Mr. Speaker, to pick up on what the hon. member just said, we actually do have to account for the absurd catastrophic experience, which is why this kind of money has to be provided.
I was disappointed that the member was not able to respond with respect to the Michigan spill, because it was a huge hit on Enbridge's bottom line. I do not know what the number was, but I would have hoped that he would have been able to share that number with the House so that we could talk about these “absurd” spills, which is what the subject of the legislation before us is all about.
The Liberal Party largely supports the bill, so my remarks are offered in that light. It is a necessary piece of legislation. We might think it is a bit incremental, but nevertheless a step in the right direction is a step in the direction. There is no gainsaying that.
My first remarks have to do with the $1 billion liability insurance. As it has been previously explained in the House, this is no-fault liability insurance, meaning that no matter how the spill occurs, there would be insurance to cover it. The reasonable expectation is that it is simply a cost of doing business, whatever the premiums are. Since none of these companies is in the business of trying to lose money, I daresay that the ultimate end user of the product will pay for the cost of this insurance one way or another.
The late and great C.D. Howe was a cabinet minister in the Mackenzie King government and in the St. Laurent government. This was in the era when cabinet ministers were serious people. They did not need to refer to talking points each and every day in order to find out what the prime minister of the day thought about any subject. C.D. Howe was a legend, and as he was presenting a budget towards the end of World War II, which was a budget with an appropriation of about $1.3 billion for the war effort—a pretty significant sum of money at the end of World War II—one of the opposition members asked him about a million-dollar item.
Mr. Howe apparently replied, “Well, in the context of a $1.3 billion appropriation, $1 million is not a significant sum of money.” Out of that came the political lexicon that has been attributed to C.D. Howe, namely “What's a million?” Conservatives being Conservatives, they were never given to accuracy or truthfulness back then, so despite the fact that C.D. Howe did not actually say that, it still became part of the lexicon.
Conservatives then and Conservatives now are basically the same entity as far as truthfulness and accuracy might be concerned. I might appropriate that political lexicon and say “What's a billion?” If “What's a million” at the end of World War II was a significant sum of money in the minds of many, then “What's a billion?” in 2015, for many people, would still be considered a significant sum of money.
A liability of $1 billion in certain areas of the country seems to me to be perfectly adequate. In fact, I would say that in maybe 95% of the areas where pipelines are located, $1 billion might very well be a perfectly adequate sum of money. However, a pipeline running through downtown Toronto—as does Line 9, which runs through through Finch and Yonge, right beside a subway station—poses a significant risk.
Similarly, pipelines that run over watercourses that provide drinking water for millions of people pose a pretty significant risk. That is again the case in Toronto. A spill there would be of far greater significance than, say, a spill in a remote region in northern Ontario, possibly in Haliburton, although it would be a shock to have a spill in Haliburton. In sum, the risk from a spill in downtown Toronto, downtown Montreal, downtown Halifax, or downtown Vancouver is of a far greater magnitude than the risk in the more remote regions of the country.
The other issue is the content of the pipeline. One of the real reasons for the problems that occurred in Michigan with Enbridge was that the content was diluted bitumen, dilbit as it is known. The way I understand it is that when it hits water, it simply sinks to the bottom. That makes it very difficult to clean up, because one is then cleaning up something that is below the surface of the water, as opposed to, say, a gas line spill where the spill is on the surface of the water and because the spill largely evaporates before it does any serious environmental damage. Thus the contents of the pipelines vary and carry a significant sum of our gross domestic product with them. The contents of the pipelines are as relevant as the location of the spills.
I also have some concerns about the unlimited liability aspect. The first billion dollars of liability is no fault, and that is covered by an insurance policy. After that, in theory, either an energy company acquires further insurance at some presumably significant cost or it does not carry that insurance, and it in turn in effect pledges its own value as the assurity or its ability to clean up that risk beyond one billion dollars. My colleague across the way thought that that might be an absurd idea, but Enbridge in particular does not think it is such an absurd idea.
I want to point out to those who might be interested that pipelines are creatures of the stock market. Some days pipeline companies are worth multiple billions of dollars, and at other times, as multiple billions of dollars melt rather quickly, they become worth multiple millions of dollars, and there is nothing like a spill to shed value on a stock market.
I recommend, Mr. Speaker, that you not be in the doorway when an energy company spill occurs, because you will be crushed by the run of stockholders out the door because, frankly, they do not want to stand around and pick up the tab for anything that is potentially beyond one billion dollars.
The concept of unlimited liability beyond one billion dollars in theory sounds pretty good, but in practice may actually be quite a challenge, because the very fact of a spill or other catastrophic market events such as what we have witnessed in the last few months literally melt billions of dollars off the bottom line of a company.
These are issues that I think and hope a committee will take into consideration and get some expert advice on so that members know what they are voting on.
My colleague from Halifax West expressed a concern about the discretion allocated to the National Energy Board and cabinet to proclaim and enforce more robust regulations. I share his concern. I know the government wishes us to think, and I would like to think myself, that inspections will increase by 50%. I hope that is true. I am also hopeful that safety audits will double. I have no reason to doubt the good faith of the government.
However, I also want to be assured, and I hope the minister and the Conservatives members on the committee will be able to assure other members of the committee who might be a touch more skeptical, that the cabinet and the NEB would engage the robust powers they would be given under the legislation and that it would not simply be in appearance rather than anything else.
We are talking about a very serious amount of money on an annual basis. Pipelines ship roughly $100 billion of product on an annual basis. I will put that into perspective. That is just slightly below the budget at Queen's Park, the budget of the second biggest government in Canada. That is a significant sum of money.
I know that the members and the minister opposite have repeatedly said that 99 point whatever per cent is shipped safely. I am prepared to believe that. However, it is a little like saying that 99% of the time my brakes work. It is kind an absurd statistic, because I am not expecting perfection. Short of some other place, there is no perfection in this world, and so I do not anticipate perfection. However, I do think that every possible measure needs to be taken to assure Canadians' safety, not only the safety of their air and their water, but also of the food chain, et cetera.
I would say that, ultimately, Bill C-46 is a move to restore public confidence and, in that respect, it is a tiny step in the right direction.
Regrettably, Canadians have come to learn not to trust the current government on any point of intersection between the economy and the environment. Unfortunately, where there is a point of conflict between the environment and the economy, the environment loses. This is a bill that would try to restore that confidence, but, regrettably, the current government has established a reputation that it is not serious about environment issues and, as I say, whenever the economy and the environment come into conflict, it is the environment that loses.
Unfortunately, we have seen in this past week a consequence of its not being serious about the environment and the consequence of its not being serious about damage to our economic best interest.
When President Obama vetoed the Keystone XL pipeline, he did so for a good reason. He does not think the current government is serious about the environment. His perception, like the perception of many, is that the current government is not serious. The most obvious example is the ever-inclining trend in GHG emissions.
The charts put out by the government itself and audited by the Commissioner of the Environment show that in 2020 we will have historically high emissions of 720 megatonnes. The goal that was set by the government after Kyoto was 607 megatonnes.
There is, I know, a fantasy life over across the way that we are on track to meeting our emissions targets, and there may actually be someone in this country outside the Conservative caucus who actually believes that. However, the simple facts of the government's own charts, as audited by the Auditor General, show that there are 113 megatonnes that need to be made up. There is no chance that the Prime Minister would meet his own watered-down Copenhagen targets.
As I said, President Obama has noticed, many members of Congress have noticed, many of the American public have noticed, NGOs have noticed, the world has noticed, the Europeans have noticed and, as a consequence, we have established this reputation for not being serious about the environment. The consequence of having established that reputation has been a serious hit to our own economy.
Just this week in the main estimates there were major cuts to sustainable development technology, $25 million; the sustainable development technology fund, another $6.5 million; major cuts to species at risk, $12.5 million; major cuts to meteorological services, $5 million; cuts to project management, $2.3 million, et cetera. Moreover, a 44% cut to the Canadian Environmental Assessment Agency was jammed into an omnibus bill. Environment Canada's budget has gone from $978 million two years ago to $961 million for the fiscal year ending March 2016, a difference of $17 million. It is not as if Environment Canada has less work to do; it actually has more work to do with fewer resources.
President Obama could be forgiven if he expressed a bit of skepticism about Canada and the current government's commitment to environmental issues, particularly greenhouse gas emissions. As I said, NGOs have noticed, Canadians have noticed, other Americans have noticed, and Europeans have noticed. Therefore, the credibility gap is quite significant; hence, the reason for this bill being on the table today. This is a tiny incremental step to regain some of that credibility. The government is, in effect, digging itself out from its own credibility hole.
It is hard to do that when the government runs around saying that the people who protest pipelines are eco-terrorists. I respectfully submit that that pretty well killed the chances of ever obtaining a reasoned decision on the northern gateway pipeline. That has affected our economic interests. The absence of credibility in the government has made Kinder Morgan a much more difficult pipeline to obtain. It has left the TransCanada east pipeline essentially orphaned in the hope that somehow or another something will happen for that pipeline to go through. Keystone XL, at least for the foreseeable future, has no life in it.
When we lose the credibility in the larger marketplace, we lose our social licence. If we lose our social licence, we will not obtain the pipelines that we think we need. When we lose that, we therefore lose our economic ability to generate revenue and GDP, and that has very serious economic consequences. This faux fight between the environment and the economy is just simply that: a faux fight.
I hope that Bill C-46 will get a good airing in committee. I hope there will be clarification of the audit and inspection powers of the NEB. I hope there will be a commitment coming out of that. I hope there will be a mechanism for ensuring that pipeline companies remain responsible for their abandoned pipelines. There are a number of things that could potentially come out of this, such as requiring a portion of each company's financial resources to be readily accessible, or providing the authority to take control of incidents. All of these things could come out of this.
I want to make note in my closing comments that I can hope, but I do not expect. I can see that we have 12 weeks left on the parliamentary calendar. To get this bill from here to royal assent in 12 weeks is mostly hope, but I think it will end up as a talking point for the government, that we had the best of intentions, but Bill C-46 died on the order paper.