Natural Resources Committee on March 24th, 2015

[Jeff Labonté]

I could answer the question maybe at a very basic level, which is to suggest that the purpose of this piece of legislation is to focus on pipelines, but it recognizes that there are other ways of moving energy around the country, and the government is looking at those ways.

My colleagues from Transport would be able to talk to rail, but I don't actually have an expertise in that area. That doesn't say that Canadians don't have an interest in making sure that any way of moving energy is as safe as possible, but I can't really say much about rail.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

I'd like to follow up on some of the questions that Monsieur Caron and Ms. Charlton were asking specifically about the three-year time limit.

Let's imagine a situation in which the billion-dollar limit has been reached and then, after the three years, new claims arise. How would those claimants be covered?

[Jeff Labonté]

I guess it's always good to have questions, and the hypothetical ones are always, for officials, very challenging because they're speaking to something that may or may not occur.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

If I may say, in defence of that line of questioning, surely part of the job of legislation is to imagine various hypothetical situations and to cover them.

[Jeff Labonté]

Indeed. The billion-dollar threshold is for major oil pipelines. In the scenario you've laid out, you've suggested that it was a major oil pipeline that would have had an incident, and you've suggested that there's a three-year limitation as to the kind of activity that would take place. If that incident was one in which there was fault and negligence proven, there is an unlimited requirement and liability that exists for the company that operates that major oil pipeline, and that is essentially the legal case.

In the world in which there is some dispute about that liability, there would be the legal system to pursue the dispute between the different parties that would be involved, beyond the absolute liability amount, which would be limited to the billion dollars.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

So the three-year limit would make no difference.

[Jeff Labonté]

The three-year limit—if I'm correct, Joseph; thankfully the Justice folks are here on the more broad scale—really deals with the claims that are made in the context.

I'd have to kind of leave it at that for now and perhaps lean on my colleague to speak to the question.

[Joseph McHattie]

All right.

Thank you for the question. The three-year limit establishes the time limits in the civil courts as well, so there's the three-year and then there's the six-year full stop limit, and those would apply.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

But I thought I just understood from the first part of the answer that, if I made a claim after the three years, I would be okay because negligence had already been established, and now I'm understanding that's not the case.

[Joseph McHattie]

They're all the same, so the time limit, the prescription that is set out by this act in proposed section 48.12, I think. That's right.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Do I have another minute?

[The Chair, Conservative, Leon Benoit]

A very short question and short answer, yes.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

I'll go back to Ms. Charlton's point about volumetrics versus type of goods.

Again, in my riding, on rail safety, my constituents are extremely concerned about certain types of oil being transported by rail, especially in their case the Bakken. Are there any particular types of oil transported in pipelines that you are particularly concerned about? I heard your arguments about volumetrics being the best metric, but is there something which there should be a special level of scrutiny around?

[Jeff Labonté]

It all should be transported safely. All crude oil and oil-related products have elements about them that make them, what in the rail world is termed, “dangerous goods”, but from the perspective of this thing versus that thing, it's all to be concerned with equally.

[The Chair, Conservative, Leon Benoit]

We go now to Ms. Block, followed by Mr. Leef and Ms. Charlton, and if any of you want to be more brief than five minutes, I wouldn't be offended by that.

Ms. Block.

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

Before I start my questions, I do want to thank you for being here. It's been good to have you here providing this testimony to us.

Canada has enormous natural wealth, and whether we're talking about the huge reserves of energy resources, or the massive tracts of forest, or the minerals and metals, we know that they contribute to the economy of our country.

I note in the deck that you prepared for us to talk about the pipeline safety act, you have a slide toward the very end that's entitled “Economic and Safety Context”. I want to give you an opportunity to speak to that, if you wouldn't mind.

[Jeff Labonté]

It's in slide 10 of the information that we provided, just recognizing that in 2013 there was some $133 billion of hydrocarbons moved over Canada's federally regulated pipeline networks. Some 6,000 jobs and $7 billion in revenues were generated by the pipeline industry. In terms of importance to the economy, these are very substantial amounts of money.

They reach across the entire country. Certainly, pipelines exist in every part of the country. They employ thousands of Canadians. Every economic activity carries associated benefits and they also carry implications for safety that have to be managed. That is the reason we have the legislation. That's why we're proposing amendments to make pipelines as safe as they can possibly be, to hold industry as accountable as we can hold them, and to establish liability.

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

That's making them safer than the 99.999% that they already are.

[Jeff Labonté]

We hope so. That 99.999% is great. It ought to be as good as it can be.

[The Chair, Conservative, Leon Benoit]

Mr. Leef, for five minutes.

[Ryan Leef, Conservative, Yukon, YT]

I think you've effectively covered some of what we saw as either outstanding concerns, or questions which on the face were a bit ambiguous, so thank you for providing a lot of clarity around some of those pieces.

I did ask about the complexity around the provincial regulatory regimes and merging with the federal bit. Maybe that would invite whatever comments you're able to make in terms of the relationship around not just provincial governments but municipal and first nation relationships. What steps have been taken to engage aboriginal communities on pipeline safety and this act in particular?

[Terence Hubbard]

Pipeline safety is an objective shared by all levels of government in Canada. We've heard very clearly from our colleagues in provincial governments, as well as from municipal governments, about the importance of pipeline safety. Over the last number of years there's been a significant level of public focus, and several major pipeline applications are currently being considered. As part of the consideration of those projects by various jurisdictions, there is significant interest in ensuring that those pipelines can be developed as safely as possible.

Over the last number of years we have used a number of mechanisms to engage provincial governments, municipal governments, and aboriginal communities. The Energy and Mines Ministers' Conference provides a mechanism whereby federal and provincial ministers gather to discuss areas of priority focus. Safety of energy transportation systems has been identified as one of those areas. We've used that mechanism to share information on the objectives around pipeline safety.

We've had a number of conversations with aboriginal communities over the last number of years within the context of individual pipeline applications, but also as part of the follow-up work the government is undertaking, following the efforts of Douglas Eyford to engage first nations communities in the development of new energy infrastructure. As part of those discussions, we heard very loudly and clearly that there's a strong expectation by aboriginal communities that governments will focus on pipeline safety. Going forward, first nations communities want to participate in ensuring safe operations of pipelines.

At the same time the pipeline safety act changes were announced, the government also made a separate commitment to work with industry and first nations communities to increase aboriginal participation in all aspects of pipeline safety going forward. We're working in parallel with industry and first nations communities in that regard.

[Ryan Leef, Conservative, Yukon, YT]

Thank you.

I think the intention of this kind of bill is, obviously, to help lead us to preventing pipeline spills in the first instance as well as to mitigate rather quickly any accidents that do occur. Really it's to reduce the overall expenses to Canadian taxpayers for both cleanup and mechanisms that need to be put in place to ensure safety.

Just as a final word, are you confident that this piece of legislation is leading us in that direction with those three priorities in mind? Do you share those three as the key priorities of this legislation?

[Jeff Labonté]

Based on the framework we have with specific elements around prevention, preparedness, response, liability, and compensation, we feel that adding further strength to try to prevent incidents is the first and most important step to preventing damage and the area on which we are focused. We think that requiring companies to be financially ready, and enabling the regulator to ensure that Canadians are protected if something does occur, and ordering companies to deal with incidents and carry out the financial aspects without need for proof of fault or negligence is a pretty sizeable burden and ensures that industry is doing everything it can and is working really hard to ensure that incidents don't happen. If they happen, and sometimes they do, companies will be held accountable and Canadians will be protected.

[Ryan Leef, Conservative, Yukon, YT]

Thank you very much.