Natural Resources Committee on March 26th, 2015

[The Vice-Chair, NDP, Guy Caron]

Merci.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Nonetheless, Ms. Perkins, I had the floor.

[Pat Perkins, Conservative, Whitby—Oshawa, ON]

I would really prefer an apology before there is anything further down the road on this, because I did not call anyone anything, and I have been accused of that.

[The Vice-Chair, NDP, Guy Caron]

Thank you very much, Mrs. Perkins. I would prefer to keep this informal.

[Pat Perkins, Conservative, Whitby—Oshawa, ON]

I really would prefer the apology. I didn't call her anything, nor would I. Therefore, since it has been verbalized to the contrary, I really think it's necessary that it be retracted.

[Chris Charlton, NDP, Hamilton Mountain, ON]

I'll correct the record. Ms. Perkins called my comments “disgusting” at a time when she did not have the floor, and I would appreciate an apology for that. I had the floor.

But I'll continue my questioning so that we can just get on with the five minutes.

In the story by Reuters, the deputy minister said that none of these things that you are now being asked to study are covered by BillC-46. We have a bill before us in the House that is purportedly going to improve safety and prevention, and yet the deputy minister has acknowledged that this bill doesn't go nearly far enough, and has given you a new mandate to report back within one year and provide up-to-date guidelines.

I wonder if you can tell me what additional improvements you think there ought to be to Bill C-46, now that you have seen the new instructions from the minister.

[Jonathan Timlin]

Thank you very much for the question, Ms. Charlton.

As we of course said previously in a question that was raised by Mr. Regan, the board, as an expert regulatory tribunal, isn't in a position to offer opinions on whether anything should be added to the bill or not. What I can speak to is what was specifically requested by the minister. The minister, when he introduced Bill C-46, did at that time indicate that he would be seeking the advice of the National Energy Board, as is his prerogative in the act currently.

Currently in part II of the act, there is a section that allows the minister to seek advice from the board on specific matters. In this particular case, the minister indicated that he would seek advice from the board on the use of best available technologies in federally regulated pipelines. This includes materials, construction methods, and emergency response techniques. The board has indeed received a letter from the minister to that effect. We will be undertaking that study, as is required of us in the act, and we will be reporting back to the minister within the timeline the minister has established.

[Chris Charlton, NDP, Hamilton Mountain, ON]

So you can't comment on why the deputy would suggest that these things are not actually within the ambit of Bill C-46? It's not a fair question to you. I suppose you can't speak for the deputy minister.

[Jonathan Timlin]

I certainly am not in a position to speak for the deputy minister. I would speak rather about what the deputy minister has said.... I am not aware of those comments.

[Chris Charlton, NDP, Hamilton Mountain, ON]

That's fair enough.

Let me ask another couple of other questions. You said, in an answer to an earlier question, that the number of audits is not mandated to go up under this bill, and yet now you have an increased responsibility for, among other things, abandoned pipelines. How are you going to do that additional work on your existing resources if there is no mandate for you to undertake more inspections and more audits and to do more of the enforcement work?

[Jonathan Timlin]

As Madam Touchette said—and her comments really emphasized and highlighted this point—safety and environmental protection are the board's top priorities. The government has told us that we are to conduct a minimum of 6 audits and 150 inspections per year. The board looks at incident data to determine where there may be trends or issues that need to be addressed and takes any enforcement actions that it deems required to preserve the safety of the public and to protect the environment.

As Dr. Steedman also mentioned earlier, the board will never fail or hesitate to take any enforcement action that it feels is required to maintain the safety of the system and to ensure that the companies are indeed anticipating, preventing, mitigating, and managing any dangerous conditions that are associated with their pipelines.

[The Vice-Chair, NDP, Guy Caron]

You have about 30 seconds left.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Thank you.

In your presentation, you talked about public consultations and a broad environment of stakeholders who want to have their say and participate in the process. What we are talking about there is the need for social licence becoming really important, as important as the other licensing and regulatory framework, and how we really do need to involve communities.

Do you have adequate resources for people to participate in the public consultation process? Can you give hearing to everybody who wants to be heard? Is it a resource issue for you? Is it a timing issue? I know that you also have a very limited timeframe for—

[The Vice-Chair, NDP, Guy Caron]

Thank you, Ms. Charlton.

I will ask for a short reply.

[Jonathan Timlin]

Thank you for the question.

The board is required, under our act, to hear from anyone who is directly affected by a project. We will always do that.

[The Vice-Chair, NDP, Guy Caron]

Thank you very much.

The floor is now Mr. Leef's for five minutes.

[Ryan Leef, Conservative, Yukon, YT]

Thank you very much.

Thank you to our witnesses.

I was interested in one piece here in my notes that you talked about in respect to benchmarking for regulatory excellence. One of your points was to maintain the focus on the right things and to get the right results. I think the concept of benchmarking is obviously a laudable enterprise. I think it's a great way of ensuring that what you do is achieving the results that Canadians expect.

I'm wondering if you could expand a little more on how you go about benchmarking in order to find that focus on the right things and the right results.

[Dr. Robert Steedman]

Thank you very much for that question, a very interesting and timely one.

It could be phrased as regulatory excellence. We see other energy regulators referring to it as world-class regulatory capabilities, or best in class, so we are very interested in working and maintaining close communications with other energy regulators. Some of the energy regulators may be national, such as ourselves. There are some such as Alberta, for example, which is a very busy regulator within the context of provincial regulation. There are others such as British Columbia or Saskatchewan and others around the world as well.

We're interested in the principles that make a regulator excellent, and we're participating in some of these round robin benchmarking types of exercises. One could anticipate that there are common principles involved, such as the trust of the public, for example. It's very important for a regulator to have that, through demonstrated excellence and, in our case, the safety and reliability of the systems we regulate. We need to be fair in our public hearings and we need to be lawful in all of our activities. I think it would be looking for a common language around what excellence is. As the NEB is absolutely committed to continuous improvement, we pursue these things quite actively.

[Ryan Leef, Conservative, Yukon, YT]

At the risk of baiting you into a self-promoting answer, how do you feel the NEB compares right now on all of the standards outside of just the safety standard, such as transparency, public engagement, and the like on a global perspective?

[Dr. Robert Steedman]

I don't suppose I can comment on that very well, as we're very early in this exercise. The NEB takes very seriously the requirement to understand and track what Canadians are looking for in terms of the public interest.

As was mentioned by Madam Touchette and the chair, this is a time of great change in Canadians' awareness and expectations, so we're working very hard to track that and to deliver on those expectations within the mandate that Parliament gives us, because we cannot go beyond that.

[Ryan Leef, Conservative, Yukon, YT]

In your introductory remarks, which were I think very comprehensive, by the way, and thank you for that, you mentioned a term, industry “cultures”. That can lead to accidents, and one of your strategic priorities is to help change those industry cultures.

Obviously you're playing an education, compliance, and—sometimes—enforcement role. Are you finding that those industry cultures in Canada are deeply imbedded? Or is it your sense that they're moving along at the pace Canadians would expect them to move in terms of wanting to achieve compliance, embracing the education you're providing them, and effectively reducing the necessity for enforcement, for an overall and ultimate safe pipeline regime in Canada?

I guess what I'm really asking is, how deeply embedded are those industry cultures? How difficult will it be to change? What's your experience with that at this point?

[Josée Touchette]

Thank you for that question.

You refer to something that's really important, because it's really about the values that companies hold and how they demonstrate their commitment to those values. Companies will say they value safety. We look at safety culture, obviously, but we also look, as I mentioned in my introductory comments, at the management systems that are in place.

On the one hand, you want those values to be enunciated very clearly. On the other hand, you want to see how they are actually implemented. Management systems will cover a whole span of activities from human resources to IT to a variety of others.

[The Vice-Chair, NDP, Guy Caron]

The time is up.

Thank you very much. Thanks also to Mr. Leef.

I would like to ask the next questions.

Ms. Touchette, how does the National Energy Board follow up on the conditions attached to a project? On what basis are you going to impose conditions?

Let me give you an example that has been brought to our attention. It deals with Enbridge's line 9B. I do not need to hear you comment on that specific case, but I would like you to tell me about the board's powers in that particular situation.

When Enbridge requested approval, the board attached a number of conditions that had to be met before they could lay the line. One of those was for valves to be installed at each major watercourse. The request was for about 95 valves. Documents submitted to the board reported that 92 of the 95 valves were more than a kilometre apart.

I do not want you to comment on that specific situation, but what powers does the board have? How do you deal with those issues so that the conditions you have attached are met?

[Josée Touchette]

I am going to ask Mr. Steedman to answer that question, given its technical nature.

[Dr. Robert Steedman]

Thank you very much for that question.

In the approval, Enbridge, on Line 9B, had conditions attached to that approval. For two of the conditions in particular, numbers 16 and 18, the board was not satisfied with the responses that were received and studied them very carefully. In the end, the board found that the company's approach to valve placement was adequate, but the board was concerned that the company be in a position to carefully monitor and be responsive to any changes at all in the risk associated with watercourse crossings, for example, and valve placement.

The board has required the company to conduct ongoing study on the question of whether an additional batch...there were valves added to the lines, 17, I believe. The board has directed the company to study over the next year or two the facts and the risks along the line and answer the question as to whether another batch of valves is necessary to increase safety. The board has assigned a member to monitor that specifically.

That aspect of the question is not fully answered. The board will not provide leave to open that pipeline. The pipeline is not yet operating. The board would not provide leave to open until it's satisfied that all of its safety expectations are met and the pipeline can be operated safely.