Ms. Linda Duncan:
Mr. Speaker, thank you very much. I asked for your intervention because I believe this is a very important piece of legislation and it is important for us to understand what the bill is and is not doing.
As I mentioned, the bill expands on the polluter pay principle, a welcome intervention, by imposing liability on operators for losses to non-use value of public resources, but it limits the power to the federal crown to pursue compensation for those impacts, and there is some concern that the National Energy Board would not necessarily seriously pursue compensation.
It expands the National Energy Board's powers to order actions by the companies where there are risks to safety or security of the public, to the company employees, or to the pipelines or abandoned pipelines, and for protection of property or the environment.
However, it may noted that the recently tabled estimates for 2015-16 provide for reductions in the budget of the National Energy Board for the regulation of pipelines contributing to the safety of Canadians and the protection of the environment. So much for the touted equal attention to supporting resource development and environmental protection. No additional resources will be allocated for the ongoing mandate and no additional resources for the added mandate of the NEB for abandoned pipelines.
Natural Resources is also apparently being cut by $320 million across the board, or 12.6% of its budget. Surely, given the potential payouts under Bill C-46, this is not the time to be paying down the deficit on the backs of the communities impacted by spills.
There would be greater confidence in the commitments of the government to address the impact if a contingency fund were set aside. That will become apparent later in the discussion of the bill, as taxpayers may be left holding the bag under this law.
The Canadian Environmental Protection Agency is also forecast to be cut by $13.6 million or 44% of its budget. A significant portion of its budget has previously gone to supporting aboriginal consultation. Many of these pipelines go through first nation lands, which are already designated as these lands or are being claimed.
Given the number of resource projects proposed and the fact that the NEB does not adequately deliver on public participation in decision-making, it is impossible to understand how the government will fulfill its duty to consult indigenous peoples and how any project will obtain the social licence needed to operate.
Yes, we recognize that these budgets may well be supplemented through the supplementary estimates, but it is astounding nonetheless that at the same moment we are debating a bill touted to improve pipeline safety, the government tables estimates providing no increased funds to deliver on the expanded mandate of the National Energy Board, the tribunal, and for the government to address spill compensation, let alone the coverage of spill clean-up costs.
This is troubling on a number of fronts. The scale of potential risks and the potential impact from major increased daily volumes have increased, in particular given the nature of the products proposed to be piped, in other words, diluted bitumen. First, the Enbridge gateway pipeline proposes 525,000 barrels a day. The Kinder Morgan Trans Mountain expansion would add 890,000 barrels a day, and the TransCanada energy east pipeline, if approved, would add 1.1 million barrels a day.
One can only hope that the intent is to retroactively apply these higher liabilities for pipelines already approved prior to the passage of this law. This law should be triggering significantly enhanced inspection and capacity to respond to breaks and spills as well. This is important given the poor record by the National Energy Board and the pipeline operators in detecting pipeline breaks and spills or in seeking compliance.
The majority of pipeline accidents of late in my province of Alberta and in the Northwest Territories have been discovered and reported, by and large, by citizens or aboriginal hunters and trappers out on their lands, not by the National Energy Board or provincial regulatory agencies, or by the companies themselves. For example, there was the incident in Wrigley.
I had an opportunity to see this when attending a Dene gathering in Fort Providence a couple of years ago, where a hunter came to the meeting and revealed that when he was out on the land, he was sitting down by a marsh and suddenly a bear appeared. There did not seem to be anything he could do to make the bear go away. He would scare the bear away and the bear would come back. So he finally decided that he would investigate what was happening with this strange behaviour of the bear. He discovered a major break in a pipeline and a massive spill. That is one example where the operators are simply not detecting, reporting, and apprising the people on the land of accidents.
In addition, in this case, we had to step in and demand support for the first nation community, which was trying to address the impact of this spill. If we had not done that, the National Energy Board would not have stepped forward.
I could go on and on about the incidents with pipelines in Alberta. For example, there was a spill from the Plains Midstream pipeline near Sundre, Alberta, into a river, then into a drinking water reservoir. It was not reported to the impacted landowners.
In April 2011, there was the largest pipeline spill in history, again by Plains Midstream, with 4.5 million litres of oil spilling northeast of Peace River. Again, that was detected by the Dene Tha' First Nation and not the operator. They ended up having to close the local school because of the fumes from the petroleum. The first nation was deeply concerned about the impacts on the waters, fish, birds, and wildlife they relied upon, and concerned about the many abandoned wellsites and pipelines. That, of course, is an example where, if the first nations are not able to seek compensation for impacts on the waters, fish, birds, and wildlife they rely upon in their habitat, it will become an issue if the government does not step up to the plate.
Again, I remind this place of the Wabamun derailment and spill. Yes, it was not a pipeline, but it took a week for the federal agencies to actually come forward and assist the first nations directly impacted by that incident.
What are some of the concerns that have been identified with the bill? There are some additional concerns with respect to many of the reforms in Bill C-46, including expanded powers and new rights.
The reforms themselves are welcome, including expansion to abandoned well sites, expansion of liability, and the increase in the liability to $1 billion. However, there are some concerns with the way the bill as drafted; for example, with the adequacy of the upper limit of $1 billion. We can all recall the Kalamazoo bitumen spill cost $600 million merely to clean up the spill, and that was before any compensation was given to any of the communities or property owners who were impacted.
Ecojustice has stated that the bill would fail to prescribe mechanisms to actually assess the risk, taking into consideration either the type of materials shipped, whether they are more corrosive, for example: the potential for environmental, and, I would add, health, damages; an accident or compliance history; and the age of the line and, I would suggest, also the maintenance record.
There is no provision in the bill specifying what the National Energy Board is supposed to consider, or the tribunal once it is established.
Second, concerns have also been raised about bankruptcy implications. There is a concern that the polluter pay provisions may be superseded in the case of bankruptcy of a pipeline owner or operator, as bankruptcy law prevails. That is something that merits discussion at committee.
Third, there is concern with the level of discretion vested in the National Energy Board and in the tribunal. There appears to be a discretionary, potentially politically influenced, process. For example, the company must first be designated before the tribunal may review.
It is also not clear whether there would be a permanent tribunal and whether its members would simply sit around, waiting for a pipeline to be designated, or a company designated, or whether it would only step forward at the time that there is an incident and compensation claims are required.
This would also only occur in a situation where the cabinet, in its discretion, has determined, on the recommendation of a minister, that a company does not have sufficient resources to pay costs or clean-up, or the company has failed to comply with an NEB order.
The National Energy Board could then directly reimburse for the impacts or the costs incurred, and the payment could be directed from a pooled fund. The costs could be recovered as a debt, but that is unlikely from a bankruptcy.
The tribunals would be established only, as I said, where a company is designated; in other words, for each incident, not permanently designated.
Proposed subsection 48.18(2) is a little confusing. It states that the Governor in Council, in other words, the cabinet, could only establish a tribunal if it is in the public interest, somehow factoring in the extent of the compensable damage. It is unclear if the concern is with too small a claim or a very large one.
The tribunal would be granted total discretion in how to notify the public. It has been suggested by a number of parties who have participated in other tribunals that there should be clear guidance on who is actually supposed to notify the public that they can seek a claim for damages and how they would go about doing that.
There is also the query of why only the appointment of retired judges. In many cases in these tribunals, it is perhaps more appropriate to appoint people with a technical background who understand pipelines, the impacts and so forth.
The reason this issue has been raised is because the staffing and expertise for the tribunal is at the discretion of the National Energy Board. However, there is no certainty that there will be some form of secretariat with the appropriate expertise to assist the tribunal in its determinations.
It is encouraging that the cabinet may make regulations authorizing the tribunal to award fees, travel and other costs for claimants to present their case. However, that will be by regulation, and it is not clear what the timeline is on the issuance of those regulations to set the guidance.
It is noted that the regulations could fix a maximum compensation, but we do know what factors that is based on, as mentioned earlier. Perhaps it would be a good idea to actually provide criteria for calculating the costs of the impacts.
The imposition of fees, levies and charges for payouts can be drawn from the consolidated revenue fund. However, there is the issue and concern of how seriously the funds will be pursued from the operator or whether there will be reliance on public funds.
The National Energy Board would be empowered to issue regulation-setting rates, but there is no mention of consultation with either the pipeline operators or the public on how it will set those rates for the levies and fees. It will be important for the National Energy Board to report regularly on its efforts to recover the debts incurred or spill cleanup for compensation. However, there is no mention in the bill to that effect.
Regarding cost advances to file claims, it is unclear if the law would allow for the payment of advanced funds to address or cleanup a spill, or if it would also allow for advances to people who would seek compensation to hire lawyers, experts and so forth, which is very important in procedures before a tribunal.
Increasing concerns are being expressed within communities and first nations with the approach to regulating pipelines arising from failed spill prevention, failed detection, failed response to spills and the failure of the National Energy Board or other government agencies to require pipeline proponents to disclose their emergency and spill response plans for public review and scrutiny.
This certainly has arisen in the review of the Kinder Morgan proposed trans mountain pipeline expansion. People along that line are very concerned that they are not getting access to the emergency spill response plan.
The same is the case with the Athabasca Chipewyan First Nation with a review of a pipeline in Alberta. It eventually pulled away from an Energy Board review because it was denied access to that emergency spill response plan for a pipeline and then given less than 24 hours to review the document.
The Alexis First Nation in Alberta has also been demanding greater access to information on the spill from breaches of mines.
The preference of Canadians is the prevention of harm to their communities, the environment, and not mere compensation after the fact. As the expression goes, “Mieux vaut prévenir que guérir ”.
The improved measures provided under Bill C-46 will be welcomed and will offer succour to those impacted by major spills. However, that is unlikely to be sufficient to restore trust in the government or in the National Energy Board in the wake of denied access to potentially impacted communities and first nations of emergency spill response plans, the downgrading of federal environmental and fisheries laws, and the diminished opportunity for public first nations to participate in pipeline reviews.
Frankly, in the National Energy Board and provincial energy reviews, there have been many concerns raised. I gave the example of the Athabasca Chipewyan First Nation, which is extremely disturbed that the pipeline will go through its traditional lands, not having access to major documents.
The change to the National Energy Board intervener rules would limit participation. I gave the example of where the previous minister of Natural Resources dubbed “interveners” in the review of pipelines as “radical groups” who “hijack our regulatory system to achieve their radical ideological agenda”, merely because they sought to intervene to raise concerns with pipeline projects.
Concerns have been expressed by the Commissioner of the Environment and Sustainable Development in his 2011 report regarding the long-standing failure by Transport Canada and the National Energy Board to ensure compliance or corrective action, and the failure of the NEB to review emergency procedures of 39% of regulated companies. Absent of increased resources, there is little confidence this will be addressed in a timely manner.
Yes, Canadians recognize that they rely on fossil fuels for use, benefit from revenues from sale and export, and that pipelines are needed to transport the fuel. However, it is reasonable for Canadians to expect their government to regulate the sector in a manner that ensures the protection of their health and environment.
Hon. Michelle Rempel (Minister of State (Western Economic Diversification), CPC):
Mr. Speaker, I have quite enjoyed the debate this morning, because we are talking about what the right balance is in terms of this particular set of regulations.
We have had some debate earlier this year in the House around how government should approach regulations, just as a whole, with regard to the red tape reduction act, and I think it is worth bringing some of that to the front end of my speech, just to get some context for my comments.
With regard to this regulation, we are trying to ensure the health and safety of Canadians. We are trying to ensure a high degree of environmental integrity with regard to transport of energy products, and we want to make sure that the regulations are based on fact, historical analysis, statistically proven probabilities, and consultation with industry and with first nations and aboriginal communities; and we also want to ensure, when we were talking about balance, that the fact-based analysis and the desire to ensure the highest degree of public safety are also contextualized within an opportunity cost calculation, making sure there is stability, transparency, and predictability for industry.
If we talk offline to anyone in industry or even in the NGO community, I would like to think there is a cognizance of the importance of the energy sector to Canada, which I will speak to in a moment. However, really what I think the bill has done, and why I am speaking in favour of it, is balance those three points.
It has a very high degree of regulation in terms of health and safety for Canadians, which of course builds on the responsible resource development package that we put in place in budget 2012. It also would ensure that fact-based analysis were used to develop some of the criteria and some of the amounts for liability that were included in the bill, but then it would also ensure that it is reasonable: it could still receive those high results but also be reasonable in terms of industry expectations to operate, so it has that economic balance.
First, I think it is worth starting at the bottom end and talking about the economic importance of this industry to Canada, because sometimes I find that the policy debate around energy infrastructure and energy policy tends to say, well, maybe we should not have this industry at all; maybe it is something we should completely scale back or, through different types of regulations, seek to curtail. I think what we should be doing with our regulation is acknowledging the importance of this industry and encouraging it to grow, but in a framework of sustainability, both for the health of Canadians and for sustainability of the environment.
I want to start by making my position and our government's position very clear, which is that we do believe that the energy sector is very important to Canada's economy. There is no doubt about this. It creates hundreds of thousands of jobs. I know the figures that are regularly put out are roughly in the neighbourhood of 500,000 jobs. That is not just through direct employment; it is through secondary sectors like manufacturing and services. Certainly, we hear about this from excellent groups like the Canadian oilwell drilling association. It has a huge impact on the economy in terms of job creation.
It also has a huge impact in terms of government revenue. Many of our social programs and our innovation programs are funded by revenues that come in from the energy sector.
We have to go into this debate saying that this is a cornerstone of the Canadian economy. It is important. How do we develop it, and how do we ensure, in this case, the transport of energy products in a healthy and sustainable way?
I should also say that we need energy. That is something we do not talk about here. Sometimes when we talk about the importance of the energy industry, we are remiss in not talking about the fact that we need the resources that are produced here, both for our own energy security and because we need energy to do things.
It is essential to have natural gas delivered to our homes, to fire furnaces on cold winter nights like we are experiencing this week, and it is certainly important in terms of looking at a viable, safe, secure source of energy that encourages manufacturing companies to invest in building Canada, that encourages our agricultural sector to grow, and that encourages mobility.
I do not think we can divorce this conversation from the fact that we need this sector from an economic perspective both in the sense of direct economic impact and also in the sense of energy security and being able to see the economy grow through that.
If we need energy and it is important to the economy, how do we transport it? That is the rub. That is why we have the pipeline safety act in front of us today. This bill acknowledges these things: that we have a demand for energy and that it is important to the economy. An interesting statistic is that, according to the International Energy Agency, the world will need 37% more energy in 2040 than it consumes today.
How do we transport it? Pipeline companies are currently moving about three million barrels of oil every day. If we were to turn off those pipelines tomorrow, we would have to add about 15,000 tanker trucks on our roads every day or put another 4,200 rail cars on our railways every day just to meet existing demand. These alternative modes of transportation consume more energy, which of course increases our greenhouse gas emissions. This is an important discussion in the context of our debate on how Canada responds to the issue of climate change. Pipelines offer a clean and efficient way to deliver the energy we need on a daily basis.
Industry knows this, and we know this. It is why we have put this bill forward in this place, to address some of the concerns around what is already a very safe track record. My colleague, the Minister of Natural Resources, talked about a 99.999% safety rate with regard to federally regulated pipelines. When we look at international best practice, we certainly have that here in Canada in terms of health and safety regulations for pipelines. This would take it to the next level.
Going back to the front of the speech, the three components we are seeking on the balance of regulation among health and safety, fact-based analysis, and ensuring that economic balance are the following: incident prevention, preparedness response, and liability and compensation.
Looking at prevention, this particular bill speaks to a number of things. I am going to give some examples of some of the things that are happening in western Canada, which may not be addressed by this bill directly but are important for the context of the discussion. My ministry, Western Economic Diversification, in part seeks to look at the strength of some of our primary industries and ask how we can use the strength in there—through both highly qualified personnel and economic opportunity—to create secondary industries that develop diversification opportunities. It is interesting, because by some of the regulations we have put in place through our responsible resource development package in 2012, we have incented innovation and new industries by creating opportunities for industry to respond to those.
There are two specific examples I want to speak to with regard to preparedness.
The first is a very interesting centre with which Western Economic Diversification has engaged in funding, and that is C-FER Technologies in Edmonton. I want to spend just a bit of time on this because I know in the previous round of debate one of the questions that were asked by my colleague across the aisle was what is industry doing now.
What I really like about this particular organization is that it focuses on facilitating the use of leading-edge technology by oil and gas pipeline operators in the development of challenging resources. The component of this particular bill that we are trying to push is the creation and adoption of best available technology. Best available technology is something that is changing and growing every day, and our government has been working to fund it. A project that has been recently completed is a facility-expansion program, which includes leasing and operating a new facility in the oil and gas sector and the design, construction, and installation of high-capacity loading testing systems, upgrades, and instrumentations. Basically this centre allows industry a place to test new technologies that pertain to pipeline safety. That includes different widgets that could be deployed in a pipeline to sense leaks. It is very high level technology.
I have been there and I encourage colleagues across the aisle to go and visit this facility. Again, it is a demonstration centre so that new technologies can be translated from the bench into the market. This does two things: first, it encourages long-term safety for these pipelines; and second, it creates jobs because we are taking intellectual property from the bench and commercializing it in Canada. It is an absolutely astounding centre, and I am very proud that we have supported it.
The other component I want to talk about is SDTC Canada, Sustainable Development Technology Canada. This is a group that has been supported by our government, which is involved in the development and commercialization of clean technology, using industry as a driver. As a Calgary MP, I want to bring up Pure Technologies, a very innovative little company in Calgary that has been working with SDTC. It has developed a robot device for pipeline inspection, of which I have a diagram. It looks like a ball. It is a very complicated, technological ball that goes into the pipeline and, based on fluid dynamics, can sense minute fractures in pipelines so that leaks can be detected and dealt with ahead of time.
Again, we are looking at ways to ensure that there is prevention with the best available technology. This is another way our government has been working with industry to strike that balance between health and safety and economic development. It is really cool to look at some of the technologies coming out in the development of a secondary industry around clean technology for pipeline safety.
Looking at the second component of this bill, preparedness and response, I will speak from my notes, but then I want to speak about another project that has an economic diversification angle with regard to this particular aspect of the bill.
The pipeline safety act would ensure a robust response in the unlikely event of an incident. We talked about that 99.999% success rate. The new legislation would require companies operating pipelines to have a minimum level of financial resources. It would also require that these pipeline operators keep a portion of that money readily accessible for rapid response should an incident recur.
The bill would also give the National Energy Board the authority and resources to take control of an incident response or cleanup if, in exceptional circumstances, the company is unable or unwilling to do so. This means the government would provide a financial backstop so that the board has the resources needed to complete the cleanup and take necessary action. Any funds provided by the government would be recovered from industry, again adhering to the government's polluter pays principle that we have talked about so many times in this place.
I would like to draw attention, though, talking about preparedness, to the importance of training people on the job. Sometimes this can be difficult for the energy sector, given that it is in remote northern conditions. We have been looking to work with industry and some institutions on best practices to ensure that training can be delivered.
A couple of weeks ago, I announced a project with the Justice Institute of British Columbia. The Justice Institute is a world leader in providing training and leading thought on safety training. It is actually launching a project that is going to have commercialization benefits, called Praxis, by which it puts simulated situations in web-enabled training. It is working with industry to have rapid response.
The interesting thing is that the intellectual property in those simulations can actually be commercialized into different software packages. Again, we are seeing economic spinoff on the service provision and commercialization on the new technology side and ensuring that companies have the preparedness and incident response requirement built into their companies. It is a great project and something I hope people look into, because it is really great and it is happening here in Canada.
With regard to liability and compensation, the third pillar of the bill, as I said, which would enshrine the polluter pays principle into law. There are two components, which I will speak to very briefly, as I know that the criteria around this will be examined more at committee. First, for unlimited liability, right now this is in practice through common law, but this bill would clarify unlimited liability when companies are at fault or negligent. This would be put explicitly into law in Canada. With regard to absolute liability, it would put an amount in place irrespective of fault or negligence for all companies operating pipelines, and it would set that amount at $1 billion.
I know that some questions have come up with regard to that particular amount, such as why this amount would be in place, how it was arrived at, and that it is not enough. When we talk about how we develop regulations, that fact-based analysis, historical analysis examples demonstrate that this level of absolute liability and financial capacity would provide world-class coverage. The average cleanup costs of major pipeline spills in North America result in costs in the range of $20 million to $50 million in the case of absolute liability.
With the time I have remaining, I should probably talk a bit about our government's response to climate change, because invariably the energy sector and climate change are a linked discussion. Certainly that has been the case this week with regard to some decisions made by our neighbours to the south on energy infrastructure.
It is important to talk about what we have done on this file, because the theme of my speech is how we develop balanced regulations. We need to talk about the same thing with respect to our response to climate change.
We have taken a sector-by-sector regulatory approach whereby we work with industry to set targets that produce tangible reductions in greenhouse gas emissions. An example is the light-duty passenger vehicle sector, where these regulations will eventually result both in lower fuel costs for consumers and in reduced greenhouse gas emissions, which is a win-win for all. We have worked closely with the coal-fired electricity sector. Both of these sectors were major sources of emissions, and we have seen those emissions reduced. That is a huge accomplishment of this government.
With respect to international action, we have said that in order to see real reductions internationally, we need an agreement that sees all major emitters commit, not just a small percentage of them. We have been working toward that goal through our participation in the Conferences of the Parties.
Also, we invest heavily in research and development with respect to not only climate change adaptation and working with communities to respond to climate change but also in researching new technologies, monitoring standards, and best practices. We are researching new technologies through the Canada Foundation for Innovation and the Natural Sciences and Engineering Research Council of Canada. We commit quite a bit of funding, through the Natural Sciences and Engineering Research Council, to climate change research through the climate change and atmospheric research program. This also builds on basic research in other areas as well that feed into the specific domain .
In the few minutes I have left, I want to go back to the start of my speech and talk again about balance and pragmatism in putting forward regulations.
This is about seeing action in climate change. It is about ensuring that we have health and safety for Canadians, but it is also about ensuring that these regulations are based on fact-based analysis of what we have seen happen in the past and what is likely to happen in the future and do not put a shock on industry. These proposals were developed hand and foot with industry. They were developed in consultation with first nations groups. We want to make sure that when we put regulations forward, they achieve that balance.
I would be remiss if I did not talk about my opposition colleague's response in this area, which I found to be not responsible. I will speak specifically about the Liberal Party.
I have watched the Liberals' comments on pipelines with some curiosity. On June 19, 2004, their leader said, “I'm also supportive of the idea of a west to east pipeline.” Then on May 29 he said, “I am very much in favour of the west/east pipeline”. Then on the 13th he said that the energy east oil pipeline is not socially acceptable.
I think it is reasonable to have a debate in this place that looks at what the liability limits are, how we are achieving that balance, and what would cause a shock to industry, a necessary shock that would see a health and safety component put in place, versus just an ideological happenstance discussion that really does not serve industry, the public, or health and safety.
I am encouraged by some of the debate that occurs. I hope that my colleagues opposite will put this bill forward to committee. It can be studied in greater detail in terms of some of the assumptions about the facts and statistics put forward to calculate some of the specific liability limits and rules. However, I hope that it will not devolve into a flip-flopping debate, as we have seen from the leader of the third party.
Mr. Guy Caron (Rimouski-Neigette—Témiscouata—Les Basques, NDP):
Mr. Speaker, I am pleased to rise to speak to Bill C-46. I am even more pleased about the fact that this is the first bill on natural resources that I have the honour to debate in the House as the official opposition critic for energy and natural resources.
This is an extremely important issue, particularly because of the various challenges we are currently facing and the projects that are under way. In my riding, the energy east project will pass through Témiscouata. It is a major project. Clearly, there are many other major projects all over the country that are directly affected by Bill C-46, which seeks to make the transportation of oil via Canada's pipelines safer.
The government asked us how we are going to vote at second reading. I can confirm that we are going to support the bill at this stage. We are not doing so because the bill is perfect, and in the next few minutes I will have the opportunity to explain the problems with this bill that the Standing Committee on Natural Resources should work on.
In our opinion, this bill is a good first step. Finally, after putting so much pressure on the government, we are truly pleased that the government is willing to reinforce the polluter pays principle, not just in words but also in the legislation.
As my colleagues no doubt know, since our leader, the member for Outremont, took over the reins of the New Democratic Party, he has spoken at length about this country's need to enforce the polluter pays principle, not only in the area of natural resources but also in all of our country's industrial and economic sectors.
He has also spoken about the need to take into account external economic impacts, for example the cost of the pollution caused by various industries, in order to reflect the actual cost of production, not only from an economic perspective for the consumer or the producer, but also from an environmental perspective and from the perspective of how it could affect large communities.
On this side of the House, we recognize the importance of the oil and gas industry across the country. We know that this industry accounts for approximately 7% or 8% of Canada's GDP and that it has an impact not only on the western part of the country, but also on regions such as Quebec and Ontario. However, if we want to enshrine the polluter pays principle in law, we will have to do so in a consistent and comprehensive manner.
In describing the bill, which is what I plan to do for the next few minutes, we realized that the generally positive points might not go far enough, such as establishing no-fault liability. Thus, at the end of the day, all companies could be liable in the event of a disaster. Even if it is not the company's fault or if negligence is not proven, the liability could be as high as $1 billion, depending on the amount established by the National Energy Board, by cabinet or by the governor in council.
While the $1 billion is positive when you consider that there is currently no implicit responsibility in Canadian legislation or regulations, it does minimize and water down the polluter pays principle. Even if the company is not at fault, it is nevertheless a question of a pipeline built and operated by a company that must eventually take full responsibility for it. We are therefore faced with the following problem: even if there is no fault assigned, taxpayers could end up bearing financial responsibility.
If a disaster occurred that cost more than $1 billion in cleanup and environmental costs, some of that burden could be placed on taxpayers through the government. We see this as one of the bill's weaknesses.
If we really want to remain true to the polluter pays principle, we need to follow through on the reasoning and make the company fully responsible.
Clearly, if the pipeline has a defect and the company is not responsible and a third party is, liability could be placed on the third party. However, if there is an operational issue and the company is responsible for the pipeline, then it must be fully responsible for any damage caused and for all environmental costs.
However, if the company is found to be at fault or negligent, under the bill, costs and damages could be much higher. This amount would be determined by either the governor in council or the National Energy Board.
We support the fact that this legislation will finally hold companies responsible for abandoned pipelines. Beforehand, the responsibility was implied but not necessarily very clear. My colleague from Edmonton—Strathcona mentioned in her speech that this is a serious problem in Alberta, where there are many abandoned oil wells connected by equally abandoned pipelines. These abandoned infrastructures pose a problem, because most of the time, the companies that owned them no longer exist, which creates legal uncertainty regarding cleanup costs.
It is therefore good that the responsibility of companies for these underground pipelines in Canada, even after they stop operating, is explicitly stated in this bill, because we are talking about major projects and companies that are relatively stable economically and financially.
How can we ensure that the companies will assume these costs? Under the bill, any company that is operating a pipeline that matches the standards set out in the bill, namely pipelines that have the capacity to transport at least 250,000 barrels of oil per day, must have liability coverage of up to $1 billion. Once again, we support that. This money will be used to ensure that the company is immediately liable in the event of an incident and will also serve as a deposit in case a pipeline ceases operations, so that the company remains responsible for any potential cleanup costs or costs associated with subsidence, for example.
The bill thus provides for protection against any damage that could result on the land under which a pipelines passes. It is perhaps minimal compared to the growing costs associated with these pipelines but it is still a recognition of the company's responsibility.
It seems like I am praising the government, but we have to acknowledge the progress that has been made in pipeline safety and the positive aspects. For example, the bill authorizes the National Energy Board to establish a pipeline claims tribunal for claims following a pipeline leak or disaster.
It used to be extremely complex and onerous for a land owner to get compensation for a major pipeline spill. The legal system is very complex and there are a lot of costs up front for a person who suffered damages.
This bill includes a provision authorizing the National Energy Board and the governor in council, at their discretion, to establish an administrative tribunal following a disaster in to order hear and compensate the parties who feel adversely affected by the disaster. This is progress because it will make the administrative process easier—if the National Energy Board and the governor in council use their discretion wisely, that is.
Those are the positive aspects of this bill as I see them. This is progress, and it is why we are voting in favour of this bill at second reading. We could then consider the bill further in committee and propose amendments to improve these provisions, which seem more watered down than they could be.
As far as the bill's flaws are concerned, we can name three. First, I mentioned several times the issue of the discretion of the National Energy Board and the governor in council, or cabinet.
It would have been preferable to provide greater certainty in this bill and give it more teeth, if you will, so that some elements would be triggered without relying on the National Energy Board or the Governor in Council to provide good governance or wise decision making.
In fact, a number of these tools that, in principle, should improve the safety of pipelines are not guaranteed. Their application will be at the discretion of the National Energy Board and the Governor in Council. We all hope that will happen, but it will be determined on a case-by-case basis with no guarantees.
Furthermore, we really wanted the government to understand that pipeline safety impacts not only the transport of oil, but also the transport of natural gas and other products, such as solvents used in the oil sands. Quite often, the bitumen is treated in one area and the solvent, after being separated from the bitumen, is reshipped to the extraction site. These solvents are highly toxic and very dangerous. It would have been good for such a bill to cover the transport of these products, whose risk to the environment is similar to that of oil.
Furthermore, it is hard to understand why the government limited its new safety standards on pipeline transportation to pipelines that transport more than 250,000 barrels a day. Why did it not impose these standards and new restrictions on pipeline transportation safety on all interprovincial pipelines that fall under the jurisdiction of the National Energy Board and the federal government?
Yes, it is a step in the right direction that the government is now applying, even partially, the polluter pays principle. That is why we will support the bill. It is also an important issue for the government and the industry, because it is a question of confidence in the industry. I can speak from personal experience, because one of the main concerns in my riding and in Quebec as a whole, given what I have heard about the energy east project, has to do with transportation safety with respect to rivers, waterways and watersheds, among others. That is a big concern that recently came up in a Harris-Decima survey of Canadians' views on the transportation of oil and gas, either by rail or by pipeline. Less than half of Canadians have confidence in the pipeline transportation system.
Lots of people talked about social licence. That is why it goes without saying that for the in-depth study and to reassure people that transporting oil by pipeline will not have a negative impact on their community, there must be elements in place to ensure safety and rapid response in case of a disaster. There must also be a mechanism in place to ensure that companies pay adequate compensation for all environmental disasters that occur on private property or even on public property. The government should have gone in that direction.
One could even argue that they took too long to go in this direction because it has been some time now since the government was reminded of its responsibility for pipeline safety and the safe transportation of oil and fossil fuels in general. It should have taken action on this long ago, and many members of society have criticized it for that, not just environmentalists, but also communities directly affected by that transportation, be it underground or by rail.
If we look at all of the projects, some will certainly be influenced or affected by this bill. It could help the communities that are stakeholders in this. I am talking about energy east, of course, and northern gateway is another one that is affected. This might enable communities to look at this from another angle.
We should not necessarily expect the government to have carte blanche when it comes to getting its projects approved by the communities. It can take a positive approach, or a relatively positive one in this case, but communities have still expressed a lot of concerns. I am not talking just about municipalities; I am talking about aboriginal communities too. For example, in the case of northern gateway, Kitimat could be severely affected if there is a disaster, and that has been brought up a number of times. The government seems unable to reassure that community. The government should have a responsibility to intervene directly in talks about pipelines with first nations; that should not be left up to the company. The government, which has a responsibility toward first nations, should be able to get involved in these matters.
It refuses to do so. As a result, these projects have no social licence. Ultimately, not only is the government doing nothing to increase safety standards, but according to most experts, it is also limiting consultation periods as well as the effectiveness of the environmental assessment process. It has sped up the process to supersonic speeds. I am using that language because, in the case of the energy east project, the National Energy Board has only 15 months. In fact, the deadline for intervening or even commenting on the energy east project in Quebec is March 3, which is next week. The problem is that TransCanada, which of course is the company behind the energy east project, has not yet even decided if there will be an oil port in Cacouna. Rumour has it that the route could change significantly. Apparently, Cacouna could be replaced by Baie-des-Sables, Bécancour or Lévis, for example. It is not clear if plans have been finalized, but the board seems to think that it has to act immediately because of the extremely tight deadlines that were imposed by the federal government's legislation.
The same thing goes for the issue of environmental assessment, given that there used to be separate processes. The National Energy Board dealt with the pipeline itself while environmental issues went through a separate process. To address some of the shortcomings, the government obviously could have changed the two processes to try to increase their effectiveness. However, in the end, by merging the processes and handing responsibility over to the National Energy Board, the government did not do the industry any favours, quite the contrary. These days, there is a lot more resistance to these projects, precisely because the process seems extremely inadequate for people who want to intervene and for those who are affected and worried and are feeling dismayed about how quickly everything is moving. In the case of energy east, we are talking about a major project involving 1.1 million barrels that the board has to handle in 15 months.
We are talking about the polluter pays principle, the federal government's responsibility, and the principle whereby the federal government should ensure the best provisions for the industry. These provisions are not just intended to make shipping and economic expansion easier. The government also has a responsibility to ensure that the economic, regulatory, and legislative conditions governing the oil and gas industry are stable enough to ensure long-term consistency. The companies and industry need to know that their economic environment is secured for the long term. At present, given how the government operates and the changes that were made, the companies are right to question the merits of the government's policies.
In the case of Bill C-46, the measures are a step forward in pipeline safety. That is why we support the bill. However, there is still some uncertainty when it comes to ensuring that natural resource development, which is important to Canada's economy, could grow responsibly and sustainably, as we gradually transition Canada's economy to one that is based more on renewable energy, of course.
Mr. Leon Benoit (Vegreville—Wainwright, CPC):
Mr. Speaker, I am delighted to speak today on the government's new pipeline safety act. I will be splitting my time with the new member for Whitby—Oshawa.
During this debate, all members have reminded us of the great importance of Canada's energy infrastructure. We heard how Canada's pipeline network functions as a vital energy highway, delivering oil and natural gas to our homes, our businesses and industry, and supplying energy to all forms of transportation. While the New Democrats would prefer to deny this fact, it is clear that we all benefit daily from the energy that Canada's pipelines carry. We rarely think about this key infrastructure because, quite frankly, there is rarely a problem with it because it is so safe.
Canada has a vast network of federally regulated pipelines—in fact, over 73,000 kilometres. Those are just the federally regulated pipelines across this great country. In addition, 70 pipelines deliver oil and natural gas across the Canada–U.S. border every day safely and reliably.
In 2013, Canada and the United States' energy trade was the largest in the world, at some $140 billion that year. That is far more than total trade between any other two nations on earth. Today, historic volumes of Canadian energy are being supplied to the United States. In fact, Canada and the United States have dramatically reduced their oil imports from offshore. I think most of us in the House would agree that that is a good thing. At the same time, oil imports from each other are at record highs, contributing to greater North American energy security and economic growth in both countries.
As large as Canada's pipeline network is, the United States' pipeline system is even larger. According to the Pipeline and Hazardous Materials Safety Administration, an agency of the U.S. Department of Transportation, there are over 2.6 million miles of pipelines in America moving oil and natural gas throughout the United States. The American pipeline network is more than 50 times the length of the United States interstate highway system, which really makes the point that it is a tremendously huge system and a very safe one as well. Again, since pipelines have proven to be the most efficient, safest, reliable, and energy-efficient way to transport oil and gas, we rarely think about these energy highways and the fact that they link most communities throughout North America.
When it comes to pipeline safety, Canada's record is outstanding. Our pipelines are among the safest in the world. Between 2008 and 2013, 99.999% of the oil and products shipped by federally regulated pipelines arrived safely. Canadians can and should be proud of that record. Instead, I hear criticism and doubt from the members, particularly the NDP across the aisle. We have seen the conversion on the road to Damascus, as it were, of the Liberal members opposite. I am happy to see that they have got on board, after seeing that it is something they absolutely have to support.
Moving that same amount of oil by road or rail would require 15,000 tanker trucks or 4,200 rail cars every day, and would consume more energy and cause higher greenhouse gas emissions. The choice to move these products by pipeline is clearly the right one. There is no doubt about that, and I honestly do not think anyone in the House would deny that truth.
When it comes to safety, Canadians demand and deserve the very best. We want our communities to be safe, and we want the environment to be protected. That is why the pipeline safety act is so important. In short, we understand that public safety and environmental protection are necessary conditions for energy development. The pipeline safety act is one more way in which we could continue to build public confidence in our 73,000 kilometres of pipelines.
Bill C-46 would build upon Canada's already impressive pipeline safety record by focusing upon three key areas: prevention, preparedness and response, liability and compensation.
Bill C-46 would include preventive measures that would clarify the rules and responsibilities of pipeline owners to prevent pipeline incidents, increase safety for Canadians, and provide better environmental protection.
The bill would require companies operating major oil pipelines to have $1 billion in financial resources at their disposal, with sufficient resources always on hand to ensure an immediate and effective response.
We would enshrine the polluter pays principle in law so that polluters, not Canadian taxpayers, would be held financially responsible for the costs of damages that any incident might cause.
We would introduce absolute or no-fault liability so pipeline operators would be held responsible, even when fault or negligence has not been proven. That is an important point that I think has been somewhat missed, even though we have had quite a bit of debate on the legislation.
For companies operating major oil pipelines, the amount for absolute liability would be set at $1 billion.
Of course, our first priority is to prevent spills from happening in the first place. That is why we are proposing amendments to the National Energy Board Act that would build upon other recent improvements our government has implemented. These include increasing the number of inspections and audits conducted each year and giving the National Energy Board the authority to levy monetary penalties.
As well, we would ask the NEB to provide guidance on the use of the best available technologies in pipeline projects. This would include materials, construction methods, and emergency response techniques. As a result, the National Energy Board, one of the most respected energy oversight bodies in the world, would be involved in all stages, including new construction of pipelines.
We are proud of Canada's safety record with pipelines, but we have no intention of resting upon our laurels. There is no room for complacency when it comes to the safety of Canadians or the safety of our environment. Bill C-46 would reflect our government's commitment to doing even better, in spite of the fact that the record of pipeline companies is already impeccable.
We also understand the importance of consulting with Canadians, including with aboriginal peoples who are often living closest to where our natural resources are found. That is why, beyond this new legislation, our government is also taking an inclusive approach to safety and resource development. We are deeply committed to working directly with aboriginal peoples throughout Canada, in all aspects of pipeline safety operations, including planning, monitoring, incident response, and related employment and business opportunities.
The Government of Canada has a constitutional duty to consult with aboriginal communities whose aboriginal and treaty rights may be adversely affected by a proposed project, and we are doing that. We believe that aboriginal peoples must be partners in everything we do, from ensuring the safety of our pipeline system, to protecting our marine environment from incidents, to sharing in the benefits of developing our resources. That is why our government is determined to forge ahead with a strong and lasting partnership with aboriginal peoples in the responsible development of our resources and our pipeline safety system.
We have seen the NDP continuously vote down all of our increased pipeline safety measures, and Canadians know they simply cannot rely upon the NDP to prioritize their safety or the environment. Canadians can trust our government. With Bill C-46, we would be making Canada's world-class pipeline safety system even safer.
I urge all hon. members, from both sides of the House, to support the truly effective proposals put forth by this legislation. I look forward to hearing the rest of the debate on the bill.
Mrs. Pat Perkins (Whitby—Oshawa, CPC):
Mr. Speaker, Bill C-46 is a piece of legislation with many compelling reasons to support it. First and foremost, the legislation would raise the bar even higher on Canada's already stellar pipeline safety record. Given the 99.999% safety record federally regulated pipelines have, we know that pipelines are a safe and efficient way to transport energy. However, as close as this track record is to perfection, we know that Canadians expect us to improve on this record even further. Our goal is simple: no spills. That is precisely what this legislation is about.
As the Minister of Natural Resources made abundantly clear, the Government of Canada is committed to ensuring that Canada has a world-class safety regulatory system for pipelines. He left no doubt that there will be no development unless rigorous environmental and regulatory reviews indicate that they are safe for Canadians and safe for the environment, because public health and environmental performance are non-negotiable.
The pipeline safety act is a solid illustration of responsible resource development in action. It would strengthen environmental protection and would create new jobs at home while providing energy security for our international trading partners abroad. The legislation is just the latest concrete action in this commitment.
The bill builds on previous pipeline safety measures our government has implemented. These have given the National Energy Board new authority to levy administrative monetary penalties and to increase the number of board inspections and audits.
I know that Canadians can count on our government to take action. Our pipeline safety act would go even further, strengthening incident prevention, preparedness, response, liability, and compensation. The legislation would give the National Energy Board even greater powers to hold the pipeline industry to account and would ensure that the sector would pay a hefty price if it let environmental standards slip.
These measures alone are reason enough to support the bill, yet there is another equally critical factor to consider: our time-limited opportunity to ensure that Canada's energy sector will continue to succeed, creating future prosperity for all Canadians.
As we know, Canada has the third-largest proven oil reserves in the world and is the fifth-largest producer of natural gas. These valuable resources are already a major economic driver in our country. The oil and gas sector accounts for over 190,000 direct jobs and nearly 7.5% of Canada's gross domestic product. Canada sold $117 billion in energy products to the world in 2013. This represents over a quarter of our total merchandise exports. That money makes its way into the pockets of all Canadians, whether directly, through business activity and jobs, or indirectly, through the benefits of resource sector royalties.
On average, for the past five years governments at all levels collectively received about $23.3 billion annually from the oil and gas sector. That is equivalent to the amount spent educating 1.6 million Canadian children in the public school sector or what governments would be spending on health care for nearly five million Canadians. This figure is just a fraction of what it could be. Hundreds of major resource projects worth more than $675 billion are under way or could come on stream over the next decade. This is truly a once-in-a-generation opportunity.
The Canadian Energy Research Institute says that over the next 25 years, the total value of the goods, services, and jobs generated by the oil sands alone could reach $2 trillion. That works out to $85 billion a year, and I have only talked about oil thus far.
According to the Conference Board of Canada, between 2012 and 2035, the natural gas industry could invest over $386 billion in Canada. Close to half of that, $181 billion, would be destined for British Columbia.
Of course, none of this will happen without adequate infrastructure to move our energy products to coastal ports in world markets. Without pipelines, Canadian oil and gas will continue to be stranded. In fact, we are already paying a price for the lack of pipelines. Discounted oil prices led to an estimated loss of $13.3 billion in revenues to Canadian producers in the year 2012.
We need new pipelines to reach new and different markets than what we have traditionally relied upon in the past. At the moment, virtually all Canadian exports of oil and gas are headed south to the United States. Canada will continue to be a key supplier to our American neighbours, but shifting global demand and supply conditions make it imperative that we broaden our customer base. Fortunately for us, there are enormous and fast-growing replacement markets we can tap into if we make our energy supplies available to them.
The International Energy Agency predicts that demand for energy will increase by one-third over the next 25 years. Two countries, China and India, will account for nearly half the increase. Some may suggest that renewable and alternative sources of energy negate the need for oil and gas. However, the International Energy Agency says that even with the progress being made in this area, it will not be enough to meet the demand, and that by 2035, three-quarters of the global energy demand is expected to be met by fossil fuels.
Canada can seize this historic opportunity to create high-quality jobs, economic growth, and long-term prosperity for all Canadians. The conditions are ideal for us to do so. Beyond our energy prowess, Canada has other important advantages that support the responsible development of our energy resources and associated infrastructure. For instance, Canada is one of the best countries in the world in which to invest. Canada placed second in Bloomberg's recent world ranking of business-friendly nations, and KPMG has concluded that Canada's total business costs are the lowest in the G7. They are more than 40% lower than the United States.
To capitalize on these strengths, our government has launched an ambitious free trade agenda. Free trade deals have been reached with 10 countries. They include Canada's most comprehensive trade agreement to date, which is with the European Union. The European Union represents a market of 500 million people and annual economic activity of $18 trillion. It is the largest marketplace in the world.
More recently, Canada has concluded a free trade agreement with the Republic of Korea, the fourth-largest economy in Asia. This landmark achievement will provide access for Canadian businesses to a population of 50 million people.
We have the perfect mix of growing global energy demand, growing Canadian energy supplies, and an economic environment conducive to increasing energy trade around the world. All can work to Canada's benefit.
The pipeline safety enhancements proposed in this new legislation to strengthen incident prevention, preparedness and response, and liability and compensation will help prepare Canada for these new economic opportunities. This legislation clearly demonstrates our government's commitment to public safety, environmental protection, and meaningful engagement with aboriginal people. By emphasizing prevention, responding quickly in the event of an incident, and making sure that companies, not Canadians, are liable for any costs, the act would ensure that we maintain a truly world-class safety system.
For all these sound reasons, I urge all parties to support this worthy and necessary legislation. The time to act is now.
Mr. Fin Donnelly (New Westminster—Coquitlam, NDP):
Mr. Speaker, I will be splitting my time with the hon. member for Victoria.
I am pleased to rise in the House today to speak to Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act.
I will begin by stating that Canada's natural resources are a tremendous asset and the energy sector is a critical component of our economy. From oil, gas, trees, fish to mining, the New Democrats recognize the vital role that natural resources play in the Canadian economy.
However, unlike the Conservatives and the Liberals, the NDP has presented a clear vision which leverages our natural capital to create wealth and prosperity, while maintaining a high level of social, cultural and environmental integrity. The New Democrat vision for resource extraction focuses on three key principles of sustainable development.
The first principle is environmental integrity. It requires us to ensure that polluters pay for environmental impacts they create instead of passing those costs on to future generations.
The second principle is partnerships. It requires that government ensure that communities, provinces, territories and first nations benefit from resource development and that we create value-added middle class jobs right here in Canada.
The final principle is long-term prosperity. It focuses on leveraging Canada's natural wealth to invest in modern, clean energy technology that will keep Canada on the cutting edge of energy development and ensure affordable rates into the future.
For far too long, Canadians have been told that they have to choose between the economy and our environment. That is a false choice. It is an approach that is stuck in the past. In articulating our balanced approach, the New Democrats believe that our natural resources must be developed sustainably. Polluters must pay for the damage they cause. This is common sense and is fair.
While natural resources are undoubtedly a central component of the Canadian economy, only Canada's New Democrats recognize the need to move away from our overreliance on fossil fuels and have a vision for development that promotes economic prosperity and job creation that goes hand-in-hand with social, economic and environmental responsibility.
For most residents of B.C.'s Lower Mainland, like those in my riding of New Westminster—Coquitlam and Port Moody, having government approach natural resource development through a collaborative approach, with the principles of sustainability at its core, is a necessary precondition for their support of resource projects.
While the Liberals and the Conservatives have been happy to rubberstamp pipeline projects, the New Democrats believe that major resource projects must be judged on their merits. That means projects must be subjected to a rigorous and robust environmental assessment process. Assessment criteria must include an impact assessment of our emissions and climate change impacts on Canadian jobs and on national and regional energy security.
Public consultations must be credible and democratic, not shallow, limited or paper-based. Projects must honour the legal obligations of our duty to consult first nations. Clearly, such rigour has been absent in the review of the northern gateway and Kinder Morgan proposals in British Columbia, and the same flawed process is now being applied to the energy east pipeline.
Despite the divisive pipeline politics that the Conservative government has created, Bill C-46 is a much needed and long overdue first step toward a polluter pays regime for pipelines in Canada. Although the bill can be seen more as an initial step than a giant leap forward, the fact that polluters will be absolutely liable for harm caused by a pipeline spill is a step in the right direction.
Once passed, Bill C-46 will ensure that any company operating a pipeline will be liable in the event of a spill, even if it has not been negligent and has not broken any laws. For companies whose pipelines have the capacity to move at least 250,000 barrels per day, that limit will be up to $1 billion. That monetary amount can be increased by the government in the future, but the bill would prohibit cabinet from lowering it. That too is a good thing.
Despite the purported goal of implementing the polluter pays principle, Canadians may still be at risk as the limit in Bill C-46 places a liability of $1 billion when there is no proof of fault or negligence. This means that taxpayers may still be on the hook for oil spills costing more than that.
While the $1 billion limit for some companies may be a big improvement over the status quo, it still would not completely cover the cleanup cost of an accident, such as the Enbridge Kalamazoo River spill in Michigan. According to recent estimates, that spill, the largest in U.S. history, cost more than $1.2 billion to clean up, not including compensation for damages, and still damages remain today.
While not a pipeline spill, I think of my home province of British Columbia and the disastrous Mount Polley mine spill that happened last August as an example of how a breach of a tailings pond can have a major environmental consequence, which may not be immediately apparent. With Mount Polley, which many say is the worst environmental disaster in British Columbia's history, the extent of the damage is predicted to remain unknown for years, even decades, as toxins can slowly accumulate in the environment, from lake bottom, to fish and wildlife, to people. This underscores that the $1 billion threshold might not be high enough, given the ambiguous cleanup times often associated with these types of disasters.
Finally, Bill C-46 would actually take a step backward by eliminating the government's ability to recover cleanup costs for a pipeline spill under the Fisheries Act, which applies in certain circumstances to make a polluter absolutely liable without limit. In the absence of such unlimited liability, the government, and therefore Canadian taxpayers, may still be on the hook for oil spills. This is just plain wrong and highly unfair.
If the government is so convinced that pipelines operate within a mature industry, then the industry is one that can and must pay for itself. Instead, the fact that the bill would not completely enshrine the polluter pays principle, means Conservatives are giving yet another handout to their friends in the oil patch by making taxpayers liable for oil spill risks.
I support imposing liability for oil spills on pipeline operators. However, ultimately, it remains imperative that we prevent oil spills from happening in the first place instead of concentrating solely on who is responsible for the cleanup.
To that end, we need better regulation and oversight. The New Democrats are committed to rebuilding a robust environmental assessment process to undo the damage done by the Conservative government.
The New Democrats understand the need to move away from our overreliance on fossil fuels and have a vision for development that promotes economic prosperity and job creation, hand in hand with social and environmental responsibility. However, until modern society can curb its dependence on fossil fuels, ensuring the utmost precautions are in place to prevent environmental degradation caused by spills, including imposing a financial liability on the operators of these pipelines, is vital.
As we have witnessed, a failure to properly regulate the natural resource sector can have a disastrous consequence for natural habitats and the environment in which we live. I will relay the impact of a spill that happened in a neighbouring community of mine.
Kinder Morgan was ordered by the courts to pay a mere $150,000 for a 224,000 litre spill of albian heavy synthetic crude oil into Burnaby's Westridge neighbourhood and Burrard Inlet, which my riding is connected to and shares. Nearly 78,000 litres poured into Burrard Inlet, impacting 1,700 kilometres of shoreline. Following that spill, Kinder Morgan spent almost $15 million in remediation costs and millions more for personal property damage. Imagine this pipeline twinned and the amount of tanker traffic in the Inlet doubling or tripling.
Residents along this pipeline are hugely concerned about an oil spill that would impact their property, neighbourhood, community and, indeed, the surrounding environment. Many people are concerned, and we need to address these issues. As I said, the bill is a step in the right direction, but it does not go far enough.
Mr. Murray Rankin (Victoria, NDP):
Mr. Speaker, it is a great honour to rise, and I wish to salute my colleague from New Westminster—Coquitlam for his excellent speech just now. I wish to avoid repeating some of the fine points he made, but I need to say a couple of things at the outset.
First, this false dichotomy of environment versus the economy, as he explained so eloquently, is simply a relic of the past. It is another example of the Conservatives' effort to divide Canadians, as they have done so effectively using terror as a wedge. They do this on the environment all the time as well. The rhetoric of the $20 billion carbon tax comes to mind, to their everlasting shame. However, that need not be the case at all in a bill like this.
Second, I want to congratulate the government for finally moving forward with something to deal with pipeline liability. It is long overdue. It is something that has been so long called for that the Conservatives have finally woken up and done the right thing.
I wish to say at the outset that I am going to talk about three things in the bill that bear repetition.
The first thing is the enormous amount of discretion given to the cabinet and to the National Energy Board. It looks great to say we are enabling a whole bunch of things to be done. The legal reality on the ground, of course, is very different. It is only if the regulator chooses to go ahead that anything meaningful will happen. I just hope Canadians are not deluded into thinking that somehow things are going to change. They may change—it is an excellent first step—but only if regulators choose to exercise the discretion that has been given to them in the bill so frequently, as I will say. That is what this bill is about.
The second thing that needs to be said is that environmental legislation and liability legislation ultimately have to do with whether there is enforcement. To use a Shakespearean metaphor:
...full of sound and fury,
That is unless and until the bureaucrats make the rules that would be enabled in this bill. Again, it is an enabling statute. If those rules that are made, once made, are not enforced because there are deals between the companies and the regulators and the like, so what? That reality needs to be put front and centre as we debate this enabling legislation.
I also wish to speak about orphan pipelines. I think that bears some discussion. First, this is an effort, no doubt, to increase the public's confidence in the regulation of our pipelines. A recent Harris/Decima poll conducted by the government pointed out that only 27% of Canadians are confident that the Government of Canada is able to respond effectively to a significant oil spill on water; a few more, 32%, think it can do better with oil spills on land. Canadians do not feel confident that pipelines, tankers, and trains that are transporting dangerous goods will do so safely. That is what the polling suggests. When it comes to rail transport, only 29% of Canadians feel confident that it is safe, and only 37% of Canadians believe oil tanker transport is safe; yet 47%, almost half, are confident pipelines can be made to transport oil safely. I say that because we need to talk about the enormous amount of diluted bitumen that is being moved through our waters, across our land on trains, and in pipelines. If Canadians have little or no confidence in those measures, then of course we need to work on that. To the government's credit, this bill is some effort to do so, if anything is effectively done with the powers that would be given.
I wish to say at the outset that this is indeed a good first step, and should therefore be taken in that context.
When the minister was speaking to this bill at first reading, he talked about how the bill would stipulate that companies have a legal obligation to respond to requests that the National Energy Board may make in relation to audits. It is passing strange that companies do not have to do so now, I gather. That is rather disturbing.
It says that the National Energy Board would strive to align federal and provincial pipeline safety zones. That is not good enough. The Transportation of Dangerous Goods Act is an excellent example of co-operative federalism where, for dangerous goods that are moving by trucks or other ways, we have a federal set of regulations inches thick that are incorporated by reference in each of the provinces. We have a one-size-fits-all, coast-to-coast approach for the transportation of dangerous goods. For the minister to say we would strive to align pipeline standards surely is not sufficient.
Speaking of things that are not sufficient, the thing that concerns me the most is this notion of companies remaining responsible for abandoned pipelines in perpetuity. I have some experience with that. After a company has abandoned a pipeline, is long gone, and has had an amalgamation or transfer of ownership, in what practical way is the National Energy Board going to be able to make it continue to be responsible for that abandoned asset?
Some people will be aware of the Britannia Beach mine in British Columbia as they go up to Whistler. It was a copper mine during the First World War. It was a multi-billion dollar liability. There was acid rock drainage seeping into Howe Sound. When the companies were finally hit with a cleanup order by the province under the Environmental Management Act, they had to go back and do forensic accounting to try to find out who the successors in title were to the ancient companies that were the owners of the assets of the mine over time. It took a lot of time and money. Ultimately, they were found.
The problem is that it is very difficult to go after people. To blithely say that there is liability for abandoned pipelines in perpetuity needs more than just mere words. It is a very complicated matter to seek liability.
I said I would be positive about the bill, and I wish to say that the idea of unlimited liability in certain circumstances is an excellent idea. Absolute liability for up to $1 billion, regardless of fault, is an excellent idea. However, what happens after $1 billion? I suppose then that negligence has to be proven in a court of law.
To people listening, $1 billion might sound like an enormous figure, but that is only until we put it into context and understand it. Simply, the Kalamazoo spill in Michigan has already cost $1.2 billion for the cleanup, let alone liability to others. Enbridge owned that pipeline. It wants to bring us another pipeline in our province, called the northern gateway pipeline.
That sum of $1 billion sounds like a lot, and I congratulate the government for the notion of absolute liability, but in context, it may not be adequate. After that, one would have to prove negligence in a court of law. Sometimes, fault and negligence are not easy things to establish.
Another thing in the bill that I think is an excellent idea, and I congratulate the government for it, is providing the government with the ability to recover costs associated with so-called non-use value environmental damages. There is no guidance on what that means, but the Supreme Court of Canada has contemplated that damages to the environment itself and the cost to the environment is worthy of cleanup. That is excellent to find in a Canadian statute, and I congratulate the drafters for putting it in. In the future, I hope that courts will pour meaning into what “environmental damages” might mean.
As I mentioned, the problem with section 48 of the National Energy Board Act as amended for abandoned pipelines is of concern. The NEB would be given the power to take necessary measures when a company does not comply with a particular cleanup order, but only given this power with respect to abandonment and abandoned pipelines. It does not relate to operating pipelines. It is not clear. I suppose in committee we could understand, if the government is open to amendments, whether that could be clarified. I say “open to amendments”, because in my experience, the Conservative government is rarely, if ever, open to amendments, unless they come from its side of the aisle.
The bill is a comprehensive bill. I mentioned some of its deficiencies. I need to say, as I go back to where I started on public confidence, that it was way back in 2011 that the environmental commissioner pointed out that the National Energy Board was failing to fix a number of known problems and ensure that pipelines would be properly maintained. Here we are, and the Conservatives have still not implemented the regulations for proper oversight and inspection from four years ago. Action would be required.
To conclude, it is a nice first step. It is good to see that there are things there, all of which require discretion and enforcement. I hope that, when we get this bill to committee, we can make it better.