The House resumed from April 30 consideration of the motion that Bill , be read the third time and passed.
Mr. Speaker, I am happy to have another chance to speak on the slightly amended version of Bill 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 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 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 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 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 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 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 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 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 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 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.
Mr. Speaker, I am going to be splitting my time today with my hon. colleague from , 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 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 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.
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 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 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 , 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.
Mr. Speaker, I am pleased speak to Bill , 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 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 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 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 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.
Mr. Speaker, I will be sharing my time with the member for .
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 would strengthen this world-class effort. Specifically, Bill 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 has said on many occasions, the 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 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 , 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.
Mr. Speaker, it is a pleasure to join the debate on Bill . 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 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 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.