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Bill C-46, Pipeline Safety Act (Second Reading)

 

Hon. Michael L. MacDonald moved second reading of Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act.

He said: Honourable colleagues, it is an honour to sponsor this legislation in the Senate, and I am pleased to have the opportunity to lead off this debate.

The pipeline safety act directly addresses our government's priorities: energy security, economic growth and environmental protection. It recognizes the importance of pipelines to transport the energy we need and use every day, whether it is to fuel our cars, power our businesses and factories, or heat our homes. It supports the significant role that the oil and gas sector plays in our national economy.

We've heard the numbers many times in this place, but they bear repeating. The energy sector, led by our abundant oil and gas resources, directly contributed close to 10 per cent 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.

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's why our comprehensive plan for responsible resource development makes it clear that no resource development will be permitted unless projects are deemed safe — safe for Canadians and safe for the environment.

The pipeline safety act is a key component of this plan for responsibly developing our natural resources.

Colleagues, Bill C-46 is based on three key pillars of incident prevention, preparedness and response, and liability and compensation. There is widespread agreement that this legislation hits the mark on all three aspects. Indeed, a cross-section of witnesses offered expert testimony on the bill to the Standing Committee on Natural Resources in the other place. There was general consensus that the legislation is needed and is a positive step. I look forward to a thorough study of this legislation during committee stage here as well.

This piece of legislation fulfills our government's commitment to enshrine into law the "polluter pays" principle. If a company is the source of pollution, they will pay to clean it up. Moreover, any losses or damages will be paid for by the company responsible.

This is not a new idea. We have already enshrined the "polluter pays" principle in a variety of other similar bills passed by Parliament. We see this in the offshore industry under Bill C-22. We've seen it in the nuclear sector. We see it in the Fisheries Act. The list goes on.

The bottom line is clear: It's polluters that must be held responsible for the harm they cause, not Canadian taxpayers.

Our government took into consideration a wide variety of factors before legislating $1 billion in absolute liability for companies operating major oil pipelines. This included an analysis of everything from historic incidents involving pipelines to the size of current and pending pipeline projects.

Government officials also looked at the volume and nature of the goods being transported by Canada's pipelines, and considered what other peer jurisdictions such as the U.S. and the United Kingdom are doing and the approaches they have taken. We know, for example, that these peer jurisdictions do not have absolute liability in their pipeline legislation. So we are very comfortable with and confident in what we have arrived at in the pipeline safety act — and not only in terms of "polluter pays" principle, but also in terms of ensuring pipeline operators have the financial resources to meet the bill's other provisions on preparedness and response, as well as on liability and compensation.

On preparedness and response, we are amending the National Energy Board Act to require companies operating major oil pipelines to have a minimum of $1 billion in financial resources, a portion of which must be on hand to respond quickly to an incident. If a company is unable or unwilling to respond, the National Energy Board can, in exceptional circumstances, be given the power to take over response operations, and the National Energy Board will recover the costs of those operations from the industry.

In other words, the Government of Canada will provide the NEB with the authority and the resources, through a financial backstop, to respond and complete the cleanup. This means that if there is an incident involving a pipeline, the response will be immediate. It will be thorough and the cost of it will not come out of the Canadian taxpayers' pocket.

The pipeline safety act also strengthens our system of liability and compensation in a variety of other ways.

Yes, absolute liability is set at $1 billion for operators of major oil pipelines for costs and damages, regardless of what happened or who caused the incident. However, the pipeline safety act reinforces the polluter-pay principle by making it very clear that pipeline operators have unlimited liability when they are negligent or at fault.

So, to repeat: If you are at fault, your liability is unlimited, period. We can't make it any clearer than that, Mr. Speaker. In addition, as I alluded to earlier, this bill will also allow the government to pursue pipeline operators for the costs of damages to the environment. As well, this new legislation empowers the NEB to order reimbursement of clean-up costs incurred by either governments or individuals. Finally, the NEB will be able to recover its own costs for stepping in to coordinate a response.

These sweeping changes are a clear indication of how committed the government is to ensuring that Canada can safely transport the energy we all use every day.

I opened my remarks by noting how the pipeline safety act reflects three priorities: economic growth, energy security and environmental protection. After taking a closer look at some of the key provisions in this legislation, I hope Canadians will have an even better understanding of how Bill C-46 contributes to achieving all three of these.

We continue to create and protect jobs and opportunities for Canadians from coast to coast to coast by encouraging our country's energy independence. We do so while maintaining and strengthening one of the most stringent and effective pipeline safety regimes in the world. That's why I urge all honourable senators to support this world-class legislation and, for the record, this bill was unanimously supported by all parties in the House of Commons.

Thank you for your attention.