada there has been a higher comfort level with pipelines because we are used to pipelines in Canada. The natural gas pipelines that run across this nation are part of the economic engine and we are used to them. However, we are dealing with something different here when we are talking about high-pressure bitumen, and when we are talking about pipelines that are 40 years and 60 years old. These raise serious questions. When we see the stripping of the environmental protection laws that has happened in this country, it undermines people's confidence and the confidence of our international partners.
I do not know why President Obama would ever stand up with the current Prime Minister and say, “Yes, we love your oil agenda because you stripped all the environmental laws; you act like a gang of ruffians when you talk about anything about the environment, you insult the environment; you act like you believe you're in the end times and you want to get the oil out as quickly as possible”. None of our international partners are going to want to be close to that.
If we are going have confidence, whether in rail or in pipeline, there needs to be, number one, some sense that the Conservatives actually care about what is happening with the environment; and number two, that they care about safety.
At the end of the day, we are a resource-based nation. We need to develop our resource, but we need to develop it in a way that is safe, environmentally progressive and that respects the overall world movement to try to deal with this carbon and climate crisis.
Jamie Nicholls NDP Vaudreuil—Soulanges, QC
Mr. Speaker, my hon. colleague mentioned the fact that the Liberal Party supports Keystone XL. This pipeline safety bill is long overdue. I can add to the support of Keystone that in my region of Vaudreuil—Soulanges, Enbridge Line 9 was outside of regulations since 1999. It shows that each of these two parties here in this House have been equally irresponsible in their care of the nation's pipelines.
Could my hon. friend expound on why we are standing opposed to Keystone, and how that differentiates us from the Liberal Party?
Charlie Angus NDP Timmins—James Bay, ON
Mr. Speaker, Keystone does not make sense. We have been told about the thousands of jobs by the Liberal leader and the Conservative leader. We are talking about building a pipeline to the Montana border. Then the resources leave us. We are talking about exporting the product so it can be value-added elsewhere, so other countries make the most of it. What we need to do is move beyond this crazy idea of shipping raw product thousands of kilometres to a port, and we actually do the value-added in Alberta, in Saskatchewan, in Canada so we are creating the most and we actually benefit as a nation from it. Right now, the Keystone plan is dead in the U.S. Nobody wants to talk about it except the Koch brothers, the Republicans, and the Conservative and Liberal leaders. People have moved on.
We need to get our heads around moving toward a progressive, economic, environmental plan that will create long-term jobs; and that when we are using natural resources like dirty oil that we are doing it within a limited capacity so we are actually lessening the impact on our planet.