Bill C-46 (Historical)

Pipeline Safety Act

An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act

This enactment amends the National Energy Board Act and the Canada Oil and Gas Operations Act in order to strengthen the safety and security of pipelines regulated by those Acts.
More specifically, the enactment, among other things,
(a) reinforces the “polluter pays” principle;
(b) confirms that the liability of companies that operate pipelines is unlimited if an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline that they operate is the result of their fault or negligence;
(c) establishes the limit of liability without proof of fault or negligence at no less than one billion dollars for companies that operate pipelines that have the capacity to transport at least 250,000 barrels of oil per day and at an amount prescribed by regulation for companies that operate any other pipelines;
(d) requires that companies that operate pipelines maintain the financial resources necessary to pay the amount of the limit of liability that applies to them;
(e) authorizes the National Energy Board to order any company that operates a pipeline from which an unintended or uncontrolled release of oil, gas or any other commodity occurs to reimburse any government institution the costs it incurred in taking any action or measure in relation to that release;
(f) requires that companies that operate pipelines remain responsible for their abandoned pipelines;
(g) authorizes the National Energy Board to order companies that operate pipelines to maintain funds to pay for the abandonment of their pipelines or for their abandoned pipelines;
(h) allows the Governor in Council to authorize the National Energy Board to take, in certain circumstances, any action or measure that the National Energy Board considers necessary in relation to an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline;
(i) allows the Governor in Council to establish, in certain circumstances, a pipeline claims tribunal whose purpose is to examine and adjudicate the claims for compensation for compensable damage caused by an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline;
(j) authorizes, in certain circumstances, that funds may be paid out of the Consolidated Revenue Fund to pay the costs of taking the actions or measures that the National Energy Board considers necessary in relation to an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline, to pay the costs related to establishing a pipeline claims tribunal and to pay any amount of compensation that such a tribunal awards; and
(k) authorizes the National Energy Board to recover those funds from the company that operates the pipeline from which the release occurred and from companies that operate pipelines that transport a commodity of the same class as the one that was released.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Okay. I was thinking about at the very end.

We know that the minister has the ability to both add or remove waterways under subsection 29(2) of the act. We heard from departmental officials and municipalities that there have only been two requests to add waterways and that to the best of their knowledge, there have been no complaints filed in Quebec, Alberta, and Saskatchewan in regard to projects undertaken. If you look at the act, you know that it's not just municipalities and provinces that could ask for a waterway to be added, but first nations would be included in that as well.

I really appreciate the clarity, Mr. Atkinson, that you have provided with respect to the focus of the Navigation Protection Act, and the reminder that there are other pieces of legislation that speak to some of the concerns that were raised by different groups at the time the Navigable Waters Protection Act was changed.

We've heard a lot from members across the way that perhaps they're not really focusing on the legislation but more on the process that was undertaken. I know that we have another panel coming next week, which I think is largely environmental groups—interestingly enough, given your observations, coming to speak to the Navigation Protection Act.

I also want to follow up, Mr. Bloomer, with some questions that my colleague asked of the municipalities about the change, in respect to pipelines under the Navigation Protection Act, over to the NEB. I believe that was done through Bill C-46, the Pipeline Safety Act. I wonder whether you can speak to that.

Then I have perhaps two questions. Do these changes in any way reduce the environmental oversight of projects? How has commercial navigation been affected by the changes that were made?

[The Speaker, Conservative, Andrew Scheer]

I have the honour to inform the House that when the House did attend His Excellency the Governor General in the Senate Chamber, His Excellency was pleased to give, in Her Majesty's name, the royal assent to the following bills:

Bill C-247, An Act to expand the mandate of Service Canada in respect of the death of a Canadian citizen or Canadian resident—Chapter 15.

Bill C-452, An Act to amend the Criminal Code (exploitation and trafficking in persons)—Chapter 16.

Bill C-591, An Act to amend the Canada Pension Plan and the Old Age Security Act (pension and benefits)—Chapter 17.

Bill S-3, An Act to amend the Coastal Fisheries Protection Act—Chapter 18.

Bill S-6, An Act to amend the Yukon Environmental and Socio-economic Assessment Act and the Nunavut Waters and Nunavut Surface Rights Tribunal Act—Chapter 19.

Bill C-51, An Act to enact the Security of Canada Information Sharing Act and the Secure Air Travel Act, to amend the Criminal Code, the Canadian Security Intelligence Service Act and the Immigration and Refugee Protection Act and to make related and consequential amendments to other Acts—Chapter 20.

Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act—Chapter 21.

Bill C-2, An Act to amend the Controlled Drugs and Substances Act,—Chapter 22.

Bill C-26, An Act to amend the Criminal Code, the Canada Evidence Act and the Sex Offender Information Registration Act, to enact the High Risk Child Sex Offender Database Act and to make consequential amendments to other Acts—Chapter 23.

Bill C-63, An Act to give effect to the Déline Final Self-Government Agreement and to make consequential and related amendments to other Acts—Chapter 24.

Bill C-66, An Act for granting to Her Majesty certain sums of money for the federal public administration for the financial year ending March 31, 2016—Chapter 25.

Bill C-67, An Act for granting to Her Majesty certain sums of money for the federal public administration for the financial year ending March 31, 2016—Chapter 26.

Bill C-42, An Act to amend the Firearms Act and the Criminal Code and to make a related amendment and a consequential amendment to other Acts—Chapter 27.

Bill C-555, An Act respecting the Marine Mammal Regulations (seal fishery observation licence)—Chapter 28.

Bill S-7, An Act to amend the Immigration and Refugee Protection Act, the Civil Marriage Act and the Criminal Code and to make consequential amendments to other Acts—Chapter 29.

Bill C-12, An Act to amend the Corrections and Conditional Release Act—Chapter 30.

Bill C-52, An Act to amend the Canada Transportation Act and the Railway Safety Act—Chapter 31.

Bill S-4, An Act to amend the Personal Information Protection and Electronic Documents Act and to make a consequential amendment to another Act—Chapter 32.

Bill S-2, An Act to amend the Statutory Instruments Act and to make consequential amendments to the Statutory Instruments Regulations—Chapter 33.

Economic Action Plan 2015 Act, No. 1

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, I will be splitting my time with my hon. colleague from Kootenay—Columbia.

Today I will talk about four things. I will talk about ships, storms, rocks, and plotting a course in budget 2015. To put this simply, budget 2015 puts Canada firmly on a new course. Not only does it balance the books, but it also provides us with hope and optimism about our future, and it steers us to success. It is a huge, positive sign on Canada's economic horizon. It puts the wind in our sails as a country.

Let us agree that there is no doubt the financial crisis of 2008 was a setback. It was a setback that tested the entire world, along with this Conservative government, and one that left many Canadians nervous. They have been thinking more about their futures and what their government is doing to ensure that they can continue to work and financially support themselves, their families, their children and their aging parents, both now and into the future.

Our federal Conservative government was tested in this financial crisis, and I am very proud to say that it came out with glowing colours, with the best job growth of the entire G7 and the envy of much of the world. How did we do that? We implemented rolling efficiency audits in all federal departments to expertly pare costs, and we rolled out a generous infrastructure spending program to bolster job growth and to take Canada to safe waters. Today with this budget, we are pulled into port.

It is important for Canadians to know that many other countries, such as Greece, Ireland, Portugal and Spain, have ended up on the rocks. Canadians today can enjoy peace of mind knowing that their government is focused on their prosperity and our country's economic growth and stability. This government has expertly guided us through the tempest and is now plotting a course for our $1.9 trillion economy to an even brighter future.

Let me tell the House some examples of what this Conservative government has done to keep its promise to balance the budget and what our sights are set on. We have focused on creating 1.2 million net new jobs, being financially responsible and eliminating government red tape. We have steadily reduced the deficit as a per cent of gross domestic product year after year since the crisis, and we have brought back a surplus, a $1.4 billion surplus.

That is exactly what my constituents in Calgary Centre have been asking for. They know why balanced budgets are so important, because governments can then provide them with many of the benefits and enhanced services to live comfortable and healthy lives, all without mortgaging their future and without mortgaging the future of their children, because mortgaging the future of their kids is simply not acceptable to Canadians, and so is raising their taxes unacceptable.

Contrary to the Liberals' plans, our Conservative government has cut taxes for families, for seniors, for every single Canadian. We have cut taxes over 180 times since coming into office, and we have brought federal tax down to its lowest level in 50 years.

Canadians also know that a responsible government needs to manage its money like they manage their personal finances, and we are doing that with our balanced budget legislation. Because we will not be piling on more interest payments, this balanced budget actually will allow us to increase our support to a typical Canadian family to $6,600 per family per year by increasing the universal child care benefits and others they receive.

We have changed the rules so seniors do not have to take money out of their tax-protected RRIFs. If they do not need it, they can leave the money in there a little longer. If they need to upgrade their homes to stay living independently, or if they need to hire a caregiver, they can also earn tax credits.

To kick-start job creation, this budget will further reduce the tax rate for small business from 11% to 9% by 2019. To boost manufacturing jobs and support continued investment in machinery and equipment, constituents in my riding have been asking for an accelerated capital cost allowance to defer taxes in the liquefied natural gas area until it is making money. We have done that.

Members of the NDP are touting a plan for job creation in their mail-outs that sounds an awful lot like ours. We are glad they like it, but perhaps they should be crediting their source. If they had consulted a copy of economic action plan 2015, they would know that this Conservative government is already way ahead of them on creating jobs.

This budget proposes to further harmonize apprenticeship training and certification requirements so that trades professionals can have their credentials recognized in all Canadian provinces and can move from province to province, if need be, to get a job.

I now want to tack over to the west and focus on how this budget specifically benefits the people of Alberta and those in my constituency of Calgary Centre.

To ensure that they continue to live healthy lives, this government is increasing federal transfer payments to record levels by investing $5.5 billion this year alone for health and social services in Alberta. That is $3.2 billion more than were invested in Alberta under the Liberal government.

Looking out to the horizon, by balancing the budget now and in the future, we know that we will be able to continue to deliver on our promise to continue to increase health care transfers by 3% per year, plus inflation, this year and into the future. The people in my riding of Calgary Centre also depend on public transit, roads and highways, to get their families from home to work, to school, to get the services they need and also to move goods. That is why we have dramatically increased infrastructure investments to an all-time high. The building Canada plan is the largest and longest infrastructure plan in Canadian history, and Alberta will see more than $3.2 billion in dedicated federal funding over the next 10 years. This is for building roads, bridges, light rail, recreational facilities and flood mitigation projects.

I met last weekend with my provincial counterpart in Alberta and I know that this funding will be very welcome. It will help the province deal with the shock of low oil prices. I am also encouraging the province and city council to make flood mitigation a priority with these funds.

Public transit is also high on the list. This budget introduces a new public transit fund that will dedicate $750 million over two years to major city transit projects starting in 2017-18 and up to $1 billion thereafter. That is a very significant step that the Federation of Canadian Municipalities lauded by saying that this is good news and “has the potential to be transformative for public transit across this country”.

The budget also includes environmental measures that demonstrate to Canadians that we are hearing them, that we are listening and we can continue to develop our resources sustainably. Americans have been aggressively developing their oil and gas industry south of the border and they will not be needing as much of ours. Therefore, to continue to support the thousands and thousands of Canadians who work in the oil and gas industry, we need to be able to get our products to markets in other countries. This budget provides $80 million over five years to the National Energy Board to contribute to safety and environmental protection and engage Canadians with new energy transportation infrastructure, such as pipelines that are being proposed. I am proud to tell Canadians we are listening to their concerns regarding the safe transport of oil and gas.

As a member of the Standing Committee on Natural Resources, I worked on drafting Bill C-46, the pipeline safety act, that reinforces the polluter pay principle. It requires companies operating pipelines to be responsible for $1 billion in liability for any incident without proving fault.

This June marks the second anniversary of the southern Alberta floods and it is a month that keeps many of my constituents on edge. It is a stark reminder of the costliest natural disaster in Canadian history. It also took a huge emotional toll. In addition to our infrastructure program which has been open to being used for flood mitigation, we have also introduced a $200 million national disaster mitigation program that will help fund flood mapping to allow for the introduction of residential flood insurance in Alberta and Canada.

Finally, this budget reaffirms our Conservative government's commitment to ensuring that low-income families and vulnerable Canadians have access to affordable housing, with $2.3 billion every year for the next four years. A few weeks ago, I helped open 1010 Centre, a groundbreaking housing first affordable housing facility in my riding, Canada's largest permanent supported housing initiative. It was a very heartwarming and moving ceremony. I heard one resident, Darren, say, “Now I feel like I have a real fighting chance”.

While the opposition chooses to focus on snippets of our government's actions or programs it would find fault with, I ask Canadians to look at the whole picture. We are discussing a balanced budget not by chance, but because this government plotted and planned, and led us to where we are today. With the expert leadership of Stephen Harper at the helm, the budget we present to the House today is the package that will give Canadians and their children the prosperous future they deserve, signed, sealed, delivered.

Second Reading

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, I am happy to stand to speak on economic action plan 2015, the 2015 budget.

When some people imagine budgets, they think about only the numbers and their eyes glaze over. They think budgets might have little impact on everyday people. I would like to point out how this particular budget is very significant for all Canadians and how it makes life better for people in Calgary Centre, whom I am humbled and privileged to represent.

When I spoke on the budget last year, I spoke about how we were planning for a balanced budget and the steps we were taking to lead up to it; this year, we have delivered. A balanced budget is exactly what Calgary residents have told me their number one priority is. We have done it, with a $1.4 billion surplus, despite a precipitous drop in oil prices and an uncertain global economy.

People in Calgary Centre and across Canada are acutely aware that given low oil prices and the state of the global economy, the budget did not balance itself. It happened because of the expert guidance of our Prime Minister, the finance minister, former finance minister Jim Flaherty, and the strong encouragement of our Conservative caucus. The budget is where the rubber hits the road. The budget is the proof of the expert leadership that we getting here in Canada. By balancing the budget, keeping taxes low and delivering more benefits to families, we are keeping Canada the envy of the world.

Last year I spoke about energy being Canada's natural competitive advantage. Every province and territory from coast to coast to coast has benefited from this industry. While the industry is now under considerable pressure, making it more important than ever to diversify our markets to China, to India, and to the EU, this budget includes new environmental measures that will demonstrate to Canadians how we can continue to develop and sustain our resources. Energy and the environment can be nurtured and developed together.

This sets us apart from the NDP, whose leader branded the energy industry as spreading Dutch disease, and the Liberals, whose leader opposes many pipelines and west coast tanker traffic, which we know we need in order to get our product to these markets.

We know that Canadians want to make sure that energy development is safe for the environment, as do we. The natural resources minister has emphasized that projects will not proceed unless they are safe for people and safe for the environment. They have to pass a rigorous scientific and fact-based inquiry by the National Energy Board as well as undergo a complete environmental assessment. This budget includes $80 million over five years for the National Energy Board to do its job and give Canadians that assurance.

It is coupled with a strict new polluter pays bill, Bill C-46, that puts energy firms on the hook for clean-ups, thus giving them extra impetus to make sure they get our resources to market without incident—which, incidentally, they do 99.999% of the time. Canadians can have confidence that our environment will be protected as we develop our competitive advantage in energy.

I would like to talk about another type of competitive advantage that this budget provides, and that is economic freedom.

This year, with a balanced budget, we can maintain and grow funding to important areas in health and education, as my hon. friend just spoke about, and at the same time provide tax cuts and benefits to help Canadians balance their own budgets. Unlike the Liberals, we do not believe that Canadians will spend those returned tax dollars on beer and popcorn. “This is people's own money”, the Prime Minister said. “We want to make sure more of it stays in their pockets and creates jobs and economic growth.”

What are the differences in the way Conservatives and other parties view the money that Canadians earn? Our government believes in economic freedom, and this year Canada was ranked number six in the world by the Economic Freedom of the World report. Economic freedom gives Canadians an opportunity to earn and an opportunity to decide how they wish to spend, rather than having those decisions made by someone else. When there is economic freedom, people have more control over their lives, and yes, government has less control.

In contrast to the other parties' belief that the government should take in as much money as it can, our government is taking less, and we are balancing the budget today so we are not mortgaging our children's futures.

Our latest family tax cut would give 1.7 million families more control over their lives. These tax relief measure would give parents like Sara and Sam an extra $6,640 this year that they could spend as they see fit. This measure would have a considerable impact on the quality of life of all Canadian families.

Retirees like Bill and Ruth would also have more economic freedom under economic action plan 2015. Seniors could put off taking funds out of their tax-protected RRIFs and leave the money there longer until it is needed.

What if I am not like Sara and Sam, or a retired couple like Bill and Ruth? What is there in the budget for me? For many young Canadians, owning a home looked like a distant goal, but we have introduced the first-time home buyers' tax credit of up to $5,000 for those buying their first home.

There are incentives for people who are retired. There are incentives for apprentices who want to take apprenticeship training. There are incentives for students who want to go back to school. The bottom line is that our federal government is giving Canadians more economic freedom by giving them more money in their pockets so they can decide how to use it. We are helping the middle class and those who want to join it.

Now I would like to talk about another of the human sides of enterprise, and that is people in need.

Two years ago, Albertans suddenly found themselves grappling with the largest natural disaster in Canadian history, the 2013 southern Alberta flood. As June approaches again, Calgarians in my riding are looking at the skies and praying that there will not be another once-in-a-hundred-years flood.

I can tell them that as a government, we have been acting. As most know, $2.8 billion in federal funds was set aside for flood recovery costs in Alberta. In addition to those funds, $134 million is currently being put into Environment Canada monitoring networks and satellite warning and forecast systems to better predict major events like the 2013 Alberta flood.

Our government has also committed to investing $200 million over four years into mitigation, which would include money for mapping. This is very important for insurance companies, which need it in order to provide flood insurance in Canada for the first time.

Further, federal infrastructure dollars could now be used for disaster mitigation projects. It is now up to the Province of Alberta to prioritize disaster mitigation on its agenda, and I urge the new premier to do that.

In this budget, our government is continuing the Building Canada plan. This is the largest and longest-running infrastructure program in Canadian history. Cities have never seen the kind of funding they are seeing now from our federal government. The program would see $53 billion invested in infrastructure across Canada over 10 years. Alberta would receive $3.2 billion, with $942 million coming from the new Building Canada fund and an estimated $2.27 billion coming from the federal gas tax fund. That is a lot of zeros.

Calgary has gained $427 million through the federal gas tax fund since 2006. We have invested in such projects as finishing the Calgary ring road and improving Calgary's transit. The city sets these priorities.

Federally, we are also helping to fund some 27 summer festivals, such as Sled Island and GlobalFest. There are things like CIFF, and theatre groups like One Yellow Rabbit and the Calgary Spoken Word Festival. We have provided more than $25 million to the gorgeous new National Music Centre in Calgary, $20 million to the Bella Concert Hall at Mount Royal University, and $25 million to the Agrium Centre at Stampede Park.

We have balanced the budget while maintaining and increasing transfer payments to the provinces for important things like health care.

This is happening not only in Alberta, but all across the country. People's lives are better and richer because of our budget. Albertans' lives are better, New Brunswickers' lives are better, British Columbians' lives are better, and we have balanced our budget. That is what leadership looks like.

Safe and Accountable Rail Act

[Jeff Watson, Conservative, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, I am pleased to rise today to commence third reading of Bill C-52, the safe and accountable rail act, which seeks to amend both the Canada Transportation Act and the Railway Safety Act.

As parliamentary secretary to the Minister of Transport, I have the great privilege to be a member of the Standing Committee on Transport, Infrastructure and Communities and to have been able to take part in the study of this extremely important piece of legislation.

Before I speak to the important points raised during committee stage, I would like to take a few minutes to remind all members of this place of the important components of this legislation, beginning with the important amendments to the Canada Transportation Act.

As stated by the Minister of Transport at committee, the tragic Lac-Mégantic derailment has shown us that our liability and compensation regime for rail must be strengthened. The Montreal, Maine and Atlantic Railway only carried $25 million in third-party liability insurance, which we now know is not nearly enough to cover the incredible magnitude of the resulting damage and loss of both life and property that night.

With this bill, railways would be required to hold a mandatory level of insurance based on the type and volume of dangerous goods they carry. These levels would range from $25 million for short lines carrying limited or no dangerous goods to $1 billion for railways carrying significant amounts of dangerous goods, namely CN and CP.

These mandatory insurance requirements have been set based on analysis of historical accident costs, taking into account the severity of past accidents involving certain goods. These requirements would make certain that a railway's insurance directly reflects the risk associated with its operations.

These insurance levels were determined to be adequate to cover the cost of the vast majority of potential accidents and, while a scenario of the magnitude of Lac-Mégantic is an extremely rare occurrence, we want to be certain that all costs in such a case would be recovered.

That is why a supplementary shipper-financed fund would be created to provide compensation above the railway's insurance for accidents involving crude oil and any other goods added through regulation.

In the event of a rail accident involving crude oil, railways would be automatically liable, without the need to prove fault or negligence, up to their insurance level, and that would happen immediately.

The bill provides that they would be liable for all actual damages, which includes damages to people, property, and the environment. There would be certain defences to this strict liability. A railway, for example, would not be held liable if the accident were a result of war, hostilities, or civil insurrection such as a terrorist act, as these occurrences are outside of the railway's control. If accident costs reached beyond the railway's mandatory insurance level, the supplementary fund would cover the remaining damages.

For the supplementary fund, we have included a broad definition of crude oil in recognition of the serious damage that all crude can cause if released. Even a less-volatile crude can have a grave impact on the environment and result in very high remediation costs.

The fund would be financed through a levy on shippers of $1.65 per tonne of crude oil transported by federally regulated railways, indexed to inflation. The aim is to capitalize the fund to $250 million, which is an amount that would provide substantial additional coverage for crude oil accidents above the insurance levels. Based on a reasonable projection of oil-by-rail traffic growth in the coming years, we have determined that, with the $1.65 per tonne levy, we would reach that target in approximately five years.

That said, however, it is important to emphasize at this point that the $250 million capitalization is a target and not a cap. The bill would allow the Minister of Transport to discontinue or reimpose the levy as necessary.

This means that the levy could continue longer than five years should oil-by-rail traffic grow at lower than expected rates. It also means that the fund could be capitalized to a different amount should that be considered appropriate.

Just to be clear. The fund will cover all costs above the railway's insurance and will not be capped. In the unlikely event that damages from a crude oil accident surpass both the railway's insurance level and the amount in the supplementary fund, the government's consolidated revenue fund would back up the compensation fund and would be repaid through the levy.

Bill C-52 also propose amendments to the Railway Safety Act, which would seek to further strengthen the oversight of Canada's rail safety regime in certain areas. These include the following: first, a new power for the Minister of Transport to order a company to take corrective measures should that company's implementation of its safety management system risk compromise safe railway operations; second, a new authority to regulate the sharing of information, records and documents from one party to another, other than the department, for example, from a railway company to a municipality; third, to broaden railway safety inspectors' powers to intervene in a more effective way with any person or entity, including companies, road authorities, and municipalities, to mitigate threats to safety; fourth, a broader power for the Minister of Transport to require a railway company, road authority, or municipality, to stop any activity that might constitute a threat to safe railway operations, to follow any procedures, or taking any corrective measures specified; and, finally, a cost reimbursement scheme for provinces and municipalities that respond to fires determined to be caused by a railway company's operation.

Part of Transport Canada's prevention strategy has been to ensure the department has an effective oversight regime. This means both ensuring that industry is in compliance with the various rules and regulations that govern them and also responding to changes in the risk environment.

Transport Canada continuously examines and monitors its resource levels to adjust and reallocate, as needed, to address emerging issues, trends and higher-risk issues.

Transport Canada has further enhanced railway safety in Canada by establishing the following new or amended regulations: grade crossings regulations; railway operating certificate regulations; railway safety management system regulations, 2015; transportation information regulations; and railway safety administrative monetary penalties regulations.

Allow me to refer back to the review of the bill at the committee stage.

The review of Bill C-52 provided the opportunity for the committee members to examine, in detail, the text of the bill, its purpose and objectives. Particular issues were raised and the hon. Minister of Transport provided some important clarifications, which bear repeating in the House today.

First, the minister assured committee members that no additional financial resources would be required for the implementation of these new proposed authorities and requirements. The department's operational budget was assessed and represents the level of resources adequate to carry out all of the projects and the priorities. Nonetheless, in the event additional funding is requirement, the government always has the ability to reallocate or request funding through the supplementary estimates.

Second, with regard to the supplementary shipper-financed fund, the minister made a number of important clarifications. The fund has been proposed, through Bill C-52, to provide substantial additional coverage for incidents involving crude oil. The fund would cover any damages that surpassed the railway's required minimum insurance coverage. To finance the fund, the government would introduce a levy of $1.65 per tonne on shipments of crude oil transported by a federally regulated railway. The formula used to establish the levy would be based on a mid-range growth estimate of projected oil by rail. The supplementary shipper fund cannot apply retroactively for incidents that occur prior to the coming into force of the legislation.

As previously mentioned, the proposed supplementary fund would not be capped or cut off. Therefore, claims against the fund would not be limited. The fund would be capitalized to $250 million. However, Bill C-52 would allow the Minister of Transport to suspend or reinstate the levy as would be necessary. This would ensure that the fund would be at the appropriate level to pay for damages in excess of railway insurance levels without holding excess capital unnecessarily.

The government modelled this compensation fund on the ship-source oil pollution fund in the marine mode. Levies for that fund were suspended once it had been capitalized. The fund has grown through interest over the past 40 years without the need for further levies. For the time being, the supplementary compensation fund will cover incidents involving crude oil.

However, the bill provides regulation-making authority to include other types of dangerous goods in the future. Moreover, Bill C-52 provides for a loan from the consolidated revenue fund if the resources in the fund have been exhausted. This loan would be subject to terms and conditions established by the Minister of Finance and would be repaid through the shipper levy.

Furthermore, this bill includes the authority to put in place a special levy on railways to help repay the CRF loan to ensure that liability continues to be shared appropriately in the event of a catastrophic accident. The funds would be supplementary to the newly proposed minimum liability insurance coverage for railway companies transporting dangerous goods.

The strengthened liability and compensation regime in the bill is in line with the modernized liability and compensation regime put forward for pipelines in Bill C-46, as well as the regime for offshore oil and gas in Bill C-22, which received royal assent on February 26. This includes a provision that ensures that the strengthened regime for rail would not preclude any other regimes, including future regimes with higher limits of liability from being applied to a railway accident.

It is also important to highlight the clarification made by the Minister of Transport at committee regarding subclause 152.7(1) of the bill. Through this subclause, only a railway company that is involved in a crude oil accident through physical operation of a railway, for example, moving a train or responsibility for tracks or cars, would be held liable without regard to fault or negligence.

In the Canada Transportation Act the terms “operate” and “railway” are defined in section 87 of the act. They are defined in a physical sense, not a commercial sense. Therefore, a carrier that quotes a through-rate or interswitches with a railway company that later has an accident would not be considered involved in an accident. With this strengthened liability and compensation regime for rail, the minister clearly stated in committee that she was confident, and “we do have the ability to ensure that the polluter pays and that taxpayers don't have to incur costs”.

The minister confirmed to committee members that where a crude oil accident was the result of an act of terrorism, the railway company would not be held automatically liable under our proposed legislation.

Finally, the committee discussed the cumbersome definition of “fatigue science” presently found in the Railway Safety Act. As stated by the minister, the definition included in the act is simply a definition of a term and does not add any implementation requirements toward the railway companies. By having the term predefined, it restricted the department's ability to enforce. Amendments to the act seek to remove the definition allowing the application instead of the new Railway Safety Management System Regulations, 2015, to fulfill its purpose of ensuring a company's safety management system includes mechanisms for applying the principles of fatigue science when scheduling the work of certain employees.

Following the Lac-Mégantic derailment, the Speech from the Throne in 2013 and the Auditor General of Canada's fall 2013 report, our government has worked to bring forward these amendments to strengthen railway safety in Canada and increase the industry's accountability. Within this process, consultation with our stakeholders, particularly on liability and compensation, was essential to achieve the results we see today in this bill. We are grateful for their collaboration, support and commitment to improve the safety and security of the railway system.

I urge all members to vote in favour of Bill C-52 so it can be referred to the other place as soon as possible.

Pipeline Safety Act

[Ryan Leef, Conservative, Yukon, YT]

Mr. Speaker, it is a pleasure to join the debate on Bill C-46. I would like to thank my hon. colleague, who spoke just before me, for being so generous in splitting her time with me today.

I am obviously pleased to be here because this speaks directly to our government's priorities: energy, security, economic growth and environmental protection. The pipeline safety act would deliver all three. It recognizes the importance of pipelines to transport the energy we need and use every single day in this vast country. Whether it is to fuel our cars, power our businesses or factories, or heat our homes, like the homes in Yukon, my home riding, pipelines play an essential role in moving our necessary energy around this country. It supports a significant role the oil and gas sectors play in our national economy.

We have heard the numbers many times in the House, but they are worth repeating. The energy sector, led by our abundant oil and gas resources, directly contributed almost 10% of Canada's economy in 2013. It also generated an average of $25 billion a year in federal and provincial revenues between 2008 and 2012. When we think about those numbers and the programs and services that the federal and provincial governments are able to deliver to their respective jurisdictions, be they social support, education, health, environmental initiatives or economic priorities, those numbers contribute greatly to allow each provincial and federal government to deliver for the priorities of Canadians.

Finally, the pipeline safety act reflects the importance we have placed on making pipelines safer. Under our government, energy security and economic growth will never come at the expense of environmental safety. That is why our comprehensive plan for responsible resource development makes clear that no resource development will be permitted unless projects are deemed to be safe, safe for Canadians and safe for the environment. Indeed, our government has proven that time and time again.

The pipeline safety act is a key component of this plan for responsibly developing our natural resources. As we know, Bill C-46 is based on three key pillars: incident prevention, preparedness and response, and liability and compensation.

There is widespread agreement that this legislation hits the mark on all three pieces. Indeed, a cross-section of witnesses offered expert testimony on the bill to the Standing Committee on Natural Resources, of which I am a member. There was general consensus that the legislation is needed and, indeed, a positive step.

After taking a closer look at some of the key provisions in the legislation, I hope Canadians will have a better understanding of how Bill C-46 would contribute to achieving all three priorities. We will continue to create and protect jobs and opportunities for Canadians from coast to coast to coast by encouraging our country's energy independence.

We will do so while maintaining and strengthening one of the most stringent and effective pipeline safety regimes in the world. In fact, each and every day Canadians drive, sleep and work over top of hundreds of thousands of kilometres of pipelines in our country.

As we heard in other debates and interventions from members in the House, Canada's pipeline safety record is tremendous, a 99.99% safety record. That is something we can certainly boast about. It is something that Canadians should have a great deal of pride in and it certainly warrants the measure of Canada having a world-class safety regime. What does that mean in respect of how other countries operate in the world, in terms of their safety and our legislative competence with this? Let me touch on a couple of those pieces.

The spill rate in Canada in comparison to other countries was 57% lower than in Europe and 60% lower than in the United States over an 11-year period. That is a pretty exceptional record. While the United States and the United Kingdom have similar legislation in place, the $1 billion minimum financial capacity, an absolute limited liability, is unique to this Canadian legislation.

Canada will also be unique in having a cost recovered financial backstop model that provides complete coverage for cleanup and damages.

I think everyone in the House would agree that prevention of any kind of accident or any kind of spill is the most important piece of our environmental protection regime. If something were to occur, with the $1 billion limited liability backstop and with penalties under the act, Canadians could be assured that breaches of any provision in this legislation would be taken seriously and that taxpayers would not be on the hook for the cleanup.

Exactly what kind of penalties would pipeline companies be subject to if they were to break the law? If we exceeded our ambition and our goals of prevention being the first and most important step and an accident were to occur, pipeline operators would be subject to the same laws that govern all industry activities in Canada, which means they would be liable without limit for incidents when they are at fault or negligent.

Second, under the National Energy Board, companies are subject to fines and imprisonment depending on the severity of the offence. Third, responsible resource development gave the NEB additional powers to implement administrative monetary penalties which enable the NEB to fine companies for contraventions of any regulations and orders. This is a new tool that would ensure smaller offences are punished.

The measures proposed today would enhance and further clarify all of these provisions. What are companies going to do to update any of the old pipelines? I know this question was posed to the previous speaker, but there are three principles that need to be recalled when this is taken under consideration.

We want to define our world-class safety systems. Prevention, of course, is integral to that piece of the plan. The legislation requires the use of best available technologies as well as the integration of aboriginal communities and businesses in pipeline safety, pipeline monitoring and operations.

All federally regulated pipelines would be impacted by these proposed measures regardless of whether they are operating, planned or under construction. Old, new or proposed plans would be subject to this new pipeline regime.

We have some questions that will mostly come around on what we are wanting to do to ensure why we are not requiring companies to create a pooled fund in advance of a spill. We are concerned about the worst case scenario. There is that old adage, hope for the best, prepare for the worst.

With our safety record in place of 99.99%, we still do have to be realistic in terms of what we can expect to see and reflect back on some past incidents to guide us in that direction. At the same time we must ensure that while we are balancing out the necessary protection for the environment and the communities in which these pipelines operate, we are realistic about allowing these companies to move ahead with moving Canada's much needed energy around this country.

From that point we can assure Canadians that any backstop, if it is assessed, will be fully recovered from industry to ensure that the taxpayers are protected. That is a fundamental piece. While Canadians expect, want and demand the strictest and safest pipeline regime, they also want to know that if there are any accidents, they as taxpayers are not responsible for cleaning it up.

We hold that firm and we have in many other pieces of legislation that we put forward. This is no exception. The polluter pay principle stands. The polluter pay principle is something Canadians want. The polluter pay principle is something Canadians expect and the polluter pay principle is something that this government is going to deliver as we move forward with our responsible resource development regime.

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

Mr. Speaker, I will be sharing my time with the member for Yukon.

I appreciate this opportunity to speak to legislation that demonstrates our government's commitment to the things that matter most to Canadians: economic growth, energy security, and environmental protection. The pipeline safety act would deliver on all three. It would help to ensure Canada's continued prosperity while demanding that our vital energy infrastructure is environmentally responsible.

Driving all of this is our determination to have Canadians continue to benefit from pipelines while taxpayers are protected from the potential cost of a pipeline incident. That is why we already have one of the most rigorous pipeline safety regimes in the world. We have measures in place to ensure that Canada's pipelines are safe and modern. We have a national regulator with the teeth to enforce compliance with today's high standards, and we have the results to prove that it is working.

As we have heard many times, between 2008 and 2013, 99.999% of petroleum products transported through federally regulated pipelines in Canada have arrived safely. Our government wants to build on that record of achievement. We are aiming for zero incidents. The pipeline safety act could help us get there.

As members know, the pipeline safety act is another key element in our government's comprehensive plan for responsible resource development. Through this plan, we are ensuring that Canada's abundant natural resources are developed in ways that promote jobs, growth, and long-term prosperity. We are doing this while strengthening environmental protection and ensuring that aboriginal Canadians are engaged in every aspect of resource development.

It is a balanced plan. It is a plan that reduces duplication and makes the regulatory review process more predictable and timely for major resource projects. This plan does so while ensuring that no project is permitted to proceed until it is proven safe for Canadians and safe for the environment.

I would like to pause on that point for just a moment. We have a world-class, and in some cases world-leading, regulatory system overseeing this sector. Our government has already introduced comprehensive measures for tankers and offshore safety to ensure world-class standards. We are also taking action on rail.

Our regulatory system would be further strengthened by this legislation. It would assure Canadians and our international customers that pipeline safety is paramount in Canada. Add such things as technological innovations in the energy sector, our commitment to the meaningful inclusion of aboriginal peoples, and our profound belief in environmental protection and we have all the elements we need to make Canada a global leader in responsible energy development.

The pipeline safety act is an important element in all of this. The act also recognizes that Canada's oil and gas sector is literally helping to fuel our country's economy. In 2013, for example, Canada produced approximately 3.5 million barrels of oil and approximately 13.7 billion cubic feet of natural gas each day. The overwhelming majority of it, some $100 billion worth, was shipped by pipeline.

As well, in 2013 the oil and gas industry employed about 360,000 Canadians directly and indirectly. That is 360,000 well-paying jobs to support Canadians and their families in every part of our country.

Furthermore, Canada's sale of $128 billion in energy products in 2013 represented more than a quarter of our country's merchandise exports. This impact is incredible. The oil and gas industry alone generated almost 8% of our gross domestic product. Over the last five years it generated an average of $23.3 billion annually in government revenue to help pay for social programs such as health care, education, and infrastructure.

Despite recent declines in oil and gas prices, the sheer size of these numbers underscores why our government is doing everything it can to harness the opportunities and benefits of our energy sector for Canadians. Safe, secure, and modern pipelines are essential to these efforts. In fact, the pipeline industry itself is a major employer in Canada, supporting thousands of jobs throughout the country.

The Standing Committee on Natural Resources, which I have the pleasure to be a part of, heard from a representative of Canada's Building Trades Unions, who described the type of job creation at stake with the construction of new pipelines. He said:

If it is an oil pipeline, it means we will have thousands of people in a variety of trades, including plumbers, boilermakers, millwrights, iron workers, sheet metalworkers, insulators, labourers, scaffolders, carpenters, and the occasional elevator constructor.... About 60 trades are involved.

That is just the construction of the pipeline. It is just one element of the economic value derived from creating a modern, safe network of pipelines.

The pipeline safety act would strengthen this world-class effort. Specifically, Bill C-46 would offer additional measures and protections in three key areas. The first is incident prevention, the second is preparedness and response, and the third is liability and compensation.

Liability and compensation is particularly important, because it sends a clear signal of our government's intent to hold pipeline operators accountable for any harm, loss, or damage they might cause.

Canadians should make no mistake about our government's determination in this regard. As the Minister of Natural Resources has said on many occasions, the pipeline safety act would build on companies' unlimited liability when they are at fault or are negligent. This legislation would do so by implementing no-fault or absolute liability for all companies operating pipelines. For major oil pipelines, the absolute liability would be $1 billion. This means that pipeline companies would be responsible for damages, regardless of what happens or who is at fault. It is a standard that would leave nothing to chance.

The pipeline safety act would specifically provide governments with the ability to pursue pipeline operators for the cost of environmental damages. In addition, the legislation would give the National Energy Board the authority to order the reimbursement of spill cleanup costs incurred by governments, aboriginal governing bodies, or individuals.

The bottom line is that taxpayers would not be left on the hook. The full cost of cleanup and compensation would be borne by the pipeline operators, as it should be. This would even extend to pipelines that have been abandoned. Operators would cover any costs and damages related to their pipelines when they were no longer in use. In other words, it is a liability that would continue in perpetuity, or at least until the pipeline was removed from the ground.

I could go on about the merits of Bill C-46, but let me close by simply inviting members to consider this legislation carefully. If they do, I am confident that they will support it as a way of ensuring the safety of our pipelines, the strength of our energy sector, and the prosperity of Canadians.

[Dennis Bevington, NDP, Northwest Territories, NT]

Mr. Speaker, I think I made it clear at the beginning of my speech that we were supporting Bill C-46. It is a step in the right direction.

However, in terms of how I see the industry, in totality, acting, I think we do need more efforts put into the legislation that could provide the safeguards that we need. That is simple enough.

We will go ahead and support the legislation going forward.

I thank the parliamentary secretary for her question, but I certainly did refer to it in my speech.

[Kelly Block, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, through this legislation, our government is demonstrating its commitment to protecting the safety of Canadians and the environment. Contrary to what the member has said, Bill C-46 would introduce concrete measures to enhance pipeline safety under the pillars of prevention, preparedness and response, and liability and compensation. It would also build upon previously announced and implemented measures that would enhance pipeline safety and further establish Canada's system as world class.

My question for the member is, are the member and his party actually opposed to legislation that would build on a 99.999% safety record, or will they be supporting Bill C-46?

[Dennis Bevington, NDP, Northwest Territories, NT]

Mr. Speaker, I am pleased speak to Bill C-46, an act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, a much-needed and long-overdue first step toward a true polluter pays regime for pipelines in Canada. The NDP takes this very seriously. We view the phrase “polluter pays” as being one of the fundamental aspects of our approach to environmental legislation when we are government later on this year. I believe November would be when we would take over.

I am pleased to see there has been co-operation and some degree of collegiality on the natural resources committee on this subject. That is an encouraging sign in a Parliament that has not had much collegiality over the five years of the Conservative majority mandate. It is good to see.

Bill C-46 would open up a liability regime, which is sorely needed. There is none for existing pipelines and that is amazing when we think of the volume, number and lengths of pipelines throughout Canada, many of them crossing provincial boundaries, which would be regulated by the federal government. That is certainly the case for the pipelines that exit my riding, the Northwest Territories.

The bill includes absolute liability for all National Energy Board regulated pipelines, which are those that cross provincial boundaries. I assume that includes all connections to those pipelines. There are web-like networks of pipeline throughout any pipeline system. Oil is collected from different locations in order to fill up a pipeline that might have a capacity of many hundreds of thousands of barrels a day.

Companies would be liable for costs and damages irrespective of fault. This liability could go up to $1 billion for major oil pipelines, pipelines that have the capacity to transport at least 250,000 barrels of oil per day, and up to an amount prescribed by regulation for smaller companies. That is an important proviso because many of the pipelines are not the size of 250,000 barrels a day. They come from smaller fields in isolated locations. I will speak to that in a bit.

Companies would continue to have unlimited liability when they were at fault or negligent. Accidental leakages, I guess, would mean that pipeline companies are not at fault or negligent, but what does “negligence” mean toward the maintenance and repair of existing pipelines? What does it mean with regard to engineering? If the engineering is inappropriate for the laying of a pipeline, is that considered fault or negligence upon the pipeline company? Some real decision will have to be made by government about what negligence or fault is part of the system, especially for smaller pipelines where perhaps there is less intensity in the environmental process when it comes to putting the pipelines in place.

Bill C-46 leaves considerable leeway for politically motivated decisions and backroom arrangements between operators and the National Energy Board. That is what we are talking about: how do we determine the responsibilities under this act? This also applies to many of the amendments to numerous environmental acts in recent budget implementation bills. We have changed the system considerably over the time of the Conservatives, mostly to weaken legislation that deals with environmental issues.

We have had several pipeline spills in recent history in my riding in the Northwest Territories. Those have come from an industry, mostly located in the Norman Wells area, that has been in place for a considerable length of time. That industry has been in the Northwest Territories since the early 1930s. We have seen that develop over time. We have a pipeline that has a capacity for 45,000 barrels a day that exits the Zama Lake in northern Alberta.

In early May of 2011, a hunter discovered oil leaking from the Enbridge Normal Wells pipeline near the Willowlake River about 50 kilometres south of the community of Wrigley. Enbridge estimated as much as 1,500 barrels of oil leaked from the pipeline. Of course the people in Wrigley were concerned about the impacts of that on the environment and on human health, as well as on the health of the animals and wildlife, which they sincerely use to a great extent for food. This was not a simple matter. It ended up resulting in many thousands of truckloads of material being hauled to the Swan Hills disposal site at a great cost. When we we talk about pipelines and 1,500 barrels people wonder what that is. However, when we have to deal with the dirt, the conditions and perform a complete cleanup, it gets very expensive. A lot of money was put into the cleanup that 1,500 barrels.

That is not the only incidence of spills we have had. The community of Norman Wells, where Imperial Oil has a refinery, ranks as the community with the most reported incidents of federally regulated pipelines in the country. Between 2006 and 2012, the National Energy Board recorded more than 70 incidents, including anything from spills and leaks to worker injuries and fires.

We are talking about pipelines that are not new and perhaps not built to the changing conditions of the northern climate. In that area near Norman Wells, scientists have reported losses of up to 40% of the permafrost over the period of a decade. Therefore, we have serious issues with changing conditions. With respect to the pipelines that were built before, the engineering was based on different circumstances. Those types of things lead to problems.

In 2012, the National Energy Board ordered Imperial Oil to come up with a comprehensive plan to deal with 77 buried pipelines at risk of failing.

Therefore, we do have some issues with pipelines in northern conditions. I cannot speak to all of the pipeline issues across the country. There is no question that many aging pipelines are used for the product around Canada. How many of them are provincially controlled and how many are federally controlled I am sure is of concern to everyone.

These 77 buried pipelines, some of which stretch for several kilometres, were installed during a boom in the oilfield expansion in the 1980s. A particular defect in engineering and construction allowed water to get between the pipe insulation and the bare steel leading to corrosion. Therefore, we have pipelines that are suspect and will likely cause problems in the future. As the corrosion gets worse the pipelines, under stress from changing soil conditions, may actually rupture. Corrosion can also cause pinhole leaks that without proper monitoring equipment on these pipelines can release a lot of oil before anybody even realizes what is going on.

Imperial Oil first identified the problem in 2011, after discovering oil seeping to the surface on Bear Island from one of its well sites in the middle of the Mackenzie River. We had leakage in one of our major pristine rivers in the north. Of course there is concern about that. Over the next year and a half, the company found a total of six leaks. Cleanup involved the excavation of thousands of cubic metres of contaminated soil. That soil had to be moved a very long distance in order to deal with it.

In 2004, a curious black bear caused an oil spill near Fort Simpson. About 12,000 litres of oil leaked out after the animal accidentally opened a valve at an Enbridge pipeline site. Is there culpability in that type of leak? Is somebody responsible for ensuring that pipeline valves are protected from the ability of black bears to manipulate them? Of course. The pipeline company's responsibility is to build pipelines that are safe and can live up to any kind of expectation. If a black bear could release a valve, so could people. We had a problem with the type of thing.

These NWT leaks are small in comparison to the roughly 28,000 barrels of crude oil spilled from a plains midstream Canada pipeline near Little Buffalo, Alberta in May 2011, or the massive 9.5 million litre leak near Zama, Alberta in June 2013 from Apache Canada's pipeline. That leak contaminated 42 hectares of boreal forest in northern Alberta.

We need stronger legislation and a stronger approach to pipeline issues in Canada. We cannot simply say that we have the very best, because the very best might have been that way 30 or 40 years ago when the pipeline was first put in place, but these things do not last forever. We can see that in the oil industry throughout the world. Pipeline degradation leads to leaks.

Whether the amount of oil is big or small, the damage to the environment is considerable, and we have to recognize that. Costs will be encountered. This legislation has loopholes within it that do not define precisely what polluters must pay. That it where our concerns are. We are still happy that we are getting something in place, but it is not the full thing I think we would look for from important legislation like this because of the nature and age of the industry in Canada, the need to fully monitor pipelines in an effective fashion so when leaks occur, they are caught as soon as they possibly can be. We are all concerned about those things.

In February 2013, an Enbridge excavation crew encountered contaminated soil in the immediate vicinity of Enbridge Line 21, which is the main Norman Wells pipeline, in two locations. The location in the first dig was kilometre post 457 on a line approximately 60 kilometres west of Fort Simpson. The second was at kilometre post 391. These two small leaks contaminated 100 cubic metres of soil.

As pipelines age, these sorts of issues start to become more and more, so it is very important that industry, dealing with aging equipment, provides the best possible care and attention to that equipment to ensure these leaks are found early and dealt with.

How does fault and negligence apply to existing operating systems for the pipelines that were approved many years ago by the National Energy Board? How do we ensure that the operating systems for these pipelines are brought up to a level that matches to the extent that the pipelines could have these problems?

While Bill C-46 makes some important improvements to Canada's pipeline liability regime, it does not unequivocally require polluters to pay. This undermines improvements and leaves uncertainty whether taxpayers will still be on the hook, in many cases for cleanup costs greater than the $1 billion where negligence or fault cannot be proved.

Basically, what we are saying here is that the very small problems are going to be covered. Larger problems, with this whole question of fault and negligence, are going to be at the discretion, I would assume, of the National Energy Board to come up with decisions. Just imagine the pressure and the lobbying efforts that could be made by various senators and other people for pipeline companies in this regime. As well as the National Energy Board being involved in these decisions, I understand the cabinet is or can be involved as well.

Ensuring that those who are responsible for making a mess clean it up is an important principle. We just went through an exercise with the nuclear industry, where we have limited their liability even after we have seen the complete disaster that took place at Fukushima, which cost exponentially more than what our limits are for the nuclear industry in Canada.

Why do we do this? It is because these industries simply cannot make the types of insurance arrangements for the kind of liability that they might incur. That is one of the problems we have in this industrial age, understanding how we can ensure that companies can carry the proper liability insurance or have the proper bond in place so that when things do go bad, the government is not left on the hook.

One of the greater examples of this is the Yellowknife Giant Mine where 237,000 tons of arsenic is going to be stored underground by the government in perpetuity at costs well in excess of $1 billion.

Things happen in many industries that we need to be very careful about, on prevention, ensuring that regulation and oversight is robust, and that the environmental assessment process leading to projects is also robust, so that we can be assured that when we are planning for the development of new pipelines, care and attention is put to every detail. I think of the Mackenzie gas pipeline and its environmental assessment process that everyone complained took so long, so many years. There were still no answers about what was going on with the pipeline, for the changing and the nature of the permafrost in northern Canada. It still did not get to that, and all the questions were not answered.

Environmental assessment is very important. Unfortunately, the record of the government is weakening environment protections. What this means is that by failing to do a rigorous environmental assessment before a project starts, there is a greater likelihood of problems later on. That is the result.

In the Northwest Territories, first nations are in court fighting against the Conservatives' gutting of the environmental regulatory system contrary to their constitutionally protected land claims and self-government agreements. The first nations are not happy that in the Sahtu region, where the pipelines are in the Northwest Territories, they are losing their regional boards, which could give them significant input into decisions that are made about pipelines to ensure that they understand the process is working best for them. Yukon first nations are preparing for a similar court fight if Bill S-6 ever becomes law.

Progressive companies, on the other hand, have found that high environmental standards actually work to their benefit, if they are selling product in the world. We heard the premier-elect of Alberta talking about that last night, talking about the need to raise the standards of Alberta so that its products can be better accepted around the world. That job is important, to ensure that what we are doing in Canada meets every rigorous requirement. Through that process, we can achieve better results.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Mr. Speaker, I thank all members of the House who have been participating in this debate.

Anyone who is watching on TV and has seen some of the back and forth between some of the members on the committee will understand that the committee actually functions fairly well. One of my colleagues across the floor made the point that none of the NDP amendments were accepted in committee. That does not mean that other amendments from any other party were not accepted at committee. In fact, if my memory serves me correctly, Conservative members and all members backed two amendments from the leader of the Green Party at committee.

The committee has been fairly collegial and has worked well. As a member who has sat on the committee in one version or another for almost nine years in the House of Commons, I must say to those who say that these things do not work to come and watch us some time. I am very pleased to be part of the committee.

Before I get into the main body of my speech, I want to re-emphasize for Canadians and people who are watching what we are really talking about here. People who do not live in the Prairies or Newfoundland sometimes do not grasp just how strategic and important Canada's oil and gas industry is. When we begin to look at it in a world perspective, depending on whose numbers we are looking at, we are the fifth or sixth largest petroleum producer in the world. Essentially, the U.S., the Saudis and the Russians are the big three, and then we are with a group of other nations that are sort of jockeying from fourth to sixth or seventh spot.

What is amazing and incredible about what we have done is not just that we are such a big producer, but that we do it in a difficult environment. Canada is a cold country, a difficult country, a big country. The oil sands are not the easiest place in the world to produce oil. It is not like the joke that reservoir engineers tell about Saudi Arabia, that they can just put a straw in the ground, twirl it around and oil will start popping up. To be a successful oil man in Canada requires a considerable amount of skills, technological, financial, et cetera. Yet, with all of this, when we look at whatever we have applied, be it our pipelines, drilling industry, or fracking which has been in the news, our world safety standards, if they are not undisputedly number one, they are up there neck and neck, equal with other countries. That is an amazing thing.

We have created one of the most prosperous oil and gas industries. It is one of the most successful and it is private. We got rid of the mess that was known as Petro-Canada and the national energy program some years ago. It is private sector run and brings prosperity from one end of the country to the other, sometimes in the form of equalization and payments to government revenues, most often in jobs in engineering and manufacturing, and direct natural resource energy jobs.

One of the key components of this industry is pipelines. Because of where the majority of our oil is geographically positioned, although our offshore production on the east coast is somewhat different, almost all of our production needs to go into a pipe somewhere and be shipped away. With difficulties, backlogs and some issues that involve politics in different parts of our country and other places, we have been forced to use rail more and more. However, as the tragic incident in Quebec two years ago pointed out, rail has its downside. Rail is more costly in the majority of instances, and it is not as safe.

That is a context that people should consider whenever they look at any of this natural resource legislation that the federal and provincial governments put forward to increase safety. We do not take for granted what we are doing. That is why the government has put this legislation forward. That is the broader context. I do not know whether I will get through all of my other speaking notes, but I will work on it.

As I was saying, we work very well in the committee. We have had some very good discussions on issues in committee, such as aboriginal treaty rights, environmental damage, the polluter pays principle, something which all parties appear to agree on, pipeline standards, government regulations, and land ownership rights, which is a big one, but it is more provincial than federal.

Members of the committee listened carefully to witnesses who provided expert testimony. We read written submissions with great interest. I am confident that we have a very good piece of legislation. We have got Bill C-46 right in terms of its clarity, its focus, the delineation of roles and responsibilities, and of course, in terms of its effectiveness.

This bill is good policy-making that would strengthen the role of the National Energy Board and would enhance environmental performance of Canada's pipeline industry.

The pipeline safety act also clarifies responsibilities of different levels of government. As has been mentioned before by other members, many of the pipelines in Canada that do not cross provincial boundaries are not the responsibility of the federal government. However, we need to know about the responsibilities of the different levels. It leaves no doubt that the industry, not taxpayers, would be held accountable for any pipeline spill or incident. This is what Canadians demand, and the government expects no less. The industry, as has been noted in other speeches today, is of the same opinion. This again is a significant achievement, one that will lead to even greater confidence in our world-class safety regime for pipelines that deliver much-needed oil and petroleum products every day.

To summarize in a few words what this bill is all about, the pipeline safety act is a commitment by the government to protect both Canada's economy and its environment at the same time. The two go hand in hand. We recognize that economic growth cannot come at any price. We do not support the robber baron style of capitalism. As the Minister of Natural Resources has said many times, no project will proceed under our plan for responsible resource development unless it has been proven safe for Canadians and for the environment. It is that simple.

That is why economic action plan 2015 includes substantive investments and initiatives to maintain public engagement. Let me give a few examples.

The budget provides over $80 million more over five years for the National Energy Board. The funding begins in 2015-16 and is intended to support greater engagement with Canadians on enhanced safety and environmental protection. Also, there is a $135 million expenditure to support effective project approvals through major project management initiatives. This is important. This is not just applied to the pipeline industry, but to other industries such as mining, et cetera, that use the major projects management office to try to navigate the regulatory system in a way that is efficient both for environmental reasons and because it makes very good business sense. There is $30 million in funding for safety of marine transportation in the Arctic and to strengthen marine incident prevention, preparedness and response in the waters that are south of the 60th parallel.

These are concrete steps which the government is taking to ensure that Canadians have confidence in the system. Canadians need to be confident in the systems that are in place to protect Canadians and the environment. Indeed, the development of natural resources deserves both scrutiny and careful stewardship. The processes and systems need to be modern and nimble, reflecting the views and needs of industry and citizens alike.

I would also like to note that this does reflect and reinforce what the government said in the throne speech in 2013. It stated:

Our Government believes, and Canadians expect, that resource development must respect the environment. Our Government's plan for responsible resource development includes measures to protect against spills and other risks in the environment and local communities.

The pipeline safety act is one more example of a promise made, promise kept approach to governing.

There are a couple of other points I would like to take from the throne speech. The government said it will “enshrine the polluter-pay system into law”, something which has been mentioned today. It said it will “set higher safety standards for companies operating offshore as well as those operating pipelines”. We have done other legislation on that.

I would like to end with a quote from the member for Hamilton Mountain, which demonstrates again how well the committee works together and the positive way it approaches things. The member said, “I would be less than honest if I did not acknowledge that [the provisions] appear to be a step in the right direction”. We appreciate that support.

We look forward to working with all partners on this legislation, including industry, citizens whose lands are affected, and of course, members of Parliament across the House.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, I am going to be splitting my time today with my hon. colleague from Saskatoon—Humboldt, with whom I have the honour of sitting on the natural resources committee.

It is great to stand in the House and talk about this bill today. This bill, the pipeline safety act, is a really important bill for every Canadian who cares about the environment, and I think that is all of us. In fact, the pipeline safety act is really the embodiment of the kinds of things that I talk about with the people I represent in Calgary Centre all the time, which are the environment and energy.

Our government is firmly committed to making sure that as our energy industry is developed, so too are we caring for the environment at every single stage. This bill is really one of the poster children in our platform of how we care for our environment at the same time as we put things in place to continue to develop and enjoy the benefits of our energy industry in Canada.

All Canadians can be proud of and confident in this bill. What we have heard from the NDP today is a little hypocritical. They say that Canadians do not have confidence in our pipelines when we know they have a 99.999% safety record. We have gold standard legislation, like we are putting forward today. All Canadians need to be aware that we have among the best or the best systems in the world for regulating the environment, and this bill is a very key part of that.

At every turn, our government has demonstrated that it has a steadfast commitment to ensuring that Canada's national network of pipelines is world class, that our pipelines are the safest that they can possibly be, and that we maintain a very strong commitment, as I have said, to the environment at the same time as we seek to grow our industry. The pipelines can contribute safely to our economic growth and energy independence. The pipeline safety act that we are bringing forward would do all of these things. It is part of the comprehensive, responsible resource development plan that we have.

People in my riding of Calgary Centre know very well that we have a lot to celebrate when it comes to our natural wealth. We have the third largest proven oil reserves in the world, we are the fifth largest producer of natural gas, and we want to get those products to market. These resources will remain trapped in the ground if we cannot develop what are the safest, most reliable ways to transport them to their markets at home and abroad.

The pipeline safety act would give us a kind of gold standard. It sets out very clear parameters that help to ensure the safe operation of pipelines so that they can be some of Canada's national energy infrastructure projects for the 21st century, some of our most important. The importance of this legislation really cannot be overstated.

Bill C-46 is another way our government is strengthening our environmental protection while continuing to protect jobs, so important now, and opportunities for Canadians in all regions of the country. Last year, we did a study on the across-Canada benefits of the oil and gas industry and we heard from people in every single province about how this industry was creating economic well-being for all of them, from coast to coast to coast.

Equally important is that this legislation mirrors what we have done with marine, rail and offshore safety. It is based on some key pillars and one of them, in particular, I think British Columbians should be especially aware of. They had asked for world leading practices around spill prevention and response as one of the five conditions in British Columbia, and this bill would answer that. Number one of the pillars is incident prevention, number two is preparedness and response, and number three is a system for liability and compensation. Therefore, the entire umbrella is covered by this very important bill. We believe it is a really important and responsible approach to pipeline safety.

This bill would modernize our regulatory review of major resource projects by eliminating duplication and providing investors with the kind of predictable beginning-to-end timelines that they need. That is in our responsible resource development plan.

We have improved environmental protection and bolstered aboriginal engagement. Bill C-46 also clearly defines the roles and responsibilities of the key players in our energy industry, the National Energy Board and different levels of government so that pipeline operators are clear, everyone is clear.

Finally, the legislation reflects a responsible approach to consensus building. I agree, that is an important component here. It incorporates amendments from our all-party House Standing Committee on Natural Resources. We have heard from some of the members recently. I am privileged to sit on that committee.

Let us talk about the amendments, because there was a reference to amendments not being included. Nothing could be further from the truth. We actually made amendments and accepted amendments from the other side of the House. There were two important changes that were included in the bill for third reading. We agreed with those and have included them.

The first amendment is clause 48.12 (1). It adds aboriginal governing bodies to the groups that could recover costs and expenses in responding to a pipeline release. This is so that in the unusual event where there might be a pipeline release, our aboriginal governing bodies could feel free to move in and take action and know that they would be compensated.

The second amendment is a little further down in the bill. It is clause 48.17 (1). It would require the National Energy Board, subject to Treasury Board approval, to recover funds from industry that happened to be advanced by the government.

These are really solid recommendations that enhance what was already a very strong piece of legislation and a world-class regime for pipeline safety.

I want to talk a little more about committee testimony, because we heard some really interesting and strong support for the legislation in committee. We heard one expert witness describe the legislation as “...much needed and quite frankly, long overdue”. Who was it who said that? It was Ian Miron from Ecojustice Canada.

Another witness praised the legislation for its language on environmental damages. That was Martin Olszynski, from the University of Calgary. He said that the language on environmental damages is “simple and comprehensive”. That is great to know. In most instances we felt comfortable that the existing language had hit the mark, but in two places we agreed as a committee that these amendments were warranted. As we can see, there is co-operation in Ottawa.

The result is we now have an even better bill that would significantly improve pipeline safety. I want all Canadians to be confident and proud of that. That is what committee reviews provide. They provide this kind of oversight where we have expert witnesses we call in to come and provide testimony to legislation. We kind of put the legislation to the test. We poke holes in it. We have an opportunity to ask questions. We make sure it is airtight. If there are any issues, then we fix them. We do that on every single bill.

I also personally welcomed the opportunity to discuss a lot of the issues with some key leaders in the pipeline industry. One was Jim Donihee, acting chief officer for the Canadian Energy Pipeline Association. Another was Robert Blakely, the Canadian operating officer with Canada's Building Trades Union. They are passionate, well-informed people who actually do support pipelines and want to make sure we have a world-class safety regime that can give Canadians confidence in their operations.

I pressed both witnesses on the nuts and bolts of the bill. Their responses were both impressive and reassuring. When asked about the quality of the work and the care that was taken by the men and women who are working on these kinds of projects, Mr. Blakely said, “The truth is, we live here”. They want the best possible pipeline because this is their home. I live here too. All Canadians live here, and I think we all share that same goal.

Mr. Donihee echoed that kind of commitment on behalf of the Canadian Energy Pipeline Association. He said:

... the member companies, which I have the privilege of representing, share in the desire to ensure that we operate the safest possible pipeline transmission system that will benefit our nation.

They all live here too.

When asked about the additional responsibilities that would be placed on the pipeline industry in the legislation, he said their goal is a zero spill safety record. That is incredibly laudable. He said the industry does not just take what the government regulations are. It seeks to even better them. That is why we have world-class safety regulations here. However, we also have an industry that is firmly committed to meeting and exceeding those world-class standards. That is very worth remembering.

The bill would embody the polluter pay principle in law. It holds companies absolutely liable for any incidents, regardless of who is at fault, or regardless of negligence. It would ensure that companies have the financial resources to respond to incidents. It would give the National Energy Board the authority and resources to clean up spills and recover costs if the board has to step in on what would be exceptional circumstances.

In conclusion, this kind of inclusive approach, which also gives first nations a place here as very strong partners, is the kind of approach that residents in my riding of Calgary Centre want to see, and I think all Canadians want to see. It is these kinds of things that make Canada so great. With the right policies, the right investments and the right decisions, we can shape our nation's destiny.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I am happy to have another chance to speak on the slightly amended version of Bill C-46, the pipeline safety act and of course, this is legislation that would amend the National Energy Board Act and the Canada Oil and Gas Operations Act, with the idea of strengthening the safety and security of federally regulated pipelines in Canada.

In fact, this legislation is long overdue and represents some progress. The Liberal Party recognizes that pipelines are a critical part of our energy infrastructure. We know that Canada must always strive to have the safest pipelines in the world. In fact, we have many thousands of kilometres of pipelines within Canada transporting both oil and gas and sometimes other products, but mainly those two, and they form an important part of our economy. People use those products every day in a variety of ways, so those pipelines play an important role and it is vitally important that they be safe.

However, we do not believe that we have to make a choice between protecting our environment and growing our economy. We have to do both. That is an important responsibility. Across this country, Liberals support projects that offer responsible and sustainable ways of getting our resources to market, while at the same time respecting indigenous rights, protecting our natural environment and earning the trust of local communities.

In fact, approximately 1.4 billion barrels of oil cross provincial and international borders every year. It is important that legislation like Bill C-46 clarifies the audit and inspection powers of the National Energy Board which regulates federal pipelines.

I should point out that many of the pipelines in Canada are not federally regulated because they are within the boundaries of a province, but they do not cross boundaries of a province or international boundaries between Canada and the U.S.

As we heard recently at the Standing Committee on Natural Resources, Bill C-46 implements a number of measures under the headings of prevention, preparedness and response, and also liability and compensation.

Prevention, of course, is critical as we must make every effort to ensure that a spill does not occur in the first place, obviously. The bill includes some sentencing provisions for environmental damages as well as additional audit and inspection powers for the National Energy Board. Of course, this raises the question of whether the NEB will do the job it is supposed to do. That would be a concern for members going forward as we watch whether the powers it is given in the bill are utilized properly.

Hopefully, the government will ensure the the NEB has the necessary resources to carry out these audits and inspections because a number of stakeholders said they were concerned about it. I am concerned about it after the recent budget. There is a question whether it has enough funding.

In fact, the NEB indicated that funding for several programs related to pipeline safety will be sunsetting in the next few years. It is up to the government to bring forward sufficient funds for the NEB to do the job of protecting Canadians and ensuring that these pipelines are operated in a safe manner. I think that needs to change.

In the event of a spill, Canadians need to have confidence that pipeline companies and the National Energy Board will respond in an appropriate manner. Bill C-46 would require companies operating pipelines to hold sufficient financial resources to cover any potential costs associated with a spill. Companies would also be required to hold a minimum level of accessible financial resources to ensure immediate response to a spill happening and that they have the financial capacity to do that. That is an important measure and I certainly support that.

Also, in exceptional circumstances, where a company is unable or unwilling to act, the NEB would have the authorization to take control of a spill response and it would have the authority to compel reimbursement of costs associated with a spill because if the NEB is incurring costs at the expense of the taxpayer, it should be reimbursed by whoever is responsible for the pipeline in general.

It is the company operating it that is going to be liable and that is why under this legislation absolute liability is provided for. In other words, whether or not negligence was provided, if a company is the owner-operator of that pipeline, it will be responsible for it. That is very important.

Finally, with respect to liability and compensation, the bill invokes the polluter pays principle with the goal of holding major pipeline companies liable for costs and any actual losses or environmental damages resulting from a spill. It includes a set of new measures which provide for no-fault or absolute liability set at a minimum of $1 billion for major oil companies, and the legislation contains the number of provisions relating to the abandonment of pipelines.

Bill C-46 seeks guidance from the National Energy Board on the application of the best available technologies for pipeline construction and operations. It also sets out how government will be required to work with aboriginal communities and industry to develop a strategy to better integrate aboriginal peoples into pipeline safety, including planning, monitoring, incident response and related employment and business opportunities.

While I noted earlier that Bill C-46 is a step in the right direction, that does not mean that no concerns were expressed about this particular bill. We have seen concerns raised over the potential impact of leaving many of the proposed changes in Bill C-46 to the discretion of cabinet and the National Energy Board. The Union des producteurs agricoles raised several points in a written submission, including their concern about the definition of “ground disturbance” in the legislation and how this will impact the cultivation of crops like alfalfa. They also expressed concern about whether the timeframe for claims should be tied to the time when a leak is discovered or the time when it occurred. Obviously, I believe that it should be tied to the time when the leak is discovered.

Ecojustice lawyer Ian Miron testified regarding the shortcomings in the legislation. He called for more guidance around the assessment and calculation of damages for the loss of non-use value in relation to public resources. Mr. Miron also suggested that, as drafted, the bill is best described as polluter might pay as opposed to polluter pays, as the government is suggesting.

Mr. Martin Olszynski of the law faculty at the University of Calgary offered suggestions to strengthen the wording of the bill with regard to environmental damages. Mr. Olszynski said that the federal cabinet should be required to make regulations setting out a process for environmental damages assessment within a prescribed timeframe.

Unfortunately, the Conservatives failed to put forward any amendments during the clause-by-clause consideration of Bill C-46 and they killed all but two of the amendments tabled by opposition members.

One of the amendments, which was adopted, will mean that an aboriginal governing body would be able to be reimbursed for expenses they may incur in responding to a spill. I think that is a good amendment.

Without that amendment, the category of entities that could get reimbursed for reasonably incurring expenses in relation to a spill, in other words for a cleanup, were limited to “Her Majesty in right of Canada, or a province or any other person”.

That would not include an aboriginal first nation and in my view it would also not include a municipality either. That is why there was, in fact, another amendment proposed to add the word “municipality” to that list, but I suppose the government side was not authorized. It did not have the green light, we might say, to say yes to that change, which would have been harmless and a good one.

The question of whether or not the province is authorized or the municipality, since municipalities are creations of provinces, is not clear at all. It might have been a very good clarification to have in the bill. Unfortunately, I am afraid the Conservatives did not support that.

The second amendment deals with a section of the bill which said that the NEB may recover funds to compensate those affected by a spill. In this case, the word “may” was changed to “shall”, another good change. At least there was some minimal accommodation and I suspect members opposite on the Conservative side would incorrectly and falsely claim that they were completely flexible on our amendments.

I know that the Minister of Natural Resources is fond of pointing out that between 2008 and 2013 more than 99.999% of oil transported in federally regulated pipelines was moved safely. That is a great record. Our pipeline companies deserve recognition for this achievement. However, we also need to look to the future. We need to take every step possible to continue to prevent spills, to put in place the proper measures to efficiently and effectively clean up spills, and to assign appropriate liability when spills do occur.

Canada must have the safest pipelines in the world. We need to ensure that this pipeline safety act is designed to achieve that goal.

The NEB has been given increased regulatory control over 73,000 kilometres of pipelines that transport more than $100-billion worth of oil, gas, and petroleum products across Canada annually. That is a lot of pipelines and a lot of value to our economy and also a lot of concern about the impact that would have on our environment if it was not dealt with properly.

Bill C-46 would build on previous moves, giving the NEB the authority to increase the number of pipeline inspections and doubling the number of yearly safety audits.

The NEB has also been asked to provide guidance on the best available technologies for pipeline construction and operations. Obviously, that is why we are hoping that the NEB will be given the resources to do that job and that it will do it properly. We will have to keep an eye on that. That is, I think, one of the important responsibilities of this chamber. It is to keep an eye on that and watch the statistics as time goes on.

We have seen measures that set out how the government is supposed to work with aboriginal communities and individuals to develop a strategy to better integrate aboriginal peoples and pipeline safety operations, including in planning, monitoring, incident response, and related employment and business opportunities.

Clearly, these and other measures in Bill C-46 signify a much-needed overhaul of the liability regime for federally regulated pipelines. The no-fault liability, the additional authorities given to the NEB, and the measures for abandoned pipelines are welcome, and the Liberal Party will therefore support the legislation.

The House resumed from April 30 consideration of the motion that Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, be read the third time and passed.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much, Mr. Chair. I also thank Mr. Hamilton and Ms. Ramcharan.

I would like to go back to the report on plans and priorities of the National Energy Board. I put the question to the minister, but I would like to hear your comments on this. I do not think I got an answer from the minister to the direct question I put to him.

In the various components of the National Energy Board plans and priorities, i.e. energy regulation, information on energy, internal services and others, we see a constant drop between the current expenditures budget and the planned expenditures between now and 2017-2018. That decline varies between 15% and 20%, in general, whether we look at financial resources or human resources.

As of 2012, the National Energy Board has been given increasing responsibilities. That year, there was a major reform in how projects are evaluated. Bill C-46 gives the National Energy Board additional responsibilities, whereas the resources allocated to it seem to be on the decline.

How can we believe that the board will be able to meet its obligations? The minister spoke about an additional $80 million, but I received no reply to the question regarding whether part of that sum is going to offset the cuts in the report on plans and priorities.

[Greg Rickford, Conservative, Kenora, ON]

I do not agree at all that there is a decrease in resources in Budget 2015. In fact, we fully acknowledge that we need to invest more in the National Energy Board.

I should say that obviously the pipeline safety act, Bill C-46 in particular, addresses the pillars of incident prevention, preparedness, response, liability, and compensation. I am satisfied, following the review by the House of Commons Standing Committee on Natural Resources, that the bill, as it's reported back to the House of Commons, reflects this government's commitment, frankly, to pipeline safety, prevention, preparedness, response, and liability, and that the resources are in place to enable the National Energy Board to sufficiently do its consultations with communities, and in terms of the powers of enforcement, which is another key component—

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much, Mr. Chair.

Welcome, Minister.

I'd like to get back to the National Energy Board 2015-2016 report on plans and priorities. On page 20, in the section that discusses energy regulations and subprograms, the implementation of various projects, including BillC-46, is mentioned. The report discusses various strategic outcomes, programs, the continuous improvement of regulations, transparency and available information. The National Energy Board is going to be given greater responsibility. However, when we look at the evolution of planned expenditures between 2015 and 2018, we see that almost all of the subprograms will see a marked decline in financial and human resources of approximately 15%.

On page 17, where energy regulation is discussed, we see that planned expenditures will drop from $49.5 to $39.2 million over three years. The same thing is true of jobs. The number of full-time equivalent positions will go from 335 to 283. The same thing applies to the implementation and monitoring of energy regulations and their application, as well as to energy information programs and internal services.

Almost all of the National Energy Board sectors will see their human and financial resources diminish by approximately 15%, despite the fact that they will be given increased responsibility.

I would like to know how the National Energy Board is going to be able to attain its objectives, given these circumstances.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, in my capacity as the critic for natural resources, I am pleased to rise in the House at third reading to debate Bill C-46.

This bill moved to report stage very quickly, because clearly, the parties did not really have a chance to properly present their case, especially the independent members in the House.

At the Standing Committee on Natural Resources, the Conservatives imposed a motion similar to the ones it imposed on all committees, since it has a majority on all committees of the House of Commons, whereby, and I am paraphrasing, when the committee clerk receives an order of reference from the House in relation to a bill, the clerk must write to each member who is not a member of a caucus represented on the committee to invite the member to send a letter to the chair of the committee, in both official languages, stating any proposed amendments to the bill subject to the order of reference. During the clause-by-clause, the chair of the committee will allow a member who proposed an amendment to make brief comments in support of it, although the member cannot join in the debate or vote.

That is how the committees always operate, and the Standing Committee on Natural Resources is no exception.

We essentially believe that these manoeuvres violate the rights of independent parliamentarians or members who belong to a parliamentary group and who are nonetheless elected just like any other member.

The big book of procedure tells us that it is the House, and only the House, that designates members and associate members of these committees as well as the members that represent the House on joint committees.

The Chair has already established that that is a fundamental right of the House. As for the committees, they have no power in that regard, especially since the rules specifically state that an MP who is not a committee member may not vote or move motions.

Report stage was usually the opportunity for these members to have their amendments heard, to debate them and to participate in the vote. Instead, practically everything is now managed, debated and voted in committee, sometimes even in camera.

This is a very important change in the functioning of the House and it greatly affects the rights of members and their ability to properly carry out their duties of representing their constituents and holding the government to account.

However, despite everything, I must highlight the work done by my colleague, the member for Saanich—Gulf Islands, who had two amendments passed despite this unfair and undemocratic government tactic.

Bill C-46 establishes a liability regime for federally regulated pipelines in Canada, and although this regime leaves many questions unanswered, the existing legislation does not provide for much of a regime.

The NDP proposed some 20 amendments at report stage, many of which were virtually the same as those proposed by my colleague from Saanich—Gulf Islands. That is why I am pleased that these requests were heard. We must understand that she was not able to propose her amendments at report stage. She was asked to present her amendments in committee, which is what generally happens. She came to do so and she got just one minute for each of her amendments.

This is a systematic problem at committee stage. Committees should be a place for debate, so that we can identify the strengths and, especially, the flaws of each bill. However, this Conservative government's method is something completely new to Parliament, and it is undermining our ability to properly debate bills.

In the case of the amendments that passed, the government tried to make first nations members believe that the addition of a definition about them to the bill was a show of good faith and openness on its part.

Like other levels of government, aboriginal governing bodies will be able to sue companies connected to pipelines for recovery of reasonable costs incurred in managing a spill on their land.

I think this is a major collective victory. It shows not only that aboriginals are full-fledged nations, but also that there is a will to treat them as such. As I said, the parties were on the same wavelength and proposed many similar amendments that targeted the same flaws in Bill C-46.

In short, Bill C-46 is a first step toward integrating a real polluter-pays principle into federal pipeline regulations.

However, entrenching that in law is not the end of it. We also have to make sure that the provisions of the law respect its principles.

The NDP voted in favour of the principle underlying Bill C-46 because that step forward was better than the status quo.

I must nevertheless point out that at least one witness gave very engaging testimony during the committee's study of Bill C-46. Ian Miron of Ecojustice described this bill as a step forward, just as we have done. He also said that it was more of a “polluter might pay” principle than a polluter pays principle. The reason is that Bill C-46 is highly discretionary. It makes a number of tools available to the National Energy Board and the government, but they have complete discretion when it comes to using those tools. The lack of absolute regulations, if I can put it that way, means that this legislation does not fully respect the polluter pays principle. It means that the principle will apply if the National Energy Board and the government want it to.

These regulations and this liability regime will now be governed by the National Energy Board, which has an especially important role to play given that Canadians' trust and their sense of safety with respect to infrastructure and the regulations in place will depend on how well the board fulfills its mandate.

The report published in 2013 following a comprehensive study by the Standing Senate Committee on Energy, the Environment and Natural Resources clearly states that those two concepts go hand in hand:

If an accident occurs, there must be trust that the “polluter pays” principle, a principle applied to all modes of transport, is backed by concrete action. Social license is earned when citizens have trust in emergency and spill response capabilities, based on clear plans for well-organized recovery and rehabilitation of the environment, as well as a means for compensating for damages.

Even the president and CEO of the Canadian Energy Pipeline Association at the time, Brenda Kenny, suggested in the study that, “it is not enough in today’s climate to obtain a regulatory license or permit in order to proceed with energy projects”.

This illustrates how important it is for businesses and the industry to have public confidence. This was corroborated by the testimony in committee of a representative of Canada's Building Trades Unions, who said he agrees with the polluter pays principle, which indicates to us that the unions and workers truly understand that environmental protection and robust protection, prevention and accountability standards are ironically the things that are going to help them keep their jobs.

For a culture of safety to take hold, there needs to be interaction between common values and beliefs on one hand, and the structures and oversight mechanisms of an organization on the other hand, with the aim of producing standards of behaviour. Unfortunately, we are way off the mark. With its bills and regulations, the government has done nothing but cause the public to lose confidence not only in the industry, but also in the key regulators. If the oil companies want public approval for the pipelines, then Canadians need assurance that these projects are sustainable and that approval processes are open, rigorous and fair. That is clearly still not the case, and this bill will not change much, unfortunately.

In fact, only 27% of Canadians believe that the Government of Canada can respond effectively to an oil spill at sea, and only 32% share the same view for spills on land. The English Bay oil spill in Vancouver in early April should serve as an example of the government's readiness to respond. Civil society groups and environmentalists have been saying for years that Canada is not prepared for a major oil spill. The 2010 Kalamazoo spill in Michigan was a turning point for the oil sector. New standards were established and discoveries were made about how oil from the oil sands behaves, which requires new standards for research, prevention and response.

The problem is that instead of working with the utmost transparency, the board encourages corporations to be secretive. According to the 2013 Senate report:

By regulation, every pipeline company is required to submit Emergency Response Plans (ERPs) on a facility-by-facility basis and the ERPs must be approved by the NEB. These plans require companies to assess the risk of a spill and outline the details of a response. They must be up-to-date with corresponding emergency manuals and must be reviewed regularly. On June 26, 2013, the federal government announced that it would require ERPs to be more accessible to the...

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, again I will reiterate that there is widespread agreement that Bill C-46 is an important step in our efforts to maintain the most rigorous pipeline safety regime in the world.

The government has worked closely with provinces and territories, aboriginal communities, environmental groups, insurance companies and industry in the development of this legislation. I am very confident that this legislation appropriately addresses the concerns raised during these consultations.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, as I stated earlier in my remarks, there is widespread agreement that Bill C-46 is an important step in our efforts to maintain the most rigorous regime in the world, the most safe regime, a regime that already has a safety record of 99.99%. Bill C-46 will bring even greater confidence to our network of pipelines and ensure public assurance for new pipelines being built. The provisions in Bill C-46 mirror steps our government has taken to strengthen marine, rail and offshore safety.

The provisions that the member has been asking for, in terms of pipelines that will see less than 250 barrels flowing through them, will be captured in regulations.

[Kelly Block, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, it is an honour to rise today on behalf of our government to open debate on the pipeline safety act at third reading. Canadians can proudly look at this legislation as another significant step our government has taken in advancing responsible resource development. That is because we stand on the threshold of a generational opportunity to harness our vast energy wealth. We have a unique opportunity to cement Canada's place in the world as a secure, reliable, and responsible producer and supplier of energy. However, we can only take advantage of these opportunities if we choose to make them happen and if we are willing to think big and act accordingly. The stakes could not be higher.

Despite lower world oil and gas prices, we know that the long-term outlook for Canada's energy sector is bright. According to the International Energy Agency, global demand for energy will increase by one-third by 2040. Again, according to the IEA, 74% of this demand will still be met through fossil fuels. Countries such as China, India, and other emerging nations are fuelling this thirst for energy. Even developed countries, like those in the European Union, are eager to diversify both the types of energy they use and who supplies it to them.

Canada is perfectly positioned to seize this moment in time to create the quality jobs, the economic growth, and the long-term prosperity Canadians want for themselves and for their children. We have some of the largest known reserves of oil and gas in the world, the blue chip companies with the wherewithal to bring these reserves to market, the clean technologies and exciting new innovations to do so in ever more sustainable ways, and the world-class pipelines to transport our oil and gas safely and reliably. In fact, as I have proudly noted many times, between 2008 and 2013, 99.999% of the oil, gas, and other petroleum products transported through the federally regulated pipelines in Canada arrived safely. This is an extraordinary record, and most countries would be satisfied that it was enough. However, our government always strives to do even better. Our target is zero events. That is why our focus is on maintaining a world-class and even world-leading pipeline safety system.

As many members know, the National Energy Board was established back in 1959, with a very clear mandate to regulate international and interprovincial pipelines, power lines, and energy trade. Now, some 56 years later, the board is overseeing approximately 73,000 kilometres of pipelines that transport over $100 billion worth of natural gas, oil, and petroleum products every year.

It is important to note that the independent National Energy Board is responsible for the review of new pipeline proposals. The NEB's work is based on an exhaustive study of the science and on extensive public consultations to determine if a project is in the overall Canadian public interest. Furthermore, the board can impose enforceable conditions and has important powers to ensure that pipelines are built and operated in a safe manner. For example, it can issue administrative penalties to pipeline companies and reduce the amount of product allowed through its pipelines, or even shut them down entirely.

However, the board's role does not end with reviewing applications and setting conditions. It also oversees the entire life cycle of a pipeline, from concept to construction, from operation to eventual abandonment. To perform these duties and responsibilities, the NEB conducts ongoing audits, inspections, and emergency exercises. Some 300 such compliance actions were conducted in 2013 alone.

At the Standing Committee on Natural Resources, we heard from a variety of witnesses who support our legislation. For example, the members of Canada's Building Trades Unions take immense pride in their work to ensure construction of the safest pipelines ever built. Other experts, lawyers, and members of the National Energy Board also appeared before the committee and voiced their own support for our goals. There is widespread agreement that the pipeline safety act is an important step in our efforts to maintain the most rigorous pipeline safety regime in the world.

The result is a bill that would inspire even greater confidence in our existing national network of pipelines and that would ensure broader public assurance for new ones coming on stream.

All Canadians from coast to coast to coast should find comfort in this proposed bill. They can rest assured that the energy that fuels their cars, heats their homes, and goes into producing their home electronics and household products will continue to be delivered through the safest energy transportation system possible. Anything less would be unacceptable to Canadians and to our government, period.

This is why the pipeline safety act is built on three key pillars: incident prevention, preparedness and response, and liability and compensation.

Looking first at prevention, our government understands that responsible resource development demands that we take every measure and precaution we can to prevent incidents from ever occurring, and we do. That is why we have proposed amendments to the National Energy Board Act that would build on the steps we have already taken over the past two years. Our goal: to further improve the transparency and operation of the board under its enabling legislation.

We have already increased the number of inspections and audits the board conducts each year, and we have given the board the authority to levy administrative monetary penalties. Our new legislation would add to the current preventive measures.

In addition to clarifying the board's audit and inspection powers, the legislation would also provide greater clarity on when to seek the board's permission before disturbing the ground near a pipeline. This added clarity would help to prevent potentially life-threatening accidents and avoid damage to both property and the environment.

Prevention also depends heavily on the design and construction of our pipelines. That is why the minister has recently asked the National Energy Board to provide guidance on the use of the best available technology in pipeline projects. This includes materials, construction methods, and emergency response techniques.

Second, the pipeline safety act would ensure a robust response in the event of an incident. The legislation would require pipeline operators to have a minimum level of financial resources and to keep a portion of these resources readily accessible for rapid response.

The bill would also allow the Governor in Council to give authority and resources to the NEB to take control of an incident response or cleanup. The NEB would take control if, in exceptional circumstances, the company was unable or unwilling to do so. This means that the government would provide an initial financial backstop to ensure that the NEB had the resources it needed, when it needed them, to complete the cleanup.

In addition, and in the unlikely event that the NEB had to take control of an incident response, the government would also be able to establish a pipeline claims tribunal. Setting up this tribunal would streamline the claims process. In either case, the legislation would provide that all costs and expenses would be recovered from the industry should the board ever have to step in and take charge.

This leads me to the third pillar: enshrining the polluter pays principle in law. We fundamentally believe that polluters, and not Canadian taxpayers, should be held financially responsible for any costs associated with an incident, responsible whether the polluters are at fault or not. For companies operating major oil pipelines, this absolute, no-fault liability would be $1 billion. However, let us be clear. The liability would remain unlimited in instances where they were at fault. It is a new standard that would leave no doubt or wiggle room, no doubt for Canadian taxpayers and no wiggle room for pipeline operators.

The pipeline safety act would also allow the government to go after operators for damage to the environment over the entire lifecycle of a pipeline. This would include even after a pipeline had been abandoned.

The absolute or no-fault liability regime created under the bill would be one of the most robust and comprehensive in the world. In addition to actual losses, all types of damage to the environment resulting from oil spills would be covered by the enhanced regime.

Under Bill C-46, three broad categories of damage could be claimed. The first would cover claims for loss or damage incurred by any person as a result of a spill, including loss of income and future income. In the case of aboriginal peoples, for example, it would include the loss of hunting, fishing, and gathering opportunities.

The second category would cover the cost and expenses incurred by the federal government, a provincial government, aboriginal governing bodies, or any other person in taking action in response to a spill. This would include recouping the costs incurred in responding to or mitigating the damage from an oil spill.

The third category would cover claims by the federal or provincial governments for the loss of what is referred to as the non-use value relating to a public resource that is damaged by a spill. Non-use value means that the federal government or a provincial government could bring a claim for damage to environmental assets that are valuable to Canadians and future generations.

The concept of non-use value was first introduced for environmental offences by our government in 2009, and Bill C-46 is consistent with those measures. It is also consistent with the amendments we have introduced to Bill C-22, the energy safety and security act, for the offshore oil and gas regime, which also would allow governments to claim for the loss of the non-use value of public resources.

In many ways, these provisions mirror similar steps our government has already taken to strengthen marine, rail, and offshore safety. As part of our plan for responsible resource development, we have been strengthening environmental protection, enhancing aboriginal engagement, and modernizing our regulatory review of major resource projects. Our overriding goal has been to eliminate duplication and to provide investors with predictable beginning-to-end timelines for projects, all the while creating jobs and growing the economy.

This is an ongoing process. It demands constant attention and continued diligence, which is why our economic action plan 2015 contains new measures and investments to build on this momentum.

There are many items I could highlight from our balanced budget, but let me start by saying what is not in it. I know that what the opposition was hoping to see in our budget was a carbon tax. Both the Liberals and the NDP have been clear that they intend to put a tax on everything Canadians buy, from gas to groceries to electricity. We have been clear. We will not introduce a carbon tax.

We are very proud of the targeted investments proposed in economic action plan 2015 that are particularly noteworthy for today's debate. The first is $135 million over five years to support project approvals through the major projects management office initiative. We are proposing to make this investment because the development of our natural resources deserves both scrutiny and careful stewardship. Our processes and systems need to be modern and nimble, reflecting the views and needs of citizens and industry alike.

The second item is a commitment of $34 million over the same period of time to continue consultations with Canadians on projects assessed under the Canadian Environmental Assessment Act.

Third, we are proposing to provide $80 million over five years to the National Energy Board to support greater engagement with Canadians and enhanced safety and environmental protection.

Through these investments, we will continue to deliver the kind of responsible resource development Canadians have come to expect from their government, development that is critical to our government's economic plan to create jobs, growth, and long-term prosperity for all Canadians.

The fact is, Canada's natural resource sector represents 19% of our economy. It accounts for more than half of our merchandise exports and supports 1.8 million jobs directly and indirectly. Canada's natural resource sector is also one of the leading private employers of aboriginal people, and let us not forget that natural resource firms have contributed approximately $30 billion per year in revenue to governments, revenue that builds hospitals and highways, schools and subways.

In short, our resource industries are critical to the strength of our economy, the quality of our lives and our aspirations for the future.

As recent geopolitical events have shown, energy is also playing a critical role in national, continental and indeed global security. Our government recognizes that Canada is in a unique position to meet the world's energy needs, but just importantly we also have a responsibility to contribute to global energy security.

That is why, between 2005 and 2014, Canada's crude oil exports grew by 81%. That is almost 1.3 million barrels per day. Our exports expanded beyond North America to reach new markets around the world. Indeed, since 2013, Canada has been shipping oil into markets from Spain and Ireland to Chile and Hong Kong. In Italy, for example, our exports accounted for 3.4% of that country's total crude oil imports in 2014, as measured by volume.

With the European Parliament's fuel quality directive confirming that oil sands crude is as environmentally responsible as other sources, we expect exports to continue to grow. Canadian exports help nations diversify their sources of energy. They help reduce their dependence on unreliable suppliers and help bolster their energy security.

To continue to play that important role in global energy security, Canada must expand its ability to get its products to market. Pipelines are the safest, most secure and most reliable way of doing so.

As we expand our ability to export, this legislation will set the standard for pipeline safety, charting a new path to good-paying jobs and sustainable growth across the country for generations to come. I urge all members of this House to join our government in continuing to support this legislation.

The House proceeded to the consideration of Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, as reported (with amendment) from the committee.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I admire the quality of optimism, and I know that hope springs eternal in my colleague's breast.

After this statement, we will complete the motion, pursuant to Standing Order 78, in relation to Bill C-51. After that, we will consider Bill C-46, the pipeline safety act at report stage, and then proceed to debate it at third reading. This bill would ensure that Canada's pipeline safety regime remains world class. That debate will continue next week, on Wednesday.

Tomorrow we will wrap up the second reading debate on Bill C-50, the citizen voting act. The House will have an opportunity later today, I hope, to deliberate on how that will proceed.

Monday, we will conclude the report stage debate of Bill C-51, the Anti-terrorism Act, 2015. Our Conservative government takes all threats to the security of Canada and Canadians very seriously.

That is why we are moving forward with Bill C-51 and the crucial provisions contained in it to protect our national security. Third reading of this important bill will take place Tuesday.

Thursday, before question period, we will consider Bill S-3, the port state measures agreement implementation act at report stage, and hopefully, third reading. This bill passed at second reading with widespread support, and I am optimistic that third reading will be no different.

I understand that the Standing Committee on Transport, Infrastructure and Communities is meeting this afternoon to give clause-by-clause consideration to Bill C-52, the Safe and Accountable Rail Act. This bill would further strengthen Canada's rail safety regime and ensure that adequate compensation is available. If the committee finishes that work today, we will consider the bill at report stage and third reading after question period next Thursday.

At second reading, New Democrats spoke about the importance of passing this bill urgently and therefore I hope that they will see to letting this legislation pass next week, so that the Senate will have plenty of time to complete its consideration of the bill before the summer adjournment.

Natural Resources

[Kelly Block, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, I have the honour to present, in both official languages, the 10th report of the Standing Committee on Natural Resources, in relation to Bill C-46, an act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act.

The committee has studied the bill and has decided to report the bill back to the House with amendments.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, we will be supporting this amendment. Our government has consistently indicated that we will pursue companies to make them pay in the case of a spill. Bill C-46 seeks to codify the polluter pays principle into law to ensure that all companies operating pipelines are absolutely liable and able to pay for costs and damages resulting from an incident.

This proposed change would be consistent with the government's intent.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

I'll just make a couple of comments, Mr. Chair.

We are opposing this amendment. It is up to the courts to determine what value, if any, is appropriate to place on non-use value damage claims on a case-specific basis. Also, the current approach in Bill C-46, as with other federal legislation, will allow the courts to develop a body of precedents in the area of awards for non-use value damages.

I guess the third piece that's very important is that setting a time limit on the creation of the regulations could bind the regulatory process, which needs to include adequate periods of time to ensure appropriate consultations are undertaken.

[Lisa Raitt, Conservative, Halton, ON]

Again, this is one of the concerns that has been raised by industry and by insurers, and I appreciate the opportunity at the committee to discuss and clarify what the position is.

What I can tell the committee is that this is standard language that is in line with the modernized liability and compensation regime that has been put forward on pipelines in Bill C-46, as well as the regime for offshore oil and gas in Bill C-22, which received royal assent on February 26, 2015. The purpose of the provision is to ensure that the strengthened regime for rail would not preclude any other regime, including future regimes that set higher limits of liability, from being applied to a railway accident. That's a clarification that was sought by industry, and I'm pleased to be able to address it today.

[The Chair, Conservative, Leon Benoit]

Good afternoon, everyone.

We're here today to deal with Bill C-46, an act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act. We will go through this bill today clause by clause.

From the Department of Natural Resources, to give us advice as requested by committee members, we have with us today Jeff Labonté, director general, energy safety and security branch, energy sector. Welcome to you again, sir.

We also have Terence Hubbard, director general, petroleum resources branch, energy sector. Welcome to you again, sir.

We have Christine Siminowski, director, energy safety and security branch, energy sector. Welcome to you.

We have Joseph McHattie, legal counsel. Welcome to you again, sir.

We'll get right to it. As you know, we are dealing with clause by clause. We'll start with the amendments in the order they apply to the clauses. So those that apply to clause 2 will be dealt with before clause 3 and so on. Some deal with many parts of a clause and extend over pages, but we'll keep them in order and deal with that.

We'll stand or postpone the short title until the end as usual.

(On clause 2)

We will start with NDP-1. I'll refer to them as they are listed on your sheets. On the sheets they indicate not only the clause the amendment applies to, but also the lines and page. I know that you have all gone through this and worked on it already, but from that you can follow along quite easily. I will keep you on track of where we are and what we're dealing with.

Let's start with NDP-1.

That was put forward by Mr. Caron.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I thank the hon. opposition House leader for his question.

This afternoon we will continue debating economic action plan 2015, our Conservative government's balanced budget, low-tax plan for jobs, growth and security.

He was referring to it and its impact on future generations, and that is where this budget is perhaps at its best, because it delivers long-term prosperity.

With the tax-free savings account, it will provide benefit for generations to come. It helps families save for their children's university education. We have put an additional element in the budget to allow greater flexibility with student loans with calculation of income.

In fact, it is future generations who stand to benefit the most. The most important element from which they benefit, something they would never see under an NDP government, is a balanced budget. That means they will not be paying the freight for generations that came before them for high-spending debt plans that we see from the opposition parties. That is the most important long-term benefit for future generations, so we are very proud of the budget in this regard. Of course, we have been hearing from my colleagues this week that it is a prudent and principled plan that will see Canadians more prosperous, more secure, and everyone confident in Canada's place in the world for some time to come.

While we are focused on creating jobs and putting money back in the pockets of hard-working Canadians, the opposition parties have both confirmed that they want to see higher spending and higher taxes on middle-class families, high taxes on middle-class seniors, high taxes on middle-class consumers. In fact, any tax they can raise, they will probably take a shot at it when they get the chance.

The budget debate will continue on Tuesday and Wednesday of next week.

While I am talking about the budget, I cannot help but note that, when pressed Tuesday night for some detailed insight into the Liberals' economic vision for Canada—something we have been waiting for since the hon. member for Papineau became the Liberal leader two years ago—that member told reporters that he would keep it secret from Canadians for yet more weeks—or months—to come.

I am going to give him an opportunity next week to be courageous and share an actual proposal with Canadians—something beyond the view that budgets balance themselves. Therefore, Monday shall be the second allotted day.

Meanwhile, we will start the report stage debate on Bill C-51, the Anti-terrorism Act, 2015, tomorrow. Through this legislation, the government is taking additional action, in line with measures taken by our allies, to ensure our law enforcement and national security agencies can counter those who advocate terrorism, prevent terrorist travel and the efforts of those who seek to use Canada as a recruiting ground, and disrupt planned attacks on Canadian soil.

Next Thursday, after we have concluded the budget debate, we will consider report stage and second reading of Bill S-4, the digital privacy act. This legislation aims to protect better and empower consumers, clarify and streamline rules for business, and enable effective investigations by law enforcement and security agencies.

In anticipation that Bill C-46, the pipeline safety act, will be reported back from committee soon, we will start report stage, and hopefully third reading, after question period that day.

We will round out next week with the debate on Bill C-50, the citizen voting act, at second reading, on Friday.

[The Vice-Chair, NDP, Guy Caron]

Thank you very much, Ms. Duncan.

Mr. Olszynski, Mr. Miron, Mr. Blakely and Mr. Donihee, thank you for spending this time with us and sharing with us your expertise and your thoughts.

Thank you very much to all members of the committee. We will reconvene on April 21 for the beginning of our clause-by-clause consideration of Bill C-46.

Have a nice couple of weeks.

The meeting is adjourned.

[Geoff Regan, Liberal, Halifax West, NS]

Let me ask you about the risks to taxpayers in the case of a catastrophic spill. I ask because currently, of course, if pipeline company X were unable to pay the entire cost associated with the spill, some things could in fact go unpaid. Under Bill C-46, we would have a regime where the consolidated revenue fund comes over to the taxpayer. It would be called upon to cover unpaid awards.

The question is, I guess, whether it's fair to taxpayers to carry this risk, although there seems to be some mechanisms to allow the NEB to recover any compensation that might be paid out. Do you think this aspect of the bill should be amended, and if so, do you have any suggestions?

Mr. Olszynski, I'll start with you.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chair.

My thanks to the witnesses here with us today and the witness joining the meeting by videoconference.

One of the things that I want to ask about is funding for the NEB, because according to the 2015-16 main estimates, the NEB's funding for the regulation of pipelines, power lines, energy development, and so forth has actually decreased from $81.7 million in 2013-14 to $76.8 million in 2015-16. That's a reduction of some $4.9 million, or 6% thereabouts.

Given the fact that Bill C-46 is actually giving quite a bit more responsibility to the NEB, and more authority, do you think it's strange that its budget is shrinking instead of increasing? How do you think this will impact public confidence in the NEB's ability to make sure our pipelines are the safest in the world?

Mr. Donihee, do you want to start?

[Ian Miron]

I don't see a whole lot of consultation within this bill itself. I am aware that there are some extra efforts outside of the legislation that have been proposed by the government with respect to consultation with first nations. This bill isn't an environmental assessment bill. This is a liability bill. From my perspective, that's what this bill is about. It's about polluter pays. I don't see a whole lot of room for consultation within this bill.

[Joan Crockatt, Conservative, Calgary Centre, AB]

We have a responsibility here as a government to protect the public environment and also to protect public jobs. I think Mr. Blakely talked about that as well today. On those counts, how does Bill C-46 stack up in your view?

[Megan Leslie, NDP, Halifax, NS]

Thank you, Mr. Chair.

Mr. Miron, I have some questions for you. I appreciate the concept you put forward of “polluter might pay”. That resonated with me. You talked about the fact that once we're over a billion dollars, the cost falls to Canadians for cleanup and compensation.

For me, all of this is with the backdrop of a couple of different things.

The first backdrop for me is the environment commissioner's 2011 report. The environment commissioner looked at the transportation of dangerous goods via pipelines and found little evidence that the National Energy Board was making sure that companies actually followed through on correcting their deficiencies in the practices they had, and also, alarmingly, that the NEB wasn't monitoring companies as to whether or not they had prepared emergency procedures manuals. That makes me think, then, about Enbridge and Kalamazoo and how the U.S. regulators likened the response to the Kalamazoo spill to the the Keystone Kops.

I think about the two overlaid. If we don't actually have an emergency procedure manual, what the heck is going on and how do we deal with it? The longer we're struggling to have a response, the more environmental damage there is and the higher the cost for cleanup and potentially for compensation.

My questions to you are around Bill C-46 and drawing on the experience of spills that we know about. How much did they cost? How much did they cost to clean up? What kinds of damages were there? What was the proportion of what the companies were on the hook for versus citizens paying through government? How much compensation actually went unsatisfied and wasn't paid out? Can you help us situate Bill C-46 within the context of what we know about spills?

[Ian Miron]

Certainly.

If a pipeline spill got into waters containing fish and caused a deleterious effect on those fish, subsection 42(1) of the Fisheries Act could have come into play to make companies absolutely liable for an unlimited amount of spill response costs. Bill C-46 basically closes that option off. Those are no longer recoverable under Bill C-46.

[Jim Donihee]

Mr. Chair, thank you for providing me with this opportunity to share some remarks with you.

Mr. Chairman and members of the committee, thank you very much.

My name is Jim Donihee. I'm the chief operating officer and the acting chief executive officer for the Canadian Energy Pipeline Association. I thank you for the opportunity to present some remarks.

First I'll give you some background. CEPA operates 115,000 kilometres of transmission pipelines across Canada, much of which falls under the jurisdiction of the National Energy Board. Our members transport approximately 97% of all of the daily natural gas and onshore crude oil that is produced, and we have been bringing it to markets very safely for some 60 years. For example, in 2014 our members collectively transported over five trillion cubic feet of natural gas, and 1.2 billion barrels of liquid petroleum products. This represents approximately 23% of Canada's mercantile trade, and it makes an extremely significant contribution to the social fabric of our nation.

While our longstanding operational safety record of 99.9995% between 2002 and 2013 is truly exceptional, at the same time we recognize that it is not sufficient; it's not good enough. Our CEOs have publicly committed to zero incidents on pipelines, and we're very actively working to get there.

Bill C-46 as proposed certainly complements our industry's strong belief in the polluter pays principle, excellence in emergency response, pipeline safety, and environmental protection. For that reason, and to reassure Canadians that our industry is fully dedicated to a safe and socially responsible energy pipeline transmission industry, CEPA supports the proposed regulation.

Our members are focused first and foremost on pipeline safety and the prevention of all incidents throughout the entire life cycle of pipelines. This continuous focus on safety saw us invest over $1.4 billion in 2013 alone, in order to ensure the safety of these pipelines. We're working aggressively through our program entitled CEPA integrity first, a management systems approach that is addressing critical priorities in pipeline operations, commencing with pipeline integrity and control room management. The integrity first program, patterned after the responsible care initiative of the chemical industry, will drive significant performance throughout our industry based on our sincere desire to exceed regulatory compliance.

This year as well, CEPA will take a big step forward by committing to conducting a safety culture survey of its entire membership in order to ensure that we focus on the human dynamic that is also so absolutely critical to excellence in performance.

We are actively participating in the development of standards, and these standards, constructed largely by the Canadian Standards Association, apply to our operations throughout the design, construction, operation, and eventual retirement of the pipelines that we have the privilege of stewarding.

The best available technology is absolutely key to the way our industry functions. Through initiatives such as the Canadian Pipeline Technology Collaborative, which is a new initiative being formed, we seek to leverage new technologies through academic institutions and in collaboration with many government partners.

I think it's important to take a look at the commitments that our industry has made in recent times. First, for example, is the mutual emergency assistance agreement, the MEAA, that was first exercised in 2014 and that clearly recognizes in this day and age that any incident of a pipeline company is everybody's incident. This MEAA will seek to harness, and does harness, the resources of all of our members in order to respond in the most effective and immediate manner to any incident that might emerge.

Along with the MEAA, CEPA's members have adopted an incident command system common to all. It reflects interoperability and enhances interoperability among all of our members.

Transparency is absolutely key to earning and sustaining the trust of Canadians. To that end we've undertaken the formulation of a task force that is addressing the common template that will make available to all Canadians every bit of information that we can in order to earn their trust, while withholding only such information that is critical to privacy considerations and the security of critical infrastructure. That information is always made available to all emergency responders.

We've heard the comments by Mr. Blakely about the NEB and we believe strongly that the oversight that we receive from a competent regulator is vital to Canada's national interests. We are well served by having a strong regulator that is capable of providing timely, science-based, and fact-based consideration of our projects.

With that in mind, especially in consideration of the new powers and authorities that the NEB will be adopting through this bill, we believe that it's incredibly important for the NEB to receive the levels of funding and the flexibility of using those funds that are necessary to ensure that it can attract and retain expertise critical to being able to fulfill its mandate.

Our member companies have an exceptional track record with a very low frequency of incidents. They believe strongly in the polluter pays principle and have always ensured appropriate restoration of the environment without any financial consequence borne by the public, including considerations for loss of use. CEPA members are dedicated to the commitment of this obligation through preparedness and response. They will ensure that they fulfill their obligations as reflected in this bill.

Notwithstanding CEPA's strict adherence to the polluter pays principle, and our strong response capabilities, we are supportive of the proposed legislation that sets out liability and compensation requirements for companies operating crude oil pipelines.

As I seek to conclude, Mr. Chair, I would offer the following recommendations for this very positive step forward.

Regulatory requirements that originate from the bill should be risk-based and respond to the proven safety record that the transmission pipeline industry has demonstrated.

The federal government should continue to explore opportunities to support multi-sectoral initiatives, such as the CPTC, which will identify, develop, and implement advanced science and technology. The Canadian Standards Association remains an extremely effective body for the development of standards. We collaborate routinely and press the envelope forward to develop these standards.

We absolutely respect the role of the NEB and believe it to be vital to the good functioning of a highly responsible industry on behalf of Canadians. We believe that the NEB requires the funding that it needs and the flexibility of employing that funding to meet the obligations that you will offer to it through the approval of this bill.

With that, Mr. Chair, I'd like to conclude my comments and thank you for the opportunity to present some comments to you. The Canadian energy pipeline industry is an industry that has a proven, long-standing track record and one that Canadians should be proud of. We look forward to making a continued contribution to the success of our nation for many years to come.

Thank you.

[Ian Miron, Barrister and Solicitor, Ecojustice Canada]

Thank you, Mr. Chair, and thank you to all the members. I appreciate the opportunity to present today.

As you might know, I'm a lawyer here on behalf of Ecojustice, which is Canada's largest public interest environmental law organization. Ecojustice has worked extensively on pipeline issues across Canada as well as on statutory liability regimes, in the context of the energy sector more broadly. This will be the focus of my presentation today.

I think we can all agree that Bill C-46 is much needed and, quite frankly, long overdue. That being said, there are some significant shortcomings in the bill as currently drafted. I'm going to focus on three of those today.

First, the absolute liability limit is inappropriately low. Second, more guidance is needed around the assessment and calculation of damages for the loss of non-use value relating to a public resource, which I'm going to refer to as “environmental damages”. Third, although the bill provides some interesting new tools for seeking compensation and reimbursement in the event of a spill, the use of most of these tools is discretionary, not mandatory.

As currently drafted, the bill can best be described as “polluter might pay”. It offers modest improvements on the current regime, but it does not fully implement the polluter pays principle, and therefore continues to expose Canadians to an unacceptable portion of the financial risks of a pipeline spill.

Moving to the absolute liability limit, it's positive that the bill incorporates the polluter pays principle into the National Energy Board Act. The bill then restricts absolute liability to $1 billion for spills from large oil pipelines.

Imposing absolute liability up to that $1 billion limit is largely an improvement over the status quo. I say “largely” because it limits what was unlimited liability under the Fisheries Act for certain spill response costs. ln the case of a major spill, $1 billion isn't enough to cover the cleanup costs, let alone compensate victims for damages and all Canadians for environmental damages. We have seen Enbridge's line 6B rupture in Michigan. The cleanup costs have topped $1.2 billion so far. There's still oil in the river there, and there's more work to be done.

ln that light, limiting absolute liability to what seems to be an arbitrary figure of $1 billion inappropriately restricts the polluter pays principle and allows polluters to shift a portion of the financial risk of a pipeline spill back onto Canadians.

Moving quickly to environmental damages, I am pleased to see that the bill includes liability for the loss of non-use value. This measure is absolutely crucial to implement effectively, because a major oil spill can never be fully cleaned up and wildlife and the environment in the vicinity of a spill will often be killed or seriously harmed before cleanup efforts can begin.

Beyond recognizing that compensation for these environmental damages is available, the bill provides no details on how they will work in practice. This lack of guidance, I submit, makes it less likely that a government will try to recover compensation. At the very least, we need a regulation-making power so that some guidance can be provided, the holes can be filled in. I urge the government to consult publicly on such guidance.

Moving to the new recovery mechanisms, the bill does provide some new tools to respond to spills and to recover damages or expenses from polluters. The use of many of these tools is left to the discretion of the NEB. Many of the tools are also contingent on the polluting company being designated by cabinet. Designation is a discretionary decision that would allow the government to, for example, take over spill response or to appoint a specialized pipeline claims tribunal to decide claims for compensation.

Staying with that pipeline claims tribunal for a few seconds, it is worth noting that any awards the tribunal makes appear to be paid directly out of taxpayer money, presumably to ensure that victims are compensated in a timely manner.

Where taxpayer funds are used to compensate victims of the spill, the NEB has the option to try to get this money back from the polluter. If the polluter doesn't have enough money to pay, then they can also try to get it back from a broader subset of the pipeline industry through various fees and levies. Again, these tools are discretionary. The NEB doesn't have to use them, and this is concerning.

In keeping with the polluter pays principle, the NEB should be required to use any and all available tools to make sure that taxpayers aren't left footing the bill for the cost of a pipeline spill. This is particularly the case given that Bill C-46, in the context of this bill's claims tribunal, contemplates non-Canadians seeking compensation before it. Obviously, exposing Canadian taxpayers to that kind of financial risk is not acceptable.

To sum up, the bill does represent a move toward a polluter might pay model, but the shortcomings of the bill still leave Canadians exposed to an unacceptable portion of the financial risks of a pipeline spill.

Those are my remarks, subject to any questions. Thank you for the opportunity to speak today.

[Martin Olszynski, University of Calgary, Faculty of Law, As an Individual]

Thank you, Mr. Chair, and members of the committee.

My name is Martin Olszynski. I'm an assistant professor at the University of Calgary, Faculty of Law. The focus of my presentation today is on what are commonly referred to as the environmental damages provisions of Bill C-46.

I began thinking and writing about environmental damages roughly 10 years ago, when the Supreme Court of Canada first opened the door for governments to sue for such damages in a case called Canadian Forest Products v. British Columbia. I have since written several articles on this topic, including with one of Canada's leading resource economists, Professor Peter Boxall.

I will begin with a brief primer explaining this concept of environmental damages. I'll then describe their role and their treatment under Bill C-46. Finally, I will make two recommendations for improvement.

Most simply, environmental damages can be understood as the financial compensation awarded for the loss or impairment of some public environmental asset and the services it provides, for example, a forest, in the case of Canadian Forest Products, or a coastal area, such as was affected following the Exxon Valdez spill or the Gulf of Mexico following the Deepwater Horizon blowout.

Environmental and resource economists divide such harms into the loss of two kinds of values: use value and non-use value. Referring to an Environment Canada publication, the Library of Parliament's legislative summary of Bill C-46 defines these two values as follows:

Use values are associated with direct use of the environment such as fishing and swimming in a lake, hiking in a forest - or commercial uses such as logging and farming. Non-use values are related to the knowledge of the continued existence of the environment...or the need to leave environmental resources to future generations.

As committee members might imagine, environmental damages assessment can be a complex and difficult task. Various scientific disciplines—ecology, toxicology, hydrology—are applied to first determine the extent of harm done, while economics and the techniques of environmental valuation in particular are then used to convert this harm into monetary terms.

Under Bill C-46 there are actually two different roles for environmental damages. They play a role in sentencing and they play a role in civil liability. As to sentencing, where an operator commits an offence under the NEB Act, the proposed section 132—and this is clause 37, page 35—directs a sentencing judge to consider the “damage or risk of damage to the environment” as a result of the offence. That is further defined under subsection 4 as “the loss of use value and non-use value”. Through this amendment, the NEB Act joins the ranks of at least 10 other federal environmental laws with similar sentencing provisions. Although light on details, this wording is both simple and comprehensive.

The other environmental damages provisions, which are decidedly more opaque, are found in the context of civil liability. Under the proposed subsection 48.12(1)—and this is clause 16, pages 6 and 7 of bill—there's a reference to three heads of damages: “(a) all actual loss or damage incurred by any person...”; “(b) the costs and expenses” of cleanup; “(c) all loss of non-use value relating to a public resource that is affected” by the spill.

In other words, environmental damages are not actually referred to in this part of the bill; rather, their availability—at least partially—is implied by the reference in paragraph (c) to “all loss of non-use values relating to a public resource...”. Use values are not explicitly referred to, although as I will explain, some of these may be caught by paragraph (a).

There are two other relevant provisions I want to touch on just briefly. These are proposed subsections 48.12(9) and 48.13(5). The former states that only federal and provincial governments may sue for the loss of non-use values, while the latter states that the NEB is not required to consider the potential loss of non-use values when determining the financial resources that operators will be required to maintain for the purposes of absolute liability.

My first recommendation is that the third category of loss under the civil liability provisions be amended to refer simply to environmental damages. For instance, “all environmental damages resulting from the release...", and that this be coupled with an additional subsection defining environmental damages, as is the case in the sentencing provisions. Those are the simpler and more comprehensive provisions, and I suggest that the civil liability provisions be amended to reflect that simple and comprehensive structure. This would not only simplify this section, but it also seems necessary to correct what appears to be an omission in the current bill.

As the committee is probably aware, most of the wording here was brought over almost verbatim from Bill C-22 , the Energy Safety and Security Act, which amended COGOA along similar lines. That legislation already had some spill-related provisions, and specifically a definition for “actual loss or damage”. I'll just read that definition quickly. It “...includes loss of income, including future income, and, with respect to any aboriginal peoples of Canada, includes loss of hunting, fishing and gathering opportunities.”

On my reading of this bill, this definition for “actual loss or damage”, which admittedly does capture some of the use values that I was referring to before, has not been brought over. Even if it were, I submit that there would still be a gap in the legislation. I can provide some examples of that gap after my presentation, if the committee is interested.

My second recommendation is that the Governor in Council should be required within a certain timeframe, or at least authorized, to make regulations setting out a process for environmental damages assessment. Reliance on this process should result in a rebuttable presumption of validity in any action for such damages, whether in court or before the pipelines claim tribunal. First, and as noted above, environmental damages assessment is a difficult and complex exercise; regulations would bring certainty to all parties and reduce needless litigation. It is for this reason that the equivalent American legislation, CERCLA and the Oil Pollution Act, contains such provisions, and that processes have been prescribed for the purpose of what is referred to there as “natural resources damage assessment”. I submit that such regulations represent the gold standard in this context.

My second reason tracks the preventative spirit of the bill. There are now roughly 10 federal environmental laws with some kind of environmental damages provisions, and it has been 10 years since the Supreme Court opened the door for governments to sue for these, and yet I am not aware of a single case where the federal crown has actually sought to do so. Perhaps this is something that future government witnesses could shed some light on. Whatever the case, this reality greatly undermines, in my view, the deterrent effect that statutory liability regimes like Bill C-46 are intended to create.

[The Vice-Chair, NDP, Guy Caron]

Good afternoon and welcome to the 53rd meeting of the Standing Committee on Natural Resources.

The topic on today's agenda is Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act.

In the next two hours, we will be hearing from four witnesses.

In the room we have Mr. Martin Olszynski from the faculty of law at the University of Calgary. As well, we have Mr. Ian Miron, who is a barrister and solicitor but is here to speak on behalf of Ecojustice Canada. Mr. Robert Blakely is the Canadian operating officer with Canada's Building Trade Unions.

Welcome, all of you.

By video conference from Calgary, we have Jim Donihee, acting chief executive officer for the Canadian Energy Pipeline Association.

Do you hear us well?

Canada Shipping Act

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, I have been following this debate very closely, just as our government has been listening very carefully to what British Columbians, and indeed all Canadians, have been saying about economic development and environmental responsibility in this country.

I appreciate the opportunity to respond to the bill before us and to reiterate some of the points made so persuasively by some of my colleagues. I will also add that I find it ironic that this member is proposing such a bill after he and his party voted against our increased measures for pipeline safety. New Democrats voted against doubling the number of audits and increasing the number of inspections on pipelines. They voted against fining companies that break environmental regulations.

Our government is listening to Canadians, and the message we are hearing is very clear: Canadians want balance. They understand the importance of resource development, but not at any price. They understand that economic development and environmental protection go hand in hand, and so does our government.

Environmental protection is and always will be a priority for us. We have been clear that projects will only proceed if they are safe for Canadians and safe for the environment. That is precisely what our plan is, and that is what responsible resource development is all about. Grounded in sound science and world-class standards, that plan ensures that we can develop the energy of the structure we need in a way that protects the environment we all share.

As part of this effort, our government is strengthening marine, pipeline, and rail safety, resulting in stronger prevention, enhanced preparedness and response, as well as improved liability and compensation in the highly unlikely event of an incident.

The members opposite may not be aware, but oil has been safely transported along Canada's west coast since the 1930s, thanks to responsible players in the industry and effective preventive measures. In addition, 99.999% of oil transported on federally regulated pipelines between 2008 and 2013 was moved safely.

This outstanding track record should reassure Canadians, and especially British Columbians, that our energy resources can safety be exported overseas to create jobs and economic growth here at home. That said, even one incident is one too many. Our goal must always be zero major spills or accidents, and to achieve this our government has introduced stringent new safety standards for tankers, together with new navigational supports to better protect our coastal waters.

Put simply, Canada's approach to marine regulations seeks to balance the safety of shipping and the protection of the marine environment with the need to encourage maritime commerce. In fact, we have nine acts of Parliament governing marine safety. These laws complement international regulations established by the International Maritime Organization, and that is before we factor in the tough new regulatory oversight and enforcement capabilities provided under Bill C-3, Safeguarding Canada's Seas and Skies Act.

There is compulsory pilotage in British Columbia's coastal waters. This means that a vessel must have an on-board pilot who is a navigator, certified to a specialized knowledge of local waters. In addition, Transport Canada has more than 300 inspectors who work every day to verify that ships meet Canada's regulations and the international standards that Canada has adopted.

Within the international maritime community, Canada is highly respected as a country that provides a clear and consistent set of rules that promote safety and protect the environment. I would like to quote the British Columbia environment minister who spoke about our government's plan and said the following:

I have a high degree of confidence that [the government is] serious about achieving the goals that we have in front of us and serious about the safety of our coast and the transportation of tankers up and down our coastline.

Canadians want a balanced approach to economic development. They support growth and want good jobs and long-term prosperity for themselves, their families, and their country. What Canadians might be surprised to learn is how important natural resource development is to our quality of life. Over the last five years, the oil and gas sector has contributed an average of $25.1 billion in taxes, royalties, and fees to government. This money helps to support public pensions, provide health care, and build schools, hospitals, housing, and highways.

If we want to maintain our high standard of living and ensure governments have the funds to pay for a wide array of social programs, we need to seize the potential of new markets for our energy. That is something our government understands. It is something business understands, and it is something Canadians understand from coast to coast to coast.

Our focus then is on preventing incidents from happening, cleaning them up quickly in the unlikely event of their occurring, and protecting taxpayers from any cleanup or remediation costs. Under this government, it is polluters who will pay, not taxpayers.

We recently introduced the pipeline safety act, which would enshrine in law the principle of polluter pays. To ensure that pipeline companies can respond in the unlikely event of a major incident, they would be required to maintain the highest minimum financial resources in the world. For companies operating major oil pipelines, that amounts to $1 billion, as well as holding sufficient cash on hand to respond quickly to incidents.

The pipeline safety act would also give the National Energy Board even greater authority so that it could strengthen incident prevention, preparedness, and response as well as liability and compensation.

With all of these efforts, we are seeking to foster greater public confidence in our country's ability to develop its resources and to do so responsibly. We know that building public confidence in major resource projects requires a whole-of-government approach. Our approach to promoting responsible resource development is a balanced approach, and it is the right way to go.

Bill C-628 is not a balanced approach. A ban on oil tankers would have a lasting negative impact on Canada. The NDP's anti-trade, anti-development agenda is clear. This bill would limit further diversifying our energy exports to countries other than the United States, which would severely impact our economy, jobs, and everything. Moreover, such a ban would be looked upon negatively by other countries, which view these waters as open for navigation, and banning a legitimate class of vessel would be contrary to the system that has served Canadians so well for decades.

Canadians want a balanced approach, and that is the path that this government is going to follow.

[Geoff Regan, Liberal, Halifax West, NS]

We talked already today about social licence and the issue of public trust. Given new authorities that the NEB has under Bill C-46, obviously it seems to me that the public trust is even more important.

Some people are suggesting that the confidence in the NEB has been shaken lately in light of the fact that senior engineers are under investigation by their own professional association. It's been reported that the engineers in question have been looking into allegations of natural gas pipeline safety code violations. What, if anything, is the NEB doing to restore public confidence in light of this?

[Chris Charlton, NDP, Hamilton Mountain, ON]

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

[Jonathan Timlin]

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

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

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

[Chris Charlton, NDP, Hamilton Mountain, ON]

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

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

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

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

[Josée Touchette]

Currently, our budget allocation is not decreasing, and in estimating what the needs are going to be once Bill C-46 is passed—assuming that it passes, because we are not there yet—we will make sure we use the resources that are appropriated to us by Parliament in the best way possible for the safety of Canadians and the protection of the environment.

[Josée Touchette]

Thank you for your question.

I believe what you are referring to is the fact that we have sunsetting money. There's our basic budget, but then we have some sunsetting funding that refers to safety, and that is set to sunset in two years from now. Our budgeted allocation for fiscal year 2014-15 was in fact $89 million.

In terms of how we could deliver on our enhanced responsibilities that would come from Bill C-46, I would suggest that at this point it's too early to definitely say how the various measures are going to be implemented if they're passed by Parliament.

[Geoff Regan, Liberal, Halifax West, NS]

According to the 2015-16 main estimates, funding for the regulation of pipelines, power lines, energy development, and so forth has decreased from $81.7 million—let's say $82 million— in 2013-14 to $77 million in 2015-16, which is a reduction of some $5 million, or about 6%.

Given that Bill C-46 gives the NEB a lot more responsibility and authority, I think, shouldn't your budget be increasing? It seems to me that Canadians want to see the NEB doing more of these kinds of things, not less of them, not saying, “Okay, we're mandated to do this number and that's what we're going to do, and it's not going to increase.” I think one of the big problems the industry has right now is a lack of confidence in the process.

In view of this, I think the real question is, how can Canadians have confidence you'll be able to effectively carry out these new regulatory functions if the budget for energy regulation is shrinking?

[Jonathan Timlin]

The number of audits or inspections has not been mandated to increase as a result of Bill C-46.

[Josée Touchette, Chief Operating Officer, National Energy Board]

Thank you, Mr. Chair.

We weren't aware that we could be asked questions beyond the scope of the bill, but that being said, we are here to answer your questions and we'll be happy to do so.

Good afternoon, ladies and gentlemen. Allow me to introduce myself. My name is Josée Touchette, and I am the chief operating officer for the National Energy Board, or NEB. It's a great honour for me to appear today before the Standing Committee on Natural Resources about the proposed Pipeline Safety Act, Bill C-46.

I bring to the board over 25 years of experience in the public service, over half of which was in senior executive positions, including at Aboriginal Affairs and Northern Development Canada, the Department of National Defence and the Department of Justice.

Allow me now to introduce my colleagues.

I am joined today by Dr. Robert Steedman, our chief environment officer. Dr. Steedman has been with the board for over 10 years. He holds degrees in environmental sciences from the University of Toronto, Oregon State University, and the University of Calgary.

I am also joined by Mr. Jonathan Timlin, our director of regulatory approaches. Before he moved to Calgary three years ago to work for the NEB, Mr. Timlin worked in Ottawa as a senior policy adviser with both Transport Canada and the Major Projects Management Office. He also previously worked in the electricity industry.

I'd like to begin by telling you about the board's role to provide a bit of context for our discussions later.

The NEB is a quasi-judicial independent agency created by Parliament in 1959 to regulate pipelines and energy development in the public interest. While the NEB functions at arm's length from government, it is accountable to Parliament through the Minister of Natural Resources. Our role is to implement—not set—policies affirmed by federal legislation. The safety of Canadians is a top priority for the NEB.

However, many Canadians don't understand this aspect of our business or how we concern ourselves with it at all.

Today I will provide some insight into how the NEB operates, including an overview, our legislated mandate, changes to the legislative framework, the new public environment, life-cycle regulation, and current safety measures. I will also give you some context on the challenges we face and the three strategic priorities that we are focusing on in response to those challenges.

The National Energy Board is an expert tribunal, currently comprised of six permanent and seven temporary board members, and supported by a staff of highly skilled engineers, environmental specialists, auditors, inspectors, lawyers and engagement specialists, among others. We are very proud of the work that we do at the NEB—whether it's managing complex public hearings, assessing environmental impacts and pipeline integrity, carrying out pipeline inspections and audits, or the myriad of other tasks that we perform daily to ensure that Canada's energy infrastructure is safe and reliable.

Let me turn to our legislative framework.

Our mandate is set out in several pieces of legislation, including the National Energy Board Act, the Canada Oil and Gas Operations Act, the Canada Petroleum Resources Act, and the Canadian Environmental Assessment Act of 2012. I will discuss each of these in turn.

The National Energy Board Act sets out the NEB's regulatory responsibilities regarding, first, the construction, operation, and abandonment of pipelines that cross international borders or provincial boundaries, as well as the associated pipeline tolls and tariffs; second, the construction and operation of international power lines and designated interprovincial power lines; and third, the import of natural gas and exports of crude oil, natural gas liquids, natural gas, refined petroleum products, and electricity. The board also monitors aspects of energy supply, demand, production, development, and trade that fall within the jurisdiction of the federal government under the NEB Act.

The Canada Oil and Gas Operations Act and certain provisions of the Canada Petroleum Resources Act set out the NEB's regulatory responsibilities for oil and gas exploration and activities on frontier lands not otherwise regulated under joint federal-provincial accords, such as, for example, Nunavut, the Arctic offshore, Hudson Bay, the west coast offshore, the Gulf of St. Lawrence, a portion of the Bay of Fundy, and onshore Sable Island.

Finally, both the NEB Act and the Canadian Environmental Assessment Act, 2012, provide the NEB with a mandate to consider potential environmental effects and conduct environmental assessments when making regulatory decisions and recommendations.

Environmental aspects have been considered in board decisions under the NEB Act since the early 1970s.

We cannot regulate outside the scope of the acts that govern us. There is a broad network of regulatory jurisdictions across Canada that share responsibility for regulating oil and gas production, energy infrastructure and the environment.

For example, the NEB Act does not provide authority to regulate the production of oil or gas. That responsibility falls to the provinces or their agencies.

I wish to underscore that this legislative mandate is given to us by Parliament. Our role is to implement—not set—policies affirmed by federal legislation.

Let me turn to some of the legislative changes that we've had recently.

In 2012, Parliament passed the Jobs, Growth and Long-term Prosperity Act, also referred to as Bill C-38, which included some of the most significant changes to the NEB Act since its implementation in 1959. Under this legislation, the NEB was given a 15-month maximum time limit for regulatory reviews. This provides the public with enhanced certainty around regulatory proceedings and NEB project reviews. The board was also given new compliance enforcement tools in the form of administrative monetary penalties, or AMPs. AMPs enable us to impose financial penalties on companies or individuals for non-compliances related to safety and the environment.

The Energy Safety and Security Act received royal assent in February. That new legislation amends the Canada Oil and Gas Operations Act and provides the board with new tools for regulating northern oil and gas activities.

The key components of that act include the following elements: $1 billion absolute liability limit in the offshore and new obligations related to financial responsibility and financial resources; improved transparency through new board authority to hold public hearings, make information public, and provide participant funding in relation to projects under the Canada Oil and Gas Operations Act; 18-month time limit for NEB review of Canada Oil and Gas Operations Act applications; authority to establish an administrative monetary penalty regime under the Canada Oil and Gas Operations Act consistent with AMPs under the National Energy Board Act; and authority for cost recovery under the Canada Oil and Gas Operations Act, which would move the board toward 100% recovery of all expenditures.

You now have before you Bill C-46, the pipeline safety act. We at the board welcome any measures that will strengthen our legislation and expand our tool kit to protect Canadians and the environment.

Should Bill C-46 receive royal assent, some of these measures include: an absolute liability regime that will cover all NEB-regulated pipelines and new financial resources requirements that will make sure companies have the ability to pay for spills; greater clarity regarding audits; enhanced enforcement powers to issue stop-work orders in the north; clarification of the board's jurisdiction over abandoned pipelines; board power to assume control of an abandoned pipeline if the company is not complying with board orders; and board powers to assume control of an incident where the governor in council determines that the company will not be able to pay or is not complying with board orders.

The NEB will work effectively and efficiently to implement any changes passed by Parliament in a timely manner.

These legislative changes come at a time when the Canadian energy industry is in the midst of a perfect storm. The conversation around energy development in Canada is working to reconcile safety and environmental protection, economic development, the rights of aboriginal people, and diverse local interests and needs. The resulting debate is complicated and provokes strong opinions.

And the board is in the eye of the storm. We are surrounded on all sides by opposing interests and are also increasingly subject to public scrutiny.

Until the summer of 2010, the board had maintained a fairly low public profile. Most Canadians had little or no idea who the NEB was. In 2006, when the board reviewed an application for the Trans Mountain Anchor Loop Project through Jasper National Park, there were eight interveners

In March 2010, the board released its Keystone XL decision to relatively little fanfare and only 29 interveners in the process.

Contrast that with today, when we have 400 interveners and over 1,300 commenters in the Trans Mountain pipeline expansion project. And we currently have close to 2,300 applications to participate in the Energy East hearing.

The National Energy Board Act stipulates that we must hear from those who are directly affected by the granting or refusing of a project application. And the public appetite to participate in energy hearings is greater than ever. So we adjust and adapt.

We have to remain flexible, so that increasing numbers of interveners can participate in our hearings in a meaningful way. But this focus on mega-projects and public participation leaves the false impression that all the board does is review applications. Nothing could be further from the truth.

As we navigate this storm, we also have a critically important responsibility to provide regulatory oversight to about 73,000 kilometres of pipeline. That is nearly enough pipe to wrap around the earth two times.

The vast majority of those pipelines are buried below ground. Canadians safely live, work, and travel over them every day, and many never even realize that those pipelines are there, but this infrastructure is aging. The majority of these pipelines were put in the ground more than 30 years ago. That is why we put so much focus on safety: on damage prevention, compliance, and enforcement activities.

In 2014, the board conducted 353 compliance activities related to public safety, security and environmental protection. That is almost one compliance activity for every day of the calendar year. These compliance activities included 230 inspections of pipelines and 6 comprehensive audits.

In 2014, the board received nearly 600 applications for pipeline and power line-related facilities, tolls and tariffs, as well as import/export authorizations.

An important part of the board's job is to review and assess project applications, and, using the evidence that is placed before it during a hearing, to determine whether a proposed project is in the Canadian public interest. However, this is only one part of our role. Our regulatory oversight spans the entire life of the project—from design to abandonment. Oil and gas pipelines under NEB jurisdiction require the board's approval before being built.

In that context, companies must file detailed project applications. When an application arrives, we assess it for factors such as safety, environmental impacts, engineering integrity, security, emergency response capability, the rights of people affected, and if applicable, the reasonableness of the proposed tolls and tariffs. Public hearings are then held in many cases.

As I already said, the public appetite to participate in energy hearings is greater than ever. We also want to hear from individuals and groups that are directly affected by a project. If a project is approved, the board sends inspectors to the construction site to ensure that the company is building the project according to the board's conditions and commitments that the company made during the application process.

After construction is complete, the board uses tools such as audits, inspections, compliance meetings, and field exercises to hold companies accountable for safe operation that protects the public, workers and the environment.

Once a pipeline is no longer needed, the NEB requires a company to submit an application for abandonment. This starts an assessment process to determine the conditions that must be met in order for the project to be safely taken out of service.

Bill C-46 would enhance the board's authority in the area of abandonment, and we welcome that. In other words, the board regulates from start to finish and holds pipeline companies responsible for the full cycle of the pipelines they operate.

There is no doubt that all Canadians are concerned about the safety of energy infrastructure and the protection of the environment. The NEB is committed to taking all available actions to protect Canadians and the environment. Conducting unauthorized activity near pipelines or otherwise failing to comply with damage prevention requirements puts the safety of people and the environment at risk.

While the NEB requires the companies it regulates to strive for zero incidents, we recognize that damage prevention is a shared responsibility among all those who operate and work near pipelines. We require pipeline companies to ensure that people know how to safely conduct activities like excavation and construction near their pipelines. We also support and promote the use of one-call systems that promote effective and timely communication between someone planning an activity near a pipeline and the pipeline company.

In addition to our damage prevention program, we have a comprehensive compliance and enforcement program to make sure companies are doing what is required. Each year the NEB conducts targeted compliance verification activities, including six comprehensive audits and at least 150 inspections of regulated companies. This is in addition to the 100-plus technical meetings and exercises conducted on an annual basis.

These tools have been effective in allowing the board to proactively detect and correct instances of non-compliance before they become issues. When companies follow our rules, which are designed to identify hazards and manage risks, pipelines are a safe and reliable way to move oil and gas.

The NEB has strict requirements companies must follow in order to operate their pipelines. These requirements touch on everything from the type of materials used to build a pipeline, to the steps that should be taken to protect people and the environment. Make no mistake—should companies fail to live up to their commitments around safety and environmental protection, the NEB does not hesitate to take strong enforcement action.

We will take every measure to protect people and the environment. We have powerful tools to keep companies on track and prevent incidents which we will use without hesitation. This could include issuing cash fines called administrative monetary penalties, lowering the amount of product a company is allowed to move through their pipeline, and shutting down a pipeline completely if necessary.

In 2012 the board took the following enforcement actions: 302 notices of non-compliance and assurances of voluntary compliance, 3 inspection officer orders, 5 safety orders, and 6 administrative monetary penalties.

While our focus is on preventing accidents from happening in the first place, should an incident occur, the NEB has an emergency management program in place and is ready to respond to an emergency situation at all times. We have working agreements with other government departments and agencies in order to coordinate responses and communicate effectively in times of crisis.

In addition, companies are required to consult with municipalities, first responders and other agencies in the development of their emergency management program. These programs must be put in place prior to operation of a pipeline and must continue throughout its life cycle.

In addition, companies are required to provide emergency management information to persons associated with emergency response, and to develop continuing education and liaison programs for relevant agencies and the public adjacent to the pipeline.

As you can see, there is a significant amount of work that is being done by our staff every day to strengthen all aspects of our pipeline oversight, whether it is through the rigorous review and testing of pipeline applications, compliance and enforcement, or developing and implementing regulatory improvements.

But as technology and the public interest evolve, so to have the NEB's regulations and the expectations of our regulated companies. Management systems in particular are critical to continual improvement in pipeline safety. At their very essence, management systems document how people are to carry out the responsibilities of their position.

In 2013, we amended the National Energy Board Onshore Pipeline Regulations to clarify management systems requirements for the purpose of protecting the public, workers and the environment. The NEB expects companies to have management systems in place for the key program areas for which companies are responsible, those being: safety, pipeline integrity, security, emergency management and environmental protection.

Amendments included a requirement for companies to have a process for internal reporting of hazards, near misses and incidents. They also included new provisions holding a company's senior leadership accountable for its management system, safety culture and the achievement of outcomes related to safety and environmental protection. One thing that has remained constant is our commitment to safety. Safety continues to be our number one priority.

This brings me to the three strategic priorities we have identified to help guide our actions moving forward. First, we are going to take action on safety. We will focus our efforts and resources on developing, refining, and communicating our actions on safety and environmental protection. Using data and trend analysis, we will continue to focus, not just on preventing incidents, but on preventing industry cultures that make incidents more likely to occur. In doing this, we will demonstrate to Canadians how we hold the companies accountable, and exactly what we are holding them accountable for.

We are leaders in regulatory excellence. We are continually improving as a regulator, by reviewing and evaluating our processes. We are committed to act and to be seen as a ''best-in-class'' regulator—and we will demonstrate this through benchmarking and performance measurement. This will also help demonstrate to Canadians that our programs are focused on the right things and achieving the right results.

Finally, we are going to engage Canadians. Our engagement with Canadians must move beyond our application processes. This means broad engagement across the whole of Canada, including a responsive focus on regional issues. It also means more information, readily accessible by any stakeholder who wants it. We feel that by being open and transparent about the work we do, we will earn Canadians' trust that we are, in fact, doing the right things on their behalf.

Another example of how we are starting to act on our strategic priorities is by directly engaging Canadians from coast to coast to coast on safety and environmental issues, including on energy infrastructure of interest to local communities. In January, our chair, Peter Watson, began an engagement initiative, setting out to listen to Canadians’ views of pipeline safety and, if necessary, adjust the NEB's practices and programs.

At the beginning of June, we will also host a pipeline safety forum in Calgary to address specific issues to improve the safety of regulated facilities. The goals of the forum will be to have an open exchange of information on technical pipeline issues, increased understanding of stakeholder concerns, and opportunities for both industry and regulators to improve safety outcomes to better protect people, property, and the environment.

The information collected from the engagement initiative and from the forum will be rolled up in a report to be released later in 2015.

Thank you once again for giving me the opportunity to speak to you today about the important work of the NEB. I provided an overview of the NEB and our legislated mandate. I highlighted recent changes to our legislation, as well as changes that are proposed.

Our long-term commitment requires that we continually review and improve the ways in which we do business. We welcome any measures that will strengthen our legislation and expand our tool kit to protect Canadians and the environment.

Should the bill receive royal assent, we will work hard to implement any changes in a timely manner.

We're happy to address any questions you may have. Merci.

[The Vice-Chair, NDP, Guy Caron]

Welcome to the committee's 52nd meeting.

We are beginning our study of Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act.

As you can see, I'm not Mr. Benoit, who, unfortunately, can't be here today, so I will be replacing him as chair.

We are pleased to have with us, today, three representatives from the National Energy Board to discuss Bill C-46. In light of the agreement that was made, members' questions may go beyond the scope of Bill C-46, but I think you were made aware of that possibility.

Now, without further ado, I'd like to welcome Jonathan Timlin, Josée Touchette and Robert Steedman.

I understand from discussions you've had with the chair and the clerk that you were given about 20 to 25 minutes for your presentation. I would invite you to start right away, before we start the rounds of questions.

[Jeff Labonté]

Sure.

The bill provides first-hand a provision that the National Energy Board could take control of an incident response and compensation of damages to any harmed parties. That provision doesn't exist in the National Energy Board Act today, and it would propose that it would be implemented based on the ability of the Governor in Council to designate a company. A designation would follow a sequence of steps, where a company might suffer an incident, and the company might not respond to the board's orders to clean up the incident or to behave in a certain way, and the board might then make a recommendation to the Minister of Natural Resources to designate the company as unresponsive. The Governor in Council would then consider designating a company as unresponsive, and then the board would be provided the authority to act.

Bill C-46 provides that the Minister of Finance may provide funds from the consolidated revenue fund to the board to pay for the cleanup and the response. In the event that damages are suffered beyond the cleanup and response, a tribunal may be established to provide adjudication and review and assessment of damages and provide compensation for parties that may be harmed. I use the word “may” in a number of choices because there are the possibilities that an incident occurs and there aren't many parties who suffer damage, in which case setting up a tribunal would be fairly extraordinary and heavy-handed and not necessary. It may be that an incident, should it occur, could affect more than one person or several parties, in which case adjudication through a tribunal would be a reasoned response.

The consolidated revenue fund reference is to the government's account, if you will, managed by the Minister of Finance, and would be exercised in that way only when a company would be designated as unresponsive or unwilling.

[Jeff Labonté]

In this particular circumstance it falls into a mix of things. My colleague from Justice might contribute to my answer more fully from a legal perspective.

From a practical perspective, it depends on the nature of what issue might come about. If a company were bankrupt and no longer existed, and its pipeline had been abandoned, it would become a situation of provincial jurisdiction, perhaps as a disturbance of an environmental nature, for example, if something had caused damage. There might be a disturbance of a different nature.

The National Energy Board at this point in time has been pursuing a fund to look at how to manage the abandonment that might occur, which may provide some protection against what you are explaining could potentially happen.

Bill C-46 provides clarity that, under the National Energy Board Act, pipeline companies will be responsible for their pipelines even after they're abandoned, up to the point at which they're removed from the ground. Should a pipeline be abandoned and left in place, the company will be responsible for it in perpetuity until the pipeline is removed, and it must give provisions to the board to ensure there's adequate and appropriate funding to accommodate that should the pipeline company cease to exist in the longer term.

It makes explicit and clear that abandoned pipelines remain under federal jurisdiction, and that companies remain responsible and liable for those pipelines.

[Jeff Labonté, Director General, Energy Safety and Security Branch, Energy Sector, Department of Natural Resources]

Thank you very much, Chair.

Thank you, committee members, for the opportunity to come to speak to you about this particular piece of legislation which is in the House and which I think has received a fair degree of good debate and discussion. We welcome the chance to hopefully address any questions and comments you might have, and if we're not able to do so today in person, we'll do so in writing if we have to afterwards.

I have a brief set of remarks that will probably take about two minutes to run through, and then there's a PowerPoint presentation. I think it's in all of the binders, and we've had extra copies distributed. I'll probably just focus on a few highlights to leave as much time as possible for comments and questions. I recognize that some of you participated in the briefing that we had earlier in the year in anticipation of today.

First of all, I'd like to welcome my colleagues and acknowledge their participation and expertise.

Through the recent introduction of the pipeline safety act, the government is taking some action to demonstrate its commitment to both the safety of Canadians and the environment. This ongoing commitment is part of the government's plan for responsible resource development, and this particular piece of legislation builds on other pieces of legislation that have been tabled in the House and several that have passed.

I will perhaps do a quick survol of where we situate ourselves with federal pipelines.

Pipelines are an area that is managed by both the provincial governments and the federal government. Canada has about 825,000 kilometres of pipelines throughout the country. The federal government has responsibility for some 72,000 to 73,000 kilometres that cross both international boundaries and provincial boundaries, which therefore make them federal jurisdiction. The regulator for the federal government is the National Energy Board.

Through those pipelines, on an annual basis some 1.3 billion barrels of oil and petroleum products are shipped between producers and warehousers, refineries and consumers. At the same time, about five trillion cubic feet of gas are piped across the country to different hubs, different distribution points, and then ultimately to consumers, both in industry and to Canadians as individuals.

The NEB pipelines have a fairly strong safety record. The government will regularly point out that 99.999% of crude oil and products arrive safely to their destination, and that's on a regular running basis over the last five-year period. While the safety record is strong, we must, of course, continue to strive to have as few and possibly zero incidents as possible to ensure that Canadians are protected and the environment is protected as well.

Bill C-46 implements a number of measures focused on world-class pipeline safety under the pillars of prevention, preparedness and response, liability and compensation. Prevention focuses on trying to ensure that incidents don't occur. Preparedness and response means ensuring that companies are ready and that Canadians are confident and assured that companies and the regulator are prepared to respond should incidents occur. Liability and compensation means ensuring that Canadians are protected from the costs and damages that might flow from an incident, should one occur.

Bill C-46 focuses on and strives to ensure that our pipeline safety system remains world-class and is consistent with Canadians' expectation for energy transportation and protection of the environment.

I'd like to take a few moments just quickly looking at the deck to illustrate a number of specific elements, and then, of course, we'll turn it over to the chair and welcome questions from committee members.

There are two aspects to our presentation. First, we would like to see amendments to the bill concerning the

National Energy Board Act as well as consequential amendments to the Canada Oil and Gas Operations Act.

To give some background, the Minister of Natural Resources is responsible for the National Energy Board Act and shares responsibility for the Canada Oil and Gas Operations Act with the Minister of Aboriginal Affairs and Northern Development, as there's a separation between north of 60 degrees and south of 60 degrees vis-à-vis energy development activities.

I will move on to slide 4, emphasizing a number of key prevention elements included in this particular bill. New sentencing provisions are in place for damages to the environment. There's an authority for the Governor in Council to implement consistent standards for pipeline monitoring and emergency response. There are amendments to damage prevention regimes to seek to have alignment and harmony with the provinces' damage prevention regimes. At the same time, there is clarification of audit and inspection powers for the National Energy Board. Those are for pipelines, and at the same time, since the board's act also provides for power lines, they extend to include power lines under their jurisdiction.

In terms of preparedness and response, slide 5, companies operating pipelines will be required under the new legislation to hold sufficient financial resources to cover any potential costs associated with an incident. Set in the act is that it would be $1 billion for major oil pipelines and regulations, at lower levels for other classes of pipelines to be developed under regulation. Companies will also be required to hold a minimum level of accessible financial resources to ensure an immediate response. This is sometimes referred to as cash on hand or cash available for a response, should it be necessary.

At the same time, the act will provide authority for the board to take control of spill response in exceptional circumstances where a company may be unwilling or unable to do so.

Finally, the act provides the NEB the authority to compel reimbursement of costs for spills incurred by governments, individuals, or communities.

In terms of liability and compensation, slide 6 in our deck, there is explicit reference in the act to the polluter pays principle. There is an inclusion of a new measure to provide no fault or absolute liability to a prescribed amount in addition to the existing unlimited liability when companies are at fault or negligent in the event of an incident. Again, the absolute liability amount is set at $1 billion commensurate with the financial responsibility requirements for major oil pipelines and will be set at a lower level for classes of pipelines to be established in regulations.

There is authority to establish a tribunal should the government ever need to authorize the NEB to take control. The tribunal will be provided as a quasi-judicial body to assess and award damages in exceptional circumstances for those who may be impacted by an event, and of course, in the end, the NEB would be provided the authority to recover said costs from the industry as a whole in an exceptional circumstance to ensure that taxpayers are not responsible for the costs.

On slide 7, I would draw attention to some additional amendments that are being made to the act for purposes of administrative efficiency, as well as transparency, including things such as: legislated timelines for Governor in Council decisions on export licences; elimination of Governor in Council approval for the name changes in pipeline certificates and transfers; and a number of things such as eliminating the mandatory retirement age for NEB members to be consistent with the Canadian charter.

We're certainly delighted to be here today and look forward to addressing your questions and comments, and certainly listening to the discussion, and would welcome that at this point, Chair.

Thank you very much, everyone, for your attention.

[The Chair, Conservative, Leon Benoit]

Good afternoon, everyone. It's good to be here today.

We're here today to start our study on the pipeline safety act, which is Bill C-46, officially called an act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act.

We had agreed to have three meetings plus the clause-by-clause consideration on this piece of legislation. Our first meeting today is with officials. Our second meeting will be with members of the National Energy Board. Our third meeting, an extended meeting, will be with witnesses from the industry as presented by our members. After that we will go to clause-by-clause.

Before I get to that, there are a couple of things that I really should deal with. The first is the budget for this study. You've all received a copy of it. The amount requested in $6,700. Of course, we only spend that if it's required.

I'd just ask the committee for their agreement to approve that budget. Is it agreed?

[The Chair, Conservative, Leon Benoit]

I will. Thank you.

Let's move ahead. We'll deal with the technical details as we go along, but let's start with the presentations of those who are here, in the order that they're listed on the orders of the day.

Before we get started, I apologize. I have one more thing I want to mention. Thursday's meeting has been cancelled. That was a meeting on the pipeline safety act. We were to have witnesses from the NEB, and they quite rightly pointed out that it would probably be more proper if they appeared after departmental officials. We have the departmental officials appearing the first meeting after the next out-week, and then we'll have the NEB on the Thursday of that same week. That was my mistake. I should have thought of that. When they brought it up, it made sense, so Thursday's meeting has been cancelled.

Let's go ahead with today's meeting, starting with Mr. Hanlon.

Go ahead, please, with a presentation of up to seven minutes.

Pipeline Safety Act

[Kelly Block, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, the opposition appears to have changed its tune. It would seem that an epiphany has occurred. It now believes what we have been saying all along, that Canada is a country blessed with natural resources and that we can grow the economy, while protecting the environment.

Bill C-46 builds on previous actions taken by our government to prevent incidents. These actions include increasing the number of annual pipeline inspections and audits conducted by the National Energy Board, as well as strengthening the board's enforcement capabilities by giving it the authority to fine pipeline operators for smaller incidents, all of which the NDP voted against.

Could the member explain why the New Democrats voted against those very important measures?

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, it is always a pleasure to rise in the House and speak on behalf of the constituents in Newton—North Delta. After spending a week in our ridings, we hear so much from our constituents. From my constituents I hear a great deal of concern with what is happening with our resource development.

Before I get into that, I want to acknowledge the work done by Kultarjit S. Thiara, the president of the Surrey-Newton Rotary Club. I was so impressed when the community raised $50,000 to build a school in the Philippines over this weekend. When we are in our ridings, it gives us so much pleasure when we go to events and people, despite all the economic challenges and being worried about their jobs, donate so generously and when local leaders are willing to play a part in making a difference around the world. I went to about 20 other events, but I will keep those for another time.

I am going to be supporting the bill at second reading so that we can send it to committee.

The bill is not perfect by any means. As a teacher, I like to give some credit when good work is done, and I believe this bill is a baby step in the right direction. I believe the regulations we have right now are just not adequate, but Bill C-46 does take a long-overdue first step toward a true polluter pay regime for pipelines in Canada. I say it is only a baby step because we know it does not go all the way. It is like going to the ocean to dip one's toes in it and then just waiting there. There is a lot more work to be done on the bill, and I can assure everyone that we will be doing the hard lifting at committee stage.

We are also very proud that our NDP leader has been a champion of polluter pay and has very practical plans to grow the economy while protecting the environment. There are those who will tell us we have to choose between the two, that it is either the environment or jobs. When I speak to the smart young people in my riding, I find that they know that is not a choice. In order to have jobs and development, we need to also make sure that we are protecting our planet and developing our resources in a sustainable way.

Over and over again, we have seen the government putting the interests of big oil companies ahead of the interests of hard-working Canadians who are struggling to make ends meet. Our middle class is feeling squeezed, and we are hearing through different studies that the quality of jobs and therefore the quality of life are being impacted.

Something else I hear in my riding is that hard-working middle-class people trust the NDP to be able to fix some of these challenges, because they know that over the decades of mismanagement and rubber-stamping by the Liberal Party and now the Conservatives' love-in with big oil companies, they have been squeezed out. Their children's future has been left out. There has not been due consideration.

We are one of the wealthiest countries in the world. We are truly blessed with not only amazing geography from coast to coast to coast but also with the richness of our resources. Once again, we absolutely have to get out of this mentality of rip-and-ship. I watch that in my province, where we see logs leaving the country on trucks, which is environmentally not that great, and then coming back as two-by-fours, which we then buy. In resource development, no matter which area we are looking at, we really need to take a look at those value-added jobs.

Once again, we need to start developing decent paying jobs for our kids and our middle class right here in Canada. I can tell members that the leader of the NDP has a very practical plan to add value to our natural resources, get away from the rip-and-ship mentality, and support family-sustaining jobs right here at home.

Let us look at what is in the bill. Often what we hear about when my colleagues across the way explain the bill is not what is actually buried in it.

There is an element of polluter pay, but what disturbs me about the bill is that it would vest all kinds of powers to the National Energy Board and the cabinet to make some of these decisions. I think that is the kind of policy-making that leads to confusion. We need to have very clear guidelines, and it should not be left up to the cabinet or cabinet ministers to decide which way it would go, and which parts would be implemented and which would not. It is very disturbing for us in the NDP.

I live in one of the most beautiful provinces. I am sure that every MP says that, and they would be absolutely right. However, we all know of British Columbia's pristine lakes and coastline. Its coastline not only provides an incredible amount of great seafood for local consumption, it is sold overseas, and it is also a great tourist attraction. We bring in billions of dollars through tourism, and we are very worried about the impact of an oil spill, be it from a pipeline or a tankard on our pristine coastline.

I have to give credit to one of the hardest-working members of Parliament in the House, the member of Parliament for Skeena—Bulkley Valley. He is our finance critic right now, but his passion and campaign to save our coast is truly inspirational. I have watched the audience, whether they are 90-year-olds or 14-year-olds, be absolutely inspired when he speaks from his heart about the importance of protecting our waterways, our beautiful coastline, and the kind of lifestyle we have out in B.C.

There is a linkage to this because as members know the northern gateway pipeline is a project that is going to be crossing over many of our key rivers. It will be going through some of our most pristine lakes, through vast territory, and will end up in the ocean through some very dangerous territory. Therefore, we are very worried. However, the linkage here is that the northern gateway is an Enbridge pipeline.

I will pause here for a moment to share with members what happened at the Kalamazoo River, in Michigan. On July 26, 2010, there was an oil spill, and 843,444 U.S. gallons of crude oil came out of a 30-inch pipeline into a prime wetland. That pipeline was owned by Enbridge. The cleanup for that spill alone, not taking account other damages or loss of non-use which has to be considered, came to $1.2 billion. However, here we would be setting a target of up to $1 billion. We can see that is inadequate, but it is without taking into consideration the non-use and all of that.

Therefore, we are very worried about any kind of leakage, whether from a pipeline or tankard into our ocean. We are absolutely committed to polluter pay, and we have to start making realistic legislation that considers the real cost of the cleanup and not leave it up to cabinet ministers or other bodies to do this at their discretion.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, I am pleased to rise in the House today to discuss Bill C-46 on behalf of my fellow constituents in Châteauguay—Saint-Constant. This is a bill that deals with issues as important as energy resources and the protection of our environment.

Bill C-46 amends the rules governing oil companies’ liability. That consists of establishing a principle under which the party responsible for an oil spill will pay up to $1 billion for the damage caused. This bill is part of a broader government review of the liability rules that apply to various aspects of oil and gas development.

Canadians are aware of the potential risks of extracting and transporting oil, and they need to know that their government is going to oversee the industry properly and also protect our environment. Canadians do not have to make a choice between economic development and environmental protection. We need to take both aspects into consideration jointly.

When it comes to projects like northern gateway, Keystone XL or energy east, it is important to make judicious decisions that promote economic development and employment in Canada, while at the same time minimizing the risks to our environment. We need a new vision when it comes to the future of our energy resources, a vision that is guided by three very simple principles.

The first is sustainability, to ensure that polluters pay the bill for cleanups associated with a spill and the pollution caused, rather than passing the bill on to the next generations.

The second is partnership, to ensure that the First Nations, the provinces and local communities genuinely benefit from resource development and to create reliable and value-added jobs here in Canada.

The third is the long-term prosperity that comes from investing the proceeds of our natural resources in modern, ecological technologies, to keep Canada on the cutting edge of energy innovation and keep energy prices affordable for all Canadians.

We are disappointed that in spite of all our calls for urgent action, the Conservatives have taken so long to introduce this bill. In 2011, the Commissioner of the Environment pointed out that the National Energy Board had been unable to solve a number of known problems and ensure adequate maintenance of pipelines. The government has still not implemented an adequate monitoring and inspection system.

Last year, Bill C-22 was also introduced. It dealt with liability relating to offshore drilling and the possibility of spills in the Arctic and Atlantic Oceans. Because of this narrow vision, the government did not conduct consultations on the liability regime applicable to rail transportation. The Conservatives did not take that issue seriously until they had to limit the political fallout or consequences from the Lac-Mégantic tragedy.

The bill we are currently considering includes absolute liability for all pipelines regulated by the National Energy Board. In other words, the companies will be liable for the costs and damage caused by a pipeline spill, regardless of fault, up to a maximum of $1 billion for high-capacity pipelines. However, in the case of fault or negligence, liability will be unlimited.

I welcome this measure. It is a good start, but that figure could be reached quickly, since the cleanup of some tragedies that have occurred in recent years has significantly exceeded the $1 billion ceiling provided by this bill.

Bill C-46 also limits the time Canadians will have to claim compensation for long-term damage to their health or the environment caused by an accident. The claim must be made within three years of when the damage occurs or six years, at most, after an oil spill. This is debatable, since it is highly probable that some damage will be discovered well after the six years provided by this bill.

The bill gives the National Energy Board the authority to order reimbursement of any cleanup costs incurred by governments, communities or individuals. It also grants the National Energy Board the authority and resources to assume control of a response to any incident, in exceptional circumstances, if a company is unable or unwilling to do so. The NEB would also have new tools for recouping cleanup costs, which could go so far as charging the entire industry.

Unfortunately, the government left some leeway here with decisions that would be left in the hands of cabinet and the National Energy Board, an agency that, on occasion, has demonstrated a lack of credibility. Instead of establishing a responsible regime, with a strict framework, the government is leaving too much leeway for politically motivated decisions, cabinet decisions and backroom agreements that would obviously not be made public between operators and the NEB. Of course, we will question the government about these discretionary measures. It is important to hold the government accountable to Canadians. We are disappointed in the scope of the bill. I hope the Conservatives will be open to the amendments that will be proposed in committee.

Given the limited scope of the bill, we are concerned that polluters will not have to bear the full cost of the damage and that Canadians will end up footing the bill. If so, that casts doubt on the true scope of this bill. What happens if there is a problem establishing fault or negligence? Will Canadians have to pay in such cases? We are talking about possibly billions of dollars. That is a lot of money, and it is not up to Canadians to pay the bills for companies that may have been negligent in their operations. It is all well and good to introduce a bill that focuses on figuring out who is liable, but we also have to be proactive and do as much as possible to prevent oil spills. This bill does not do that.

We need better regulations and increased monitoring of pipelines. In addition, we need to rebuild the robust environmental assessment process that has been dismantled by the current government over the past few years. With the huge expansion in the production and transportation of crude oil, we need enhanced safety protection, regardless of the method of transportation. To that end, we need to increase mandatory inspections, implement adequate regulations, and enforce these standards. Public safety and environmental protection must be among our top priorities.

My colleagues and I firmly believe that Canada must take steps to ensure that we are developing and transporting our resources in a safe and secure way that serves the interests of all Canadians. To that end, all pipelines need to adhere to the highest possible safety and environmental standards consistent with the principles of sustainable development. To ensure that oil companies and pipeline operators adhere to the regulations, we need to put in place robust laws and establish credible environmental assessment mechanisms.

Furthermore, given that transportation affects the provinces, municipalities and communities, we must ensure that the government consults them and establishes partnerships with them. If everyone works together, Canadians can be assured that all of these projects will be implemented and will respect the principle of sustainable development and that the approval process will be as fair as possible, in order to strengthen the accountability of everyone involved. The provinces will continue to develop their natural resources. The issue is knowing how to develop those resources sustainably, while protecting the environment and creating value-added jobs in Canada.

In closing, we will support this bill at second reading, and we ask the government to remain open to the amendments we plan to propose in committee.

[Alexandrine Latendresse, NDP, Louis-Saint-Laurent, QC]

Mr. Speaker, I am very pleased to be able to debate Bill C-46 today.

I am delighted because for once, this is a bill that has some good elements. Also, we cannot deny that oil transportation is a major issue and among those that most concern the public. People are worried and they have reason to be.

The figures given here speak for themselves and reiterate what I have heard before in many conversations. The public’s confidence in the methods of oil transportation is very low: 71% of people believe that rail transport is dangerous. After what happened again in Gogoma on the weekend, that opinion may become more entrenched.

In addition, 63% of Canadians believe that shipping oil by sea is too risky. Quebeckers are terrified at the idea that a tanker might capsize in the St. Lawrence. An incident like that would cause widespread and irreparable harm to Quebec, since the river is such a unique and fragile environment, and of such crucial importance to us all. Pipelines are seen by the public as the least dangerous method, with 47% support.

Overall, nobody is really happy. People fear the worst. They are right to be worried, if we consider that the consequences of an accident are catastrophic and irreversible. The number of barrels of oil per day that travel by pipeline is enormous. When we talk about huge figures like billions of barrels a day, it is to be expected that the idea of a spill would immediately take on incomprehensible and terrifying dimensions.

Canada is first and foremost a country with natural resources that can be exploited. This has always been the source of our well-being and our affluence. The diversity of our common resources positions Canada and its provinces on a number of economic fronts at the same time. It is also the source of our tremendous technical knowledge, built over decades in response to the needs associated with resource development, for which we are internationally renowned.

In short, we are blessed with incredible good fortune, and that fortune belongs to all Canadians. This is our real national treasure. However, while it is certainly a blessing, that treasure sometimes looks like a curse. Tragic events have happened in the past. The risks of inadequate regulation of the oil shipment methods are clear. The Lac Mégantic disaster is so serious and so clearly connected with the federal government’s complacency that I am surprised at how lax the legislative initiatives are.

In fact, the public has little faith in the government when it comes to its ability or desire to regulate the energy sector. If not the government, who should do it? The industry itself? Of course not. What we are seeing is a very serious legitimacy deficit. Canadians do not believe that the Government of Canada is going to protect them, or wants to protect them. That hurts.

I believe the people of Canada are entitled to expect that members of Parliament will make not just good decisions about pipelines, but the best possible decisions. All of us here have a duty to think about public safety, the sustainability of resource development and the resilience of the environment. Development of our natural resources that is responsible and scientific, the Conservatives’ favourite adjective, is what will guarantee our survival as an affluent society. Of course, we have to assume that everyone here wants our society to survive and does not imagine that the world is going to end next week with the second coming of the Saviour. That remains to be seen, however.

I am well aware that we must not expect too much. The government has now taken a step toward a polluter pays scheme, which is encouraging. Holding the industry accountable is essential. It comes a quarter-century late and it was not very difficult to put forward, but we will take what we can get.

Bill C-46 introduces absolute liability for all pipelines overseen by the National Energy Board. This is a good initiative and it is the reason behind our support. Absolute liability in the case of fault or negligence means that the operator will have unlimited liability.

In the case of any other incident, the operator is liable up to a maximum of $1 billion. By taking that approach, the government is clearly thinking only of physical damage and the repair costs that may be incurred. This initiative seems to be valid, but there are two points in Bill C-46 that are still vague. It is important that the public know that they might easily have to make a financial contribution in the event of a disaster.

First, if the case could not be made for negligence or fault, the government might have to absorb the costs. In addition, if the costs incurred exceed $1 billion, we will have to pay anything above that amount. In some cases, the bill adds up very quickly and can easily exceed that limit. As several of my colleagues have done already, I would also like to refer to the accident caused by Enbridge in Kalamazoo, Michigan, which has cost nearly $1.2 billion.

Second, as we suspected, environmental damage is not really part of the calculation.

In the end, the potential irreparable damage to the very fabric of our country, which is priceless, will not be worth it.

What the government is counting on can be easily explained: considering Canada's size, the government hopes that accidents will happen in the middle of nowhere, where environmental oversight has already been eliminated by budget cuts, and that the public will quickly forget contamination of the hinterland. Out of sight, out of mind.

Although this may be an ideological government, it certainly is not a sentimental one. Bill C-46 strengthens some of the powers of the National Energy Board to ensure that the transport of oil by pipeline meets certain standards and that the public is protected. However, the operator will still have a say and the bill leaves room for backroom arrangements. Ultimately, cabinet will decide whether there should be sanctions.

If the operator does not comply with the NEB orders, the board will not have the powers needed to take action, unless it is dealing with an abandoned pipeline. We will all agree that an empty pipeline is rather safe.

I would like to reassure those who thought that the Conservatives had suddenly discovered the merits of environmentalism. Bill C-46 is all about the economy. Accidents are expensive and it is unfair for the public to pay for the negligence of corporations. Naturally, we agree.

Because the “teeth” that Bill C-46 gives the National Energy Board are merely molars, if the government does not see fit to crack down on an operator, the only thing the board can do is chew on its reprimands.

The government began reviewing its liability regimes for oil and natural gas development last year. Bill C-46 is a first step that we find acceptable even though we would like the regulation to go much further. We want to protect the environment because we believe that the ecosystem is non-negotiable. Other countries do this and are more prosperous than we are.

The government refused to consider it and brought forward legislation that might not even serve the purpose if evidence of fault is lacking or if the government decides to act in favour of the operator.

Is it any surprise that public confidence is so low under the circumstances?

In addition, as we might have expected, this bill did not involve in-depth consultation with the members of Confederation or first nations. This is yet another example of the omniscience we see so regularly in the Langevin Block.

I am fascinated by the Prime Minister's telescopic vision, his effortless ability to see and understand everything across the country. That sense of direction is amazing—superhuman, even. The only thing the Prime Minister needs to complete his image is a central Asian republic.

At the end of the day, what people want is strict, guaranteed regulations. People want pipelines to be extra safe—no loopholes, no risky measures—as well as responsible, environmentally sound and sustainable management.

What Canadians want is for us to act like adults, not teenagers.

I can therefore guarantee that the best environment minister Quebec has ever had will not accept any “ifs” and “maybes” when he considers approving pipelines once he becomes prime minister of Canada.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I appreciate the opportunity to speak to a very important bill that is at the second reading stage. At the moment, this bill is very controversial, even though the NDP plans to support it at second reading.

I am going to read the title for the people who are kind enough to be listening to us on CPAC. It is the Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act. The bill is at second reading. To ensure that people are able to follow us, second reading is not the final passage of a bill. Some of us are considering supporting a bill that is extremely flawed so we can send it to committee where a host of amendments will certainly be proposed. We will see how things go in committee in order to decide whether the bill then deserves support at third reading. That is the point at which it might be enacted into law for Canada.

In 2013, 1.3 million barrels of crude oil were transported through pipelines under federal jurisdiction in Canada. That shows the importance of this subject. In Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, we are currently having to deal with the presence of the National Energy Board, because at the moment, the processes that have been initiated are hugely problematic. As the entire country now knows, there is an oil port project in my riding that is directly associated with a very large pipeline project, energy east. We are in a completely ludicrous situation in my constituency, where, on the one hand, the promoter has unilaterally decided not to clarify anything about its project before the end of March, while, on the other hand, the National Energy Board is requiring that community stakeholders decide now whether they are going to be included in the consultations in a few months. Therefore we have very competent people who are spending hundreds if not thousands of hours preparing to participate in a consultation that is probably going to be about something other than what is being presented by the promoter at this point. That makes this project a hot topic for the people I represent.

I am going to offer some explanation about the bill that is before us today. The bill includes absolute liability for all pipelines regulated by the National Energy Board. That means that the companies will be liable for costs and expenses and for damages regardless of fault, up to a maximum of $1 billion for high-capacity pipelines, that is, pipelines that transport at least 250,000 barrels of oil per day. That is a very high capacity. For a middle-class person sitting quietly in Tourville, Longueuil or Trois-Pistoles, $1 billion may seem like a large amount. Someone might say $1 billion is wonderful, and if something happens, we will be protected.

I would remind people that things are relative here. I will take Lac Mégantic as an example. People have to understand that Lac Mégantic would not have been covered by this bill. We are talking exclusively about accidents associated with pipelines. In a situation like the one in Lac Mégantic, the money that was distributed to the families of the victims as compensation totalled $200 million. That is just the money paid to the victims’ families. The cleanup of the downtown area cost $190 million. Of the 7.5 million litres of oil the train was carrying, 80% mostly leaked into the river. The cleanup is going to take years, and we do not yet know exactly how much it will cost, but it will be several hundred million dollars. Just by looking at the situation in Lac Mégantic, we realize that in relative terms, $1 billion is virtually a minimum. We have not received assurance that the amount that must be available for protection in the event of an accident is sufficient.

I will give another example, a very tough one. It is the worst example in North America at this point, and it has been cited by at least three of my colleagues in the last few hours. It is the accident in Kalamazoo, Michigan. It involves the Canadian company Enbridge and 4 million litres of heavy crude that were spilled into the Kalamazoo River and wetlands. The last time I saw the figures, the damage amounted to over $1 billion and there had been more than five years of cleanup. More than 80% of the bitumen spilled into the Kalamazoo River is still there in the environment, after over $1 billion was spent. That is another example that puts this $1 billion into perspective.

I also wonder where the $1 billion comes from. Why $1 billion?

This $1 billion looks like a vote-getting figure, if you will pardon that term. The Conservatives seem to be using something easy to understand, something that looks big. However, if they had sat some experts around the table to estimate the kind of minimum guarantee needed for an oil spill, the experts would not have come up with $1 billion. They might have come up with $1.2 billion or $1.3 billion. This $1 billion is completely arbitrary; it is a round number, easy to remember. I hope that some very direct questions will be asked during the committee meetings where the bill will be considered.

The companies’ liability would be unlimited only in the case of fault or negligence. What will happen in a case where fault is not clear or is disputed? We are talking about billionaire proponents here. If, literally, they want to hire an army of lawyers to try to prove the fault does not lie with them, how many years will it take to see the end of a court action disputing fault, with resources like that? Mr. Speaker, I think your training makes you an even better judge of that than I am. It may really be a very long time.

That runs counter to another aspect of the law that I question, which puts a limit of six years after the event on the right to seek compensation, if a person is a victim of the consequences. That does not work. In Kalamazoo, they have been cleaning up for five years, and there are still pollutants. In the years to come, people are therefore going to have to take stock again to determine whether their property and their health have ultimately been affected by that. The cleanup is not yet finished. It is not that people do not want to determine, in six years, whether they are affected or not; rather, the phenomenon is still in a state of flux. The victims are not acting in bad faith. Someone may realize only after seven or eight or nine or 10 or 12 years that they have been negatively affected by the event. Why suddenly impose a six-year limit?

The energy east project will carry 1.1 million barrels a day. That means 173 million litres every day. We all remember the damage caused by 4 million litres of crude in the Kalamazoo River. That cost over $1 billion. Now, operators want to build a pipeline that will carry 173 million litres a day, or 120,000 litres every minute. Pipelines are relatively safe at the beginning of their life cycle, but often, near the end, tragedies or other serious incidents happen more regularly. An accident like the one in Kalamazoo, where managers took some time to close the valves, must never happen. Literally millions of litres of oil spilled into the environment. Think about it: that is 173 million litres a day. The same question remains regarding the $1 billion.

There is another question I have not yet heard. Perhaps an esteemed colleague, a minister across the way, could answer this. Is the $1 billion indexed? At the rate costs grow with inflation, in five or 10 years, $1 billion will not be worth the same amount. A major accident could happen in my region over the next 40 years and we are told there will be a $1 billion limit. If an accident were to happen tomorrow morning, it might already cost more than $1 billion, and I did not see any anything about indexing or mechanisms to guarantee that this will follow the cost of living, considering the astronomical costs associated with cleaning up these kinds of accidents.

I would like to finish on a more positive note and talk a bit about one of the NDP's key principles. What distinguishes us from the current government is, first and foremost, sustainability. We believe it is crucial that polluters pay for the pollution they create, rather than passing on the cost to future generations.

I have one last example. Now that the toxic effects of mines on the environment cost billions of dollars, laws require environmental protection funds to be set aside during mining operations so that we do not end up at the end of a project with a company that maybe made less profit, or left for another country, or suddenly disappeared at the end of a project to avoid paying to clean up the mess it left behind. That kind of mechanism is missing here, and neither I nor most of my constituents find that reassuring.

[Paulina Ayala, NDP, Honoré-Mercier, QC]

Mr. Speaker, we are in the process of debating Bill C-46.

Our party will support the bill at second reading, because we want to go further. We feel this is a good step forward, but we must continue because we dream of a country that, like Sweden, Denmark and Finland, is capable of living with clean energies, which serve people well and reduce the harmful effects of pollution.

We are saying that this bill is a step forward, but a lot of proposals and amendments will be necessary in order to make it a really good bill. Bill C-46 leaves a great deal of leeway for politically motivated decisions and secret agreements between pipeline operators and the National Energy Board.

I am a member of the Standing Joint Committee on the Scrutiny of Regulations, and we can see that sometimes many things are left up to the ministers, who will end up making regulations. In some cases, they do not necessarily keep to the intent of the law. I would therefore prefer to have a bill that is clearly drafted and leaves no grey areas. Unfortunately, this is not the case with this bill. It is a little bit too general for my taste.

This bill does not necessarily include absolute liability for gas companies and other non-oil pipeline operators or for small-scale oil pipeline companies. This will also be established through future regulations or by cabinet. However, cabinet is the executive branch. Cabinet is not the legislative branch. Here again, partisan politics will be at play. It is a very sensitive area.

For us, as members of the NDP, it is important to begin by making it mandatory for companies to be liable for what they do to the environment. We are well aware that they are transporting raw materials by the means they have available to them, that is, pipelines, trains and so forth. There is always a risk. However, safety is fundamental and Canadians must be reassured. We feel that Canada must take measures to ensure that natural resources, these resources that are so dangerous, are developed and transported safely, because we must protect our constituents. Communities must be consulted and engaged in a meaningful way.

We always keep in mind what happened in Lac-Mégantic. Last weekend, we learned that there was another accident involving the transportation of oil and that a fire was caused. Fortunately, this time, no one was killed. However, it is frightening. We talk a lot about security in our country, but this is also a security issue.

If oil companies really want to get Canadians’ support, they must consider public opinion and provide information. They cannot do this by sitting back and discussing issues solely with the groups that want to make money. Canadians must be truly informed and their views must be considered in the decision-making process. Since information has not been flowing very smoothly and some has been hidden, people have begun to stand up against the pipelines. For instance, there is an article in Le Devoir that describes the municipal revolt against the energy east project. It states that, “At least 75 cities have voiced concerns about the TransCanada pipeline”. That is 75 cities in Quebec alone.

Guillaume Tremblay, mayor of Mascouche, said, “We do not want this project in our city”. In his view, there are a number of elements that point in favour of simply rejecting the pipeline that the oil company wants to build in the municipality, which is located north of Montreal.

He said that he is really concerned about protecting the artesian wells that many residents have, as well as safeguarding natural habitats. It has been said that if the oil companies cause damage, they will pay for it. However, that is not enough. It is not enough to simply repair the damage that has been done. We must consider producing sustainable energies that will eliminate people's fears. The mayors are already against the project; not all of them, but most.

Other citizens’ groups are concerned, not just the ones that are involved in the decision-making. Another article was published in Le Devoir on Tuesday, March 3, entitled “early childhood centre concerned about Enbridge project”. In this case, the centre is concerned about the reversal of the flow in line 9B, which passes through its backyard. Think about the parents that send their children to this centre. If a spill happens there, the children will be paying for it.

The director of the Gamin Gamine day care centre in Terrebonne is very concerned about the reversal of the flow in the pipeline, which will soon be sending 300,000 barrels of oil toward Montreal every day, because the pipeline passes through the centre's backyard.

People are asking us what is going to happen, and we politicians are obliged to give them real answers. We have to take this seriously. Schools are also concerned. These people fear for the safety of their children. This is a serious matter.

The Montreal metropolitan community believes that there are still unanswered questions. People do not feel as though they have been consulted and they are of the opinion that many of the answers they have received are not clear, primarily those concerning emergency plans. There is nothing about this in the bill.

Enbridge states, however, that meetings with the first responders in the municipalities concerned should be held in the next few weeks. It is as though the company is saying that it had planned to look into this later and that people should just trust it. Canadians should not be taken for puppets who can be manipulated into just about anything because they need gas for their cars. It goes beyond that.

Hydro-Québec has also sounded the alarm. It wants its concerns about the possible route of TransCanada's energy east pipeline to be heard at the National Energy Board public hearings to be held later this year. There are concerns about the proven phenomenon of corrosion.

In its letter, the crown corporation pointed out that the preliminary route proposed by the Alberta company runs along its high-voltage power lines for about 700 kilometres. Hydro-Québec is concerned that the project will limit the operation and growth of its network. However, electricity is a clean energy.

Hydro-Québec is concerned about what a pipeline leak would do to its own infrastructure. It mentions the risk of the presence of power lines, which could lead to corrosion problems for the pipeline. We really need a more in-depth study.

TransCanada acknowledges that it had similar problems with its Keystone pipeline in western Canada, after it went into service in 2010. However, the company's spokesperson, Tim Duboyce, says that the company has developed a technique called cathodic protection, which protects steel structures. That is a step forward.

Environmental groups such as Greenpeace are concerned about all these issues: “Hydro-Québec is very clear: there are risks.”

As legislators, we cannot simply settle for supporting the polluter pays principle. We need to be more ambitious than that. Radio-Canada published an article on this topic. It said:

Pipeline operators are required to report any oil spills to the Transportation Safety Board of Canada.

The most recent report states that the number of accidents has decreased, but if you look at the number of accidents in relation to the volume of oil transported per pipeline, it is clear that the number of accidents has been consistently increasing for 10 years.

I invite everyone to take a little trip with me as we take a look at European countries. Since the oil crisis in the early 1970s, Sweden has invested massively in research on alternative energy sources, and it is working. Sweden is a huge consumer of energy per capita—about 16,000 kilowatts per person per year—but its carbon emissions are comparatively smaller. The country primarily uses wind energy and hydroelectric energy.

We need to continue to dream and go further. This bill is a step in the right direction, but it is not the last step. We need to take this very seriously. We are talking about our health and the health of our children and our planet.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, I would like to make an aside at the beginning of my speech to point out that it is Quebec Intellectual Disability Week. As this will last the entire week, I hope that we are going to talk a lot about it and that there will be less prejudice against people with intellectual disabilities. I wanted to take this opportunity to mention this week here in the House.

I rise today in support of Bill C-46, an act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act at second reading.

Bill C-46 amends the statutory liability regime for federally regulated pipelines in Canada. The bill includes absolute liability for all National Energy Board regulated pipelines. Under the new law, a firm's liability for oil leaks and spills would be augmented to $1 billion for major oil pipelines to cover costs for a large-scale rupture, regardless of fault. These are pipelines that have the capacity to transport at least 250,000 barrels of oil per day. A company would continue to have unlimited liability when it was at fault or demonstrated negligence.

The National Energy Board is set to take control of oil spill cleanups. As policy makers, it is our duty to have an in-depth analysis of all of the provisions that are part of a bill and to shed light on dark corners. Although this bill contains important measures that would allow for greater liability in the event of a disaster or an oil leak, there remains a serious cause for concern, mainly due to a lack of clarity and a lack of certainty. There is a lack of clarity because if the cleanup costs surpass $1 billion dollars, Bill C-46 does not provide clear indications as to who would assume the cleanup costs where there is no proof of fault or negligence. There is lack of certainty because the implementation of many of the proposed changes would be left to the discretion of the National Energy Board or cabinet.

Although identifying those responsible for cleanup is important when polluters are to pay the bill for the pollution they caused, we must ensure at the outset that all prevention measures are meticulously developed and adequately strengthened, so that fossil fuels are transported under the best possible conditions. Our first priority should therefore be to prevent oil spills from happening. It is essential that the production and transportation of crude oil is accompanied by an improvement in safety measures, regardless of the method of transportation used.

Today, a large proportion of Canadians do not have much faith in the way in which we transport oil. Only 29% of Canadians think that rail transportation is safe. Take, for example, the Lac-Mégantic disaster or the derailment in northern Ontario this past weekend. In my riding, there are many railways and this is of concern to my constituents. A great deal of oil is transported using these rail lines and people are worried about it. Here are a few more statistics: in Canada, only 37% of Canadians think that tanker transportation is safe, and only 47% of Canadians think that pipelines are a safe way to transport oil. I do not think this is very many.

These perceptions are shaped by the growing number of accidents over the past decade. The latest Transportation Safety Board of Canada report shows that pipeline accidents have increased significantly, from 71 in 2004 to 118 in 2014. The number of accidents has gone up by 47 per year in 10 years. In 2011, the Commissioner of the Environment pointed out that the National Energy Board had not managed to fix a number of known problems or to ensure that pipelines were properly maintained. The Conservatives have still not implemented an adequate monitoring and inspection system.

To address these problems, the NDP believes that the government must introduce solid regulations, increased monitoring and stricter inspection of the infrastructure in use. We believe that rebuilding a strict environmental assessment process to repair the damage done by the Conservative government should be a top priority. We also need strict legislative provisions for environmental assessments instead of the environmental regulations that the Conservative government is constantly contravening. This process must be carried out in collaboration with communities, government organizations, the provinces and territories, and first nations, which must be consulted and involved in a meaningful way.

Bill C-46 represents significant progress towards improving the liability regime, particularly by strengthening the powers of the National Energy Board, which, if the bill is properly enforced, will protect taxpayers by applying the polluter pays principle. However, the bill remains rather vague and does not address some crucial issues.

Indeed, the bill leaves some doubts about whether taxpayers will have to bear the cost of cleanups over $1 billion when fault or negligence cannot be proven. Furthermore, too many provisions create uncertainty because their implementation will be left up to the discretion of either the National Energy Board or cabinet, not to mention that very few of the provisions in Bill C-46 are mandatory, and the application of many of them will depend on measures that the government will take.

From that perspective, Bill C-46 allows quite a bit of flexibility in terms of decisions made for political reasons and in terms of secret agreements between operators and the National Energy Board.

Many stakeholders in civil society have already expressed reservations about this bill, and the NDP shares those concerns.

For example, Ian Miron, a lawyer at Ecojustice, said that Bill C-46 is too discretionary in that its influence depends on how the NEB and cabinet decide to implement certain provisions. It is possible for some measures to be implemented for political or other reasons, which would leave Canadians without the protection and peace of mind that this bill purports to provide them.

An NDP government would give Canada a sustainable industry, enforce environmental laws, and take into account cumulative repercussions, public safety and respect for first nations in all of its decisions.

The NDP understands the need to stop excessively relying on fossil fuels. Our vision for development promotes economic growth and job creation, while ensuring social and environmental sustainability.

On this side of the House, we place particular emphasis on the development of renewable energy resources, such as solar energy, hydroelectricity, tidal energy, and biomass energy. Through this approach, we will create a significant number of well-paid jobs and make Canada a leader in the field.

The NDP has repeatedly criticized the government's lack of action and leadership on green and renewable solutions. By investing in renewable energy and energy independence, Canada will not only reduce its greenhouse gas emissions, but it will also foster innovation and create green jobs.

Canadians deserve to be represented by a government with a vision, a government that looks to the future and that wants to strike a balance between economic development and environmental protection.

The NDP promises to better manage our natural resources, invest in renewable energy and clean technologies and improve energy efficiency in order to build a more sustainable economy. Canadians know that they can count on the NDP.

Since becoming an MP, people have been telling me in their many emails and phone calls, and when I meet them going door-to-door, that the environment is a priority for them. They are concerned about what will happen to future generations. They tell me that we are heading towards a world where we are so reliant on fossil fuels that it will be difficult to change course.

I think this is a very important topic. As my colleagues have mentioned, this is a step in the right direction. I hope we will be able to improve the bill in committee. We believe in the polluter pays principle, but I showed that there are some shortcomings and we must absolutely fix them.

I hope that all parties in the House will be willing to work together, since this is very important for Canada and for our global environment.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, it is always an honour to rise and speak on behalf of the people of Timmins—James Bay, and speak on the issue of Bill C-46, the so-called pipeline safety act, the amendment to the National Energy Board Act. As I rise today, back home there is great concern in my region about the third derailment in this past month in our region. There were two tanker derailments in the small community of Gogama, one at Hornepayne. Twenty-nine cars carrying heavy crude went off the tracks. A number of them are still burning out of control in the Mattagami River right now. The Mattagami River runs from that part of northern Ontario right through the heart of the city of Timmins, through communities like Smooth Rock Falls up into the Missinaibi and the Moose rivers in James Bay. A huge drainage area of 37,000 kilometres is affected.

This heavy crude is burning in a fish habitat very close to the community of Mattagami First Nation and very close to Gogama. We need to look at these issues in terms of government policy. We saw the horrific tragedy at Lac-Mégantic this past summer and we saw the failed safety measures. We saw the promises that have been put in place allowing companies to look after themselves, that somehow Canadians would be better protected in this privatized world and that if we let corporations look after themselves without oversight, everything will be fine. Many good people in Lac-Mégantic died because of that.

If the train had derailed just a few kilometres from where it did, not into the river but into the community of Gogama, we could have had a repeat of Lac-Mégantic. For all of us across so much of Canada and across the north, our communities are built on the rail lines. Across the street from my house, the Ontario Northland carries its heavy duty sulphuric acid from the smelter in Rouyn-Noranda. In fact my street address is Mileage 104, on the railway line. We are so closely tied to the issues of safety.

I speak of that in terms of the huge economic impact the oil industry has on our country. It is a huge driver, but also we need to start addressing the growing environmental impact to make sure that there is a balance. There will be some people who say “we will not ship by rail anymore, let us get the pipelines through and once the pipelines are through, we will not have to worry anymore”. The problem is the lack of a long-term vision of the government where, as my colleague from Toronto—Danforth said, they only believe in the rip-and-ship philosophy.

There is something fundamentally, economically wrong when the vision of our national economy is to take raw bitumen out of the ground, ship it 2,000 kilometres to a port in Quebec so it can be shipped off to China or someplace else to be processed. That is an abomination. That is not an economic plan. The people who carry the risk are the people living along that pipeline because the government stripped all the environmental protection acts, stripped the Navigable Waters Act so that the need to have the shut-off valves along the rivers does not exist anymore.

We are told that somehow this is in all our interests. I see oil industry ads all over Ottawa say “It's your oil, it's our oil, let's do the right thing”. It is not our oil. It should be Canada's interest. No, it is our risk. The benefits are going to the Koch brothers in the U.S. They are going offshore. Ask any northerner at the pumps, for all the damage they suffered in the economy lately, when have they ever had a break on gas prices. We never had one.

We need to look at this. There are some good things in the bill about issues of liability. I ask people back home about the processes that are in place to protect the public. If I look at the National Energy Board, I do not feel much comfort. I guess if I were an oil lobbyist, I would feel great. If I were a big Suncor or Sunoco, I would think the National Energy Board is good. Energy east is a major project that is happening. The public has a right to participate because if we talk about moving bitumen through pipeline, there needs to be public buy-in and they have to understand what is at stake.

The National Energy Board needs to hear from the citizens about what is at stake. However, citizens do not get to write a letter to the National Energy Board. They have to get approval to write a letter in order to be able to write a letter. The National Energy Board does not accept unsolicited letters. People have to apply and then it will decide whether or not their opinion counts. That is not how to build public trust. That is not social licence. The National Energy Board will decide whether the letters will be posted or whether to outright refuse them.

Therefore, granting or refusing a project application impinges on whether or not there is a direct effect on the interests of the person, the degree of connection between the project and the person, the likelihood of severity of harm that a person is exposed to, and the frequency and duration of a person's use of an area near the project. I am trying to interpret what that means. Maybe if I live right on top of the pipeline I get to go to the hearings to say whether or not I like it. If I am like the citizens of Timmins, in the case of the Gogama derailment, if I am part of the larger population of 37,000 square kilometres who has been impacted by this present derailment and if it was a pipeline blowout, would any of those people be allowed to speak at the National Energy Board hearings?

The issue we are dealing with here with crude, with oil, are about a national vision that says that there is no point processing and upgrading in our own country where we can create value-added jobs and ensure the great gifts we have in terms of resources of oil, gas and mineral production. There is no national vision to upgrade, to make sure there is value added, so we are taking less out of the ground because we would see more in our economy. However, we are being told that somehow we should trust the pipeline agenda because the government has turned our country into a petrol state and, like all petrol states, it is corrupt. We see its attack on birdwatchers, on environmental organizations, on anyone who speaks up against its agenda.

We are supposed to believe that bitumen is just like oil, but it is not. I am looking at Bill C-46 that talks about a $1-billion liability, which was surpassed in terms of the damage that Enbridge did to the Kalamazoo River. It is still being ordered by the Environmental Protection Agency to go back and fix the damage it did to the Kalamazoo River. It may not ever be able to fix the damage it did to the Kalamazoo River because it did not have the proper oversight.

I am thinking of a pipeline running through northern Ontario like the train that ran through Gogama. If there is a blowout and it is carrying bitumen, is there enough protection in this bill to offset the billions of dollars in damage that would accrue? If this northern gateway pipeline had ever gone through and it was blowing bitumen out through the B.C. mountains, how would anyone be able to get to that? When one drives up through the mountains in B.C., sometimes there are trucks at the bottom because it was too difficult to get down to the trucks that went off the edge. How would we be able to somehow get the bitumen off those rivers? That is why President Obama rejected Keystone, contrary to the demands of the Liberal Party and Conservative Party leaders. He said it was not in America's interests to take the risk without the benefit.

Therefore, I am looking at where we need to be as an economy. Our natural resources are vital to us but there has to be social licence. It has to be done safely and with the long-term implication that if companies will be moving products like bitumen out of the ground they are doing it in a safe way. They failed with our rail. We have had too many accidents and we need accountability there. However, if we are supposed to trust that this bill would protect us on pipelines, when we see the collusion of the oil interests and the Conservative government, I do not believe them for a moment and I do not think Canadians do either.

We are interested in this bill and want to bring it to committee, but there is a bigger issue with respect to environmental accountability that has to be addressed by this nation.

[Craig Scott, NDP, Toronto—Danforth, ON]

Mr. Speaker, I am honoured to be rising to speak to Bill C-46, an act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act. We know the bill deals with the whole question of liability for pipeline spills.

My riding of Toronto—Danforth is a very strong environmental riding. The environmental consciousness of the average citizen is exceptional. Constituents are very concerned about the serious environmental risks associated with pipeline projects in Canada, including oil spills. It is also important to say they also understand that pipelines are directly tied to the facilitation of accelerated oil extraction and oil export that is at cross purposes to the urgent need to fight climate change, the single most important challenge the world faces and, indeed, the single most important challenge that we have faced for decades without acting properly on it.

Many also realize the particular risks of localized pollution of diluted bitumen once it spills in any form, whether from a tanker or from a pipeline, as the member for Saanich—Gulf Islands has been emphasizing in today's debate. My constituents have very little faith that the government is taking steps in general to ensure that these kinds of environmental concerns are thoroughly addressed. They need to know that the environment is being protected and that necessary preventive and response measures are going to be put in place.

Of course, I take these concerns seriously. When it comes to major resource projects like pipelines, the NDP believes that proper community consultation, respect for the rights and title of aboriginal peoples, and rigorous environmental assessments are the bedrock of any kind of viable sustainable development approach. This has not been the approach taken by the government, by and large, in the review, for example, of northern gateway, Kinder Morgan and Keystone XL, and in the same flawed process that was applied to Line 9 and is now being applied to Energy East.

The legislation we are debating today is, however, a step forward. Bill C-46 seeks, among other things, to ensure that some polluters will be absolutely liable for harm caused by a pipeline spill, including environmental damage, what is termed in the bill as non-use harm. The bill includes absolute liability for all National Energy Board regulated pipelines. That means companies would be liable for costs and damages, irrespective of fault, up to $1 billion for major oil pipelines, which are pipelines that ship or transport more than 250,000 barrels of oil a day. Where there is fault, including negligence, there is no cap, and that is a good feature of this bill. For those under 250,000 barrels a day, it is left to regulation. Therefore, there is lack of clarity as to what the liability cap will be for smaller operations.

It is a good start, as I have said, and that is why, of course, I will support it at second reading. From what I have heard, most of my colleagues, if not all of them, also will be. We need to send it to committee for further study and amendments, and this is exactly the kind of bill where there will be real expertise brought to bear from across the spectrum. I honestly hope the committee will have enough hearings to go into the finer details of the bill to get it right. There seems to be a cross-party consensus that it needs to be done right, by and large, and it is not the kind of bill that should be overly politicized.

We in the NDP have long been consistent in our position that companies, corporations, and not taxpayers and not citizens who call on the public treasury for other government programs, should cover the cost of pollution. The bill is long overdue as a first step toward a polluter pays regime for pipelines in Canada.

There are some other specific provisions I should briefly point out by way of being somewhat laudatory of what the government has put forward in Bill C-46. One is that aboriginal governments, termed “any Aboriginal governing body”, in the bill, are treated similarly to other governments, municipal, provincial and federal, in terms of the role they play in cleanup and being compensated for any kind of cleanup they have to do. Other powers and rights are given to them as well, and that is something.

Additional remedies, as part of the judgment that a court can give under offence provisions in the National Energy Board Act, include such creative possibilities as ordering the creation of scholarship funds for environmental studies. This is written into the bill.

Interim compensation is possible as one of the orders from the new pipeline claims tribunal, which can be called into being in cases of so-called designated companies. The system set up by the bill would have the ability to access as much of the pooled liability reserve funds as the National Energy Board would deem needed in the case of designated companies. Therefore, when a company is sharing a pooled fund, to ensure it has enough money, it is not just its share of the pooled fund that can be accessed, but the entire fund, at least on my reading.

Also, in terms of the kinds of fines that come with the offence provisions that already exist in the National Energy Board Act, there are a number of new headings under which aggravation of damages could be sparked, or what kind of extra factors would mean higher fines. One of the aggravating factors is where there is evidence that shows that the corporation allowed the spill to happen essentially as part of an economic calculus in order to save costs, in order to make more money.

All of these things are to be commended in the bill. There are, however, more than a few problems.

The first problem has been mentioned a few times, and that is setting the limit on liability in cases of so-called non-fault at $1 billion, which may not be sufficient. The member for Saanich—Gulf Islands has already indicated clearly that we know it has already cost more than $1 billion for the cleanup in the Kalamazoo River area. We also know the cleanup has not actually worked and to some extent the attempt goes on, whether a real cleanup will ever be possible given the nature of diluted bitumen.

Second, much of the bill is heavily laden with regulatory and discretionary provisions. An awful lot of power is given to the cabinet and the National Energy Board to set out detailed regulations. This includes, for example, that this new pipeline claims tribunal exists in the act in a very general way. The Governor-in-Council, however, would be given the power to make regulations on virtually everything to do with this tribunal, including in subclause 48.47(a) “prescribing the terms and conditions of appointment of its members”. There is nothing in the act—we have nothing to look at—to know what kind of tribunal this would be. Where are these members going to come from? How are they going to be appointed? How do we know this tribunal will be a fair and adequate replacement for the courts, for example, in the stream of cases that might go to it? There is actually a lot of room for manipulation of that pipeline claims tribunal by virtue of so much being left out of the act.

Other problems are more in terms of how things are left to regulation, even as the act has taken care to ensure some things cannot be regulated. For example, it appears from my reading that the Governor-in-Council cannot prescribe higher amounts than the $1 billion on a company-by-company basis. It is allowed to say yes for a certain kind of pipeline that carries much more than 250,000 barrels per day that the liability limit should be more than $1 billion. However, it cannot do that on a company-by-company basis, although it would be specifically allowed to do it on a company-by-company basis for pipelines involving under 250,000 barrels. Therefore, if there is a company that is notorious for having problems, notorious for non-compliance, notorious for being a greater risk and yet still is in the game so to speak, there seems to be a prohibition on treating that company differently. There is a kind of formal equality idea here, which is a problem.

In terms of the amount of cash on hand that a company has to keep in order to cover liability, the National Energy Board is not required to ensure that the money on hand includes enough money for any potential loss of non-use value, which is code in the bill for environmental damage relating to a public resource. This is part and parcel of a couple of features we discussed earlier in questions and answers in relation to an earlier speech. There are a couple of areas in which, although the act starts out by saying so-called “non-use value”, environmental damage is covered as one of the three major heads of damage that the bill's liability provisions are meant to go to, but there are other provisions in the act that seem to claw that back.

In conclusion, this is a good start for sure, but at the same time it is a bill that needs close scrutiny in committee. It is the kind of scrutiny that will be very easy to understand in terms of what is necessary to improve the bill. I hope all parties will gather together to do that.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I thank my colleague for his question.

The $1 billion cap is really a problem because there is the possibility, and even the probability, of pipeline disasters where the costs would exceed $1 billion. For example, there was the Kalamazoo River disaster in Michigan caused by Enbridge. More than four years later, the river is still polluted.

Dilbit spills, as far as we know, cannot be cleaned up, at any cost, and the attempts so far to clean up in Kalamazoo have exceeded the $1 billion cap set out in Bill C-46. That means that whatever is left over in terms of cost within Canada would be absorbed by the Canadian government, Canadian taxpayers.

I know that Conservative members have pointed out that the Kalamazoo, Michigan spill occurred in another country, but it was still caused by a major Canadian company.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, speaking to Bill C-46 relating to pipeline safety, I thank my colleague in the Green Party, the member for Thunder Bay—Superior North.

There have been a lot of advances in the technology, particularly for double-walled pipelines. None of the current pipelines being proposed across Canada are double-walled. There is no question that if there are two walls with sensors between each of the two walls in a pipeline and sensors to detect leaks, that it is far more likely to operate a system where leaks are less frequent. It would be a significant improvement on the safety measures for the currently proposed pipeline.

What I want to stress, as I did in my speech, is that the Green Party opposes any of the currently proposed pipelines, whether they are heading west or east or south or potentially north, any pipeline determined to deliver raw bitumen to tidewater, to ship overseas, carrying the very dangerous mixture, the very environmentally damaging mixture of bitumen mixed with dilbit. That is something we would oppose.

The House resumed consideration of the motion that Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, be read the second time and referred to a committee.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, I would also like to wish you a very happy retirement. We have all appreciated your time in this House.

I have a lot of worries and questions as I enter this debate on the bill. The pipeline safety bill is a contemporary issue that links transportation and safety.

In recent years, a number of serious incidents all over North America have repeatedly brought this issue to the forefront of many citizens' concerns, including the people of my riding, Charlesbourg—Haute-Saint-Charles. For example, many of my constituents have said they are worried about the oil terminal proposed for the port of Cacouna. Pipeline safety and security are under close watch by the Canadian people.

Moreover, this is a crosscutting debate that affects several levels of government, such as municipalities, provinces, territories and other social groups and communities, including first nations.

As I speak today, I hope the government will listen to my fears, take note of my questions so it can answer them, and show its good faith and its openness to dialogue and to the amendments we will be proposing later.

I want to tell the House about three main aspects of this bill: the importance of favouring prevention over reaction; the cap of $1 billion on the polluter pays principle applying to private companies' spills; and the future of our energy resources.

I have a lot to say about the importance of favouring prevention over reaction. After a decade in power, the Conservatives are looking tired, or maybe even lazy. They are tired of having to meet the needs of the population and the middle class and tired of facing criticism. Their masks are beginning to slip, and we can see what lies behind.

The Prime Minister's stubbornness has caused considerable damage to our environment and our economy. Why did he not seize the opportunity afforded by this legislation to be proactive? The Conservatives always seem to be in reaction mode, as if they have to wait for the very worst, for things to hit rock bottom, before they will take action. It should not be that way. Canadians expect better.

There is a total lack of leadership when it comes to pipeline regulation in Canada. However, the real question we need to ask ourselves is this: is that because of laziness or is it because it is in the Conservatives' interest to help oil companies? The statistics, data and testimony about the effects of spills are compelling.

The Conservatives are dragging their heels on this. Pipeline incidents have been happening for a long time now. Maybe they should stop by the Transportation Safety Board of Canada's website a little more often. The website posts monthly statistics on pipeline incidents, and there are incidents every month.

The Conservatives also introduced disturbing new standards for reporting incidents. This is what a Radio-Canada article had to say:

Until July 2014, any spill, no matter how small, had to be reported to the TSB. On July 1, the federal body harmonized its regulations with those of the National Energy Board, the NEB. From now on, only spills of 1.5 cubic metres or more have to be reported.

That means that pipeline-related incidents need to be reported only if they are in excess of 1.5 cubic metres. Our government agencies do not record spills that are smaller than that.

Am I the only one who finds that disturbing? The Conservatives have kept us waiting quite a while when it comes to figuring out who is liable for oil spills resulting from broken pipelines.

I would also like to take this opportunity to emphasize the dire need for more inspections and more monitoring, as well as measures to prevent oil spills. We cannot allow this government's lack of leadership to endanger communities, infrastructure, wildlife and plants.

It is also important to talk about the polluter pays concept.

The NDP has been defending this principle for quite some time. Since the Conservatives are stuck working with us, our ideas seem to have inspired them. Still, it took a tragedy for them to act.

The Lac-Mégantic tragedy served as a lesson for the Conservatives. We cannot allow companies to operate on Canadian soil if they cannot respond appropriately in the event of fault or negligence. However, we must realize that it does not take long to spend $1 billion in the event of a spill. Consider the costs associated with decontamination, compensation, damage to infrastructure, and so on.

A number of experts shared their concerns regarding this $1 billion limit, indicating for instance that a spill in an urban setting could easily cost $5 billion or $10 billion. We have to make sure that polluters pay for the pollution they create, rather than pass the cost on to future generations, namely, our children and grandchildren.

Ian Miron, a lawyer with Ecojustice, has said that no liability regime can truly be considered a polluter pays regime unless and until polluters are made absolutely liable for the full costs of environmental harm.

As for the cap, it will certainly be the taxpayers who end up paying cleanup costs over $1 billion when fault or negligence cannot be proven.

We admit that Bill C-46 does make some important improvements in the liability regime for pipelines in Canada. However, why should the taxpayers have to pay the bill if there is a spill or some other accident?

I am also worried that the bill does not include absolute liability for gas companies and other operators of non-oil pipelines and small oil pipeline companies. Why not? The Conservatives want to do this later, through regulation or a cabinet decision. Why not do it now, while we are having an open, transparent, public debate?

We know that the government likes to work behind closed doors. Too many aspects of this bill are left to the discretion of the National Energy Board and the cabinet. The Conservatives seem to be leaving a lot of leeway for politically motivated decisions and secret agreements between the operators and the National Energy Board, a regulatory body that lacks credibility regarding pipelines.

That is why we are not certain this bill goes far enough to protect the safety of all Canadians.

Finally, with regard to the future of our energy resources, the NDP has a vision of long-term prosperity. The Conservatives are trying to make people believe that a New Democratic government would not be good for the economy, but that is completely wrong.

Canadians have been told for too long that they must choose between the economy and the environment. That is a false choice. We propose a different course that will favour economic growth and protect the environment.

I would like to say something about something that is very close to my heart, and that is the principle of sustainable development. When we talk about sustainable development, we are talking about social licence, environmental protection and economics. If more attention had been paid to social licence, there would not have been so many failed pipeline projects. No one is making the effort to consult people and make sure that Canadians are safe.

[François Pilon, NDP, Laval—Les Îles, QC]

Mr. Speaker, I am pleased to rise and speak today to a bill that addresses the concerns of many of my constituents in Laval—Les Îles, Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act. Although this bill is a first step toward a true polluter pays regime for Canadian oil companies—which is what the NDP wants—this is something the government should have done a long time ago.

The bill also amends the statutory liability regime for federally regulated pipelines in Canada. Bill C-46 includes absolute liability for all pipelines regulated by the National Energy Board. That means that oil companies will be liable for costs and damage, irrespective of fault, up to $1 billion for major pipelines, that is, pipelines with the capacity to transport at least 250,000 barrels of oil per day. That is definitely an improvement over existing laws. However, there are significant improvements to be made to this bill and grey areas that we feel need to be clarified, as is always the case with this government.

First of all, the bill before us does not include absolute liability, which I mentioned earlier, for natural gas companies and other operators of non-oil pipelines or for small oil pipeline companies. Under this bill, that will be determined by future regulations or by cabinet.

I am honoured to be a member of the Standing Joint Committee for the Scrutiny of Regulations. My colleagues on the committee, including the members for Honoré-Mercier and Beauharnois—Salaberry, would be able to talk about how extremely slowly this government, like the Liberal governments before it, deals with certain regulations. The committee regularly scrutinizes regulations from 1980 and 1990. Believe it or not, we recently dealt with a regulation that has been pending since 1976. I am therefore very suspicious of this government's ability to manage a matter of such great importance and to act efficiently and quickly when it comes to regulations.

The Conservative government has a reputation for being slow to respond to urgent situations, unless they are politically advantageous and can be used to appease its political base, as we have seen many times, including with Bill C-2 and more recently with Bill C-51. Since the Conservative base does not consider defending the environment to be sexy, this government has taken years to act—and it has not done nearly enough, if you ask us—in order to solve the problem of liability in the event of an oil spill if a pipeline breaks.

Ian Miron, a lawyer with Ecojustice, sees the $1 billion liability limit as insufficient. According to him, no liability regime can truly be considered a polluter pays regime unless and until polluters are made absolutely liable for the full costs of environmental harm. While the $1 billion limit may be considered an important first step for some companies, just look at what happened in the case of the Kalamazoo River spill in Michigan. Cleanup costs can quickly add up to $1 billion in the case of a major spill, and that does not even include compensation for damage.

The bill for the Enbridge spill in the Kalamazoo river is $1.2 billion. That does not include any damages or losses. In that type of case, we realize that the liability limit set at $1 billion is hardly enough and that the taxpayer will likely have to cover the rest of the bill yet again.

It is therefore quite understandable why so many people from Laval in my riding and my colleagues in the region are so concerned about Enbridge wanting to go through the area. The consultation process is flawed and does not include any consultation or fulsome discussion with the public and various stakeholders. There is just as much concern over the idea that in the event of a spill, the companies' liability is limited.

I already hear my colleagues opposite saying that we are anti-oil and anti-pipeline. That is pure rhetoric. The NDP wants responsible and sustainable development. There is no doubt that the natural resources we have in Canada are a real boon.

The energy sector is an essential driver of our economy. However, our vision for enhancing these resources and creating wealth and prosperity must not come at the expense of the social and environmental sustainability of our economy. For far too long, the Liberals and the Conservatives have been telling Canadians that they must choose between the environment and the economy. That is not true. They do not have to choose.

A new vision is needed for the future of our energy resources. The NDP has such a vision, and it is based on three key principles. The first is sustainability. We must ensure that polluters pay for the pollution they create instead of leaving those financial and environmental costs to future generations.

The second is partnership. We must ensure that our communities, provinces and first nations all benefit from resource development and that we create value-added jobs for the middle class here in Canada.

The third is long-term prosperity. We need real long-term prosperity, not just meaningless words from the Conservatives. We need prosperity to leverage 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.

Bill C-46 is a step in the right direction when it comes to companies' financial liability. It is important to note that the bill also has some serious shortcomings, which I mentioned earlier and which we truly hope that the government will consider and fix in committee, in the spirit of collegiality. One particular shortcoming is the exclusion of gas companies from the absolute liability process. These companies are absolved in the current version of the bill.

However, it is even more important that in the future—at third reading, we hope—the bill include provisions that are nowhere to be found in this version of the bill. This includes, for example, the need for oil and gas companies to hold extensive consultations with communities, like my own community of Laval. This would ensure that the public can have its say and that the company that wants to put a pipeline through a particular area is accountable to the public in the region with respect to the security of the facilities and environmental standards.

Unfortunately, under this government, the environmental assessment process has been literally gutted, as have so many other environmental regulations since 2011. We are still holding out hope that the Conservatives will finally listen to reason and that they will listen to the people who have concerns, as we are doing in the NDP.

In conclusion, the bill before us today is an extremely important one. It is crucial for all of us, no matter the party, to do things the right way. Over the past four years, this government has rushed vitally important bills through the House, without meaningful debate and without being open to amendments that would improve bills or even address potential flaws.

Unfortunately, Bill C-51 is very representative of this reality. Therefore, I hope that Bill C-46 will mark a new way of doing things for this government, because as parliamentarians we must work in the interest of those who elected us, not in the interest of those who contribute to the Conservatives' campaign fund.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is a pleasure to speak to Bill C-46, the pipeline safety act.

As I pointed out in my question, Canadians have a reasonable and high expectation that industry will ensure that our pipelines are safe and secure, not only today but well into the future. The Liberal Party is committed to ensuring that this is the case. If at all possible, it would be wonderful to say that we have a 100% safety and security record. We need to at least set that bar very high.

In her response, the member for Calgary Centre made reference to Algeria. We do not need to compare Canada to Algeria. We have our own standards and expectations. I hope the government, in going to committee, is not going to take the approach that because we have a 99.999% record there is no room for improvement. There is room for improvement. The government has recognized this, at least in part, by bringing forward the legislation. Hopefully, if amendments come forward through the committee process that would improve the safety of our pipelines, it will listen and respond accordingly. That is an important aspect as we get ready to go to committee. As the Liberal Party critic has clearly indicated, the Liberal Party will support the bill going to committee.

Bill C-46 does a number of significant things. The most important is that it enshrines the polluter pays principle. If we were to canvas, I think we would find that there is virtually unanimous support for that principle. It is something that is long overdue, and it is great to see it being incorporated in Bill C-46.

Bill C-46 deals with a few more issues I would like to quickly point out. It would better enable the National Energy Board to provide direction on using the best technologies available for building and operating pipelines. The NEB would also have a role in aligning federal and provincial pipeline safety.

We often hear about the 70,000 km plus of pipelines the federal government is, in essence, always watching over indirectly. I would suggest that in some areas, it is doing it more directly.

There are also other pipelines out there, and there needs to be coordination with our provincial counterparts. Many, including me, would suggest that it should go beyond that to include first nations and others.

Bill C-46 would give the National Energy Board the authority to take control of an incident if deemed necessary. I think most people would have anticipated that this would have been the case. The bill provides more clarity in that whole area.

The bill would provide for unlimited liability when at-fault or negligent actions are taken. There would be an expectation that the NEB would ensure that the companies responsible would actually have the funds necessary, which would lead to insurance contracts and so forth.

The bill also deals with an important point on which there has not been much debate, and that is the area of abandoned pipelines. There are, in fact, some abandoned pipelines, and the bill deals with that issue.

It is one thing to talk about pipeline development, and I will spend a bit of time on that, and pipelines that are fully commissioned and bringing product to market. However, there are, at times, decommissioned pipelines we need to spend some time, energy, and resources on to ensure that the environment where those decommissioned pipelines are is protected.

There are reasons to believe the legislation, which will ultimately pass through committee, will be of benefit, both to our environment and to the industry as a whole.

My understanding is that even industry stakeholders, in particular companies, are at the very least understanding of why the legislation is here today. If they have any understanding of public opinion and want to address the high standards that have been established by Canadians, they will be supportive of the legislation. There will be some areas of concern, but at this point I believe there is substantial support for the bill going to committee.

There is a great deal of need to ensure we get this right. Over the last number of years, the Prime Minister has invested a great deal of his political capital on one issue at great cost: the development and exportation of oil. It has cost tens of thousands of jobs in other sectors. He has made Canada more dependent on the price of oil, to the degree that the government indefinitely put off presenting its budget, which is somewhat bizarre.

The Prime Minister's inability to deal with the needs of future exportation of oil, whether it is to other provincial jurisdictions or to the United States, and his failure to work in consultation to develop pipelines that will be in the long-term interest of Canada will cost hundreds, if not billions, of dollars in the future. This means good quality jobs will be lost because of the incompetence of the Prime Minister on the file. We all need to be somewhat concerned about that.

On the one hand, we have the inability within the Conservative Party to get the job done. On the other hand, the New Democrats talk about pipeline safety, which means no pipeline development or just no real interest, from my point of view. We saw that in part when the leader of the official opposition went to the United States to tell Americans to say no to the Keystone pipeline. In the Prairies we understand how anti-west the leader of the official opposition can be at times.

With the development of our natural resources, the economic opportunities and how that improves the quality of life for all Canadians, it is to the benefit of the House to get this right. We in the Liberal Party recognize there are economic opportunities, but there are also environmental responsibilities. We believe we are in a position to say to Canadians that we understand the issue, unlike the approaches of the current government and the New Democrats.

It is the attitude of working with our counterparts, understanding the needs of industry, understanding the needs of first nations and those of other stakeholders, and our environment. In the right situation, working in consultation, it can be done. The alternative, as others have said, is this. If we do not do what is necessary, and we want to at least attempt to meet the markets, we would have phenomenal percentage increases in rail line and semi-truck transportation of oil and gas, which is no safer than our pipelines.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Mr. Speaker, I am thankful for the opportunity to speak to what is in many ways groundbreaking legislation, because today we are setting a gold standard. This is a gold standard of environmental protection in the energy business, and that is something all Canadians should be proud of.

The measures we are introducing in Bill C-46 would have a positive impact on everything, from international energy markets to setting technical standards to fostering continued public confidence in Canada's world-class pipeline safety system. Yes, it would impose some hardship on energy companies—something we are cognizant of, particularly in the low oil price environment we are living in right now—but it would reap rewards in public trust, because the public needs to understand that in the unlikely event that there was need for a cleanup, taxpayers would not be left paying the bill. That is something this legislation would do.

As the minister has said many times, we cannot deliver our vast energy resources to global markets if we do not first garner public support in our own backyard. I want Canadians to know and spread the word to their neighbours, friends, co-workers, and relatives—and this is important—that Canada ranks in the top four countries in the world in environmental standards around our energy industry. We are number one in many areas, and this is something that we need to know and should be proud of. Bill C-46, the pipeline safety act, would add another gold standard to our environmental protection record in this area.

I want to talk now about supply and demand.

As Canadians, we understand the importance of the oil and gas sector. Certainly in my riding of Calgary Centre, that is what people live and breathe. All of us across Canada know how essential it is to have such things as natural gas delivered to our homes to light our furnaces and heat our houses when we have the brutal weather we have had in areas of Canada recently.

We also know that we need gas when we go to local service stations when we are taking our daughters to ballet or baseball or our sons to hockey. We understand that somebody, somewhere, will have to fuel the planes to fly us to see our loved ones living three provinces or three time zones away. All of us are consumers of this great resource.

The pipeline safety act was designed to address both our need and our desire for energy to be delivered safely to our communities and beyond. Every single one of us in this country utilizes this resource, and to pretend otherwise is simply not accurate. The bill also recognizes that Canadians inherently know that the demand for energy at home and abroad is a fact of modern life. In fact, energy is essential to move people out of poverty.

We have to develop our energy resources with a strong, world-class environmental safety system. According to the International Energy Agency, the world will need 37% more energy in 2040 than it consumes today, and that is going to include some of our resource.

Canadian pipelines currently are moving about three million barrels of oil every day. If we were to turn off all those pipelines, we would be adding 15,000 tanker trucks to our roads every day or putting another 4,200 railcars on the rails every day just to meet the current demand. Of course, these other modes of transportation go right through towns and cities and consume more energy, which in turn increases our greenhouse gas emissions.

Simply put, pipelines offer a very clean and efficient way to deliver the energy that all of us need every day. In Canada, they represent the safest way to transport oil and gas. As the Minister of Natural Resources has also said, Canada boasts one of the most enviable safety records in the world when it comes to transporting oil, gas, and petroleum products by pipeline. I thought it was interesting that in his speech, the member opposite was talking about an oil spill that did not occur in Canada, where we have among the safest pipelines in the world.

Between 2008 and 2013, for example, 99.999% of the oil and gas products transported through federally regulated pipelines arrived safely. Pipelines are clearly the way to go. The only question is how we keep building on our world-class safety system, and the pipeline safety act is our answer. We want to create the safest energy transportation system in the world. That might sound overly ambitious to some people, but we know that with political will and Canadian engineering, we can help make it happen.

The legislation before us will get us there by strengthening pipeline safety. It has three key pillars: first, incident prevention; second, preparedness and response; and third, liability and compensation.

Looking at prevention, we have committed to responsible resource development in Canada. We are delivering it. That demands that we take every possible measure and precaution to prevent incidents from even occurring. That is why we are proposing amendments to the National Energy Board Act that would build on other recent improvements, such as increasing the number of inspections and audits conducted every year and giving the National Energy Board the authority to levee penalties for non-compliance. Why? It is because we want to further improve the transparency and operation of the NEB under its enabling legislation.

Prevention starts even before that. It starts with the design and the construction of pipelines. In addition to this new legislation, the government will seek guidance from the NEB on the use of the best available technologies. Canada is really at the front end of many of these technologies. They are very exciting. They are being used in pipeline projects. They include materials, construction methods, and emergency response techniques, one of which is a really cool SmartBall. It rolls through a pipeline and can detect the slightest little change in pressure or a hiss to detect a pipeline problem almost before it occurs. These are really exciting developments.

On preparedness and response, the bill would ensure a robust response in the very unlikely event of an incident. It would require companies operating pipelines to have a minimum level of financial resources. It would not be just insurance. Pipeline operators would be required to keep a portion of that money, $100 million, readily available for rapid response if an incident should occur.

On liability and compensation, the third pillar, the bill would enshrine the polluter pays principle. We believe that polluters, not Canadian taxpayers, should be financially responsible for any cleanup costs. This would also give our companies skin in the game. They would know that in the unlikely event that they had a leak or spill, they would be paying the bill. That would give them even more incentive to use the best environmental safety practices they could find and would give the public confidence that they would not be picking up the tab.

We are proposing absolute liability, which is something no other country in the world has. Truly, this is a gold standard. The no-fault liability would mean that companies would automatically be responsible for damages. They would not have to wait to see who was at fault. It would be $1 billion for major oil companies, regardless of who caused the incident. It would require companies that operate pipelines to have matching financial resources to deal with any incidents.

Finally, the bill would allow, if necessary, the government to pursue operators for environmental damages over the entire life cycle of a pipeline, including abandonment. This ability would be truly world leading.

In conclusion, when it comes to moving oil and gas, government and industry must strive for the highest safety standards possible. We are aiming for a world-class standard that all Canadians can trust, the gold standard.

I am supporting the pipeline safety act. It will help us set that gold standard for safety. The Liberals and the NDP often vote against increased pipeline safety measures. They certainly have in the past. I am hoping for their support on this particular bill. It will make Canada number one in the world.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I am pleased to rise today on this important bill to have the polluter pays principle apply to some of the government's legislation, which has been long sought after in this chamber. Therefore, Bill C-46, an act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, will be receiving our support to send it to committee.

There are some issues with this bill. It is lacklustre in some components, whether that be with respect to the clarity of the National Energy Board's oversight or liability. We have talked a bit about that today. However, the significant Achilles heel of the bill is the determination of the cleanup costs for companies that reach the $1-billion liability limit. That might sound like a lot of money on the surface, but in reality we have had spills that have cost more than $1 billion in terms of cleanup. I will speak to one in my area. Although it is an American example, our energy is integrated and it happened in a river that is connected to the Great Lakes tributary system. It affected the largest clean water supply. This is important not only with respect to the environment and water consumption for individuals but also to the general economy. We have ships that service all of the Great Lakes right out to the oceans, as well as tourism worth hundreds of millions of dollars with respect to the ecosystem. To give some perspective, over 800,000 U.S. gallons of oil escaped into the Kalamazoo River from a 30-inch pipeline. It got into the water system and required $1.2 billion U.S. to clean up. Given the value of our dollar today, that would be much higher than it was at the time. The reality is that it affected us.

To give those who are listening to the debate today an idea, a lot of effort and public money was spent to clean up the Great Lakes and other ecosystems. Therefore, it is not just about the damage and the problems that are caused at the moment a spill occurs, it is also about undermining all of the public investment that has been done to try to restore some of our ecosystems because we have treated them poorly so many times.

Most recently, we were able to celebrate the release of the sturgeon back into the Kalamazoo area, which is important to both the ecosystem and tourism sectors. A lot of hard work has been done to improve the terms and conditions by which we can use those and we have turned a negative into an asset. Therefore, when a spill takes place we cannot think of it in the context of that one moment, that one spill and that one time. When we look at the spills we have had across the country, there have also been legacy costs due to other related effects on the community, with respect to loss of use of water resources or land. Canadians have been quite clear and have consistently shown poll after poll that they do not have any confidence with respect to companies being able to clean up and contain oil spills affecting land and, in particular, water. A few years back, we saw some more modest spills that had shown up unexpectedly in the Detroit River when people found oil washing up on the shore. The company had no idea there was a spill.

Ironically, at one point in time if companies were fined for an oil spill or received a corporate fine or penalty, they could claim it as a tax deduction. I am proud that in 2004 the New Democrats fought to get that law changed so that they could no longer write off the costs of polluting. Not only did the polluter not pay, it was rewarded because it was a business-related expense at the time. That can no longer happen and is a step forward.

However, we are still left with some problems related to this bill. As I have noted, Canadians do not have confidence in the cleanup. Part of the problem that we have with the bill is that the National Energy Board's ability to act and investigate would not be sufficient.

I would point to the poor track record of the Conservative government. It is important that we did some see some action related to the horrible incident in Lac-Mégantic, but for some time now, we have been warning about some of the problems that the government has in relation to self-regulation.

I was on the transport committee when we tabled a report on rail safety in this chamber. I cannot say what was done when we were in camera, but I can say that the report did not have a dissenting opinion put with it. That was odd, because there were things that were clearly missing in the report that we tabled. A report prior to that talked about the safety management systems and how there was a culture of fear at CN and CP.

With a self-regulating body, are people going to feel strong enough and confident enough to go forward and challenge some of the industries that clearly have the ear of the Conservative government? This is a concern that I have with the National Energy Board. As we move to the self-regulation aspect, having seen cuts to the regulatory oversight, is that going to be enough? I do not think that it will be. That is what causes me major concern about this bill. It is the liability and accountability.

I would like to conclude with this. As I mentioned, in terms of their confidence in cleaning up oil spills, only 27% of Canadians are confident that the Government of Canada is able to respond effectively to a significant oil spill on water. That is significant. That lack of confidence from Canadians would be felt from coast to coast to coast and on our inland operations where we get our freshwater supplies.

We will move this bill to committee, but we will be asking significant questions to try to figure out why there is a $1 billion cap and why taxpayers should be on the hook for negligence.

[Kelly Block, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, I am very pleased to stand in my place and speak to this important piece of legislation.

The pipeline safety act is another example of our government's commitment to protecting both Canada's economy and the environment. Our government knows that the two do go hand in hand.

As Canadians know, our government is dedicated to creating jobs, economic growth, and long-term prosperity for everyone across this great land. That is our first priority. However, we also recognize that jobs and economic growth cannot come at any price. As the Minister of Natural Resources has said repeatedly, no project will proceed under our plan for responsible resource development unless it has been proven safe for Canadians and for the environment.

In fact, we have spelled it out very clearly as a commitment in our Speech from the Throne:

Our government believes, and Canadians expect, that resource development must respect the environment. Our Government's plan for responsible resource development includes measures to protect against spills and other risks to the environment and local communities.

The pipeline safety act is one more example of our government's promise made, promise kept approach to governing. I would like to read two more sections from our throne speech, because they outline the necessary action we promised to take on pipeline safety:

Our government will: Enshrine the polluter-pay system into law; Set higher safety standards for companies operating offshore as well as those operating pipelines, and increase the required liability insurance.

With Bill C-46, we are delivering, just as we promised and just as Canadians would expect from their government. I am truly proud of that. We are doing exactly what we said we would do.

Specifically, this new legislation for pipeline safety focuses on prevention, on preparedness and response, as well as on liability and compensation.

As the Minister of Natural Resources said when he launched this debate, the amendments in this act send a clear message. The Government of Canada will ensure that Canada's pipeline safety system is world class, that first nations are involved in pipeline safety operations, and that taxpayers are protected. These are fundamental responsibilities for a federal government, and we are fulfilling our obligations fully and directly.

I am also pleased to see that members opposite have agreed that Bill C-46 is another important step in our efforts to ensure that Canada is a world leader in pipeline safety. As the member for Hamilton Mountain said, “I would be less than honest if I did not acknowledge that the amendments appear to be a step in the right direction”.

Moreover, the member for Skeena—Bulkley Valley said, “This may sound strange, but I have looked forward to some version of such a bill for many years”. It is strange, since New Democrats are completely opposed to all form of resource development. However, we appreciate that they recognize an excellent piece of legislation when they see one.

Just as important, it appears that all sides of this chamber have finally acknowledged that Canada's energy sector is the key engine driving our economy. The oil and gas industry alone contributes almost 8% to our gross domestic product. It employs 360,000 Canadians directly and indirectly, and it generates more than $23 billion annually in government revenue to help pay for social programs like health care, education, and infrastructure.

At the same time, pipelines are crucial to the safe transport of oil and gas across our country and to markets beyond our borders. As we have heard many times during this debate, Canada has an enviable record on pipeline safety. Of all the oil and product transported through about 73,000 kilometres of federally regulated pipelines in Canada, 99.999% of it has arrived safely.

My colleague from Nanaimo—Alberni captured this point very well with a reference to his home province of British Columbia. He said:

We had a pipeline going through Burnaby for more than 60 years, and most people in Burnaby did not even know it...

As my colleague for Stormont—Dundas—South Glengarry said:

...most homes in Canada are heated with natural gas, all of which is delivered by pipelines, but Canadians do not need to give it a second thought because it all happens so safety and seamlessly every single day.

Canada has a reputation for building and operating pipelines safely. This is one of our country's many strengths, and our government is determined to keep improving upon this record. That is why we have already implemented other important measures. For example, we gave the National Energy Board new authority to levy administrative monetary penalties and additional resources to increase its inspections and audits each year. As a result, oil and gas pipeline inspections have increased by 50% a year and comprehensive audits of pipelines have doubled.

The pipeline safety act would move those yardsticks even further. I would like to highlight a few examples. At the top of the list is the proposal to enshrine in law the polluter pays principle, to ensure that polluters would be held financially responsible for any costs and damages they cause. The legislation would also introduce absolute no-fault liability and require companies operating pipelines to hold minimum financial resources for incident response. For companies operating major oil pipelines the requirement would be set at $1 billion. As well, the pipeline safety act would, in exceptional circumstances, provide the NEB with the authority and resources to take control of incident response and cleanup when a company is unable to do so. Also, the new legislation would expand NEB authority to recover costs from industry for that backstop.

Furthermore, we are working with aboriginal communities and industry to enhance the participation of aboriginal peoples in all aspects of pipeline operations, from planning and monitoring to responding to incidents. This would ensure that aboriginal peoples participate fully in related employment and business opportunities.

These are all right and good measures. They are perfect examples of how our government is leading the way in protecting the well-being of Canadians, our communities and the environment. They also remind us of how safety standards can and should be enhanced as technologies evolve and regulations are improved.

The pipeline safety act delivers on all of these fronts. It ensures that Canadians keep setting the bar when it comes to the safe transport of oil and gas. I urge all members to support this valuable piece of legislation.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, as always, it is an honour to rise in the House to speak on behalf of my constituents from Surrey North.

Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act would amend the statutory liability regime for federally regulated pipelines in Canada. The bill includes absolute liability for all National Energy Board regulated pipelines, which means companies would be liable for costs and damages, irrespective of fault, up to $1 billion for major oil pipelines, pipelines that would have the capacity to transport at least 250,000 barrels a day. Companies would continue to have unlimited liability when they were at fault or negligent.

The bill is a much needed and long overdue first step toward a true polluter pays regime for pipelines in Canada. The official opposition, the NDP, has been calling on the government to bring in legislation so we have a true polluter pays system.

I think the Conservatives understand what polluter pays is, however they are reluctant to make it happen in Canada. Canadians understand what polluter pays means. Even my children understand what it means. Unfortunately the Conservatives have chosen not to understand its meaning to protect their friends in the oil companies, friends who are damaging the very environment of Canada.

I think Canadians understand what polluter pays means. As I pointed out, my children understand that if one makes a mess, then one cleans it up. It is not for the next generation to clean up that mess, and I will share a story of my children to demonstrate that.

I have two children, a son, Jaron, who is 8 years old, and daughter, Jessica, who is 18. My son is a typical eight year old. He makes a mess, whether it be with his toys, or paint or a lot of other stuff, as it is the case in every Canadian household. Children make messes at home. However, one afternoon there was a huge mess of toys in the livingroom. My wife asked Jaron to clean up the mess he had made from playing with his friends. He looked at her and then looked at my daughter and said that she would clean it up for him. Jessica looked at him and said, no. He had made the mess and he would have to clean it up. Jaron then went running to his mother and told her that his sister would not clean it up. His mom told him that it was his mess and that he would have to clear it up. He understood that. He knew it was his mess and he needed to clean it up.

This is a very basic concept. Whoever makes the mess must clean it up. Unfortunately if the Conservatives' friends in the oil industry make a mess, or if a pipeline erupts or is damaged, they do not expect the oil companies to clean it up. The Canadian taxpayers have to do that. How fair is that? If most Canadians understand the concept of polluter pays, why can the Conservatives not understand that? I think the Conservatives understand it, but they are trying to protect their friends in the oil industry and are putting the liability on Canadian taxpayers.

The bill before us is the first step with regard to the polluter pays, unfortunately the implementation of many of the proposed changes in Bill C-46 are left to the discretion of the National Energy Board and cabinet, or the details are left to regulations.

Bill C-46 leaves considerable leeway for politically motivated decisions and backroom arrangements between operators and the National Energy Board, a regulator that lacks credibility on the pipeline front. We are therefore left with uncertainty as to whether the bill goes far enough.

I come from British Columbia, and we have seen the opposition to the northern gateway pipeline. We know the mess that the National Energy Board has created where legitimate people were not allowed to testify or make their presentations in front of the NEB. The Conservatives have put in so many roadblocks to have a fair process. If we are going to have pipelines, there has to be a clear process in place to ensure that all of the considerations are taken before a decision is made.

The Conservatives have made a mockery of the process, and they have gutted the very environmental regulations that are supposed to protect not only our environment but also our resource sectors in this country. They have failed to take a leadership role to show that some of these projects are viable and that we take into consideration the environmental regulations and guidelines to ensure we have projects protected. Again, the polluter pay system is something that is not foreign to the Conservatives; they choose to be on the side of the oil companies instead of Canadian taxpayers.

Bill C-46, as a first step, makes some important improvements to Canada's liability regime, but the lack of certainty about the degree to which polluters would be required to pay undermines these improvements and leaves uncertainty as to whether the taxpayer would still be on the hook for cleanup costs when $1 billion in fault or negligence cannot be proven.

The amount of $1 billion is a drop in the bucket when it comes to a major oil spill. We have seen oil spills cost much more than $1 billion. There needs to be more to ensure that Canadian taxpayers are not left holding the bag that Conservatives are passing on from their friends in the oil companies to the taxpayers. That is not fair. Canadians expect parliamentarians to ensure that liability stays with the polluter, not with the taxpayer.

When it comes to profits, the oil companies will gladly make sure that they take those profits, and Conservatives actually help the oil companies. If they lose money, that loss is nationalized on the backs of the taxpayers. People in my constituency clearly would not want that to happen. I have talked to many people in my constituency who want a system where we ensure that liability stays with the polluter and not with taxpayers.

I have a minute left, and I could go on in this subject because it is very much a concern to people in my constituency. Basically, there is no doubt that Canada's natural resources are a tremendous blessing and the energy sector is a driving force of our economy. The NDP vision for leveraging those resources to create wealth and prosperity does not sacrifice social or environmental sustainability.

The vision of the official opposition can be summed up in three key principles: first, sustainability, to make sure that polluters pay for pollution they create instead of leaving costs to the next generation; second, partnerships, to make sure that communities, provinces, and first nations all benefit from resource development, and that we create value-added, middle-class, high-paying jobs in Canada; and third, long-term prosperity, to leverage Canada's natural wealth to invest in modern, clean energy technologies that will keep Canada on the cutting edge of energy development and ensure affordable rates into the future.

The House resumed from February 26 consideration of the motion that Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, be read the second time and referred to a committee.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Speaker, the environment is the economy. Nearly two years ago, on May 10, 2013, I stood in the House next to the environment minister to declare what British Columbians and Canadians believe: that the environment is the economy.

Every time we consider whether environmental and economic factors are in balance, we are suggesting that the environment and the economy are in conflict with each other. Some would argue that we must sacrifice one to advance the other. In other words, we tend, wrongly, to start our discussion from the notion that the economy and the environment are at war with each other.

As a member of Parliament, I am increasingly required to consider the impact of industrial projects on the economy and environment, especially in the riding I represent. Throughout the year, conversations at events, in coffee shops, and in the homes of constituents are often related to responsible resource development. Constituents of mine, as individuals and in groups, have consistently expressed their support for Canada's economic success, but have also stood for responsible environmental practices befitting of a riding that many call the most beautiful place on earth.

Some of these proud Canadians include former fisheries minister John Fraser, Carl Halvorson of the North Vancouver Outdoor School based in Squamish, Squamish first nation elder Randall Lewis, and David Bromley, a world-renowned environmental engineer. The environment is the economy. This is the message we Canadians are increasingly taking to our Prime Minister, the natural resources industry, and the environment, fisheries, and other ministers. Bill C-46, the pipeline safety act, shows that our government is listening.

The environment is the economy. This is best illustrated in the context of value-added projects both in the riding I represent and elsewhere in Canada. This government has created a challenging review process for natural resource projects, where proponents have a high standard to meet. They must increasingly show better productivity and value to Canada, with less waste, more efficient use of resources, and a respect for the environment we cherish. These projects have a significant impact on the quality of life in Canada, providing financial and infrastructure inputs. Canada needs these projects.

The automatic reaction of “stop” is a simplistic approach, characteristic of special interest groups that just want to stall projects. This Conservative government believes in the need for continuous improvement in project implementation and impact mitigation. However, we are opposed to the simplistic hands-down rejection by people who would just say no to industry, who forget Canada's entrepreneurial roots, and who would leap to negative conclusions without due process, sound data, or information to support their position.

More and more, we Canadians are learning the benefits derived from a focus on the environment. Specifically, less use of resource inputs such as water, energy, and land has made us more efficient, leading to higher productivity and economic sustainability. As a government, we have emphasised the need for a science-based, independent, objective approval process that keeps us focused on the real objective of less impact, greater efficiency, and sustainability.

This government's focus on these principles has driven a culture of responsibility to improve continuously. The result has been the growth of jobs in the environmental sector, which now supports employment levels that dwarf even the automotive and oil and gas sectors. According to the organization ECO Canada, as of 2013, some 682,000 jobs in Canada are directly related to the environment. The focus on the environment is a change agent, not a simplistic “stop” agent. It is why I continue to say that Canada's environment is our economy.

Our government continues to rely upon independent, objective scientific assessments before approving any project. We saw this approach at work recently in our government's rejection of the Taseko New Prosperity mine project in northern B.C., an ambitious proposal to create thousands of jobs and large economic stimulus, but nevertheless rejected for environmental reasons. Many British Columbians supported the Taseko initiative, but environmental considerations prevailed. As demonstrated by that decision, our government has pledged that natural resource development will only proceed if the project is proven to be safe for Canadians and safe for the environment.

The pipeline safety act would complement a number of measures previously implemented by our government to strengthen pipeline safety, which provided the National Energy Board, for example, the authority to levy administrative monetary penalties and increase the number of inspections and audits.

Bill C-46 would build on this work and provide a world-class regulatory regime for Canada's pipeline sector, while strengthening protection for Canadians and the environment. Bill C-46 addresses three main areas, which are incident prevention, preparedness and response, and liability and compensation.

Today, as a lawyer, I am focusing on the area of liability and compensation, particularly emphasizing the bill's strengthened measures to compensate for environmental damages in keeping with the polluter pays principle.

Under Bill C-46, our government would deliver on the promise to enshrine the polluter pays principle in law, to make it an important foundation for the pipeline safety regime. It would place accountability on industy and protect Canadian taxpayers from having to pay for damages and cleanup costs in the unlikely event of a spill or accident. The polluter pays principle assigns responsibility to the polluter for paying for damage to the environment, as well as the associated cleanup costs.

One of the key features of the proposed law is that it would raise the cap for absolute civil liability up to $1 billion for pipeline owners, even where there is no fault or negligence on the part of the proponent. On the other hand, liability where the pipeline owner is at fault or negligent would remain unlimited. Another key feature is that the legislation would establish the legal right for various parties to seek environmental damages. This would ensure that any damages to wildlife, waterways, or other public resources could be addressed.

The absolute or no-fault liability regime created under Bill C-46 would be one of the most robust and comprehensive in the world. While the U.S. and the U.K. have similar legislation in place, the $1 billion minimum financial capacity, and absolute liability limit would be unique to Canada. Canada would also be unique in having a cost recovered financial backstop model that provides complete coverage for cleanup and damages.

Our country has a world-class pipeline safety system. Between 2000 and 2011, federally regulated pipelines boasted a safety record of over 99.999%.

The natural resources sector is the largest private employer of aboriginal people in Canada. The plan described in the pipeline safety act was developed closely with industry and aboriginal communities to provide training for aboriginal communities on pipeline monitoring and response. This would allow aboriginal people to continue to make important contributions as full partners in the development of our natural resources.

In conclusion, Canada's environment is the economy. This government supports robust processes that take into account all considerations relevant to British Columbians and Canadians: a sustainable environment, value-adding jobs, and thriving economic growth.

Let us put an end to the “stop” mentality, which is characterized by not having sound data, and let us start encouraging open dialogue that considers all of the evidence, starting with this question of pipeline safety.

[John Barlow, Conservative, Macleod, AB]

Mr. Speaker, I want to thank my colleague from Wild Rose for sharing his time with me, and for his presentation.

I am delighted to participate in this important debate today. This is an important discussion because pipelines are one of the lifelines of our economy. They get the energy we use every day to Canadians across the country.

By amending the National Energy Board Act, Bill C-46 proposes a number of new measures to make our pipelines across Canada even safer.

For many Canadians the National Energy Board, the NEB, may not be something they are very familiar with, so I would like to take some of my time today to focus on what it does, the role it plays, and some of the changes to it that we are proposing.

Established 56 years ago, the National Energy Board has a very clear mandate: to regulate international and interprovincial pipelines, power lines, and energy trade. Today, that means overseeing 73,000 kilometres of pipelines and transporting more than $100 billion of natural gas, oil, and petroleum products each year.

The NEB boasts a staff of about 450 highly skilled experts with a wide range of experience, from engineers to inspectors, to environmental specialists and economists. Their expertise makes the NEB one of the most renowned regulators in the world. I want to make that very clear: it is one of the most renowned, respected regulators in the world.

Equally important, the NEB is independent. It reports through Parliament but is independent of it. Quite simply, it operates at arm's length and has full autonomy. The board uses that independence to rigorously apply science-based analysis to every review it conducts. Those reviews, which are among the most robust in the world, are based on a number of criteria, including the environmental, economic, and social aspects of each and every proposal.

Canadians may ask, what is the end goal? What is the overarching goal of the National Energy Board? The goal is to keep our pipelines and the public safe while, at the very same time, ensuring that the environment is protected.

If an application is successful, and only then, it is still subject to further conditions established by the board.

To enforce its rulings, the NEB has a number of important powers. It can impose administrative penalties on pipeline companies, lower the amount of product allowed through the pipelines, or even shut them down entirely. In some cases, prison sentences from one year to even five years could be imposed for violations to the National Energy Board Act.

Only when the board is confident that a pipeline can be built and operated safely does the company earn the right to proceed with that project. However, the board's role does not end there. It oversees the full cycle of a pipeline, from concept to construction, to operation, to eventual abandonment of that pipeline. That means ongoing audits, inspections, and emergency exercises, with some 300 such compliance actions being conducted in 2013 alone. These ongoing audits and inspections are important. It also means that they continue to raise their standards, requiring more of pipeline companies, imposing stricter conditions, and also conducting rigorous testing.

Under this regime, the board has performed exceedingly well. For example, between 2008 and 2013, 99.99% of oil and other products transported through federally regulated pipelines was moved safely.

Let me be clear here again. That is an outstanding safety record, a record that any country in the world would be envious of. It is a wonderful tribute to the work of the National Energy Board and Canada's pipeline operators.

While we are gratified, we are certainly not satisfied. Our goal must be to have no incidents whatsoever. One incident is one incident too many. That is why, as part of our government's plan for responsible resource development, we have already strengthened the NEB, enabling it to increase its annual oil and gas line inspections by 50% and to double the number of annual comprehensive audits. These inspections and audits are critical proactive measures, because they can identify potential issues and prevent incidents from occurring, which we heard quite a bit about today.

The changes proposed in the bill are another good step toward ensuring that these accidents do not happen. We have provided the NEB with new powers to improve prevention by imposing tough monetary penalties against pipeline operators who do not comply with those regulations. These penalties, which range from $25,000 to $100,000 per day per infraction can also be cumulative, should the infractions not be addressed.

Now, with Bill C-46 we would go even further. Additional amendments to the National Energy Board Act would set a new standard for pipeline safety, ensuring that we have world-class protection. New measures would focus on preventing incidents from occurring, improving our ability to prepare and respond to events, and ensuring that the polluter pay through a tougher liability and compensation regime. In terms of prevention, we would tap into the expertise of the National Energy Board by seeking the board's guidance on the best available technologies for constructing and operating pipelines. As new technologies are developed, we want to ensure they are put into practice. We want to ensure that our safety systems remain evergreen and ever on the cutting edge.

We would also clarify the audit and inspection powers of the NEB, as well as the obligations of the pipeline companies to respond to requests arising out of these actions.

Moreover, we would modernize the damage-prevention regime to further harmonize it with provincial guidelines to prevent accidental damage through digging or other activities.

On preparedness and response, we would amend the National Energy Board Act to require companies that operate major pipelines to have a minimum of $1 billion in financial resources, a portion of which must be readily available to quickly react to any incident.

If a company is unable or unwilling to respond immediately, the NEB would have, in exceptional circumstances, the power to take over response operations and to recover the costs of those operations from the industry. In other words, the Government of Canada would provide the NEB the authority to respond and provide a financial backstop, in addition to giving the NEB the authority and funds to complete any cleanup. The bottom line here is that in the unlikely event there is an incident, the response would be swift, it would be thorough, and it would not be paid for out of the pockets of Canadians.

This bill would also strengthen our system of liability and compensation. Not only would pipeline companies now face unlimited liability when found to be at fault, but companies would automatically be responsible for damages up to a set amount. This is called “absolute liability”. It would not matter who or what caused the incident; the company would be responsible regardless. In the case of companies operating major oil pipelines, once again, that liability would be $1 billion, more than in any other country in the world.

What is more, this bill would allow the government to pursue pipeline operators for the costs of environmental damage, and it would empower the NEB to order reimbursement of cleanup costs incurred by either government or individuals. Finally, the NEB would be able to recover its own costs by stepping in to coordinate a response.

These are among the most sweeping changes to the National Energy Board Act since it was passed in 1959. This is a clear indication of how committed this government is to ensuring that Canada can safely transport the energy Canadians need and use every day.

Canadians understand that the energy sector is a critical part of our economy. It provides jobs and opportunities from coast to coast to coast. Canadians know how important the energy sector is to our quality of life and to our communities. However, they also want be reassured that our environment will be protected. Our government shares those priorities. That is why we are bringing forward this bill and I urge all members to support it.

[Blake Richards, Conservative, Wild Rose, AB]

Mr. Speaker, I will first say that I will be sharing my time with my neighbouring colleague, my good friend from Macleod.

It is a pleasure to rise today in support of our government's pipeline safety act. As all hon. members know, Canada's natural resource industries play a vital role in supporting the quality of life we enjoy in this country. In my province and all provinces across this country, we owe our quality of life and the strength of our economy to the important natural resource industries.

Taken together, these industries actually account for more than 13% of our gross domestic product and more than one half of our merchandise exports. When we include the supply chain that provides goods and services to the resource sectors, these industries actually account for almost one-fifth of all economic activity in this country, almost 20% of the economic activity in this country. They create and sustain jobs from coast to coast to coast and in every region of every province in this country.

Directly and indirectly, the jobs of some 1.8 million Canadians depend on our natural resource sectors, and our natural wealth continues to be developed to create opportunities for Canadians. There are hundreds of major natural resource projects under construction or planned over the next 10 years, representing as much as $675 billion worth of investment.

Canada's energy sector is a key part of this. It contributes $175 billion annually to our economy and generates more than $25 billion a year in federal and provincial revenues. While the NDP would like to ignore this fact, these are the same revenues that help to pay for social programs like health care, education, and infrastructure. However, for Canadians to benefit fully from the potential of our energy sector, it requires world-class transportation and infrastructure, including pipelines, to get our energy products to market.

Fortunately, building and operating safe pipelines has been a Canadian tradition for decades. Canadians have the experience and the know-how to move more than three million barrels of oil across our country every single day. As we have heard, 99.999% of the oil and products transported through federally regulated pipelines in Canada have arrived safely. That is why I can stand here and proudly claim that Canada already has an extremely impressive environmental record with regard to pipelines. Indeed, few sectors can boast such an outstanding safety record.

One of the characteristics of this strong, world-class safety regime is that it continually evolves and improves. It is a safety record that is enhanced with every technological advancement and innovation and with every regulatory improvement, and that is the way it should be.

As we look ahead to the many major resource projects still on Canada's horizon, our plan for responsible resource development is more important than ever, because it is focused on getting things right for Canadians, for our environment, and for our economy.

Under our plan, we are focused on four key objectives: first, making the regulatory review process for major projects more predictable and more timely; second, reducing duplication; third, strengthening protection for the environment in marine transportation, offshore development, and pipeline safety; and fourth, enhancing engagement with aboriginal communities in every aspect of resource development.

The pipeline safety act is part of this comprehensive approach. The legislation would build on our government's plan for responsible resource development. Bill C-46, the pipeline safety act, would further strengthen our robust pipeline safety system around the pillars of incident prevention, preparedness and response, and liability and compensation. It features concrete measures to improve our pipeline safety record and to ensure that it remains truly world class. That is why it focuses on prevention, preparedness, and response as well as on liability and compensation.

It offers real action to strengthen pipeline safety, including by modernizing the National Energy Board Act.

Of course, prevention begins with the design and construction of pipelines. In additional to our new legislation, the government is seeking guidance from the National Energy Board on the use of best available technologies in pipeline projects. This includes the materials, the construction methods, and the emergency response techniques.

The legislation would clarify the rules and responsibilities for pipeline operators, including measures to prevent pipeline incidents, to increase safety for Canadians, and to better protect the environment. That is in addition to new regulations that recently came into force and that provide the National Energy Board with the power to directly administer tough new penalties, penalties that will address contraventions quickly so that larger issues do not arise in the future.

Concerning matters of preparedness and response, our proposed changes would ensure that companies know exactly what they are liable for. They would need to demonstrate their ability to meet minimum financial requirements. For example, companies operating major oil pipelines would now be required to demonstrate that they have $1 billion in financial resources.

With regard to liability and compensation, the legislation would enshrine the polluter pays principle in law. This would ensure that Canadian taxpayers will not foot the bill in the unlikely event of a major oil spill. The pipeline safety act would also protect Canadians by providing a financial guarantee, or backstop, to address damages from a major spill. It would authorize the National Energy Board to recover cleanup costs from pipeline operators. We are also taking steps to ensure that pipeline operators are responsible for any potential costs or damages when their pipelines are no longer in use or have been abandoned. No other country in the world requires a $1-billion guarantee from companies operating major oil pipelines.

On top of these improvements, we will continue to work with aboriginal communities and with industry to enhance the participation of aboriginal peoples in all aspects of pipeline operations, from planning and monitoring to responding to incidents. This will ensure that aboriginal peoples participate fully in related employment and business opportunities.

With the passage of this legislation, Canada's pipeline safety system would be truly world class. Members may ask what that means exactly. We define world class as being equal among our peer nations, countries like the United States, the United Kingdom, Australia, and Norway. Also, in many cases, Canada would be world leading. No other country in the world has absolute liability so that industry, and not Canadian taxpayers, would be held financially responsible, even before fault or negligence were proven.

Today Canada's regulatory and safety regime for pipelines is among the best in the world. However, when it comes to protecting Canadians and protecting our environment, there is no room for complacency. Pipelines are crucial to the safe transportation of oil and gas across our country and to markets beyond our borders.

With this legislation, we would make existing and new pipelines in Canada safer than ever before. It would ensure that Canada keeps setting the bar when it comes to the safe transport of our energy products. That is why I want to urge all hon. members to support this very important piece of legislation.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I would first like to congratulate my colleague from Skeena—Bulkley Valley on his excellent speech. He clearly set out the premise of this debate. He clearly explained why we have difficulty trusting the Conservative government and believing in what it does.

However, Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, is obviously a step in the right direction. The NDP has been asking the Conservatives to abide by the polluter pays principle for a long time. We believe that it is a basic principle of sustainable development. Of course, we will support this bill, but we will be proposing some amendments in committee.

In short, the change that the bill makes is to seek absolute liability for all pipeline projects regulated by the National Energy Board when the company is at fault. We support this excellent measure.

However, the maximum liability is $1 billion, which is much better than the few tens of thousands of dollars that it was before. However, $1 billion is still not very much when it comes to a big oil spill and all of the consequences that has. Nevertheless, it is a step in the right direction. We are talking about liability of $1 billion without proof of fault or negligence. In such a case, the problem is that Canadians are the ones who will have to pay. People in Drummond and everywhere else in Canada who pay their taxes will have to pay for the problems caused by companies and the bad job that the Conservatives did. Why am I talking about how the Conservatives did a bad job? My other colleagues mentioned it. It is not enough to make a company pay when there are spills and leaks. We also have to prevent spills from happening. The Conservative government is very weak in that regard. That is a serious problem, which they made worse in 2012, when they amended the Canadian Environmental Assessment Act.

We are all well aware of this change to the Canadian Environmental Assessment Act. Participation in consultations has been severely restricted. Now people can participate in consultations only if they are directly affected by a pipeline project. Many people in Quebec are upset about that because they were expecting to be able to participate in the consultations on TransCanada's energy east pipeline proposal. Unfortunately, it is very hard to get in because the Environmental Assessment Act, which was amended in 2012, severely restricts people's access. There is also another problem I have to raise. Right now, the National Energy Board is starting to ask people to register for consultations even though the final route is unknown. People have to sign up without knowing whether the pipeline will go through their area or not. This is utterly ridiculous. Quebeckers, environmental groups and citizen groups have demanded that the National Energy Board's hearings be suspended until the pipeline's exact route is known. Without that information, how can people register and how can the assessment process involving individuals and organizations be started?

This shows how Bill C-46 is heading in the right direction. However, we need environmental bills that will enable us to prevent disasters rather than clean them up after the fact. That would be much better.

We know that the energy east pipeline will cross dozens of rivers and bodies of water as well as the St. Lawrence. These are strategic places that municipalities draw their water from to treat for drinking water.

We need to be careful and focus on prevention. A report from an RCM in the region that will be affected pointed out flaws in the TransCanada project. We expect much more from the government. It is not enough to repair the damage afterward. We need to focus on prevention. That is very important.

In 2014, the Commissioner of the Environment released a report pointing out the problems with the reform of the Canadian Environmental Assessment Act. For example, she mentioned that the criteria are unclear, which explains why some projects are subject to an assessment while others are not. She also indicated that it is very difficult for the public to participate in these consultations. If the public cannot be heard and listened to, that leads to a social licence problem. That is the problem with many of the projects on the table right now that could be good for our economy. There is a lack of information and transparency.

Ottawa commissioned a report on the aquatic environment in 2013. We were not given access to that report until a group of environmentalists submitted an access to information request. How can we trust a government that hides a report about the oil sands and the impact they will have on the aquatic environment for two years? That is unbelievable. The report indicates that there is a serious lack of information on the impact of an oil spill on the aquatic environment. There is a lack of information on how we could clean up the oil that spilled into the St. Lawrence River, for example. This report shows the lack of competence of the Conservatives, who do not take the importance of preventing accidents seriously. Introducing this bill, which of course is a step in the right direction, will not be enough if a spill occurs.

Oil spills have happened in the past and, unfortunately, will continue to happen. We must be ready to prevent them insofar as possible and to take quick action when one occurs. We need only think of the ExxonMobil pipeline spill in Arkansas in 2013. In 2010, there was the notorious Enbridge oil spill in the Kalamazoo River, where four million litres of oil were spilled in 14 hours. The cleanup of this environmental disaster is ongoing. So far, it has cost $1 billion, which is just the start. That is why I am saying that the $1 billion limit is not enough when oil companies are not directly responsible.

In conclusion, this bill is a step in the right direction. The NDP has been asking for a long time that the polluter pays principle be applied and that the companies be responsible for safety. However, we have a major problem with respect to preventing oil spills. I mentioned it in my speech. That is why we are asking for a clear long-term vision for sustainable development. The NDP has the strongest vision. We do not pit the economy against the environment; they are compatible. If we do it right, the economy and the environment will be the most profitable sectors. They create the most jobs and will help us improve the Canadian economy.

The NDP plan is to have a good economy based on sustainable development.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I want to inform you that I will share my time with my esteemed colleague from Drummond. This is a good idea, as always.

This may sound strange, but I have looked forward to some version of such a bill for many years. With Bill C-46, the government has finally come to acknowledge a principle that for more than 20 years the New Democrats thought was important for the energy sector and industry at large. This is the principle that we commonly now know as the polluter pays. It is a very simple concept. It is a concept that should be embedded in all of our economic thinking about resource development and the potential for pollution, which is the company that causes the pollution should pay for the pollution.

This is an important concept for us because we also believe in pricing pollution across the board. We have heard the Prime Minister recently muse about the idea of perhaps putting a price on carbon similar to the Alberta model. It has some faults, but the very concept that pricing carbon, a known pollutant in causing climate change, is now something to which the Conservative government may be open. However, we hear Conservatives day after day ridicule and rile the opposition for any hint of the very same policy, which the Conservatives rain on.

Juxtapose that with the strange crossing of ideologies where the Liberal leader now says that pricing carbon should not be up to the federal government at all. It is odd to watch those two leaders cross themselves. More important, in Bill C-46 and the liability around spills from pipelines, we recall that the Prime Minister in an economic forum declare that Canada would quickly become a world energy superpower. This vision was outlined by the Prime Minister in very forceful terms. What one would have expected to be behind such a declaration was a plan or a strategy to achieve that vision.

As we have seen in the last eight or nine years, that commitment has been nothing but an unmitigated failure for the government. We have not seen the approach taken by the Conservatives enhance Canada's standing in the world when it comes to energy in any measurable way, not with our largest trading partner in the United States.

As pointed out by my Liberal colleagues, not only has the relationship around one particular project, in this case Keystone, caused all sorts of tensions between the government and the White House, but it has caused tensions in our trading relations in general. I recently had meetings with some trade department officials and investors from the United States, They wondered about the Conservative government's obsession with one project to the detriment of so many other important trade relations with the United States.

In making the declaration, when the Conservatives said that we would be an energy superpower, one would have thought there would have been some foundational elements included. One of them would have been the polluter pays principle. It is an important and key strategy in bringing the public along to any development, like a pipeline development. If there is a spill, it should not be the public who is on the hook for cleaning up the costs.

As has been pointed out in this debate already, Enbridge, which has proposed the northern gateway pipeline that will go through my region, had that exact experience just south of the border, when 3.5 million litres of diluted bitumen was spilled in the Kalamazoo River. It has spent north of one billion dollars cleaning that up.

In Canada, we had this perverse incentive in that the companies were never on the hook for that money for the cleanup. The companies receive the profit; the public gets the pain when there is an accident. There are spills. There have been several hundred spills across Canada over the last couple of years, some small and some quite a bit larger. The idea that the public would foot the bill for a company's mistake and damage to our environment is indeed perverse.

Several things in the bill remain lacking in a true energy policy from the government. If becoming an energy superpower were so important, one would have thought the government would have sincerely, and with great dedication, sought what would be a very important principle for any company operating, and that is the social licence to operate.

This is a commonly used term by industry today, particularly by extractive industries, heavy industries, that in order to be profitable and to remain viable, having a social contract with the public, an agreement on how companies conduct themselves, supported in the communities in which they operate would be foundational of any investment.

When I talk to the investment banks, the major banks in Canada, and some of the other investors who invest heavily in our country, the social licence of any particular project is paramount to the investor's rational to invest or not invest. If a company is facing protracted legal battles, if a company is in the face of strong public discontent, that affects the investor's decision.

Even with the Conservatives government, which is particularly fixated, having put so many of their eggs in one particular resource extraction basket, on oil, we would have thought that bringing forward legislation, working policies that would increase the level of public support would have been job number one. The efforts by the government to treat and negotiate with first nations in Canada would be job number one. The Prime Minister hired a special investigator, Doug Eyford, to go British Columbia to consult with first nations and find out what was lacking. In his report, Mr. Eyford stated that there was a lack of federal leadership in treating and negotiating with the first nations of British Columbia in particular .

Having lost almost 180 consecutive Supreme Court decisions that deal with first nations rights and title, we would think the federal government would have woke up to the idea that rights and title maybe matters, particularly to a resource like this one.

The bill is missing the ability of the government to understand, to respect and to negotiate with the first nations people of Canada. In provinces like British Columbia, rights and title have been confirmed again and again in the federal courts and at the Supreme Court level, and the government considers it an option to ignore those rulings, as if anything will get built, as if anything will get done by ignoring our Constitution and first nations rights and title.

We have also seen the government utterly ignore another foundational question that Canadians have with respect to any resource development, which is risk versus benefit. The benefits are generally seen in two areas: one through taxation and the other through job creation. What have we seen from the Conservatives? We saw the whole temporary foreign worker fiasco where they drove loopholes so big through the program that companies were firing Canadians working in the banking and energy sector and then hiring temporary foreign workers to the point where the Conservatives had to swing the pendulum back so hard that they essentially shut down virtually all of the temporary foreign worker program.

We have also seen a government absolutely ambiguous about the notion of value-added. Particularly when we deal with a one-time, non-renewable resource, we would think the government of the day would have some interest one way or the other as to whether companies are adding value or shipping the product out in its raw form. We know the true job components in any oil and gas project is when we add value to it.

The proposed projects, which heavily supported by the government, all purport to export raw bitumen in its most raw form. That leaves the risks with Canada and exports the lion's share of the benefits elsewhere.

The economy of the people I represent in northern British Columbia is primarily based on resource extraction. We understand the resource industry, we are support of it and are particularly supportive when it works with the values in the communities in which it seeks to operate.

Conservatives have ignored this time and time again and have lost public support, not just in their wild enthusiasm for projects that do not help the Canadian economy and certainly risk the Canadian environment, but they have run roughshod over first nations rights and title. The record shows they are not getting anything done. All they are doing is increasing conflict and uncertainty, which drives away investment and the ability of the Canadian economy to be more than just a raw export economy.

Time and time again we see the government make the same mistake. The Conservatives suggest that doing the same thing again will get them somehow a different result. We know the definition of someone who believes that doing the same thing repeatedly will get a different result: insanity. Increasing uncertainty, increasing conflict has done so little to even advance the agenda the Conservatives had.

What else do we miss from the Conservative government? It is not just a diversification of our trading partners, but also the diversification of our energy resources. The support for oil has been so outweighed by no support whatsoever for the clean energy sector.

The good news for Canadians is that globally last year, and we look forward to 2015 being similar, the advancements and the investments in clean energy technology, with the costs of production dropping and the acceptance and encouragement by the public writ large across the world for clean technology, solar, wind, geothermal and rest, has only grown and investments are outpacing investments in carbon energy.

Canada should be embracing this enthusiastically, with a government that understands we need to have a balance between these things. However, to put all of the attention on one energy source alone, we see what happens. The Conservatives have had to delay their budget. They have no plan B. All they have is this, and it is not working.

The bill is a small and important step in advancing a more balanced approach to the energy sector in Canada. We look forward to its passage. We will see if the calendar allows for its passage and how much enthusiasm the Conservatives have for it to become law.

The House resumed consideration of the motion that Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, be read the second time and referred to a committee.

[John McKay, Liberal, Scarborough—Guildwood, ON]

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.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Mr. Speaker, I welcome the opportunity to further acquaint my hon. colleagues with Bill C-46, the pipeline safety act.

Bill C-46 represents another important step in realizing our government's commitment to assuring Canadians that our country's abundant natural resources are developed and transported in a safe and responsible manner. This commitment is the foundation of our plan for responsible resource development. No major project will proceed unless rigorous environmental and regulatory reviews have demonstrated that it is safe for Canadians and safe for our environment. This is essential if we are to continue to enjoy the benefits these industries have provided to generations of Canadians, and the benefits are many.

Given Canada's wealth of natural resources, experience and expertise of the industry in our country, we can be confident that the long-term prospects for natural resources development are there and will benefit us all as Canadians. It is a fact that natural resource development offers particular opportunity for aboriginal people in Canada.

Many of the existing or proposed energy and other natural resource and infrastructure projects are located near aboriginal communities. We have a duty to consult these communities and we will work to ensure they are fully engaged throughout the life cycle of resource development projects. It is a pillar of our plan for responsible resource development to pursue development in collaboration with aboriginal people in a way that protects the local environment, that respects aboriginal and treaty rights and that enables aboriginal people to participate in the economic opportunities that resource development can provide, opportunities that contribute to stronger, healthier and more self-sufficient communities.

We are taking concrete action to fulfill this commitment to consult and engage aboriginal communities in a truly meaningful way, including in the safety of existing pipelines and the potential development of new pipeline infrastructure. The pipeline safety act would provide for a series of new measures that would provide Canadians with the assurance of a truly world-class pipeline safety regime, strengthening incident prevention, preparedness and response, and liability and compensation.

Prevention, of course, is the first priority and the goal will always be zero incidents.

Bill C-46 would give the National Energy Board the ability to guide pipeline builders and operators in the use of the best available technologies in federally regulated pipeline projects, from materials and construction methods to emergency response techniques. To assure preparedness and effective response to incidents, pipeline companies would be required to show they would have ready access to a minimum amount of cash or cash equivalent so there would be no delays.

In the event a company is not able to mount an immediate, effective response, Bill C-46 would provide the National Energy Board with the authority to step in and lead the response. Where liability is concerned, Bill C-46 would impose absolute liability in the amount of $1 billion on the pipeline company. In other words, regardless of who or what caused an incident, the company would be liable for up to $1 billion in damages, period.

Of course, there would be no limit on liability should the company be found at fault or it were proven that it had acted negligently and caused the incident. The National Energy Board would have the authority to order the company to reimburse in full, even above the $1 billion mark in absolute liability, any and all cleanup costs incurred by any federal, provincial, municipal or aboriginal government body, or any person. As with the energy safety and security act, which is currently in the Senate, the pipeline safety act would include a firm statement of the principle of polluter pays. Taxpayers would not be left holding the bag. Companies would bear the full cost of cleanup and compensation.

I want to emphasize that our government recognizes and is supporting the important role aboriginal communities can play in ensuring pipeline safety, and we continue to move forward with new initiatives to ensure aboriginal communities are fully involved.

There is another way the government is responding to the work of the Prime Minister's special representative on west coast energy infrastructure, Mr. Douglas Eyford. Based on Mr. Eyford's report, Forging Partnerships, Building Relationships, we are proposing the development of a strategy to bring together aboriginal communities, the Minister of Natural Resources, and project proponents in establishing objectives and actions to enhance aboriginal participation in pipeline safety.

The goal is to integrate aboriginal communities into the overall process of pipeline safety. The government would work with industry, provinces and territories, community colleges, and aboriginal communities themselves to develop and promote training on pipeline monitoring and emergency response.

This collaborative approach would also focus on developing industry guidelines for community involvement in the preparation of emergency response plans, including who should be engaged and how they should be engaged, as well as the specific content of response plans.

A further objective is identification of employment and business opportunities that aboriginal engagement in pipeline safety may offer to all communities. Pipeline monitoring could be an example.

These new initiatives would build on earlier actions our government has taken to advance reconciliation through constructive engagement and collaboration. In May 2014, for example, our government announced a series of measures to strengthen the engagement with first nations where resource development is concerned. These included establishing the Major Projects Management Office–West, a single window for the Government of Canada to coordinate activities on energy infrastructure development with British Columbia first nations and industry in British Columbia and Alberta.

In July 2014, in response to other key recommendations in the Eyford report, we initiated action to promote reconciliation in advance of and outside the formal treaty process. These measures range from engaging on a new version of the guidelines on consultation for federal officials to new guidance for industry, including an overall public statement to clarify roles and responsibilities.

We have committed to entering into more consultation protocols with aboriginal groups, which would support more efficient consultations in key priority areas such as resource development. We are also acting to ensure aboriginal communities have the resources they need to participate in consultations in a meaningful way. In economic action plan 2014, for example, we provided $13.6 million over two years for that very purpose.

With the pipeline safety act, our government is again providing a commitment to respect the interests of aboriginal people. I encourage all members of this House to support Bill C-46.

The House resumed consideration of the motion that Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, be read the second time and referred to a committee.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, this afternoon this afternoon we will continue debating Bill C-46, the Pipeline Safety Act, at second reading. This bill updates our laws respecting pipelines to make our legislative framework a world leader. The debate will continue—and hopefully conclude—on Monday, March 9.

Tomorrow, before we start our constituency week, we will conclude report stage debate on Bill C-2, the respect for communities act. The bill would enshrine in law the requirement for communities to be consulted when there is an application made to open a drug injection site.

I know the opposition House leader will be very interested in this. Tuesday, March 10 will be an allotted day, and we will have the House debate a New Democratic proposal. I just heard my official opposition counterpart make some comments on time allocation of government bills. Of course, Tuesday will the 79th time allocated opposition day debate of Parliament. That will be the 79th time the NDP has imposed time allocation on a motion it has brought before the House.

Our government allows generous time for debates on bills. We allow considerable time at each stage, yet every time the NDP chooses a subject for debate, it limits the debate to the minimum the rules allow, one day. The rules expressly allow it to allocate a number of its allotted days to a single subject of debate, but on 79 occasions, the NDP has chosen time allocation to the bare minimum of one day. Seventy-nine times it has imposed time allocation on the House to limit debate when it gets to choose the subject. The rules let it choose more days. The rules let it apply more time to those subjects. It chooses not to do that. I invite the hon. member, who seems to have some skepticism, to check out Standing Order 81(16)(b), which gives him that power; so if we want a preview of what could come from the NDP, based on its conduct here, I think we can see it right there.

On that day, March 10, we will finish what I am sure will be the 79th occasion of the NDP imposing time allocation on our ability to debate its ideas. Then, that evening, we will conclude debate on the fourth report of the foreign affairs committee.

On Wednesday, March 11, we will have the third day of second reading debate on Bill S-6, the Yukon and Nunavut regulatory improvement act.

Thursday, March 12 will see the House resume consideration at second reading of Bill S-7, the zero tolerance for barbaric cultural practices act. This is a bill that would demonstrate that Canada's openness and generosity will not extend to early and forced marriage, polygamy, and other similar practices.

We will have third reading of Bill C-2 on Friday, March 13. Finally, for the benefit of committees’ forward planning, I anticipate scheduling Tuesday, March 24, as the last allotted day of this supply period. I will confirm this during next week’s Thursday statement.

Pipeline Safety Act

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

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.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, Bill C-46 takes a long overdue first step toward a true polluter pays regime for pipelines in Canada, which has always been an element of the NDP's plan to grow the economy while also protecting the environment. I think this is a positive first step.

Presently in Canada some of the pipeline proposals are to export raw bitumen, which is not only a substance that will float to the bottom of the ocean and that cannot really be contained but is a substance that represents the export of jobs. That bitumen could remain in Canada and be processed here, creating all sorts of good, high-paying jobs for Canadians. I am wondering if the member has an opinion as to whether Canada should be seeking to try to process bitumen in Canada.

My second question is on climate change. Does she have any concerns that increasing our exports of fossil fuels will contribute to global carbon emissions, leading to climate change, and does she have some ideas on how we should be dealing with that?

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

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.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

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.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

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.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I thank my colleague for her excellent speech. I am honoured to serve with her on the Standing Committee on Natural Resources.

I will have the pleasure of giving a speech on Bill C-46 this afternoon, but I would like to ask my colleague a question about liability. The bill limits liability to $1 billion in the case of a disaster caused by a pipeline where there is no proof of fault on the part of a company. Why did the government choose that amount? In Kalamazoo, in the United States, costs have already reached an estimated $1.2 billion, and only a tiny proportion of the mess has been cleaned up.

Why did the government peg liability at $1 billion? Would it not be better to set a higher amount? That seems to me to be nothing more than a round number.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

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.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, it is my pleasure to rise to speak to C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act. The government has chosen to name the bill as the pipeline safety act.

The measures to increase liability for pipelines are long overdue and very much welcome. However, there are some concerns that the measures may be inadequate, which I will speak to.

Crude oil petroleum products, natural gas liquids, and natural gas move through 71,000 kilometres of existing interprovincial and international pipelines. That does not include the three proposed pipelines to be regulated by the National Energy Board.

This bill purports to reinforce the polluter pays principle. It purports to confirm that the liability of companies operating pipelines would, first, be unlimited if an unintended or uncontrolled release of oil, gas, or other commodity is a result of their fault or negligence; and, second, be a limited liability to a maximum of $1 billion for pipelines with capacity to transport a minimum of 250,000 barrels of oil per day if there is no proof of fault or negligence.

The bill purports to obligate pipeline operators to maintain the financial resources necessary to cover potential liability. It also purports to authorize the National Energy Board to reimburse government entities for any costs incurred in a spill response.

It purports to improve responses to abandoned pipelines. That is a new measure, as the National Energy Board previously was not regulating abandoned pipelines. It also expands that responsibility to inquire into accidents involving abandoned pipelines. It purports to grant discretion to the National Energy Board to require companies to maintain funds for abandoned pipelines.

It also purports to empower cabinet to establish a pipeline claims tribunal in certain circumstances. The tribunal would examine and adjudicate compensation claims. It also authorizes spending to respond to spills, to establish the tribunals, and to pay for compensation awards that are issued by the tribunal. Furthermore, it authorizes the National Energy Board to recover funds paid out by the government as opposed to the company.

It expands on the polluter pays principle by imposing liability on operators for losses to non-use value of public resources. However, it limits the power of the federal Crown to pursue those, and there is some concern expressed at how seriously the National Energy Board will pursue that.

Mr. Speaker, I wonder if I could interrupt. The minister is having a conversation with another member and I am having a very hard time hearing myself talk. I wonder if they could be asked to move it outside.

The House resumed from January 26 consideration of the motion that Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, be read the second time and referred to a committee.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, this afternoon we will continue debating Bill C-51, the anti-terrorism act, 2015, at second reading. These measures will keep Canada secure from evolving threats.

Of course it is important in the context that we live in today that these important measures to keep Canadians safe and combat terrorism do become law during this Parliament. In order to ensure that happens, the debate will continue on Monday, and thanks to an order of this House adopted earlier this day, we are able to have certainty that we will have a vote on it at that time.

Tomorrow we will have the 10th day of debate on Bill C-32, the victims bill of rights act. That afternoon we will wrap up the third reading debate of these measures, which will place victims at the heart of our justice system.

Tuesday shall be the fifth allotted day, which will see us debate a proposal from the Liberal Party. That evening, we will have a take note debate on the troubling rise of anti-Semitism around the world.

This important take-note debate will be on the disturbing rise of anti-Semitism around the world, and we are very much looking forward to seeing this topic discussed. I want to thank the Minister for Multiculturalism and the member for Mount Royal for their persistence in this initiative.

On Wednesday we will turn to Bill C-2, the respect for communities act, for another day of debate at report stage. It will be the 12th day that this bill has been considered by the House. With luck, the opposition will stop holding up this important proposal and let regular, ordinary Canadian citizens have a meaningful say when people want to come to their communities to set up a drug injection site operation.

Then, on Thursday, we will resume the second reading debate on Bill C-46, the Pipeline Safety Act, which aims to establish world-class safety standards for pipelines in Canada.

Red Tape Reduction Act

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is a pleasure to rise today to speak to Bill C-21. It is a significant piece of legislation. A strong statement is being made, and maybe a certain expectation is being built up by the government.

I must say at the get-go that the government has not been very successful at meeting the expectations of Canadians, specifically small businesses, with respect to the government's getting rid of unnecessary red tape.

The member referred to the idea of having those regulations in front of us. We would need an exceptionally large table, because we are talking about literally hundreds of thousands of pieces of paper that we would ultimately have to review, and that is just federal regulations. That does not mention provincial regulations and municipal regulations, all of which have a very significant impact on each and every one of us, in particular with a special focus on small businesses.

Within the Liberal Party, we have recognized that the potential growth, the potential valuable jobs into the future, will be provided by our small business sector. It is the mid-sized businesses that will be providing the hope into the future in terms of those valuable, important jobs that will feed our middle class and ensure that the Canadian economy continues to move forward or improves from where the Conservative Party has it today.

Bureaucracy and the public service as a whole, our civil servants, have done a phenomenal job in working with the regulations we currently have in place and ensuring that those regulations are being followed. It is our job to do what we can to try to minimize the regulations and at the same time make sure there is a strong sense of efficiency.

No one would question, at least within the Liberal Party, the need for strong regulations dealing with issues of safety, health care, food safety, and so forth. We have asked plenty of questions related to all three of those. In fact, earlier today, we were debating Bill C-46, which deals with pipeline safety. I had the opportunity to pose a question in regard to that issue.

Canadians recognize that regulations are not an option, but an absolute necessity. They provide a service that complements legislation and ensures that there are certain standards throughout our country to protect us. Whether it is health care, environmental safety, ensuring our pipelines are built satisfactorily, ensuring there are fines where they are appropriate, or ensuring that good quality product is produced and manufactured, and the whole nine yards, there is absolutely no doubt that regulations are of critical importance.

Having said that, I think it bears repeating, because I have heard many members from all sides of the House talk about regulations that are somewhat dated. There are a great number of regulations currently in place that are just not necessary.

Reviewing should not happen every four or five years but happen internally, virtually on an ongoing basis, at the micro end. We should look at regulations that could be deemed dated or no longer necessary and look at ways in which we can improve the system.

There was an interesting report done by the Canadian Federation of Independent Business. It was suggested in the report that the cost of regulations to Canadian businesses was estimated in 2012 at $31 billion. That is a phenomenal cost. Obviously, a good part of that cost is necessary, but let me suggest that there is great room for improvement. When we look at it from a party's perspective, if we can identify ways in which we can improve the system and ensure that there is more efficiency, we can help small and medium-sized businesses.

By doing that, we would be helping the Canadian economy. We would be creating jobs, and possibly even raises in certain sectors. If small business owners were able to save money on some of that administrative work that they have to do every week, that money could be turned into a cost reduction of a consumer product or consumer service. It could be used as an increase in pay for the workers, which is something that I personally would highly recommend. There is so much more that can be done if we are successful at reducing the paperwork.

I would suggest that the Canadian Federation of Independent Business has been fairly consistent over the years. I am relatively new to Ottawa, having been here for just over four years now, but I have been a parliamentarian for 20-plus years. When I have had the opportunity to meet with members of those stakeholder umbrella groups, they have consistently said that there is a need to improve and get rid of red tape and make our system more efficient.

Even in the NDP-administered government in the province of Manitoba, there is a great deal of room for improvement. However, there is also room for improvement at the municipal level, and obviously there is room for a great deal of improvement here in Ottawa. That is why I posed the question for the minister responsible for Treasury Board about how he, as the President of the Treasury Board, along with his department, is trying to work with other levels of government to deal with the issue of administration costs, and what our expectations jointly are for small and medium-sized businesses in Canada.

I have been disappointed, in the sense that there does not seem to be any holistic approach to dealing with business people in particular. I do not say that lightly. I hear members talking about meeting with business people and what the business people have to say. Like them, for me it is something that is ongoing. I am constantly talking with entrepreneurs, almost on a weekly basis, and dealing with a wide variety of issues. One of the issues that comes up time and again is the issue of red tape, administration costs, and things of that nature. I truly believe that there are businesses that are no longer in existence because of the paperwork that was required to be in business.

Let us look at what it takes in order to even start a business these days. It is no easy task, whether it is having to register and fill out all the necessary paperwork for a name for one's business or whether it is meeting the requirements for an occupancy permit and everything that is involved in regard to that.

Often business people refer to the federal government as a collection agency for the government. Whether it is the collection of the provincial sales tax, which sadly is going up in Manitoba, or the GST, or employment insurance or pension benefits, all of these are very important, but look at the pieces of paper involved. How often do we find a great deal of repetition in all of it? Is it the most efficient way of dealing with and supporting our small and medium-sized businesses, along with others?

There is room for great improvement. We have lost jobs in Canada. We are not talking about dozens or even hundreds. We are talking about thousands of jobs. Why? It is not because of the entrepreneur's idea, desire and possible dream to own a business and employ Canadians. It is because of the overwhelming amount of paperwork. That is what it feels like to many small business owners in particular.

My gut feeling is the government has sensed that in our communities and that is why it has come up with Bill C-21. It is hard to oppose the bill, given it is making a statement in the general direction of reducing unnecessary regulations. However, I think it has a lot more to do with the government wanting to give an impression that it is sympathetic to what individuals and businesses are saying, which is they are quickly becoming overwhelmed with the amount of paperwork and duplication. The government could have done a great deal more in addressing this very important issue.

The government has brought in trade agreements. We in the Liberal Party have been very supportive. We understand the real value of trade. We are not scared of trade agreements for the simple reason we recognize Canada is a trading nation and in the long run it is in our best interest to develop, promote and encourage trade agreements. We differ from our New Democratic friends who tend to oppose free trade for rather bizarre reasons, but they have their own rationale and justification.

When we talk about trade, what are we really encouraging? The exporting and importing of goods. Canadian jobs are very dependent on that. Consumers benefit immensely from it.

To what degree has the government been able to deal with some of the barriers of regulations of trade? I believe there is a lot of room for improvement. I have had discussions with individuals who get exceptionally frustrated because their product is being held at the border waiting to get paperwork through, or there are issues surrounding tariffs, or what should be deemed what. There are a great number of complications. The bottom line is that it causes delays and those delays have significant impacts on our communities in all regions of our country.

At times, the government seems to move in a general direction in certain areas, which we can support. However, more often than we would like to see, it is caught falling short on the important issues that affect us all, and we should be giving those issues more attention. That is why I posed the question for the President of the Treasury Board with respect to the issue of leadership. To what degree has the treasury minister or any other minister worked with the different levels of government?

Members should put themselves in the shoes of individuals who want to open a small business such as selling widgets, or a restaurant or whatever it might be. They do not necessarily care what level of government is causing the issues related to the amount of paperwork. They understand that there is a certain amount of paperwork involved in owning a business. I think where they are less sympathetic is when the government as a whole does not respond to what they feel are overwhelming situations at times, where there is just too much being asked of them, especially when in certain situations they do not have the financial means to meet those requirements without substantial cost. Quite often family business members are making less than minimum wage in order to sustain the business.

The government needs to be more sympathetic. Therefore, when I posed the question for the President of the Treasury Board, I was hoping the minister would tell me that the government was proactively working with other levels of government, while at the same time reviewing its regulations to see what it could do to better enhance the overall efficiency in the bureaucracy or in the filling of forms. How wonderful it would be to have a portal on the Internet which would assist our small businesses more directly and efficiently. We will need more co-operation and collaboration among our partners of Confederation to make that happen. It is an admirable goal. It means we have to work with others. We in the Liberal caucus are not scared to work to make a difference.

As my time is quickly running out, I will conclude where I started, by emphasizing just how important our small and medium-size businesses are to our economy and to our social and economic fabric.

I believe we could be doing so much more. Regulations is just one aspect of it but it is an important one. We recognize the great deal of frustration. If we take a more proactive approach in dealing with some of those frustrations, at the end of the day we will see more successful businesses. With that success, we will witness more employment, better pricing for consumers and better wages, which is one of my personal favourites.

I want to stress how important regulations are with respect to the issues of safety and health. We need to stay on top of this and that is why we are here.

As an example, today the government brought forward the bill on the pipeline safety act. It is important that we hold the government accountable when it is about to make significant changes to the regulations.

Pipeline Safety Act

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Mr. Speaker, I will be sharing my time with the member from Saskatoon—Humboldt today.

Let me begin by saying I am very pleased to have the opportunity to speak to the pipeline safety act and its critical importance to all Canadians.

Most Canadians hardly think twice about the impact pipelines have on their day-to-day lives. These energy highways are essential for delivering energy that Canadians need to heat our homes, power industries, and fuel our vehicles. When Canadians turn up the thermostat, we hardly bat an eye. We tend not to consider where energy comes from. Like mine, most homes in Canada are heated with natural gas, all of which is delivered by pipelines, but Canadians do not need to give it a second thought, because it all happens so safely and seamlessly every single day.

Behind the scenes is a vast network of federally regulated pipelines. There are some 73,000 kilometres throughout Canada. These pipelines transport $100 billion worth of oil and natural gas each year. When we stop to think about it, energy fuels our daily lives and pipelines carry that energy. Pipelines are used to move oil from producers to refineries and on to customers right across the country. Whether we travel by car, bus, train, boat, or airplane, our journey is fuelled by energy that was most likely transported by pipelines at some point.

The oil and gas sector is tremendously important to Canada. It generates almost 8% of Canada's gross domestic product. As members know, energy is our leading export. Central to all of this economic activity are Canada's pipelines. In fact, 94% of all Canadian transportation is fuelled by energy from petroleum products moved by pipelines.

One thing is certain: pipelines are the cornerstone of Canada's oil and gas sector and are also an important national industry. In 2012, pipelines added nearly $9 billion to Canada's gross domestic product and over 6,800 jobs. They also account for between $40 billion and $55 billion in private sector investment each year. That is a lot of dollars being invested in the Canadian economy.

It seems that Canadians cannot pick up a newspaper or turn on the television these days without hearing about pipelines. Some Canadians have concerns about pipelines after a few recent incidents, but when it comes to safety, Canada's record is outstanding. In fact, our pipelines are among the safest in the world. Between 2008 and 2013, 99.999% of oil delivered through federally regulated pipelines arrived safely. As a result, our pipeline safety record easily tops that of Europe and the United States. What is more, during the last three years, 100% of the liquids spilled by these pipelines were completely recovered. Therefore, pipelines have proven to be one of the safest means of delivering the energy we all use.

Every day, Canadian pipeline companies move about three million barrels of oil. Moving the same amount of oil would require 15,000 tanker trucks or 4,200 railcars. Transporting oil through pipelines also consumes less energy and causes fewer greenhouse gas emissions.

However, we know we can always do better, and when it comes to the safety of Canadians and the safety of our environment, there is no second best. That is why new pipeline safety legislation is so important. With this legislation, the Government of Canada is building on its already impressive safety record through a suite of measures in the areas of prevention, preparedness and response, and liability and compensation. We are taking action to strengthen pipeline safety and modernize the National Energy Board Act.

This legislation proposes preventative measures that will clarify the rules and responsibilities of pipeline owners to prevent pipeline incidents, increase safety for Canadians, and better protect the environment. It will ensure that pipeline operators have the financial resources to respond in the unlikely event that an incident occurs. For example, major oil pipeline operators will be required to show proof of $1 billion in financial resources. In addition, they will be required to carry a certain portion of these resources as cash on hand in order to ensure an immediate response.

New regulations would also give the National Energy Board the power to directly administer tough new penalties that would address contraventions quickly so that larger issues would not arise in the future. We would enshrine the polluter pays principle in law so that polluters, not Canadian taxpayers, would be held financially responsible for the costs and damages they caused.

The bill also introduces absolute or no-fault liability. This means that pipeline operators would be held liable even when fault or negligence has not been proven. For companies operating major oil pipelines, the amount of absolute liability would be set at $1 billion. The pipeline safety act would also give the NEB authority to take control of incident response and cleanup if a company is unable or unwilling to do so. At the same time, it would expand the authority of the National Energy Board to recover costs from industry if the NEB ever steps in and takes charge.

Beyond the legislation itself, our government is taking a wider approach to pipeline safety and resource development. We are deeply committed to working directly with aboriginal peoples in all aspects of pipeline safety operations, including planning, monitoring, incident response, and related employment and business opportunities. 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 Conservative government is working with aboriginal peoples to ensure the responsible development of our resources and the long-term prosperity of our communities for the benefit of all Canadians.

Taken together, these measures would ensure that Canada's pipeline safety system is world class and among the safest in the world. Building safe pipelines is something Canadians have done well for decades now; with the proposed legislation, we are making Canada's robust pipeline safety system even safer.

When it comes to the handling of oil and gas, our government should and will strive for the highest safety standards possible. Canadians expect and deserve nothing less. Canada's pipelines carry the products that fuel our economy, support the livelihoods of thousands of Canadians, and support our day-to-day high quality of life. I am a big promoter of continuing the great record we have.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I appreciate the opportunity to speak today in the House to Bill C-46, the so-called pipeline safety act.

I listened closely to the speeches by the last two speakers in the House, and I hope that we can work together here in the House, but also at the Standing Committee on Natural Resources, on improving this bill and making it stronger and more effective. This is a major issue for the environment, for the industry and for Canada.

I hope this legislation will not suffer the same fate as the legislation that we finally passed through the House last year, which addressed the liability regime in Canada's offshore oil and gas sector. That legislation, Bill C-22, as I mentioned earlier in a question for the minister, was introduced numerous times by the Conservatives only to be left to languish on the order paper for several years. The government seemed to be in no hurry at all to move that forward, for the longest time, so the fact that it seems to be a bit more anxious now is encouraging. When that bill finally moved through the House, the government refused to accept a number of solid amendments that would have improved the bill, made it stronger, and given greater protection for the offshore environment.

I hope it will be a different story for Bill C-46. Perhaps one might say, when I express optimism, that I am feeling hope despite all past evidence to the contrary. However, I remain an eternal optimist.

The Liberal Party recognizes that pipelines are a critical part of our energy sector's infrastructure. We have all seen the consequences of the government's failure to provide the means to get our resources to market. We have all seen what it has meant domestically in Canada for communities and in the international community in terms of how the Conservative government is viewed as a regulator of the environment. It is certainly not seen as a defender of the environment, and it has no credibility when it comes to environmental regulations, which makes it harder to get acceptance, for example, for the Keystone XL pipeline in the U.S. or to sell our resources in the international market and around the world.

Bill C-46 has already drawn a number of comments from members of Parliament and from interested stakeholders and other groups. Some have raised concerns over the potential impact of leaving many of the proposed changes in Bill C-46 to the discretion of cabinet and the National Energy Board, as I was saying earlier. Again I am an eternal optimist, but hopefully the government side will address this issue during debate on the legislation or perhaps in committee.

I am also looking forward to hearing at some point from the leader of the Green Party on this legislation, who according to media reports, sees nothing in the bill that she would oppose. However, she also indicated that she looks forward to a discussion about why her party will always oppose any pipeline shipping diluted bitumen. I certainly look forward to hearing that discussion.

One thing on which there is consensus is the importance of the energy sector to our economy. It is undebatable. The energy sector makes a large direct contribution to jobs and economic growth in this country. That is perhaps one of the reasons we are so aware across Canada of the impact on the oil and gas sector of the recent drop in the price of oil.

Let us look at what generally has been the case in that sector. For instance, we have seen average annual government revenues of $26.6 billion from the oil and gas sector. That pays for a lot of doctors, a lot of schools, and a lot of teachers. It is a significant number, to say the least. Per year, it is $155 billion in the country's GDP and approximately 300,000 jobs. There are indirect impacts in engineering and construction jobs, about $2.5 billion in engineering and research and development in 2010, and $32 billion in annual energy efficiency savings across the economy in 2010. Important research development is happening in the energy sector. This is, without question, an important sector. In my view, this has to be part of the equation when we consider what ought to be the absolute liability limit for pipelines.

Overall, there seems to be a consensus that, while the bill is long overdue, it is a move in the right direction or at least a good first step. I do not think anyone would argue with the fact that we need to strengthen the safety and security of pipelines to ensure that companies operating them take every measure to prevent any spill from happening and of course be held accountable if a spill does occur.

I know the Minister of Natural Resources is fond of pointing out that between 2008 and 2013, 99.9995% of oil transported in federally regulated pipelines moved safely. It is not perfect, but it is certainly a very good record, and our pipeline companies do deserve recognition for this important achievement.

The fact of the matter is that we use petroleum products in our country every day. We could go outside to the nearest street and watch the number of cars that go by. They are not all electric, by any means. Most of them obviously are not. We use it to heat our homes. We use petroleum products in so many ways. We rely on pipelines. They are an important part of our economy and are likely to be for quite a while to come. They play an important role in our society, and it is vitally important that they be run safely. When they are, it is appreciated, and we have to find ways to ensure it is done as well as possible at all times.

However, we also need to look to the future and take every step possible to continue to prevent spills, because they are the last thing we want. We heard about one in Montana a few minutes ago. That is very alarming. We do not want to see the kind of damage that oil can do when it is released to the environment.

We need to put in place proper measures to efficiently and effectively clean up spills and assign appropriate liability to make sure that companies have a really strong incentive to look after those pipelines, to renew them, and to maintain them appropriately. Canada must have the safest pipelines in the world, and we need to ensure that this pipeline safety act is well designed to achieve that goal.

In the bill, the National Energy Board would be given increased regulatory control over the 73,000 km of pipeline that transport more than $100 billion worth of petroleum products across Canada annually. Bill C-46 would build on previous moves to give the NEB the authority to increase the number of pipeline inspections and double the number of yearly safety audits. It does not guarantee the NEB would actually do either of those things, but at least the bill gives it the authority. In that sense, it is a step in the right direction. The worry is the amount of discretion that would be given to cabinet and to the NEB, as I mentioned earlier.

The NEB would also be asked to provide guidance on the best available technologies for pipeline construction and operations. We have seen the measures that set out how the government would work with aboriginal communities and industry to develop a strategy to better integrate aboriginal peoples and pipeline safety operations. That is something those communities are very concerned about, for obvious reasons. This would include planning, monitoring, incident response, and related employment and business opportunities. I hope this is an indication that we will see some progress in this area.

However, let us look at some of the key provisions in Bill C-46. Previous speakers have noted that there would be at least the $1 billion absolute or no-fault liability limit. In other words, in a case where there is negligence or fault shown, the liability would be in fact unlimited. However, no-fault or absolute liability applies when that negligence or fault is not shown. It means that no matter what they have done, if the product is a deleterious product that could be toxic, we would hold them accountable when there is a release of it, whether or not it can be proven they were negligent. That is an important measure because it is a valuable product and it produces important revenues for the industry, so we have to hold them to account appropriately. We are talking here about an unintended or uncontrolled release of oil, gas, or other petroleum product from a pipeline.

Absolute liability applies to companies operating major oil pipelines; that is to say, those with capacity to transport at least 250,000 barrels per day of oil. Lesser amounts—so smaller pipelines—will be prescribed by regulation for companies that operate smaller pipelines.

It should be noted that Bill C-46 confirms that the liability of the companies operating pipelines would remain unlimited if the spill is the result of negligence. Companies would be required to maintain the financial resources to pay the amount of liability that applies to them and must make sure that the resources are readily accessible to ensure rapid response to any spill situation. They would be required, as stated in the bill, to have the materials and equipment necessary nearby in order to deal with a spill. I hope the NEB would enforce that.

Under the bill, the NEB would have the authority to take control of an incident response if a company were unable or unwilling to do so and to order reimbursement of any level of government, whether it be an aboriginal governing body or a federal-provincial-municipal government or an individual, for cleanup costs. That is a positive measure. Again, would be left to the discretion of the NEB, and that discretion is a concern.

If the NEB takes control of an incident response, the government may also establish a claims tribunal. Again, it is “may establish”. We do not know that the government will do this; we hope it would. It may also establish a claims tribunal to streamline claims for compensation for those affected by the spill. This could be a good measure, depending on how the government used its discretion in implementing this.

While the government would provide the resources to take control of an incident and set up a claims tribunal, it would have the authority to recover the costs from the individual or the company. That is a good thing.

The bill would also ensure that companies are liable for their pipelines until they are removed from the ground, and the National Energy Board would be authorized to make sure companies are responsible for the maintenance of their abandoned pipelines. Clearly these and other measures in Bill C-46 signify a much-needed overhaul of the liability regime for federally regulated pipelines.

The no-fault liability, the additional authorities given to the NEB, and measures around abandoned pipelines are welcome, and the Liberal Party will support sending the legislation for further study at committee. I expect that the process will lead to amendments at committee that strengthen this legislation. I hope we will be surprised to find that the government will actually adopt such amendments, because our past experience has been that this is not the case.

For instance, groups like Ecojustice have already noted that the effectiveness of the changes proposed in Bill C-46 would be left largely to the discretion of the National Energy Board and the government. I think this is an issue we will hear more about when the bill goes to committee for further study.

To wrap up, as I said earlier, I was a bit surprised to be debating Bill C-46 on the first day of the House coming back after the holiday recess and given the fact that this legislation was only introduced on December 8, 2014. Perhaps the haste with which the government is proceeding has more to do with trying to restore public confidence in pipelines after it has completely bungled the file so often.

As my colleague from Papineau has said, when it comes to pipelines, the Prime Minister and the government are all hat and no cattle. This is a government that has failed to effectively protect the interests of the oil and gas sector or the environment. Of course, the oil and gas sector needs pipelines to get its product to offshore markets and other markets domestically in North America in the safest manner possible. I suspect members would all agree that, in terms of transportation of petroleum products, a pipeline is safer than a truck or a train.

Look at the government's record. It has botched the handling of the Keystone XL project. It bungled the northern gateway. It has orphaned energy east. Let us not forget that this is a government that has swallowed itself whole with regard to its attitude toward the energy sector. It was not very long ago that the government and the Prime Minister were constantly boasting about how Canada was a petro-state. The Prime Minister boasted that we are an emerging energy superpower to anyone who would listen. As a result of his fixation with the oil and gas industry, his party became dismissive of the importance of other sectors.

Of course, that was when the price of oil was in the $100 a barrel range, and perhaps it will be there again in six months or a year. Who knows when? However, now that the price of oil has fallen dramatically, the Prime Minister and his minions have adopted a new mantra to try to cover their incompetence and their failed economic strategy to put all their eggs in one basket.

Today they are telling Canadians that the energy sector is just a small percentage of Canada's GDP and that the economy as a whole is strong. They should tell that to the workers who are experiencing downsizing these days.

Some voters might believe the empty rhetoric, if there were not obvious signs of panic and chaos within cabinet ranks. We have a finance minister who one day says that his economic forecast remains on target and the very next day says that he is forced to delay the budget for several more months because of severe economic uncertainty. How do those two things equate? How do they go together? Clearly, the finance minister is hiding his budget, for obvious reasons.

I hope the natural resources minister is not hiding the real reason he is moving so quickly on Bill C-46. I hope the government is serious about pipeline safety, when it comes to Bill C-46, and is not just trying to cover up its ineptness and incompetence. I guess we will find out when we see its response to our efforts to enhance and strengthen this legislation to make sure that Canada has the safest pipeline infrastructure in the world. I hope that means the government will allow us to hear what experts have to say about what the limit ought to be and how this bill ought to be amended to be improved. After all, Canadians deserve nothing less.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, since this is the first sitting day of the 2015 calendar year, I begin by wishing you, Mr. Speaker, and all of my colleagues in the House a belated happy new year.

I do not know how I got lucky enough to be the first New Democrat to give a speech on a government bill in this chamber this year, but I am certain that there is a short straw with my name on it somewhere in the opposition lobby. Anyway, let us launch right into it.

The bill before us today is Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act. Perhaps it will help people to stop from nodding off if I explain at the outset that despite its unimaginative title, the bill really purports to improve pipeline safety in our country.

That is where we find the yardstick for whether my NDP colleagues and I will ultimately be able to support the bill. Does Bill C-46 actually improve pipeline safety, or is it a rhetorical exercise to provide the government cover in what is, after all, an election year? I will spend the next 20 minutes or so in this House trying to answer that single and most germane question.

I will begin by providing a bit of context first. There is no doubt that Canada's natural resources are a tremendous blessing and that our energy sector is the motor of the Canadian economy. It is imperative that we capitalize on those unique advantages. For New Democrats, that means that we have to leverage them by creating high quality middle-class jobs, by harnessing the full potential of Canada's natural gifts, and by maximizing the benefit of development for all Canadians. That development is vital to our economy and our country.

However, the reality is that resource development can only move forward if development is done sustainably. If we are going to seize the opportunities ahead, if we are going to leverage our resources to create wealth and prosperity for generations to come, then we will have to rise to meet new challenges and adapt to the new reality of the new century, and that requires a new vision, a vision that my NDP colleagues and I have been promoting tirelessly, not just for months, but for years now.

Our vision is one that promotes economic growth without sacrificing social or environmental sustainability, one that looks to the future instead of clinging to the past, and one that creates lasting prosperity instead of feeding endless cycles of boom and bust. To that end, our vision is based on three key principles: sustainability, to make sure that polluters pay for the pollution they create instead of leaving those costs to the next generation; partnership, to make sure that communities, provinces, and first nations all benefit from resource development and that we create value-added, middle-class jobs here in Canada; and most important, long-term prosperity that leverages our natural national resource wealth to invest in modern, clean energy technology that will keep Canada on the cutting edge of energy development and ensure there are affordable energy rates into the future.

For far too long, Canadians have been told they have to choose between our economy and our environment, but that is a false choice. It is an approach that is stuck in the past. A little less than two years ago, government documents revealed the very real economic costs of the environmental cleanup of the Giant Mine at Great Slave Lake. They have doubled from initial estimates, ballooning to nearly a billion dollars.

This is a vast industrial waste site bordering on the second deepest freshwater lake in the world, a Canadian treasure, and yet for more than half of the last century, it was contaminated with no regard for the costs it would impose on our children and grandchildren.

Communities from coast to coast to coast have made their voices clear. We will not let that happen again. However, despite this mess, the Conservative government is continuing down the same short-sighted path. It is dismantling every major piece of environmental protection and hurting Canada's economic development at the very same time.

Past generations can perhaps be excused for the way they treated places like Great Slave Lake, but our generation has no excuse. The fact is, in the 21st century, a social licence is every bit as important as a regulatory licence, if not more. In this day and age, any development model that relies on degrading our environment, on putting public safety at risk, or on exploiting our resources without benefiting our communities is no model at all.

Canadians understand only too well the long-term consequences of the Conservative government's attacks on our environmental laws, and they are reacting because those attacks are sabotaging resource development and ultimately our economy as a whole.

In big cities and in small towns, development projects are meeting increasing resistance. The northern gateway, Kinder Morgan, and energy east pipelines are but three of the most recent examples.

Why should Canadians not be worried? They see the Conservative government gutting environmental assessments, they see dangerous pipeline spills on the rise, and they worry whether their communities will be next.

A recent Harris/Decima poll conducted for the government made it clear that only 27% of Canadians are confident that the Government of Canada is able to respond effectively to a significant oil spill on water. The number is only slightly higher, at 32%, for oil spills on land. Similarly, a significant proportion of Canadians do not feel confident that pipelines, tankers, and trains are transporting dangerous goods safely. When it comes to rail transport, only 29% of Canadians feel confident that it is safe. Only 37% of Canadians believe oil tanker transport is safe, while 47% of Canadians are confident that pipelines can safely transport oil.

Clearly, that is not a vote of confidence in the Conservatives' handling of this critical file.

It is equally clear that Canadians share the belief of New Democrats that we must take steps to ensure that we are developing and transporting our resources in a safe and secure way; that we have to implement effective oil spill prevention measures; that we have to increase inspections in oversight; and that we have to push for expanded liability so that we are giving teeth to the polluter pays principle.

When it comes to oil transport, with the huge expansion in production and transportation of crude oil, we need enhanced safety protection. This is common sense, no matter what the method of transport.

Public safety and environmental protection must be the highest priorities if we are to develop our natural resources sustainably.

That brings us back to the heart of the bill that is before us today. Would Bill C-46 implement a true polluter pays regime in Canada, and would the bill go far enough to obviate Canadians' legitimate concerns when it comes to pipeline safety?

Let us look at what the bill purports to do.

Unfortunately, in the time allotted to me here today, it is only possible to do that in the broadest of terms. However, I am hopeful that we will be able to undertake the detailed clause-by-clause scrutiny the bill merits at the committee stage of the legislative process.

At its most general, the purpose of Bill C-46, would be to improve Canada's pipeline liability regime.

It would be part of the government's larger review of the distinct liability regimes that govern different aspects of Canada's oil and gas development. Here, members will recall that last year Bill C-22 dealt with liabilities related to offshore drilling and potential spills in both Arctic and Atlantic waters. As well, over the course of last year, the government began consultations on the liability regime governing rail transport, as it sought to do damage control in the wake of Lac-Mégantic. Now, we have yet a third piece before us dealing with the liability regime governing Canadian pipelines.

Here is what Bill C-46, would do.

It would reinforce the polluter pays principle.

It would confirm that the liability of pipeline companies is unlimited if an unintended or uncontrolled release of oil, gas, or any other commodity is a result of fault or negligence.

It would establish the limit of liability, without proof of fault or negligence, at no less than $1 billion for companies that operate pipelines with capacity to transport at least 250,000 barrels per day and an amount prescribed by regulation for companies that operate any other pipelines.

It would require that pipeline companies maintain the financial resources necessary to pay the amount of the limit of liability that would apply to them.

The bill would authorize the National Energy Board to order any company that operates a pipeline from which an unintended or uncontrolled release occurs to reimburse government institutions for the costs incurred in taking any action in relation to the release.

It would require that pipeline companies remain responsible for their abandoned pipelines.

It would authorize the NEB to order pipeline companies to maintain funds to pay for the abandonment of their pipelines.

It would authorize the Governor in Council to authorize the NEB to take, in certain circumstances, any action the NEB considers necessary in relation to an unintended or uncontrolled release.

It would also allow the Governor in Council to establish a pipeline claims tribunal to examine and adjudicate claims for compensation for damage caused by an unintended or uncontrolled release from a pipeline.

Many of these changes are long overdue, and I would be less than honest if I did not acknowledge that they appear to be a step in the right direction.

However, it is also true that, once again, the Conservatives are late to the game. New Democrats have been waiting for the government to fix oil spill liability for quite some time. As always, with the current government, the devil is in the details.

Let us take a closer look at the some of the pluses and minuses of what has been presented to us in this bill.

On the upside, the fact that polluters will be absolutely liable for harm caused by a pipeline spill is obviously a good thing. What it means is 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. Moreover, companies must have enough financial resources to cover in full the absolute liability limit. For companies whose pipelines have the capacity to move at least 250,000 barrels per day, that limit will be $1 billion once this bill passes. That monetary amount may be increased by the government in the future, but the bill would prohibit cabinet from lowering it. That too is a good thing.

The bill would also give the NEB new tools to recoup cleanup costs from polluters, and in certain circumstances it even gives the board the power to recover costs from the industry as a whole, not just from the individual polluter.

Finally on the plus side, the bill would make polluters liable for environmental damages. Members will recall that we spent a lot of time when scrutinizing of Bill C-22 on the need to make polluters responsible for environmental damages or losses of non-use value of public resources. It is as important now as it was then to ensure that liability is not just restricted to the environment's commercial value. Bill C-46 sets out to do that and is an important first step in catching up with U.S. oil spill regulation, which is much more developed with respect to the recognition of environmental damages.

However, as a thoughtful analysis by Ian Miron at Ecojustice makes clear, there is an overall lack of certainty in Bill C-46 that may well undermine what would otherwise be this positive first step. Specifically, Mr. Miron points out three things. First, and perhaps most crucially, Bill C-46 does not impose unlimited absolute liability on polluters. No liability regime can truly be called a polluter pays regime unless and until polluters are made absolutely liable for the full costs of environmental harm.

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 costs of an accident such as Enbridge's 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.

Moreover, Bill C-46 actually takes 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 absolute liability, the government and, therefore, Canadians may still be on the hook for spills, and that, frankly, is wrong. If the government is so convinced that pipelines are a mature industry, then the industry is one that can and must pay for itself. Instead, the fact that this bill does not completely enshrine the polluter pays principle means that the Conservatives are giving just one more handout to its friends in the oil patch by making taxpayers liable for oil spill risks.

In that regard, it is also worth pointing out that the bill is completely silent on identifying absolute liability limits for smaller oil pipeline companies, or for gas and other non-oil pipeline companies. While such limits may be set by cabinet down the road, it begs the question of why the government would not do so now. Is volumetrics the only criterion the government has used to assess the potential magnitude of damages from a spill? I hope that in the course of our deliberations the Conservatives will give us an answer to that rather pressing question.

This leads to my final broad criticism of the bill. Just as the absolute liability limits are discretionary for all but the big pipeline companies, many other aspects of the new liability regime are as well. While the bill would create several new tools that could enhance the NEB's ability to recoup cleanup costs from a polluter, the NEB or the cabinet get to decide whether or not they will be implemented. As Ecojustice thus rightly points out, BillC-46 leaves considerable leeway for politically motivated decisions and backroom arrangements between operators and the NEB, a regulator that lacks credibility on the pipeline front.

In fact, this may be a good time to say yet again that the NEB needs a fundamental overhaul. While the Liberals and Conservatives have generally been happy simply to rubberstamp pipeline projects, my NDP colleagues and I firmly believe that major resource projects must be judged on their merits. That means that the NEB has to subject proposals to a rigorous and robust environmental assessment process. Assessment criteria must include the impact of each individual project on our emissions and climate change commitments, on Canadian jobs, and on national and regional energy security. Public consultations must be credible and democratic, not shallow, limited, or by paper only, and projects must honour our legal obligations to first nations.

Clearly, such rigour was absent in the NEB review of both Enbridge's northern gateway and Kinder Morgan's Trans Mountain expansion, and the same flawed process is now being applied to TransCanada's energy east plans as well. No wonder Canadians are worried about these pipelines snaking their way through backyards.

Northern gateway has the capacity to move 525,000 barrels per day, 890,000 barrels per day for Kinder Morgan and a staggering 1.1 billion barrels per day for energy east. The potential for disaster is huge, which brings me to the last point I want to raise in wrapping up my participation in today's debate.

While the new liability regime deals with protecting Canadians from the cost of cleaning up an oil spill, my NDP colleagues and I believe the best way to protect Canadians is to ensure such spills do not happen in the first place. Measuring risk correctly and assigning liability may be one tool in the kit to encourage industry to improve its safety practices and therefore reduce the likelihood of catastrophic accidents. However, it is only one tool of many and nothing else is being done. Where is the concrete action to fix the broken environmental assessment process that the Conservatives have dismantled? Where is the much-needed legislation that would bring in better regulation and oversight?

As far back as 2011, the environment commissioned highlighted that the National Energy Board was failing to ensure that known problems were being fixed and that pipelines were being properly maintained. We have a world-class labour force that is ready and eager to do that work. However, without companies making commitments to pipeline safety, Canadians can be forgiven for wondering not whether an oil spill will happen but when.

Canada's natural resources are a tremendous blessing and managed properly and sustainably they can be important drivers for our economy. This is particularly true of the energy sector. However, instead of guiding our energy policy in the best interest of Canadian jobs, the environment and the economy, the Conservative government is gutting assessments and reviews, and failing to address the valid concerns of Canadians. That is such a narrow-minded and counterproductive approach. Social licence, the consent of Canadians for the development of Canada's resources, is crucial to the success of any project. However, instead of working to achieve such consent, the government's intransigence is actually undermining the support for companies in the pipeline sector by exacerbating opposition to energy development right across the country.

There is a better way, and the New Democrats have been championing it for years. It is based on sustainable development. Governments must look at environmental, social and economic impacts before going forward with any development project. That way we can prevent devastating environmental damage, while ensuring that Canadians benefit from Canada's natural bounty of resources. It is the right thing to do, and it finally would allow us to move beyond the all too convenient Conservative canard that Canadians must choose between the economy and the environment. Nothing could be further from the truth.

With the right kind of leadership, Canadians will finally be able to have their cake and eat it too, and that is the kind of leadership the NDP will provide when it forms government, under the experienced leadership of the member for Outremont, later on this year. That will make this a happy new year indeed.

[Greg Rickford, Conservative, Kenora, ON]

Mr. Speaker, I thank the member for that question, particularly with respect to her work in western economic diversification and the support this government is giving for certain companies to advance pipeline security, monitoring, and safety.

There is a reference to best available technology in this legislation. Through our support, these companies from Quebec City and across the country through to Alberta are working on exciting new technologies that will give a key frame of reference for all companies in the business of creating pipelines and energy infrastructure to focus on and take the safety element even further.

With respect to liability, there are two key points here. Pipeline companies remain fully liable when they are found to be at fault or negligent. This is referred to in insurance nomenclature as unlimited liability. What builds on that and what is terrific about the pipeline safety act, which on all accounts has been well received by stakeholders, is the absolute $1 billion liability, which means that no matter what the problem source or whose fault it is, the pipeline company would be responsible to pay up to $1 billion.

An analysis of historical data demonstrates that this level of absolute liability is world-class, world-leading coverage. Comparisons to countries around the world tell us that we are at the forefront and assure Canadians and our prospective customers in new markets that energy infrastructure is important to us and that our liability and compensations lead the world.

[Greg Rickford, Conservative, Minister of Natural Resources and Minister for the Federal Economic Development Initiative for Northern Ontario]

moved that Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, be read the second time and referred to a committee.

Mr. Speaker, it is a privilege and an honour for me to serve the constituents of the great Kenora riding and to proceed with the debate on pipeline safety.

One of our country's greatest success stories is Canada's extraordinary ability to develop our natural resources through the use of new technology and innovation. Whether we are unlocking the incredible energy potential of the oil sands, mining uranium to generate nuclear power, or developing our vast hydroelectric power resources, Canada's energy industries continue to rise to the occasion.

As Canada's production of energy resources grows, we have an opportunity to export more of our energy products to international markets with growing demand. The choice is simple: build the energy infrastructure to reach these markets, or leave these products in the ground.

Expanding our energy trade in not merely a priority for our government, it is an imperative. We recognize that for this opportunity to be realized, we must ensure that the public is confident in the safety of our infrastructure.

Through our responsible resource development plan, our government strengthened environmental protection, enhanced aboriginal consultation, and provided predictable timelines for regulatory review. This included bringing forward regulations that ensure that companies, not taxpayers, are responsible in the event of an incident.

There are over 73,000 km of federally regulated pipelines that criss-cross our country. They deliver oil, natural gas, and petroleum products from coast to coast to coast and beyond our borders. These energy products heat our homes and our workplaces. They power factories and farms. They fuel cars, buses, trains, and planes. They transport us across town, across the country, and around the world.

More specifically, in 2013, Canada produced over 3.5 million barrels of oil and 13.7 billion cubic feet of natural gas per day. The vast majority of it, over $100 billion worth, was shipped by pipeline.

While the economics themselves tell a compelling story, we have been clear that if projects are to proceed, they must be proven safe for Canadians and safe for the environment. In fact, more than 99.999% of petroleum products, going through more than 72,000 km of federally regulated pipeline between 2008 and 2013, was transported safely. Much of the credit for this solid track record rests with our stringent regulatory requirements and the excellent work of the National Energy Board.

Companies operating pipelines must anticipate, prevent and manage potentially dangerous situations associated with their pipelines. They must develop programs to address safety issues, deal with emergency situations, manage the integrity of the pipelines, educate the public and protect the environment.

The National Energy Board reviews and audits all of these measures. Although the pipeline safety record is impressive, our ultimate goal is zero incidents. That is the purpose of this bill. The pipeline safety act seeks to further improve Canada's record by modernizing the National Energy Board Act.

This legislation would send a clear signal. Our government would be fulfilling our commitment in the Speech from the Throne to have a world-class safety system that enshrined the polluter pays principle in law.

We are determined to reduce risks to public and environmental health and safety as we capitalize on Canada's energy wealth to create jobs and prosperity for Canadians. This ongoing commitment to safety and environmental protection is part of our plan for responsible resource development. The plan is a continuous process of finding new and better ways to improve our world-class regulatory system.

This legislation represents the next step in our continued process of strengthening Canada's pipeline safety system. It would build on previous pipeline safety measures that gave the National Energy Board new authority to levy administrative monetary penalties and to increase the number of NEB inspections and audits. The pipeline safety act would go even further. In other words, we would build on that 99.999% safety record for more than 72,000 kilometres of federally regulated pipelines.

Our objective here is to ensure that we have a world-class, in fact, elements of it world-leading, pipeline safety system. It would be built on three pillars: one, prevention; two, preparedness and response; and three, liability and compensation.

The pipeline safety act would deliver on our pledge to enhance efforts to ensure that aboriginal peoples are engaged in all aspects of pipeline safety operations.

Let me explain each of these improvements in greater detail.

First, we will look at the preventive measures. In order to develop our resources responsibly, we need to do everything we can to prevent incidents from occurring. We will be asking the National Energy Board to provide direction on using the best technologies available for building and operating pipelines. Technologies continue to improve, and the government is committed to ensuring that every project is environmentally sustainable.

As an additional preventive measure, the act sets out the National Energy Board's powers related to audits and inspections. It stipulates that companies have a legal obligation to respond to any requests the board may have in relation to such audits. To protect pipelines from accidental damage, the National Energy Board will strive to align federal and provincial pipeline safety zones.

Companies must inform the authorities and obtain approval before digging or building in the safety zones. This safety measure will prevent damage to pipelines.

We will also take action in terms of preparedness and response measures. We are strengthening requirements, particularly financial requirements, to ensure that companies are able to deal with an incident, if necessary.

The pipeline safety act enshrines the polluter pays principle. The bill requires companies operating pipelines to hold a minimum level of financial resources for responding to oil spills, set at $1 billion for companies operating major oil pipelines. The companies must demonstrate their financial capacity and a portion of those financial resources must be readily accessible to ensure rapid response to any incident.

The bill includes other measures. It gives the National Energy Board the authority to take control of incident response and cleanup in exceptional circumstances. This means that the government will provide financial security to ensure that the NEB has the necessary resources to pay for the cleanup costs. If a company is unable to pay damages to those affected, the government may establish a pipeline claims tribunal to streamline the complaints process.

In both cases, the legislation expands the NEB'S authority to recover costs from the companies if it is called to respond. Canadians can rest assured that every incident will be dealt with properly and that taxpayers will be protected.

I want to emphasize the government's commitment to working with aboriginal communities. Together with communities and the industry, we will develop a strategy to increase aboriginal participation in pipeline safety measures.

I also want to emphasize the government's pledge to work with aboriginal people in a way that protects the local environment and respects ancestral treaty rights.

The third key area or pillar covered by the legislation is liability and compensation. In this regard, we are world class, if not world leading. Building on companies' unlimited liability when they are at fault or negligent, this legislation would implement no-fault or absolute liability for all companies operating pipelines. For major oil pipelines, the figure would be $1 billion. What this would mean is that pipeline companies would be responsible for damages, regardless of what happened, who caused it, or how an incident arose. This is a standard that would leave no doubt.

The pipeline safety act would provide government with the ability to pursue pipeline operators for the costs of environmental damages. The legislation would also give the NEB authority to order reimbursement of spill cleanup costs incurred by governments or individuals. Companies would bear the full cost of cleanup and compensation.

Also of significance, the legislation would ensure that companies would remain responsible for their abandoned pipelines in perpetuity. In the event of an incident, operators would cover all costs and damages related to their pipelines, even if they were no longer in use. This would reassure landowners that they would never be in a position where a pipeline would become their responsibility.

As well, the act would expand the board's authority to recover its own costs for stepping in and taking charge if industry failed to adequately respond to an incident. Again, operators would be held financially accountable for costs and damages.

Tally up these amendments and the message is clear. The Government of Canada will ensure that Canada's pipeline safety system is world class, that first nations are involved in pipeline safety operations, and that taxpayers are protected.

The oil and gas sector is vitally important to the lives and livelihoods of Canadians, contributing 7.5% of our country's gross domestic product. Canada sold $117 billion in energy products to the world in 2013. That is more than one-quarter, 27%, to be precise, of our country's merchandise exports.

While we have an enormous endowment of petroleum resources, we have only one significant export customer. One hundred per cent of our natural gas exports and 97% of our oil exports currently go to the United States. This relationship has served both countries well and will continue to do so in the future.

However, it is clear that Canada will need to find new markets as Canadian and United States' oil and gas production grows. There are incredible market opportunities, particularly in Asia and Europe. In Asia's case, the International Energy Agency forecasts that by 2035, the world will need one-third more energy than is being consumed today. The rise of China and India, among other emerging nations in that part of the world, is propelling the bulk of that demand.

Although we are making progress toward developing alternative and renewable energy sources, according to the International Energy Agency, by 2035, fossil fuels will still be meeting three-quarters of global demand.

Canada's energy sector can contribute more to our economy and global energy security, but only if we build the pipelines to transport energy to markets, including the domestic market.

Our country needs to develop a new energy infrastructure to diversify its markets and seize this unprecedented opportunity. This is critical if we want Canada's energy sector to prosper and stimulate our economy in the future.

The economic benefits for Canadians would be enormous. According to the International Monetary Fund, building new energy infrastructure would boost Canada's GDP by an additional 2%. That is equivalent to $1,000 for every man, woman, and child in the country.

First nations communities are especially well positioned to benefit from responsible energy development. Many of the existing or proposed energy resources and infrastructure projects are located proximal to their communities, and over the next decade, hundreds of major resource projects worth more than $675 billion are planned or currently under way.

As technology evolves, Canada's oil sand reserves could double to over 300 billion barrels to become the largest reserve in the world, leading to an even greater opportunity in the future for Canada.

Likewise, Canada's marketable natural gas resources are estimated to be up to 1,300 trillion cubic feet. These are incredible reserves. That is not only enough to meet our domestic demands for over 200 years at current production rates, but to meet the burgeoning demand from markets like Europe and Asia over the medium term. That is before we have even considered offshore gas reserves and new discoveries potentially revealed or realized through fracking.

According to the Conference Board of Canada, between 2012 and 2035, the natural gas industry could invest over $386 billion in Canada, almost half of it in British Columbia.

As global energy markets change, Canada also needs to change in order to unlock this potential. Other countries are moving quickly to capture growing energy markets in places like China and India. We cannot lag behind if we want to continue to make the most of our energy resources.

We have a world-class and, in some cases, unique regulatory system to monitor this sector. This legislation further strengthens the regulatory system. It sends a message to Canadians and international clients that pipeline safety is paramount to Canada.

If we continue to innovate in the technology sector and remain committed to working constructively with aboriginal groups and protecting the environment, we will then have all the elements needed to ensure Canada's place as a world leader in responsible energy development.

Furthermore, the government is committed to ensuring that Canada's pipeline safety system is a world-class system that Canadians can trust. We will not be satisfied with a system that is almost perfect; we want absolute excellence.

The legislation we are debating today builds on our world-class safety regime, but the job is never done. We will continuously examine the pipeline safety system to better protect Canadians and the environment. We are striving for zero incidents. We will get there by maximizing advances in technology and innovation.

We can take inspiration from Sir Henry Royce, the English engineer and car designer who co-founded Rolls Royce Company. He built a dynasty in his quest for perfection. His motto was “Strive for perfection in everything you do. Take the best that exists and make it better.” That remains our goal and our focus as we continue to develop and transport Canada's natural resources responsibly.

[John Duncan, Conservative, Vancouver Island North, BC]

moved for leave to introduce Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act.

(Motions deemed adopted, bill read the first time and printed)