Thank you, Mr. Chair, and thank you to all the members. I appreciate the opportunity to present today.
As you might know, I'm a lawyer here on behalf of Ecojustice, which is Canada's largest public interest environmental law organization. Ecojustice has worked extensively on pipeline issues across Canada as well as on statutory liability regimes, in the context of the energy sector more broadly. This will be the focus of my presentation today.
I think we can all agree that Bill C-46 is much needed and, quite frankly, long overdue. That being said, there are some significant shortcomings in the bill as currently drafted. I'm going to focus on three of those today.
First, the absolute liability limit is inappropriately low. Second, more guidance is needed around the assessment and calculation of damages for the loss of non-use value relating to a public resource, which I'm going to refer to as “environmental damages”. Third, although the bill provides some interesting new tools for seeking compensation and reimbursement in the event of a spill, the use of most of these tools is discretionary, not mandatory.
As currently drafted, the bill can best be described as “polluter might pay”. It offers modest improvements on the current regime, but it does not fully implement the polluter pays principle, and therefore continues to expose Canadians to an unacceptable portion of the financial risks of a pipeline spill.
Moving to the absolute liability limit, it's positive that the bill incorporates the polluter pays principle into the National Energy Board Act. The bill then restricts absolute liability to $1 billion for spills from large oil pipelines.
Imposing absolute liability up to that $1 billion limit is largely an improvement over the status quo. I say “largely” because it limits what was unlimited liability under the Fisheries Act for certain spill response costs. ln the case of a major spill, $1 billion isn't enough to cover the cleanup costs, let alone compensate victims for damages and all Canadians for environmental damages. We have seen Enbridge's line 6B rupture in Michigan. The cleanup costs have topped $1.2 billion so far. There's still oil in the river there, and there's more work to be done.
ln that light, limiting absolute liability to what seems to be an arbitrary figure of $1 billion inappropriately restricts the polluter pays principle and allows polluters to shift a portion of the financial risk of a pipeline spill back onto Canadians.
Moving quickly to environmental damages, I am pleased to see that the bill includes liability for the loss of non-use value. This measure is absolutely crucial to implement effectively, because a major oil spill can never be fully cleaned up and wildlife and the environment in the vicinity of a spill will often be killed or seriously harmed before cleanup efforts can begin.
Beyond recognizing that compensation for these environmental damages is available, the bill provides no details on how they will work in practice. This lack of guidance, I submit, makes it less likely that a government will try to recover compensation. At the very least, we need a regulation-making power so that some guidance can be provided, the holes can be filled in. I urge the government to consult publicly on such guidance.
Moving to the new recovery mechanisms, the bill does provide some new tools to respond to spills and to recover damages or expenses from polluters. The use of many of these tools is left to the discretion of the NEB. Many of the tools are also contingent on the polluting company being designated by cabinet. Designation is a discretionary decision that would allow the government to, for example, take over spill response or to appoint a specialized pipeline claims tribunal to decide claims for compensation.
Staying with that pipeline claims tribunal for a few seconds, it is worth noting that any awards the tribunal makes appear to be paid directly out of taxpayer money, presumably to ensure that victims are compensated in a timely manner.
Where taxpayer funds are used to compensate victims of the spill, the NEB has the option to try to get this money back from the polluter. If the polluter doesn't have enough money to pay, then they can also try to get it back from a broader subset of the pipeline industry through various fees and levies. Again, these tools are discretionary. The NEB doesn't have to use them, and this is concerning.
In keeping with the polluter pays principle, the NEB should be required to use any and all available tools to make sure that taxpayers aren't left footing the bill for the cost of a pipeline spill. This is particularly the case given that Bill C-46, in the context of this bill's claims tribunal, contemplates non-Canadians seeking compensation before it. Obviously, exposing Canadian taxpayers to that kind of financial risk is not acceptable.
To sum up, the bill does represent a move toward a polluter might pay model, but the shortcomings of the bill still leave Canadians exposed to an unacceptable portion of the financial risks of a pipeline spill.
Those are my remarks, subject to any questions. Thank you for the opportunity to speak today.