Thank you very much, Chair.
Thank you, committee members, for the opportunity to come to speak to you about this particular piece of legislation which is in the House and which I think has received a fair degree of good debate and discussion. We welcome the chance to hopefully address any questions and comments you might have, and if we're not able to do so today in person, we'll do so in writing if we have to afterwards.
I have a brief set of remarks that will probably take about two minutes to run through, and then there's a PowerPoint presentation. I think it's in all of the binders, and we've had extra copies distributed. I'll probably just focus on a few highlights to leave as much time as possible for comments and questions. I recognize that some of you participated in the briefing that we had earlier in the year in anticipation of today.
First of all, I'd like to welcome my colleagues and acknowledge their participation and expertise.
Through the recent introduction of the pipeline safety act, the government is taking some action to demonstrate its commitment to both the safety of Canadians and the environment. This ongoing commitment is part of the government's plan for responsible resource development, and this particular piece of legislation builds on other pieces of legislation that have been tabled in the House and several that have passed.
I will perhaps do a quick survol of where we situate ourselves with federal pipelines.
Pipelines are an area that is managed by both the provincial governments and the federal government. Canada has about 825,000 kilometres of pipelines throughout the country. The federal government has responsibility for some 72,000 to 73,000 kilometres that cross both international boundaries and provincial boundaries, which therefore make them federal jurisdiction. The regulator for the federal government is the National Energy Board.
Through those pipelines, on an annual basis some 1.3 billion barrels of oil and petroleum products are shipped between producers and warehousers, refineries and consumers. At the same time, about five trillion cubic feet of gas are piped across the country to different hubs, different distribution points, and then ultimately to consumers, both in industry and to Canadians as individuals.
The NEB pipelines have a fairly strong safety record. The government will regularly point out that 99.999% of crude oil and products arrive safely to their destination, and that's on a regular running basis over the last five-year period. While the safety record is strong, we must, of course, continue to strive to have as few and possibly zero incidents as possible to ensure that Canadians are protected and the environment is protected as well.
Bill C-46 implements a number of measures focused on world-class pipeline safety under the pillars of prevention, preparedness and response, liability and compensation. Prevention focuses on trying to ensure that incidents don't occur. Preparedness and response means ensuring that companies are ready and that Canadians are confident and assured that companies and the regulator are prepared to respond should incidents occur. Liability and compensation means ensuring that Canadians are protected from the costs and damages that might flow from an incident, should one occur.
Bill C-46 focuses on and strives to ensure that our pipeline safety system remains world-class and is consistent with Canadians' expectation for energy transportation and protection of the environment.
I'd like to take a few moments just quickly looking at the deck to illustrate a number of specific elements, and then, of course, we'll turn it over to the chair and welcome questions from committee members.
There are two aspects to our presentation. First, we would like to see amendments to the bill concerning the
National Energy Board Act as well as consequential amendments to the Canada Oil and Gas Operations Act.
To give some background, the Minister of Natural Resources is responsible for the National Energy Board Act and shares responsibility for the Canada Oil and Gas Operations Act with the Minister of Aboriginal Affairs and Northern Development, as there's a separation between north of 60 degrees and south of 60 degrees vis-à-vis energy development activities.
I will move on to slide 4, emphasizing a number of key prevention elements included in this particular bill. New sentencing provisions are in place for damages to the environment. There's an authority for the Governor in Council to implement consistent standards for pipeline monitoring and emergency response. There are amendments to damage prevention regimes to seek to have alignment and harmony with the provinces' damage prevention regimes. At the same time, there is clarification of audit and inspection powers for the National Energy Board. Those are for pipelines, and at the same time, since the board's act also provides for power lines, they extend to include power lines under their jurisdiction.
In terms of preparedness and response, slide 5, companies operating pipelines will be required under the new legislation to hold sufficient financial resources to cover any potential costs associated with an incident. Set in the act is that it would be $1 billion for major oil pipelines and regulations, at lower levels for other classes of pipelines to be developed under regulation. Companies will also be required to hold a minimum level of accessible financial resources to ensure an immediate response. This is sometimes referred to as cash on hand or cash available for a response, should it be necessary.
At the same time, the act will provide authority for the board to take control of spill response in exceptional circumstances where a company may be unwilling or unable to do so.
Finally, the act provides the NEB the authority to compel reimbursement of costs for spills incurred by governments, individuals, or communities.
In terms of liability and compensation, slide 6 in our deck, there is explicit reference in the act to the polluter pays principle. There is an inclusion of a new measure to provide no fault or absolute liability to a prescribed amount in addition to the existing unlimited liability when companies are at fault or negligent in the event of an incident. Again, the absolute liability amount is set at $1 billion commensurate with the financial responsibility requirements for major oil pipelines and will be set at a lower level for classes of pipelines to be established in regulations.
There is authority to establish a tribunal should the government ever need to authorize the NEB to take control. The tribunal will be provided as a quasi-judicial body to assess and award damages in exceptional circumstances for those who may be impacted by an event, and of course, in the end, the NEB would be provided the authority to recover said costs from the industry as a whole in an exceptional circumstance to ensure that taxpayers are not responsible for the costs.
On slide 7, I would draw attention to some additional amendments that are being made to the act for purposes of administrative efficiency, as well as transparency, including things such as: legislated timelines for Governor in Council decisions on export licences; elimination of Governor in Council approval for the name changes in pipeline certificates and transfers; and a number of things such as eliminating the mandatory retirement age for NEB members to be consistent with the Canadian charter.
We're certainly delighted to be here today and look forward to addressing your questions and comments, and certainly listening to the discussion, and would welcome that at this point, Chair.
Thank you very much, everyone, for your attention.