Honourable senators, I rise today to speak on third reading to Bill C-17, which appropriates funds to departments for expenditures related to their operations and programs. The final destination of these funds is outlined and defined in the 2020-21 Main Estimates and Supplementary Estimates (B), on which the Standing Senate Committee on National Finance reported yesterday.

I would like to begin by thanking the members of the Standing Committee on National Finance and their staff for their thorough and diligent work during the study of this bill. I especially want to thank Senator Forest for his contribution; he requested that the committee be mandated to study a clean and just economic recovery that would place the well-being of Canadian society at the heart of its objectives.

Also, I want to thank the committee for directing the government to increase our domestic capacity to develop, manufacture and produce coronavirus vaccines, medical countermeasures and personal protective equipment.

C-17 includes a program expenditure to allocate to the Department of Finance a $1 billion sum, provided to the Government of Alberta to “close inactive oil and gas wells and rehabilitate the well sites.”

Section 7.5 of the Senate Standing Committee on National Finance report hints at the fact that the orphan and abandoned wells issue is extremely complex. There is uncertainty regarding when and how the wells will be remediated and how this will result in job creation.

I wish to focus my remarks on this particular aspect of Bill C-17 that I found to be poorly understood, poorly communicated and lacking transparency.

This is the final instalment of the government support announced in April 2020, of a $1.7 billion transfer to Western provincial governments to help cover the costs of remediating the ever-growing number of inactive and orphan wells. This is the single largest COVID-19 pandemic support package given to a specific industrial sector to date.

While I rejoice that the federal government prioritizes remediation efforts, I have concerns about the program’s design and the lack of strings attached.

Since this money serves to cover remediation obligations of the fossil fuel sector, we can consider this support to be another form of subsidy of this industry.

Yesterday we heard Senators Mockler and Pate explaining, with passion, that millions of citizens living below the poverty line did not receive financial assistance. Meanwhile, the petroleum industry has received this generous subsidy, giving further evidence to support claims that there is socialism for certain corporations and capitalism for the poor.

As you may or may not know, there are 450,000 oil and gas wells in Alberta, of which over a third are abandoned. They are inactive and have yet to be remediated. A subset of all of these wells are owned by companies that have become defunct and are no longer able to repair the damage their well has caused to the environment or to the landowner from whom they leased the land. These are orphan wells, of which there are 5,650 across the country.

Oil and gas companies are legally obligated to remediate their wells, but are often not required to put the money aside as insurance, from the beginning of the operations, as is now required of the mining industry in some provinces. This allows corporations to shirk their remediation obligations by going bankrupt and reincorporating into a new form — abandoning their wells and jeopardizing the health and safety of humans and ecosystems.

In Alberta, when industry is not able to remediate these wells, the cost is transferred to the Orphan Well Association.

This association is funded through industry contributions. However, at the current rate of contributions to this fund, my office estimates it would take almost 160 years to clean up existing abandoned wells, soon to be major liabilities.

Ultimately, as is the case with the $1.7 billion in federal support, there is a real risk this liability will fall back on the public, as only $200 million provided to the Orphan Well Association is meant to be repaid.

When the government takes steps to reduce the adverse impacts of resource extraction, it is true that it is protecting our local communities, our farms and our environment. However, the it is not following one fundamental principle of social justice, the polluter-pays principle. The industry generates pollution and governments subsidize the clean-up costs that result from their carelessness.

If this is the first time you’re hearing about it, that’s because the subject has not been given the attention it deserves in our debates. To put things into perspective, we spent hours analyzing and debating Bill C-9, An Act to amend the Income Tax Act regarding the Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy, in committee and in this chamber, but we have spent less than five minutes discussing the orphan wells subsidy, and the final committee report doesn’t comment on the matter at all.

We have essentially handed the oil and gas industry close to $2 billion, and in doing so we have sent the signal that it is okay for an industry to ruin the environment and the health of citizens, pollute farms and agricultural soils, and risk the future of our children, because government will step in and fix it.

Not only does it send the signal that it is okay to pollute, it in fact incentivizes polluting activities because the companies reap the profit of the commodity while avoiding the externalities attached to it. And those benefits are not even for Albertans or for Canadians, since 70% of oil sands production is owned by foreign corporations or shareholders.

Struggling fossil fuel companies have already left a multi-billion dollar legacy of liabilities in the form of mine tailings, orphan wells and disused pipelines. Worst-case scenario estimates from Alberta Energy Regulator have put the price tag at around $260 billion for oil and gas liabilities in this province alone. Despite being legally responsible, these companies have set aside a very small fraction of the anticipated costs, and the full burden will inevitably fall on taxpayers, exactly as the Auditor General of Alberta pointed out in his 2015 report.

It would be irresponsible to expect the industry will or can come up with the required sums, since there has been a 79% reduction in oil sands capital expenditures since 2014. It is expected to decline again in 2020 for the sixth straight year.

Colleagues, the worst thing we can do is stick our heads in the sand. We must address and assist Albertans in fair and sustainable ways, and promote and support the diversification and sustainability of their economy.

This financial assistance ignores the polluter-pays principle, jeopardizes public funds and delays reconciliation efforts, not to mention that it could also constitute a potential violation of the human rights of Indigenous peoples. To date, only 0.1% of oil sands land has been recovered and returned to the provinces. Canadians — particularly the citizens of Alberta, Saskatchewan and British Columbia — deserve a transparent accounting of this liability, so that we can hold the industry to account and come up with a realistic plan to remedy the situation.

Finally, and in case you didn’t read about it, a recent Financial Post article revealed that Imperial Oil, Suncor and Canadian Natural Resources, along with lesser known fossil fuel companies such as Enerplus, AltaGas and Peyto, which all received federal assistance through the CEWS program, continued to pay dividends to shareholders during the COVID-19 pandemic.

Is this managerial practice acceptable to Canadians?

Colleagues, I will support Bill C-17. I will end my intervention by emphasizing the inefficiency and promotion of public distrust of this form of use of public funds and would like to refer to a recommendation from the white paper my office recently released on the urgent need for a clean and just recovery from the COVID-19 pandemic.

Financial assistance, if provided, must be accompanied by strict accountability measures as well as enforceable and demonstrable commitments to contribute to human and ecosystem well-being.

Thank you very much, meegwetch.

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

Some Hon. Senators: Agreed.

An Hon. Senator: On division.

(Motion agreed to and bill read third time and passed, on division.)