Natural Resources Committee on March 24th, 2015

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Leef.

Finally, we go to Ms. Charlton, for up to five minutes, please.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Part of me feels a little sheepish here. We do think this bill is a step in the right direction; we're just trying to get to the heart of whether the bill actually achieves what we all hope it will achieve. If you feel as though we've tried to put you on the hot spot or we were too aggressive, our intent was good, I think, even if the questioning was a bit tough at times.

I want to ask you one specific question. Under proposed section 48.46 of the NEB Act, you would know that the Minister of Natural Resources would recommend to the Minister of Finance the amount of public funds that would be made available to pay for response measures, a tribunal, and costs related to cleanups. I wonder how the Minister of Natural Resources is expected to determine what amount to pay and what the criteria are.

I will also have a follow-up question to that.

[Jeff Labonté]

Thank you for the question.

We envisage that the first step actually involves the National Energy Board, who are the experts, and the regulators establishing an understanding and providing a recommendation to the minister that a company is either not able to deal with the incident or is not dealing with it in the way that it is legally expected to.

[Chris Charlton, NDP, Hamilton Mountain, ON]

You may not be able to answer this question because I suspect you might suggest it's a political one, but I'd like you to try.

[Jeff Labonté]

I'll do my best.

[Chris Charlton, NDP, Hamilton Mountain, ON]

If the NEB makes a recommendation to the Minister of Natural Resources—and I may ask the NEB what those criteria might be—the Minister of Natural Resources has a conversation with the Minister of Finance, and at that point you have two competing priorities. One priority may well be that you want to balance the budget, and the other may be that you want to do right by the communities affected. At that point the decision about what would be an appropriate amount to pay becomes entirely political. You're talking about that money coming out of the consolidated revenue fund, so obviously the lens through which you would view priorities at that point becomes entire political.

If we really believe in the polluter pay principle, why is that section in the bill in this way as opposed to making it possible for us to be assured that the polluter indeed does pay?

[Jeff Labonté]

Let's start at the beginning.

Companies are absolutely liable for $1 billion. We have all of the measures in place to ensure in the regulatory frame that the companies have the $1 billion, that they have the adequate financial circumstances. We've—

[Chris Charlton, NDP, Hamilton Mountain, ON]

Unless they don't, which is what a large part of this bill contemplates.

[Jeff Labonté]

In the world of incidents that have occurred, and incidents that we've seen and behaviour that we've seen, there's nothing to suggest that companies will not behave in the way that we expect them to or that they financially can't.

I think it's reasonable to say that it's unlikely, but in the event that it does occur—and it's in the minds of Canadians for sure, and we've heard it in discussions that we've had with different players—what will happen?

The bill provides a statute-based frame that allows the National Energy Board, an independent body that regulates the oil and gas pipeline industry in Canada federally, to make a determination that they don't believe a company is able to deal with the consequences because they may go bankrupt, or they're not behaving as rapidly or quickly as appropriate, and they make a recommendation to the Minister of Natural Resources.

The Minister of Natural Resources then seeks a cabinet decision, which is the democratic decision-making process around how the government operates, as to whether the company would then be designated as unresponsive or unreliable or unreasonable, however it might be, based on the circumstances that the board presents—the independent regulatory body. That then provides the Minister of Natural Resources with the ability to instruct the board to act.

Then the Minister of Natural Resources makes a recommendation, again based on information on the circumstances presented by the board, which is independent and has the expertise, that they believe it is going to be x dollars. It makes a recommendation to the Minister of Finance that says they believe it's going to be x dollars to clean this up, recognizing that the further authority in the act provides for the government to recover all of those costs.

Although there is a decision to be made by ministers who are accountable to Canadians about what the circumstances are and how they are present, I think we're talking about an event that's probably going to be very out of the ordinary, at best. That decision-making frame will provide the appropriate guidance to make that decision, and in doing so, it still protects Canadians and will ensure that polluters pay. The individual polluter in this circumstance, the company that isn't behaving properly, may not be the only party that pays. The industry more broadly might pay, but that would then be actually recovered by the government.

[The Chair, Conservative, Leon Benoit]

Thank you.

[Chris Charlton, NDP, Hamilton Mountain, ON]

May I ask one quick follow-up on public reporting? Do I have 10 seconds?

[The Chair, Conservative, Leon Benoit]

Okay, very quickly.

Go ahead.

[Chris Charlton, NDP, Hamilton Mountain, ON]

We're talking about public accountability, right?

It's the cabinet, on the one hand, but on the other hand, can I ask whether there would be any kind of public reporting of the liability coverage that companies actually have in place so we don't get down this road? I don't see a requirement for that kind of public reporting, but maybe I missed it.

[Jeff Labonté]

It is part of the hearing record of the National Energy Board certificate conditions today. In establishing the conditions that will be required on a go-forward basis, it will be part of the certificate conditions. Those are public.

[Chris Charlton, NDP, Hamilton Mountain, ON]

That's at the front end.

Where would I find it for existing pipelines?

[Jeff Labonté]

For existing pipelines, you would see them in the record of those existing pipelines that might be—

[Chris Charlton, NDP, Hamilton Mountain, ON]

It wasn't a criterion necessarily at the time.

[Jeff Labonté]

It is actually a criterion of the board.

The board reviews today, and has for 50 years, the economic circumstances of the company making the application. They have not necessarily in all cases provided for “You must have $100 million in insurance”, but they have reviewed the economic circumstances of pipelines.

To finish the comment, because I think you've asked an important question, in representing what's in the bill, the board will have to have proof provided by the company, and that will be part of the certificate condition for the pipelines that exist today, including ones that were certificated 20 years ago. They will be—

[The Chair, Conservative, Leon Benoit]

Thank you very much, Ms. Charlton.

Thank you to the officials for being here today. We'll see you back at clause-by-clause study, I assume.

Let's go directly to the issue of committee members and independents. Apparently committee can decide that independents have to present any amendments that they may be proposing at the same time as the committee agreed time.

Ms. Block.

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

Mr. Chair, given that our final day of witnesses is March 31, and that we had already planned to go through clause-by-clause study on April 21, which is the day after we come back, I would like to propose that we set a deadline for amendments of Friday, April 10.

That's about a week and a half after the final day of witnesses and about a week and a half before we go through clause-by-clause study. I think that would give time for the amendments to be put together and give us an opportunity to see them before we're actually going to be looking at them and contemplating them during clause-by-clause study.

[The Chair, Conservative, Leon Benoit]

Our date set for starting clause-by-clause study is April 21.

Monsieur Caron.

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

I would like to have a little more time before the deadline to table amendments, because we still have many questions. Of course, we no longer have time to put our questions orally.

We could submit a list of questions to the clerk so as to obtain an answer from the department representatives. It may take them some time to reply. We should be able to give them a timeframe, such as the first week of April when we will be in our ridings. These replies will allow us to develop the amendments we could present subsequently. We need a little more time to submit those amendments. I suggest Wednesday or Thursday. Is April 15 a Wednesday?

[The Chair, Conservative, Leon Benoit]

April 10 is the end of the first riding week, I think, yes.

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

We could suggest that April 15 be the deadline to table amendments, so as to allow them to answer the questions we would like to send to them before the previous Friday.

[The Chair, Conservative, Leon Benoit]

You've heard an alternate proposal of April 15.

Ms. Block.