moved that Bill C-5, an act to amend the Canada-Newfoundland Atlantic Accord Implementation Act, the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act and other Acts and to provide for certain other measures, be read the second time and referred to a committee.
Mr. Speaker, before I begin, I want to congratulate the Prime Minister and the Minister of International Trade for the agreement in principle on the Canada-Europe trade agreement, the largest free trade agreement Canada has completed. This is a great achievement and demonstrates that our economic action plan is working.
We are here today to talk about the new legislative provisions to amend the Atlantic accord implementation acts, in order to extend occupational health and safety jurisdictions to Canada's offshore areas.
Before we talk more about these legislative provisions, I would like to set the stage by emphasizing how vital the offshore resources industry is to Atlantic Canada and to our country's economy.
There is no question that the offshore oil and gas industries have made an enormous economic contribution to Newfoundland and Labrador and Nova Scotia. Indeed, it is not an exaggeration to say that these industries have transformed the economy of eastern Canada.
Not long ago, the province of Newfoundland and Labrador was receiving the highest per capita equalization payments in the country. Today it is among our strongest provincial economies and now contributes to the equalization program.
Newfoundland and Labrador's GDP has performed at or above the national average in nine of the past 13 years. A large part of that success comes from offshore oil and gas, which accounted for 33% of Newfoundland and Labrador's GDP in 2011. Resource revenues, again primarily from the offshore, have allowed the province to steadily pay down its debt. The total provincial debt was about $7.7 billion in 2012, down from a high of $12 billion just eight years ago.
Simply put, offshore energy development has given Newfoundland and Labrador more jobs, lower taxes, and new investments in services and infrastructure that play an important role in building stronger communities. These benefits will continue to grow.
Hibernia was the largest project of any kind ever undertaken in Newfoundland and Labrador. As valuable as Hibernia has been, the Hebron project may be even bigger. Hebron represents a capital investment of as much as $14 billion. It could deliver $20 billion in taxes and royalties for the province over the 30-year life of the project.
Just a few months ago, the Canada-Newfoundland and Labrador Offshore Petroleum Board announced its latest call for bids for exploration licences for the offshore of Newfoundland and Labrador, netting $117 million in work commitments by major players in the oil industry.
Nova Scotia's offshore area also offers enormous potential. The Play Fairway analysis, undertaken by the government of Nova Scotia, estimates that the offshore area may contain eight billion barrels of oil and 3.3 trillion cubic feet of natural gas. The Atlantic offshore is a major gas producer, with three gas fields serving Atlantic Canada and the U.S. northeast.
In the past two years, the Nova Scotia offshore area has seen the largest bids ever for offshore parcels in Atlantic Canada, with more than a total of $2 billion bid for 12 parcels of land. Shell Canada and BP clearly see the potential that exists in the Nova Scotia offshore.
Meanwhile, there is an estimated 120 trillion cubic feet of natural gas, and production continues to grow. Sable Island's 270 million cubic feet a day will soon be joined by 200 million cubic feet a day from Deep Panuke.
It is essential that Canada continue to ensure that our offshore industries carry out their activities safely and in compliance with the most stringent environmental standards. Canadians expect to see a world-class regulatory body, and our government is taking the measures necessary to ensure Canadians' continued satisfaction in that regard.
That is why we are bringing in new legislation to clarify provincial and federal responsibilities when it comes to offshore occupational health and safety.
The accord's implementation acts are the cornerstone of all offshore oil and gas activities. They give the boards the legal authority to regulate oil and gas activities on behalf of the provinces. Every day, Canada's offshore workers have to deal with a difficult work environment.
The harsh weather conditions in Atlantic Canada and the remoteness of their workplace are just two difficulties that come to mind. The safety of the courageous men and women who work in this environment must always be our main concern.
The changes we intend to make need to be mirrored by provincial legislation in order for the amendments to come into force. Our Conservative government has been working closely with the governments of Newfoundland and Labrador and Nova Scotia to achieve this. Both provinces introduced their legislation in May, and both have given royal assent to their respective bills. This time, they must wait for the legislation to pass our federal Parliament for the new regime to come to fruition.
The proposed amendments would address gaps in the current legislation. They would invest authority for offshore occupational health and safety in the accord acts.
There are two safety regimes that apply to workers offshore. Occupational health and safety pertains to the workers in the sense of the hazards they may face, their protective equipment, and safeguards on the equipment they use in their functions. It also pertains to three essential worker rights: the right to refuse dangerous work, the right to information, and the right to participate in making decisions on workplace health and safety. Under the current regime, occupational health and safety is the jurisdiction of the provinces.
Operational safety pertains to workplace systems, facilities, and equipment as well as the risk management and integrity of those systems, facilities, and equipment. Examples are the prevention of gas blowouts, the ability of a facility to withstand storms, and a facility's fire suppression systems. Operational safety was included in the accord acts and provided that the offshore petroleum boards be responsible on behalf of both levels of government.
Following a tragic accident, when a worker was killed due to an improperly installed door, the overlap of occupational health and safety and operational safety created a grey area. It was not clear whether the door's installation fell under operational safety or occupational safety. The lack of clarity prevented any party from being liable. It was unclear under whose jurisdiction the incident should be regulated. The provinces and the federal government agreed that the best course of action was to eliminate the grey area and to incorporate the power to regulate occupational health and safety directly in the accord acts.
For the section on occupational health and safety, which would typically fall under the purview of the Minister of Labour, the legislation specifies that the Minister of Natural Resources may receive advice from the Minister of Labour and that any regulations related to occupational health and safety must be made on the recommendation of both ministers.
In addition to fixing this historic issue, the legislation would establish a hierarchy of responsibility. It would make operations operators ultimately responsible for all activities related to their authorization. It would also spell out the specific duties expected of operators, employers, supervisors, employees, contractors, and interest holders.
The nature of the offshore is that work sites are usually hundreds of kilometres from shore. We would be ensuring that the health and safety regime also applied to workers in transit to the offshore. These workers could refuse to be transported if there were safety concerns.
The legislation would also include powers to establish regulations related to additional safety equipment for workers in transit. Offshore board inspectors would also have the power to conduct compliance audits on the vessels used to transport workers. These measures would significantly enhance workers' safety in the offshore.
This legislation would also give new powers to offshore board officers to further enhance safety. For example, they would have the power to inspect anything, take samples, meet in private with any individual, and inspect living quarters.
Due to the distance and isolation offshore activities regularly require, offshore board officers would have the power to act in exigent circumstances. That is, they could act without a warrant to preserve evidence or to prevent non-compliance. The requisite warrant would have to be sought from and granted by a judge or a justice of the peace post activity.
The legislation would also clarify certain issues regarding the chief safety officer. The position of this officer could not be held by the CEO. This would ensure that safety was an independent function within the senior management of each offshore board. The chief safety officer would have to review and provide written recommendations related to safety on all authorizations. This would formalize the process that both boards are already following.
Chief safety officers would also be granted the power to allow regulatory substitutions, which would be made on application by an operator who would have to satisfy the SFO that the substitution provided an equivalent or greater level of safety. The SFO also could require that the operator or employer establish a special occupational health and safety committee. The committee would be in addition to the workplace health and safety committee that all workplaces with more than five employees must establish.
We would also introduce a new appeal process for the most serious cases. In certain special cases, the provincial minister would be able to appoint a special officer. The legislation is very clear that this could only be done where there were reasonable grounds to believe that such an appointment was warranted to avoid a serious risk to health and safety and that the risk could not be avoided by the use of other means available through the accord acts. Both the federal and provincial ministers would have to agree that the required conditions had been fulfilled. The orders of a special officer would supersede those of all other officers, including the chief safety officer.
These amendments would create a more transparent regime for Canada's offshore industry. The health and safety of Canadians and protecting the environment are among the Government of Canada's top priorities. That is why Canada's offshore installations and the equipment and training required to operate them must meet strict regulatory standards that are among the highest in the world. Nevertheless, we recognize that our offshore regime can be improved, and today we are taking steps to do just that.
Our government recognizes that accidents can happen anywhere, regardless of laws and safety measures. We are also very confident in our safeguards. We have very strong environmental laws and standards and a robust, well-developed safety regime for offshore exploration and drilling.
On our east coast, the Canada-Newfoundland and Labrador Offshore Petroleum Board and the Canada-Nova Scotia Offshore Petroleum Board are responsible for evaluating every project for compliance with federal regulations. Drilling cannot occur unless the responsible board is satisfied that drilling plans are safe for workers and safe for the environment.
Beyond high standards for training, safety, and equipment, oil and gas companies are required to maintain environmental protection and spill response plans. The government is committed to the polluter-pays principle and the responsible management of risks. The responsibility rests with operators to immediately take all reasonable measures to clean up a spill and prevent further spillage. Of course, the government needs to be prepared to step in to help if need be.
As the regulators, the National Energy Board or offshore boards would be the government's lead agencies for the response. Using aerial surveillance and satellite imagery for detection and tracking, they could provide advice about a spill with trajectory modelling, weather and sea-state forecasts and warnings, the location of wildlife and sensitive ecosystems, and cleanup and remediation options.
I am certain that once these legislative provisions are in place, the offshore boards will do their job and determine what is safe for workers and the environment.
I would like to speak very briefly about the creation of a separate regulatory body for offshore safety.
First, I would like to make it clear that these legislative provisions are not related to this issue.
Work on these provisions started well before this recommendation was made for the first time. These legislative provisions were the result of the accident off the coast of Nova Scotia, which I mentioned earlier.
With respect to the actual recommendation, we continue to work with the provinces on this very important issue. We expressed concerns about the fragmentation of our offshore regime and the proliferation of regulatory bodies. We want to ensure that the system is as simple as possible and protects Canadians' health and safety. We will continue to discuss these issues with our provincial counterparts.
Our government has always adopted a safe and prudent approach to offshore drilling, an approach that protects Canada's offshore workers and the environment.
It is vital that all development activities in Canada, and not just offshore activities, ensure the safety of workers and protect the environment. We have adopted many measures in Canada's resource sector to ensure that this objective is the main focus of our regulatory bodies.
I hope that all members will support this important legislation.