Offshore Health and Safety Act

Bill to Amend--Third Reading

February 16, 2021


Hon. Mohamed-Iqbal Ravalia [ + ]

Moved third reading of Bill S-3, An Act to amend the Offshore Health and Safety Act, as amended.

He said: Honourable senators, I’m pleased to rise today to give a few closing remarks on Bill S-3, An Act to amend the Offshore Health and Safety Act. I want to begin by thanking Senator Massicotte and the Standing Senate Committee on Energy, the Environment and Natural Resources for their thorough consideration and observations, as well as the witnesses for their compelling testimony.

I would also like to thank Senator Wells for his invaluable contribution to this bill. As the sponsor of the original Offshore Health and Safety Act in 2014, as well as the former deputy CEO and board member of the Canada-Newfoundland and Labrador Offshore Petroleum Board, there is no one better suited to help us examine this bill.

Allow me to provide a very brief refresher to help frame the context of this bill. The original Offshore Health and Safety Act amended two provincial accord implementation acts and established a new occupational health and safety regime in Canada’s Atlantic offshore areas. The act established new measures to prevent accidents and injury arising out of, linked to or occurring during employment in offshore petroleum-related activities.

For example, it clarified the role of both provincial and federal governments, as well as regulators, in preventing accidents and injury; outlined the safety roles played by everyone involved from owners, operators, employers, supervisors, employees to contractors; and added a new appeal process when someone is accused of violating rules. It also established and clarified employee rights, including the right to refuse dangerous work without the risk of facing reprisal.

While the 2014 Offshore Health and Safety Act was complex and broad in scope, the bill that is before us today is straightforward. Bill S-3, in its original form, proposes to extend the current transitional regulations, which expired at the end of the past year, for an additional two years, to December 31, 2022.

This extension is intended to help ensure that the governments of Newfoundland and Labrador, Nova Scotia and Canada have enough time to finalize the comprehensive permanent regulations that are currently being developed. These permanent regulations will ultimately replace the transitional regulations with a single, comprehensive offshore health and safety regulation that are tailored to the unique, and often dangerous, offshore working conditions.

Given that the current regulations have expired, clause 3 of this bill ensures that the extension of the transitional regulations will apply retroactively to January 1, 2021. In addition, although Bill S-3 falls under federal jurisdiction, both Newfoundland and Labrador and Nova Scotia have continued to have mirror provincial regulations in place, ensuring the continuation of protection for our offshore workers.

I recognize that the government has had five years plus an additional one-year extension to complete this task. As we heard during committee, developing these regulations has been an incredibly challenging process.

These regulations are very complex, totalling nearly 300 pages, with more than 100 domestic and international health and safety standards incorporated by reference. These regulations require vetting and approval by three separate governments, multiple ministries and two jointly managed regulatory boards, which, as you can imagine, can be extremely time consuming. There are also several other factors, including extensive consultations and engagements with stakeholders, as well as competing drafting priorities and, most recently, new challenges imposed by COVID-19.

I understand and can appreciate the disappointment that arises from needing this extension. As highlighted in committee, there is a need for the government to prioritize this legislation and, in effect, prioritize the health and safety of our offshore workers and their loved ones.

As Minister O’Regan and his department officials indicated during committee, there is a detailed implementation schedule in place to ensure that the Department of Justice and its provincial partners adhere to the December 31, 2022, deadline. This plan was shared with committee members.

The bill before us contains amendments proposed by Senator Wells that extend the transitional regulations to December 31, 2021. In the most practical sense, I hope that this tight timeline will not negatively impact the advent of the new bill.

As the minister outlined, there are still several outstanding steps to finalize the current regulations, including finalizing the draft regulations, sharing them with provincial partners and offshore boards, an internal review to be conducted by the Department of Justice to ensure consistencies within the regulations and legal framework, pre-publishing in the Canada Gazette, Part I and the final step of publication in Canada Gazette, Part II.

Honourable senators, passing this bill through the Senate is a priority, but it still needs to make its way through the other place and receive Royal Assent. The clock is already ticking. However, I am confident that Natural Resources Canada, the minister, the government and all parties involved are firmly committed to managing the regulatory development process closely and will adjust as needed to ensure all steps are completed by the end of the granted extension.

Bill S-3 is more than a piece of legislation; it involves protecting the health and safety of our offshore workers. Passing this bill will be one step in the right direction toward completing this crucial task and bolstering the state of Canada’s offshore health and safety regulations. We owe this to the brave men and women who earn their livelihood in a hazardous and unpredictable environment. Thank you. Meegwetch.

Hon. David M. Wells [ + ]

Honourable senators, thank you very much for the opportunity to speak on third reading of Bill S-3. I want to, again, thank the chairmanship of Senator Massicotte and, in fact, the whole committee for their thoughtful deliberation at committee and within the chamber at second reading. I also want to thank Senator Ravalia for shepherding this bill through. It is an important bill, as you know. I’ve spoken on it many times, both in the chamber and outside.

The 2014 bill was simply enabling legislation for regulations to be written. We don’t make the regulations in the Senate. They don’t make regulations in the other place. We simply enable officials and the government to create the regulations, and that is done through a process of consultation and gazetting. I will speak about that in a couple of minutes.

In the initial legislation, colleagues, you will recall, that five years were given. That was extended by one year in the Budget Implementation Act, 2018, No. 2. Bill S-3 attempts to grant two additional years to that program to December 31, 2022.

It is coincidental to be addressing this at this time. Yesterday, all of Newfoundland and Labrador quite publicly commemorated the thirty-ninth anniversary of the sinking of the Ocean Ranger and the loss of 84 lives and, very soon, in early March, we will be remembering the Cougar Flight 491 where 17 people lost their lives. This is important, not just for Newfoundland and Labrador, not just for the workers in the offshore, but for all of Canada. It should be commemorated in that light.

At committee we heard from the operators. The operators are the large companies that operate in the offshore, companies like ExxonMobil, Husky, Suncor, Chevron, the large operators as represented by CAPP, the Canadian Association of Petroleum Producers. Colleagues, we also heard from Noia, which is the oil and gas association based in St. John’s, Newfoundland and Labrador, but really with membership across Canada. It is the largest oil and gas industry association in Canada. We also heard from Unifor, the union that represents many of the offshore workers. We heard from individual companies that deal in safety on a daily basis. And we heard from Cougar Helicopters, who had an excellent presentation and let us know how the important permanent regulations are to the helicopter sector of the offshore business.

We know, colleagues, that it can be done in less than a year. And we say why? Because the officials and the minister told us it could. The minister specifically said at our February 9 committee meeting that they had, and I’m reading from the text from the committee meeting last week:

. . . we were scheduled to start full-day, in-person drafting sessions the week of March 23 last year, then the pandemic hit us.

So we know that the department had at least nine months to get this done, to December 31. We now have those nine months plus five weeks — it being mid-February — under that timeframe.

The minister also said that one of the reasons for the delay, aside from COVID-19, which obviously had an impact and some delay in 2020, but had no impact on the delays beginning in 2014 up to the beginning of 2020.

We know, colleagues, also that the drafting is complete. Mr. Gardiner, from Natural Resources Canada said in his testimony at committee last Tuesday, February 9:

. . . I can confirm we do have a full-draft regulation. This is not the first consultation. As the minister and Glenn have pointed out, there have been extensive consultations on policy intent in five different stages between 2016 and 2018.

So, colleagues, we know it can be done in the time given.

I reference a comment made by Senator Patterson in committee. He gave an excellent quote from Cyril Northcote Parkinson: “Work expands so as to fill the time available for its completion.”

I think that’s what has happened here. When I look at the legislation from 2014, we gave five years to get this done. If you give anyone five years to get something done, I find that they don’t start looking at getting it done until year four, and I’m afraid that’s what happened in this case.

The items that could cause further delay — but I am assured won’t cause further delay — are the consultation and gazetting process. We were told by one of the officials that the regulations have been drafted. The gazetting process, as per the default that was in the 2014 legislation, is 30 days; 30 days for industry to respond to the draft regulations that the department puts out.

We know because we heard testimony from both CAPP, Dr. LeDez, Noia and Unifor that they can turn around their comments within the 30-day gazetting requirement.

The only thing that requires greater consultation in gazetting is a 75-day period for international trade agreements and if there is another order from the President of the Treasury Board. So the default is 30 days and all parties have accepted that this is what it will take. Colleagues, this is routine. This draft is complete and the officials told us so.

Minister O’Regan said the time delay, as I mentioned earlier, was due to consensus decision making and Canadian federalism. This is not about Canadian federalism. This is about safety in the workplace. This is an easy one.

I recall Senator Simons’ comments in the committee about perfect being the enemy of good. Senator Simons would know, as a journalist and a writer, that you can tweak forever to try to make it perfect, but getting it out the door is critical.

The other thing, colleagues, with this legislation and the regulations that came under the 2014 bill, we don’t write the regulations. We give the enabling legislation. Regulations can be changed at any time in the future with a gazetting process and consultations. So that’s an important consideration to make. This is not the endpoint. This is only the beginning point.

I’d like to spend a moment talking about the observations we made at the committee. There were three amendments, and it was all-encompassing under one amendment, and that’s to reduce the timeline to get this done from two years to one year — or, in fact, increase the timeline for the transitional regulations that were put in place by an additional year — six years to seven years — which would end at the end of this current year, on December 31, 2021.

Colleagues, I would like to talk about the observations made and I want to especially thank Senators McCallum and Galvez for assisting me in putting these observations together. They were important. We were tasked with doing it and presenting it to steering, which we did.

The first observation, colleagues, is that the committee is concerned that deferring the adoption of permanent offshore health and safety regulations is delaying necessary changes. The committee is of the opinion Bill S-3 should represent the final extension of the deadline to adopt permanent health and safety regulations for Canada’s offshore.

Further, the Natural Resources Canada must submit an implementation progress report to the Senate by June 15, 2021, including the implementation schedule to the expiry of the transitional regulations.

Colleagues, this observation is obvious. The intent is to ensure that there is oversight in the work that needs to proceed. We can do that through the Standing Senate Committee on Energy, the Environment and Natural Resources or we can do it through the Senate itself.

Observation number two was spearheaded by Senator McCallum, and I appreciate her efforts on this. The committee is of the opinion that the regulations should ensure safeguards and best practices are upheld and maintained by all, subject to the regulations with regard to health and safety and regardless of one’s age, race, religion, gender, sexuality, et cetera.

Honourable senators, I think the observations complete very well the work that the committee has done. If this passes third reading as amended, as the committee had recommended, we will all be keenly watching if the other place agrees that this should get done as soon as possible.

Colleagues, I mentioned some of the presentations that were made at committee and I want to finish with this. Last week, the day after our February 9 committee meeting and the day before our February 11 committee meeting, committee members were sent a submission by Robert Decker in French and in English. Robert Decker, you will recall from my second reading speech, was the lone survivor of Cougar Flight 491, which went down in the Atlantic Ocean in March 2009.

I want to read one line from Mr. Decker’s submission. And as you will recall, I know Mr. Decker, and he does not speak publicly about this but he was driven to at this juncture. I will just read one section from his submission:

. . . I would like to add my voice that as a victim of a failure of safety in the offshore, that five years in the initial 2014 legislation seemed like a long time for something everybody agreed on. The one year delay granted in 2018 flew under the radar but was accepted because there appeared to be forward movement.

Now, a further delay in implementing these health and safety regulations to January 2023 gives the strong indication that those charged with the legislative oversight of safety in the offshore have not learned and don’t care. Senators, I urge you to press the government to do what was promised and to not let the excuses of Ottawa further impact the safety in our workplaces.

Colleagues, nothing more needs to be said. Let’s get this done. Thank you.

Hon. Marc Gold (Government Representative in the Senate) [ + ]

Honourable senators, I want to thank the sponsor, the critic and members of the committee for their hard work. We believe that it is important that this bill get to the other place. The health and safety of our precious workers are at stake.

I simply want to register the government’s reservations about the shortened timeline that the amendment has introduced. We will be voting for this bill, but we remain concerned that no shortcuts should be taken in the development and in the proper consultation with all stakeholders in the development of these regulations. With that, we are ready for the vote.

The Hon. the Speaker pro tempore [ + ]

On debate, Senator Galvez.

Honourable senators, I rise to speak to Bill S-3, An Act to amend the Offshore Health and Safety Act, which seeks to reinstate transitional regulations while permanent regulations are being finalized. The initial legislation passed in 2014 gave five years for the development of these regulations and this period was extended by one year in 2018 up to 2020.

There is currently a federal regulatory gap in the offshore occupational health and safety regime which Bill S-3 attempts to address.

Colleagues, oil and gas production is dangerous work. Oil-and-gas-producing provinces have much higher workplace injury rates than other provinces. Newfoundland in particular has the highest rate by far of occupational disease fatality in Canada. According to the U.S. government, a worker in oil rigs is seven times more likely to die on the job than the average American worker.

As Husky Energy put in 2012:

The Grand Banks region has a harsh environment . . . .

. . . icebergs are a common occurrence. . . . Icebergs up to 5,900,000 tonnes have been observed in the area. . . .

The quote continues:

Winter storms are considerably more intense and frequent than those in the summer. The associated winds reach gale force several times in a typical year, and sometimes attain hurricane force.

When a big storm is forecasted, operators cap the well and staff are usually evacuated via helicopter, or so we hope. When the Ocean Ranger drilling rig off Newfoundland capsized in a storm in 1982, as was mentioned before, all 84 workers on board died. In 2009, a helicopter ferrying workers to an oil rig crashed in the Atlantic Ocean, killing 17 people.

Things are not going to get any safer with climate change impacts. With increasing temperatures, we can expect more icebergs and worker exposure to more extreme weather events. Higher winds and more hurricanes can affect the structural integrity of platforms, and ocean acidification wears down steel and concrete infrastructures. Sea level rise, storm surges and bigger waves can inundate the decks and affect tie-down components. Higher water levels, stronger winds and waves can result in the overturning and total failure of offshore structures and platforms.

In 2005, Hurricanes Katrina and Rita devastated the Gulf of Mexico, destroying 116 platforms and causing 150 others to be removed in the year and a half that followed.

We cannot and must not forget the 2010 Deepwater Horizon disaster, the largest oil spill in U.S. history, which killed 11 people, injured 17 and caused $17.8 billion U.S. in damage. A judge later found that BP had acted with gross negligence. In 2013, BP pleaded guilty to manslaughter and paid $4 billion in fines.

It’s worth noting that BP holds an interest in nine exploration licences in Newfoundland’s offshore oil region.

In April 2015, the U.S. Department of the Interior Bureau of Safety and Environmental Enforcement proposed a set of complex and highly technical regulations that impose expansive new requirements on offshore oil and gas drilling following the Deepwater Horizon tragedy. The new requirements called for far-reaching changes to the rules by which the oil and gas operators are governed and would increase costs in a manner that will severely impact Gulf Coast economies. I suggested hearing from health and safety experts from the U.S. offshore to understand how Canada’s current transitional offshore regulations compare. Unfortunately, none testified before our Energy Committee.

It has also been very hard for me and my team to find information about the cost of compliance with rigorous health and safety standards such as those. A rare study by Wood Mackenzie cited in a 2016 article on the safety rule changes found that under an assumption of $80 per barrel of oil, the modified rules would decrease exploration drilling by up to 55%.

To my surprise, unlike the U.S. oil industry, representatives of the Canadian oil industry seemed totally unconcerned with costs — it could be good news — despite a much lower price of oil these days. The Canadian Association of Petroleum Producers does not expect major changes with permanent regulations or additional costs to bear. CAPP told the Energy Committee, “With respect to cost, that doesn’t come up in our discussions.” And again, “When it comes to cost considerations, that’s not really a factor in our discussions or in our review of new regulations.” And later, “Cost doesn’t come into the equation.”

This was echoed by Ms. Johnson of the Newfoundland & Labrador Oil & Gas Industries Association who said, “cost has not come up in any conversations that we’ve had with our members. I’ve been CEO for three years here at Noia . . . .” And, “Cost hasn’t been an issue.”

However, as you are all aware, the oil and gas sector doesn’t shy away from government handouts. Last September, the federal government handed over $320 million to the Newfoundland government for the offshore industry, with the only caveat being that it be used to support workers and reduce carbon emissions. Ms. Johnson said at the time, “To say that we’re pleased to see hundreds of millions of dollars come with virtually no strings attached, that is good news.” And to continue, “It’s always been about ensuring our industry is globally competitive.”

Our Energy Committee could not get any acceptable justification for why permanent regulations are still not in place despite six years of development. There were allusions, as mentioned, to “consensus decision making under Canadian federalism,” a factor which did not stop or slow the federal government from going forward at full speed on regulatory developments to favour the offshore oil industry. Indeed, as we were still studying Bill C-69 in the Senate, the government proposed to exempt offshore exploratory wells from review through a rushed regional assessment and completed the whole regulatory process in just over a year. While the assessment was getting underway, Minister O’Regan reassured the industry about its consequences. He told them, “Exploratory wells will not be on the projects list once a regional assessment has been completed — full stop.” However, the regional assessment report stated the “abbreviated time” given for the study was a key challenge and concluded in their report:

Assessing and evaluating risk was beyond the timing and resources available to the Committee, but remains a fundamental requirement to guide future decision-making around sustainable use of offshore resources.

The report did not assess cumulative impacts to the local ecology or for an area of ocean larger than the province of Alberta or on climate change. Despite this, the government stated its regulatory intention to exempt exploration from the brand-new Impact Assessment Act four days after receiving the report. Final regulations were adopted despite a court challenge.

We know the risks of offshore drilling exist. In 2018, we saw the largest oil spill in Newfoundland offshore drilling history: a leak which sent 250,000 litres of crude oil into the Atlantic Ocean. In 2019, an oil spill from Hibernia produced two oil slicks that were each over 3 km long. In 2020, there were two “unauthorized discharges” and two fires.

When I asked Minister O’Regan how the government is able to complete the full regulatory cycle over complex issues in just over a year when it is favourable to the industry, but then needs more than six years to develop the regulations to protect the industry’s workers, I was told that the exemption for exploratory wells “was the number one priority.” “Time is money,” he told me.

Delays resulting from COVID-19 was the other reason given, but again, COVID-19 did not stop three new exploration projects off the coast of Newfoundland from being approved a month ago.

At the end of the day, our committee did not receive any clear or acceptable justification for the long delay in implementing measures to ensure the health and safety of offshore workers. The committee amended Bill S-3 to grant an extension to the end of 2021, a year sooner than the government requested. We also believe that this should be the final extension of the deadline to adopt permanent offshore health and safety regulations, and we are calling for the Department of Natural Resources to submit a progress report to the Senate.

Colleagues, for all I have explained and for the above reasons, I urge you to adopt Bill S-3 as unanimously amended by the committee so as to afford offshore workers who put their lives at risk the permanent protection they deserve and is already much overdue.

Thank you. Meegwetch.

The Hon. the Speaker pro tempore [ + ]

Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

(Motion agreed to and bill, as amended, read third time and passed.)

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