TRGO Committee Meeting

STANDING COMMITTEE ON TRANSPORT AND GOVERNMENT OPERATIONS

LE COMITÉ PERMANENT DES TRANSPORTS ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 3, 2001

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[English]

[Technical difficulty—Editor]

...our international obligations, but it is quite different from the domestic regime, largely in the amounts of liability the shipowner is charged to pay under those regimes.

The domestic regime is supported in terms of substantive law by the Canada Shipping Act, because it deals with powers of the Minister of Fisheries and Oceans as part of an overall response regime to take certain action when a pollution threat is imminent or when an incident happens dealing with other pollutants. That was the reason for the linkage, which has been in the law since 1989, between the two and the separation of the two regimes to make sure that it is not confused, that it is very clear that oil pollution triggers different liability, different limits of liability, and that pollution caused by other pollutants is distinct and is not linked to international conventions.

Mr. Jay Hill (Prince George—Peace River, Canadian Alliance): Is there some reason we couldn't have cleared it up? I disagree. In reading it, it seems anything but clear that the shipowner will be held liable when it's up to the minister to take some definitive action.

It doesn't say, as it does with oil pollution, that the shipowner will be held liable when it comes to other pollutants. Is there some reason we couldn't have just upgraded other pollutants to the same as oil pollutants so that it's very clear that the shipowner will be held liable?

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Mr. Jerry Rysanek (Director, International Marine Policy and Liability, Department of Transport): I think there is one principal reason—that is, what we have in our domestic regime is not backed by any international agreement. It is a unilateral regime developed by Canada for the purposes of the measures that the Minister of Fisheries and Oceans can take. It is not a regime similar in scope to the international oil pollution convention, because there are no international agreements on other pollutants.

Such a regime is in place, that is to say, it has been developed by the International Maritime Organization. Canada signed it in 1997, and it's subject to ratification and implementation in Canadian law. So one day we will have what you're saying, but at the moment we have a strictly domestic regime, which I'm afraid has to be kept separate from the oil.

Mr. Jay Hill: I guess I'll leave it up to your superior judgment that we have to leave it separate.

Hon. David Collenette (Minister of Transport): I think Mr. Hill's point is a very useful one. Mr. Rysanek has basically said that we are prevented from pursuing the course that Mr. Hill suggests by virtue of the lack of an international convention, so I assume this does not preclude such a convention in the future.

Mr. Jerry Rysanek: No, it certainly does not. Indeed, there is international work on the way to implement that convention. I think I cited it in my testimony earlier. It's the International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea, and when that becomes part of Canadian law we will be able to do what you suggest. But if you were to delete the word “oil” from clause 51, we would overnight create a regime dealing with liability caused by all pollutants, without any distinction as to the source, and that would be wrong.

Mr. Jay Hill: When you say that would be wrong, do you mean we can't do that?

Mr. Jerry Rysanek: We can't do that because the limits for liability are different.

Mr. Jay Hill: Do I have any time left?

The Chair (Mr. Ovid Jackson (Bruce—Grey—Owen Sound, Lib.)): You have about two and a half minutes.

Mr. Jay Hill: I have a number of questions to raise, but I probably have time for only one more.

In the amendments that are contained in Bill C-14, individual members of conferences are allowed to enter into confidential service contracts, but then the conferences, as I understand it, are required...for the shipping lines to publicize any changes in their rates. I wonder how we can justify protecting only a portion of what I, and I think most people, would view as a confidential contract.

Mr. Jerry Rysanek: The conferences are required to file agreements with the Canadian Transportation Agency at the moment. They are also required to file confidential agreements between the conference as a group and an individual shipper or shippers, but in the future they will not be required to file confidential service agreements between a member of a conference and an individual shipper.

I hope I understood your question, but the distinction is between two types of confidential contracts. Is it one between a conference as a group and a shipper or shippers, or is it a confidential service contract between a member of a conference and a shipper or a group of shippers? The latter will not be filed.

Mr. Jay Hill: My understanding is that there is a requirement for the individual shipper to file the details of their contract with the conference. Is that correct?

Mr. Jerry Rysanek: I think I'll have to defer to my colleague Mr. Gautier on that one.

Mr. Louis Gautier (Counsel, Legal Services, Department of Transport): Thank you. There's no requirement to file the confidential service contracts of the new type that will be provided under the new amendments because they are essentially a private contract between a conference member and a shipper. The only service contracts that will continue to have to be filed are those of the conference with shippers.

Mr. Brian Fitzpatrick (Prince Albert, Canadian Alliance): I might have one follow-up question on that.

The Chair: Okay, I'll give you a minute and a half.

Mr. Brian Fitzpatrick: My understanding is that members of that convention, under their agreements with that convention, are required to have these contracts filed and approved by the members of the convention. Of course, that permits a shipper in Canada to negotiate, in a confidential arrangement, a price below the minimum floor price of the convention, because that contract will have to be filed with the convention and they'll be offside with that.

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I think a Canadian shipper should have the right to negotiate a better deal than what this convention has fixed as a minimum floor price. My understanding is that we really don't have much in the way of statutory protection for people who try to negotiate such agreements, and of course those agreements would be beneficial to our economy. It's helping our shippers and it's helping our export industry if we can get better prices on our shipping.

Mr. Louis Gautier: Under the new provision—

The Chair: We have about a minute, Mr. Gautier.

Mr. Louis Gautier: Under the new provision, the new service contract, confidential contract, the conferences will not be able to oblige the conference member to divulge to the rest of the conference these contracts. So each shipping line will be able to negotiate one to one, if you will, with shippers for their contract.

Mr. Brian Fitzpatrick: But if the law absolutely prohibited them from having to file with the convention, that would make the job a lot easier.

Mr. Louis Gautier: Right now there is no regulation of the contracts with the conferences.

The Chair: We'll now go to Marcel Proulx of the Liberals for ten minutes.

Mr. Marcel Proulx (Hull—Aylmer, Lib.): Thank you, Mr. Chair. Good afternoon, Minister.

Mr. Minister, many Canadians see the Shipping Conferences Exemption Act portion of Bill C-14 as legalizing a type of collusion, an activity that would generally not be permitted in other sectors. Could you share with the committee the rationale and the history behind allowing this type of cooperative behaviour? And what occurs in other countries? How would Canada be affected if these changes in Bill C-14 were not made?

Mr. David Collenette: I think a lot of people are uncomfortable with this kind of arrangement in this day and age, but the fact is that our shipping companies, our lines, are vulnerable if we do not participate in the conference, until such time as there is a general change in attitude around the world. If we were to unilaterally absent ourselves from this, it would be disastrous for our own industry. These conferences don't operate as a monopoly in Canada. They constitute one option for shippers to secure services and move cargo. There are independent, non-conference shipping lines that are able to compete and offer rates and levels of service comparable to the ones in the shipping conference.

In fact, we're seeing a trend develop, the growth of independent liner traffic. I think it's now about 50% higher than the conference share for Canadian export and imported container cargo. So you're seeing a general trend. I would ask my officials to comment, because they're more expert in the history, but this is a hold-over from an earlier era, and we have not yet been able to seize the new world sufficiently. But the trend is there, and that is why people talked about a sunset clause and the phasing out of our participation in the conferences. I think if we have this debate ten years from now, the environment will be completely different, and it's not inconceivable that these conferences will have, if not disappeared, been significantly diminished.

Mr. Marcel Proulx: Thank you.

Do I have any time left?

The Chair: Yes.

Mr. Marcel Proulx: I'll share it with Mr. St. Denis.

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Thank you, Mr. Chair, and thank you, Minister, for being here with your officials.

You mentioned in your opening remarks the fact that there was an opportunity to share an early draft of the bill with stakeholders and the public in general, a process that, it appears, has produced a result satisfactory to, if not everybody, at least most of the stakeholders.

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I wonder if you or any of your officials could comment on a couple of major issues that came up during the stakeholder discussions and why there's general agreement among stakeholders to move forward with Bill C-14, the issues for the most part having been resolved.

Mr. David Collenette: Mr. Streeter will take you through that, because he oversaw that process.

Mr. B. Streeter (Director General, Marine Safety, Department of Transport): Thank you very much.

I think if you were to take the opportunity to compare Bill C-35 and Bill C-14, you would see that the consultation and negotiation has continued pretty much from the time we had permission from cabinet to release a consultation draft. The significant changes we made were really to fine-tune the enforcement and compliance scheme, so that issues of misunderstanding, particularly of provisions relating to knowingly or negligently committing offences, we were able to address.

We were able to address ownership issues relative to ships, specifically where we wanted to make sure that every ship under Canadian registry had an authorized representative we could hold accountable for safety and pollution prevention matters. It was brought clearly to our attention that there might be a conflict in respect of ownership, so those issues were able to be addressed and changes made.

In effect, as you indicated, although we don't have 100% agreement on every issue, we have narrowed the issues down to those of policy disagreement or where industry believes we may not have to go the way government believes we have to go. These are substantive issues and can effectively be dealt with in fora like this.

Mr. Brent St. Denis: Thank you, Mr. Chair.

The Chair: I'll go to Mario Laframboise of the Bloc Québécois.

[Translation]

Mr. Mario Laframboise (Argenteuil—Papineau—Mirabel, BQ): Thank you, Mr. Chairman.

First, I'd like to say that the Bloc Québécois supports this bill, because several amendments had been requested by the industry and other stakeholders in the maritime shipping community. So we feel that this bill should be approved as soon as possible.

I just want to ask a few rather technical questions.

In Part 2, clause 46, it says:

46. (1) A vessel must be registered under this Part if it

And then, exceptions are noted, particularly:

c) is not registered, listed or otherwise recorded in a foreign state.

As I understand, all Canadian vessels have to be registered, except those which are already registered, recorded or otherwise listed in a foreign state. Is that what clause 46, among other things, actually means?

Mr. B. Streeter: Clause 46 indicates that international law prohibits a vessel from being listed or registered in two countries at the same time.

It's possible for a foreign vessel to operate in Canadian waters for part of the season. It can then be included among those ships registered in Canada, if its registration in another country is suspended during the time it operates in Canada. In that case, the ship must comply with Canadian laws and regulations. This is why the exception is noted in this paragraph.

Mr. Mario Laframboise: You are probably referring to clause 64, where it says:

64. (1) A Canadian vessel has the right to fly the Canadian flag.

The title of this section is "Right to fly Canadian flag". Why don't we require Canadian vessels to fly the Canadian flag? Are you saying that some ships could fly the Canadian flag only during a certain period of time?

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Mr. B. Streeter: Yes. It's possible, for instance, for a vessel to be registered in Canada during the summer, while it operates in the Arctic, and to fly a foreign flag in winter, while it operates in other parts of the world. It's done everywhere to ensure that a ship is used all year round.

It's also very important to note that, as recognized by the United Nations, each country has a right to maintain a ships' registry. Some countries don't enforce this right, but the Canadian government has a right to maintain a registry. People can, as they wish, record their vessel either in the Canadian registry or in a foreign registry, if they prefer to be under foreign regulations.

Mr. Mario Laframboise: So that's why it's so hard to know whether a ship is Canadian-owned or otherwise, since people have the option to fly different flags according to the season.

Mr. B. Streeter: But if a ship wants to trade in Canada, it has to comply with Canadian regulations, even if it's subject to the Coasting Trade Act, for example. So a foreign vessel can, for instance, operate in Canada and be subject to the Coasting Trade Act, but with a Canadian crew, it has to comply with Canadian regulations.

Mr. Mario Laframboise: It can operate under and be subject to Canadian law only during part of the year.

Mr. B. Streeter: That's right. It can operate under the law of other countries for the rest of the year, yes.

Mr. Mario Laframboise: And when a ship comes into port, you check to make sure it's registered as required.

Mr. B. Streeter: Exactly. Sometimes we can do that before the ship arrives in Canada, if it's supposed to go from one Canadian port to the other. We can do our own checking in foreign countries, even if the ship is in dry dock.

Mr. Mario Laframboise: They have to report revenues coming from their operations in Canada. So they are subject to income tax laws.

Mr. B. Streeter: It's a requirement under the act... [Editor's Note: Inaudible] not under the Canada Shipping Act.

Mr. Mario Laframboise: It would have been useful to require a Canadian ship... But this whole situation makes it impossible.

Mr. B. Streeter: This is the way it goes in international trade.

Mr. Mario Laframboise: Yes. That's why there are so many tax heavens around the world.

In section 98, it says that if the authorized representative of a Canadian vessel has entered into an agreement with another person to provide crew members, that other person is responsible for the contracts that were entered into. This is what this section says. As I understand, if the shipowner has a third party do the recruiting, he is no longer liable as far as crew members are concerned. The person who did the recruiting is responsible for entering into contracts, providing discharge certificates and maintaining records. In fact, this person will have many responsibilities regarding employees. Thus, we free the shipowner of all liabilities when he has used a third party to recruit crew members. I wonder why.

Mr. B. Streeter: Because now, the trend is to use hiring agencies to recruit crew members, and to sign a contract with those agencies. In one instance, the shipowner paid a hiring agent, but the crew never saw that money. The purpose of this section is to ensure that someone is responsible for the crew and the seafearers aboard the ship. The hiring agency has to ensure that all requirements are met. If not, under the act, it's up to the shipowner or the hiring agent to see that everything is in order.

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Mr. Mario Laframboise: Why haven't you left some kind of responsibility to the shipowner? I understand what you are trying to do. But why haven't you clearly indicated that the shipowner still has some responsibilities.

Mr. B. Streeter: In fact, at the end of the day, under Canadian laws, the shipowner is liable, because crew members can sue him in a Canadian federal court and even have the vessel seized if their salaries have not been paid.

Mr. Mario Laframboise: You're saying that the shipowner remains somewhat liable.

Mr. B. Streeter: Exactly. He still has some measure of responsibility, but it's the hiring agent who is liable, first and foremost.

Mr. Mario Laframboise: First and foremost, it's the hiring agent who will be liable.

Mr. B. Streeter: That's right. Once, already, the money that had been paid to the agent vanished.

Mr. Mario Laframboise: Tank you.

How much time do I have left, Mr. Chairman?

The Chair: Two minutes.

Mr. Mario Laframboise: I'll come back later. Thank you.

[English]

The Chair: Okay. I'll go back to Mr. Fitzpatrick, then Mrs. Desjarlais after that.

Mr. Fitzpatrick of the Canadian Alliance.

Mr. Brian Fitzpatrick: I come from Saskatchewan and, as you might expect, we don't have a lot of marine shipping in that province. We have 100,000 freshwater lakes and there are a lot of personal water craft in the province. The section dealing with water craft is something I wanted to get some clarification on.

Out in my part of the world, we're a little apprehensive about a new public sector growth industry. We think that has happened with Bill C-68. There are people with personal water craft who are concerned about some of the signs they've seen in this area. A lot of those folks operate motor vehicles, know the basic rules of safety, and have operated personal water craft for many years. I think their experience and common sense tell them how to operate these things in a safe and reasonable manner.

Some of the provisions under the regulations do cause me some concern because the power to make law by regulation is quite broad in those sections.

Paragraph 207(1)(j) requires owners to modify their pleasure craft at their own expense in order to comply with regulations under paragraph 207(1)(f).

Paragraph 207(1)(f) says “respecting the design, construction or manufacture of personal craft or classes of pleasure craft”.... It seems to me implicit in there is a power to make regulations retroactive.

If a person has a 1988 water craft, the power with your enforcement people could be so broad as to force an owner to upgrade a 1988 Mercury engine to comply with the standards of the 2001 one.

Paragraph 207(1)(b), dealing with qualifications for an operator, seems to leave a lot of latitude for regulatory people as well.

Clause 201 seems to be an awfully broad section too:

Every operator of a pleasure craft shall ensure that it meets the requirements of the regulations made under this Part.

In clause 199:

If an inspector considers that a pleasure craft does not meet the requirements of this Part or the regulations under this Part, the inspector may direct any person not to operate it until it meets those requirements.

I'm a bit concerned that this whole regulatory area with pleasure craft really does leave a lot of power to Ottawa, public servants, and so on. It could create a major industry in the country, a national industry, to create all these standards and enforce them. Perhaps I'm looking for a strong assurance that we're not going to have some new major government intrusion into this area and this just represents the status quo, as far as pleasure craft are concerned.

Mr. David Collenette: I stand to be corrected by the officials, but it certainly doesn't represent the status quo. The whole point of this bill is to adapt the legislation to current needs.

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I would submit, Mr. Chairman, that we're all familiar with summer pleasure boating activities. We've all been at cottages and on waterways; many of us have been, whether we're in Saskatchewan, Ontario, Quebec, or anywhere else. The new kinds of craft, the speed of and proliferation of such craft on crowded waterways, necessitate some degree of regulation—certainly in southern Ontario, the part of the country where I come from.

This is an area for which I won't be responsible. This could be a comment of my colleague, Mr. Dhaliwal. Certainly on the general point, I would say people have been arguing for greater regulation in this area.

As with all regulations that have promulgated under statutory process, there are checks and balances. The regulations can, and are, scrutinized by committees of Parliament and the Standing Joint Committee on Scrutiny of Regulations. Then there is the gazetting of such regulations that allows for a comment period.

Mr. Fitzpatrick is right, but I would suspect most Canadians would agree greater regulation is required in this area.

Mr. Streeter wants to add something.

Mr. B. Streeter: Thanks, Mr. Fitzpatrick.

I wanted to add two things. I do appreciate the freshwater lakes. I grew up in Alberta before I ran away and went to sea.

In the wording of these provisions, if you were to look at the existing act, you would find more general references to the regulation-making authority of the Governor in Council to deal with most of these issues.

I would also note that, with our colleagues from Fisheries and Oceans, we tried to be more specific so that there was some comfort with the areas. We felt, with the stakeholders, if we would have to intervene, we were being specific.

Finally, the pleasure craft category deals in fact with very large pleasure yachts. They may well have hired crew, but they are used solely for the pleasure of quite well-to-do people. These vessels are much bigger than ones we see on some of the lakes. Certainly there are large vessels in a lot of areas used for pure pleasure craft where a different standard is required.

The provisions are very much what you would find in the Motor Vehicle Safety Act. You initially have to take your first test. As a driver, you are responsible for maintaining your vehicle in accordance with the laws of the province in which you operate. You get, of course, corrective action from the police force if they happen to catch you out with that law.

Mr. Brian Fitzpatrick: The only point where I would be happier is if some of the rules of the road—I guess that isn't the right term—were spelled out in the legislation, rather than leaving it to the regulatory way of proscribing these things.

If safety is an issue here, maybe we should have some of those things spelled out. They are under the provincial Motor Vehicle Safety Act. The rules of the road are pretty well set out. Anyone who runs into a police officer for a traffic violation will soon find out he knows those provisions very well.

I am concerned about people who have existing pleasure craft. The engines and the structure of those boats are different from modern ones and safety standards change. If I read these regulations correctly, a lot of those folks could be in trouble. I don't think it's fair to have regulations that can have that kind of retroactive effect.

Those are some concerns I have. I have one other, if I still have a minute or two.

The Chair: You have about a minute and a half.

Mr. Brian Fitzpatrick: Section 167 concerns the exemption for foreign-owned shipping that comes into Canadian waters. It says “the Minister is of the opinion that the vessel or class of vessels” really meets or exceeds our standards.

I'd agree with the minister. The act does set out clear standards for Canadian domestic shippers and so on.

It seems to me, under that section, a foreign shipper would be exempt if the minister was satisfied the foreign shipper came from a regime with standards that met or exceeded our standards.

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The thing I'm trying to determine is what sort of due diligence would take place to ascertain whether a foreign ship that's coming into our waters satisfied those requirements? Do we send people to those countries where they're registered and check out all their laws, their safety requirements, their environmental laws, and their labour laws as far as the rights of crew members and so on? Would we go that far to satisfy that threshold, or what would we be doing?

The Chair: You have approximately three-quarters of a minute.

Mr. B. Streeter: The short answer is yes, sir, we do. We're very confident in vessels from a number of regimes that are parallel to ours, that are signatories to most of the conventions at the IMO, and that have good flag-state records. We target substandard countries in all aspects of shipping, so we have quite a bit of confidence in terms of vessels that enter Canadian waters. If they're an issue, we target them and inspect them.

In terms of this provision, it's to permit vessels to pass through Canadian waters to get to other ports, because we have quite a lot of passing traffic. If there are issues, the minister will have the right to develop policies and laws that say, “I'm sorry, you're not passing” or, “Yes, you can pass”.

The Chair: I would like to now go to Mrs. Desjarlais of the NDP.

Mrs. Bev Desjarlais (Churchill, NDP): I just want to clarify something, Mr. Rysanek. On the issue of the pollution regulations, I understand that the oil has to be indicated separately because of international convention. But are we restricted from putting in here the equivalency for other pollution if it's not restricted by international convention? The fact that international convention hasn't accepted it—how does that restrict Canada from implementing it within its own legislation?

Mr. Jerry Rysanek: I think in theory we could do whatever we want in domestic law in terms of expanding the domestic regime as we have it. The issue here is, what would happen then?

If you look at the international conventions that we have supporting the oil regime, it is not only that we say in the law the shipowner is liable, but there is also a mechanism of how to get the money from the shipowner, particularly by way of compulsory insurance, which the shipowner or owner of an oil tanker has to provide in order to trade in Canadian waters. In order to make the domestic regime equally effective, it would have to have that requirement.

Mrs. Bev Desjarlais: So—

Mr. Jerry Rysanek: That was already tried once in Canadian law—to impose unilaterally a regime including compulsory insurance—and it didn't work. The insurers do not—

Mrs. Bev Desjarlais: I hope you're not going to tell us today that the insurers don't think this can work, after our meeting on Bill S-2, when the insurers told us they can put a regime in place on another issue—

Mr. Jerry Rysanek: Indeed. No, I'm not trying to tell you that at all. What we were discussing with insurers last week was insurance for passenger vessels, and they were quite ready, saying, “Yes, we can do it at some future date”. Here we're talking about pollution, and we're talking about international shipping where we need the cooperation of international insurers.

Mrs. Bev Desjarlais: But we can put it in our legislation. We may have trouble proceeding with enforcement or restitution, but we can have it in the legislation.

Mr. Jerry Rysanek: As I said, theoretically you can have it. It has been tried before; it didn't work. It was unenforceable because we could not obtain evidence of insurance on the part of international shipping. The international shipping refused to cooperate.

Mrs. Bev Desjarlais: But we can do it on behalf of Canadian shipping?

Mr. Jerry Rysanek: For Canadian ships, to the extent that they are dependent on international insurers, I would have some doubts as well as to whether they would be able to comply.

Mrs. Bev Desjarlais: Okay. So we're not restricted then by international convention. It's purely that we're restricted by the will to do it?

Mr. Jerry Rysanek: Well, shipping is an international business, so—

Mrs. Bev Desjarlais: Okay.

Mr. Jerry Rysanek: —most maritime nations try to bring forward new legislation based on international convention, and that's what the International Maritime Organization is trying to do with our help.

Mrs. Bev Desjarlais: I don't know who wants to answer this one. In regard to the authorization of an authorized representative in relation to the shipowner, or whoever, not hiring the crew members now.... In the area of all the different specifics that are in here that are beneficial to crew members, if they are no longer hired by the shipowners, and the authorized representative becomes the person you try to get the money from, or whatever, to either pay crew members or do whatever, what kind of insurance is there that those agencies hiring the crew members are doing all the things they're supposed to do? It says here that they now have the responsibility for the safety training and a bunch of different issues. These agencies are now going to do that. The shipowners aren't going to be responsible, so what provisions are in place?

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Mr. B. Streeter: The only place where a shipowner is not going to be directly responsible for that is where he chooses to employ a hiring agency.

Mrs. Bev Desjarlais: Okay, but my question to you is—

Mr. B. Streeter: So if he has employed the agency—

Mrs. Bev Desjarlais: —when the agency is used—

Mr. B. Streeter: —then it is incumbent upon...you will note that there is still authority for the master to make sure, first of all, in areas of safety training, that those personnel come with the proper qualifications and issues like that.

In terms of making sure that the benefits get to the employees, if, for example, the employees were left unpaid and the crewing agency skipped town, as I indicated in my previous response, ultimately the crew has the first right against the ship. They can in fact, with our assistance, have the vessel detained, have the vessel arrested, take the vessel to court, and have the vessel sold under court order.

Mrs. Bev Desjarlais: Even if an agency has been used?

Mr. B. Streeter: Even if an agency's been used. They still have...you will note that, in further sections—

Mrs. Bev Desjarlais: Yes, I think we've gone through this—

Mr. B. Streeter: I know, but that order of precedence is there clearly.

Mrs. Bev Desjarlais: Okay, thank you.

The Chair: We'll go to Mr. Burton of the Alliance party.

Mr. Andy Burton (Skeena, Canadian Alliance): Thank you.

Just something for the record, and then I have a little statement and a couple of quick questions here.

Just for the record, as a powerboat owner most of my life, I share Mr. Fitzpatrick's concerns. I don't think we should be overly onerous with legislation affecting small craft owners. How far this legislation goes, I'm not really sure, but I think we don't need to be overly onerous.

Most of us are pretty responsible, and I assure you, if you've ever been out in a 15-foot swell with the waves breaking over your command bridge, you want to make sure your boat's in good shape before you go out there. I know; I've been there. Most people are pretty darn responsible when their lives are... When you're out in the saltchuck, your life's on the line, so let's just keep that in mind.

Anyway, I have just a quick statement here. Fines for non-compliance with the Shipping Conferences Exemption Act would be raised from $1,000 to $10,000 per day. Are these penalties consistent with penalties for non-compliance found in other transportation legislation within Canada? Are these penalties consistent with those of other countries with shipping conference exemption legislation?

Mr. Louis Gautier: They are generally in line with the others for those types of infractions.

Mr. Andy Burton: I'm sorry, I can't....

Mr. Louis Gautier: They are generally in line with the other infractions.

Mr. Andy Burton: Is that the answer to both questions?

Mr. Louis Gautier: Well, yes.

Mr. Andy Burton: Okay, so the answers are yes and yes.

Mr. Louis Gautier: Your question was whether the fines were at the same level as—

Mr. Andy Burton: Yes.

Mr. Louis Gautier: Yes.

Mr. Andy Burton: Yes, okay. And they're consistent with other countries with shipping conference exemption legislation, too?

Mr. Louis Gautier: I don't know about the other countries, but in Canada, yes.

Mr. Andy Burton: Would you not compare legislation with other countries before you develop legislation, or do you just develop it ad hoc?

Mr. Louis Gautier: Yes.

Mr. Jerry Rysanek: If I may add to it, we certainly compared legislation with other countries in terms of the substantive provisions, but I think we have to do the comparison with fines, yes. That's a good point.

Mr. Andy Burton: Okay, thank you.

Mr. Brian Fitzpatrick: I wonder if I could just reiterate the point again—it's good to have safety with the use of pleasure craft. If anybody in the federal government envisions some really major, intrusive move in this area, I think this government can anticipate a whole lot of people across this country who are going to be very upset with that sort of thing.

So I would say, proceed with caution. Look at some of the moves that have happened in other areas where some big initiatives were created because people think government can dictate results—you can just pass regulations and results, and the magic wand happens, and suddenly we've got a safer society. As soon as you create a whole new regime of onerous regulations and so on, you've got to have public support for that. Then you've got to have an army of people to enforce those laws. I haven't gone into the enforcement area, but the enforcement people I see back home have lots of problems with lots of other things as it is now. They don't need a whole new workload.

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These are some things that I think the folks in your department should be cognizant of, because I think you could be driving into a firestorm if you're not careful.

Mr. David Collenette: Perhaps I could interrupt here.

The firestorm, I would assume, is if we take the earlier point made by Mr. Fitzpatrick about retroactivity. That's where you're really coming from.

But if you take the auto industry as one, standards are set for the manufacture of new vehicles, and there is much in this legislation that's akin to that kind of regulatory requirement. In the case of motor vehicles, there is a grandfathering of certain standards that is permitted. It's recognized that certain equipment cannot...it's impractical to require everyone to retrofit.

I'm not sure where we are on seatbelts. If you have a 1957 Chevrolet, I'm not sure whether the law requires you to put seatbelts on it. It probably does in that one instance. But there may be other cases relating to cars that have standards that are not as good as today, but those standards are accepted by virtue of the fact that they're grandfathered. Provincial regimes will allow certain cars to be on the road. And I think that would be the case here, where we're talking about establishing a new regime.

More and more people are getting into the pleasure craft mode. They have disposable income. They're using these craft, and the whole issue is ensuring that new equipment meets our current standards with the knowledge that we have of safety that we apply to other areas of other vehicles.

I don't know if Mr. Streeter has anything else to add to that.

Mr. B. Streeter: No, sir. I think you've effectively covered it all.

The issues of concern are simply that most of the pleasure craft, I'm sure you know, are not necessarily manufactured in Canada. Many are imported, so we tend to make sure standards that are chosen and standardized upon are those that can be met south and north of the border, so that there is relatively easy movement in terms of technical standards. It's certainly not the intent to apply new rules to old ships in any case. Grandfathering is a time-honoured tradition since Admiral Nelson was in the marine business.

The Chair: We will go to Larry Bagnell of the Liberal Party.

Mr. Larry Bagnell (Yukon, Lib.): Thank you.

I have a couple of questions.

The first question is for Mr. Streeter, to follow up on an interesting point that Mr. Fitzpatrick brought up. I thought it was quite interesting when he was talking about ships coming from other countries, and then he ran out of time.

Does this apply to small pleasure craft as well?

Mr. Steve Troy (Director, Safety and Environmental Response Systems, Department of Fisheries and Oceans): Specifically referring back to what was talked about—it was reciprocity on the west coast—it's actually the movement through joint waterways. On the west coast, in the Juan de Fuca Strait, the inbound is on the American side and the outbound is on the Canadian side. What we're really looking at with this particular clause in the bill is to allow the free movement of traffic, be it commercial or recreational, through that waterway.

The application in this particular context is to commercial shipping and it's to recognize those ships that may be subject to the American Oil Pollution Act of 1990 regime and therefore would be subject, potentially, to double jeopardy. In other words, they would have to comply with both an American regime and a Canadian regime at the same time. What this will allow the Minister of Fisheries and Oceans to do is, through a due diligence test of comparing the two regimes, to decide whether the United States regime is equivalent to or stricter than the Canadian regime, which would then allow those ships to be exempted from the Canadian regime because they would be subject to the U.S. regime.

In this context, and the point that was raised specifically, what it comes back to is very much the movement on the waterway, and in particular on the Juan de Fuca Strait.

Mr. B. Streeter: In reply to your question, which is whether or not foreign pleasure craft are inspected before they come to Canada, there is an importation requirement for pleasure craft, and much like a motor vehicle, if there were differences in standards, you might well have to do some work to comply, for example, for equipment that might be different. But there is no formal process for inspecting them before they come to Canadian waters. It's a declaration by the owner of that vessel for his compliance plate.

• 1635

Mr. Larry Bagnell: My question was related to the concept of...on the border with the States. We're not known, in the land of the free, for a lot of regulation...if there are a lot of pleasure boats that are going back and forth daily on those border points.... If they came into Canada and they didn't file one of these things about the size and everything under the regulations of pleasure boats and then they had an accident, would the Government of Canada be named in a liability lawsuit for not enforcing that provision? It might be hard to enforce those provisions on all these little boats all over the place. I'm just talking about little recreational boats.

Mr. B. Streeter: Well, on speculation...the international rules of the road that people would follow.... There are international rules. Along shared waterways, we have very effective enforcement programs with the U.S. Coast Guard and the police forces. If there was an accident—and there have been accidents involving Canadian and/or U.S. pleasure craft or commercial vessels, and the worst case scenario is probably a pleasure craft with a commercial vessel—it's normally an issue that's investigated by both countries together, and resolution of it in terms of any charges or any actions must be taken by the enforcement officials. There may well be follow-up civil action. That would depend on the circumstances. Of course, we have yet to see cases where we, the Government of Canada, have really been taken to task in U.S. courts. We have, of course, many where we've been taken to task in Canadian courts.

Mr. Larry Bagnell: My other question is related to the...I'll just give you a chance to comment on how the officials run the new enforcement scheme. I noticed at the top of page 3 of the minister's speech it talked about the new administrative scheme, and I think it's a good thing in lawmaking these days that we're trying to get things out of the courts as much as possible. Do you think this scheme of administrative penalties will help to keep things out of the courts and keep things regulated in a more efficient manner? I hope there's some recourse for these minor offences if people don't pay that bumps them up.

Mr. David Collenette: Well, as I say, Mr. Chairman, this is a trend we're seeing not only in marine legislation but also on the aeronautics side whereby inspections are delegated to private sector operators, and it's something that has worked very well on the aviation side. Mr. Streeter could probably talk more about the marine side, but inspections by marine safety inspectors can be delegated to the private sector, providing there is the necessary oversight.

Let me tell you how it's worked in the aircraft industry. Bombardier is now the number three aircraft manufacturer of civilian aircraft in the world. This has caused a real...I wouldn't say problem, but a challenge for us at Transport, because those planes have to be manufactured and brought to the client on short order. Quite frankly, the department has not had the personnel to deal with all the inspections. So what we have done is developed an inspection regime where the inspection is delegated to the manufacturer, but with oversight from Transport Canada. So it's a self inspection, a self-regulatory process. It's worked extremely well.

Yesterday I was in Yellowknife with the Northern Air Transport Association, and members of that organization were asking for further latitude on the part of Transport Canada on the air side to allow—especially in northern Canada where you're from, where Transport Canada inspectors can't get to all the time—for this kind of self enforcement.

But there is an administrative penalty system. It's not letting people off the hook. It recognizes that, in the case of the air industry, the manufacturers and others obviously want to comply. They do not want safety irregularities and they follow the regulations as prescribed by Transport Canada, but they have this delegated authority and there is oversight. It's the same, as I understand, as was being proposed in this bill. It's part of our strategic plan, which has worked in other industries, and I think should work on the maritime scene.

The Chair: Thank you, Minister.

I think Larry's out of time. I go to Mario Laframboise of the Bloc Québécois.

• 1640

[Translation]

Mr. Mario Laframboise: Thank you, Mr. Chairman.

Regarding oil discharges, in Part 8, it says, among other things, in section 167:

[...] every prescribed vessel [...] shall:

a) have an arrangement with a response organization in respect of a quantity [...]

And section 169 stipulates how the minister can certify a response organization.

Are there any certified response organizations, as we speak?

[English]

Mr. Steve Troy: If I understood the question, in comparing clauses 167 and 168, 167 visits obligations on vessels entering into Canadian waters, basically tankers over 100 tonnes and non-tank vessels over 400 tonnes. I did not understand the question correctly. My apologies.

[Translation]

Mr. Mario Laframboise: It's just that section 167 says:

[...] every prescribed vessel [...] shall:

a) have an arrangement with a response organization [...]

And section 169 stipulates how the minister can certify a response organization. Are there, as we speak, any certified response organizations? We give them some powers. In section 170, the qualifications of a certified response organization and its responsibilities are detailed. Section 171 says:

171. Every response organization shall

a) have a response plan [...]

b) have the prescribed equipment and resources [...]

So are there any certified response organizations as we speak?

[English]

Mr. Steve Troy: There are four organizations in Canada that currently hold accreditation as a certified response organization. There is one on the west coast, which covers the B.C. coast. There are three in eastern Canada, one that covers from the Great Lakes all the way through into the eastern seaboard, one that deals with the Bay of Fundy, and one for the Port Hawkesbury area in Nova Scotia.

[Translation]

Mr. Mario Laframboise: Did you feel you had to spell out what they are supposed to do because there are problems right now? Those organizations' responsibilities are stipulated in section 171. Do you have any problem with these organizations right now? Why did you feel you had to spell that out?

[English]

Mr. Steve Troy: We felt we needed to spell it out to establish planning standards enabling us to be sure that an accreditation process had something by which we could measure what was being sought by the organization and, through time, actually measure their performance. So the whole question of establishing the standards with them was to allow us to have that performance, that planning, and then that monitoring and evaluation capability. And those in fact are what they are certified against.

[Translation]

Mr. Mario Laframboise: In section 188, regarding pollution incidents, its says:

188. If a vessel is required by the regulations to have a shipboard oil pollution emergency plan, the vessel shall take reasonable measures to implement the plan in respect of an oil pollution incident.

In the margin, the title is: “Implementation of oil pollution emergency plan”, but this provision is about “reasonable measures”. Why don't we simply say: “Every vessel is required to implement...”?

[English]

The Chair: You have one minute to answer. You are in the five-minute round. Thank you.

Mr. B. Streeter: Thank you, sir.

[Translation]

If you want to cover every incident that can occur on such a ship, you can't include a list. That's why we talk about "reasonable" measures. As you know, there is oil on that ship. There are a few containers with pollutants. It's therefore almost impossible to list all requirements, all measures that have to be taken in response to an emergency. That's why we say "reasonable".If an incident occurs, what can be deemed reasonable might have to be determined by the courts, because each vessel is different.

• 1645

[English]

The Chair: Thank you very much.

Mr. Hill of the Alliance Party.

Mr. Jay Hill: Thank you. I have a couple of quick questions. First of all, Mr. Minister, in your presentation you said the objectives of Bill C-14 are stated clearly. First and foremost, they are to protect the health, safety, and well-being of individuals.

When we discussed Bill S-2 clause by clause, I put forward an amendment—I'm sure you're aware of it—to ensure that insurance coverage for shipowners would become compulsory in the near future, rather than having it left to the discretion of the government when that would take place.

Given your statement that one of the three objectives of Bill C-14 is certainly to protect the health, safety, and well-being of individuals, can we see anything in this legislation requiring shipowners to carry liability insurance, in case somebody gets injured on their ship?

Mr. David Collenette: Mr. Rysanek is going to answer that.

Mr. Jerry Rysanek: Thank you, Mr. Chairman. Well, I think the proper framework for issues of insurance is Bill S-2, the Marine Liability Act—not the Canada Shipping Act, the bill that's before us.

The Marine Liability Act first and foremost establishes the liability of the shipowner to passengers, Canadians at large, and those travelling on any public or private commercial vessel. As I tried to indicate, I think it's a quantum leap for the shipping industry to be brought up to the level of other modes of travel, particularly air travel, and to deal with specific liabilities.

There are provisions in Bill S-2 to introduce regulations respecting compulsory insurance. As was indicated during the debate, I certainly think this is an important matter to look at once the bill has passed and we have the liability. We should look at ensuring that shipowners have adequate insurance against this liability.

Mr. Jay Hill: It's sort of like the provisions for ensuring that shipowners are as liable for other types of pollution as they are for oil pollution. Sometime in the future, we'll probably see that happen.

My other question gets back to this issue of the rates in conjunction with the conferences, so I guess it's directed to Mr. Gautier. Maybe I didn't explain myself too carefully, or maybe I didn't understand your position. But if an individual shipper negotiates a lower shipping rate with a shipping line, is there a requirement that the line has to reveal that rate to the conference?

You said they didn't have to make all the terms public. But if they belong to that conference and negotiate a lower rate, do they have to make it public?

Mr. Louis Gautier: Nothing in the act says they have to—it's between the conference members themselves. Of course, the new section will say that the conference agreement will not bind members to reveal the contents of those individual contracts.

Mr. Jay Hill: They won't have to?

Mr. Louis Gautier: No, the members won't have to. They can't be compelled to do it.

Mr. Jay Hill: Okay.

The Chair: Thank you very much, Mr. Hill. I'll go to Marcel Proulx of the Liberals.

Mr. Marcel Proulx: Mr. Minister, the sunset clause was discussed with shippers. However, it was decided not to put it in with the amendments. Why?

Mr. David Collenette: I had a lot of representations on this particular clause. I guess if Canada did it, that would represent a major departure from current international practice. I think it would isolate us, put our shippers in an awkward position, and give the industry some uncertainty we don't think it should have.

• 1650

But as time goes on, we may wish to take another look at this. You can always bring an amendment forward; we could always deal with that. The fact is, these shipping conferences are a throwback to the 19th century. Their strength is dissipating, as I said earlier. There's competition from larger independent groups.

I think this does not preclude Parliament from doing it in future, but the timing is just not right now. We don't think there should be that much uncertainty thrown into the mix.

Mr. Marcel Proulx: Thank you.

The Chair: Mrs. Desjarlais.

Mrs. Bev Desjarlais: To go back to Mr. Hill's question on Bill S-2 and the insurance, I would appreciate it if you answered that, Mr. Minister. Actually, I'm absolutely flabbergasted we wouldn't ensure that the compulsory liability clause be included in the legislation. I was surprised that no compulsory liability insurance even existed.

We felt we didn't get an up-front answer on the issue from Transport, because it was suggested to us that the insurance industry couldn't handle it—which is just not the case.

You know how I feel: I want Canadians to be comfortable with their transportation system, I want them to know it's safe, and I don't want people to worry about our industry. I don't think Canadians realize there isn't compulsory insurance. I think this is going to become public knowledge, and I think it's going to affect the passenger industry and the tourism industry. It's imperative for us, as a committee, to ensure that we put in legislation.

You have always said that safety is the number one consideration. Well, safety includes security for people travelling in our transportation system, in whatever facet. You're just not there on this issue unless we have some kind of compulsory legislation. I see no reason to leave it till whenever.

Mr. David Collenette: Mr. Chairman, I think Mr. Rysanek answered this question when he was here last week for Bill S-2, and he's given an answer again today. There are major departures in the whole approach to shipping in this bill, and we are taking a gradual approach. I think Madam Desjarlais is equating the same liability towards people as for pollution—

Mrs. Bev Desjarlais: No, no, I'm talking about the clause in Bill S-2 that would ensure passenger liability insurance.

Mr. David Collenette: But again, I think this matter was dealt with last week by the officials on Bill S-2.

Mrs. Bev Desjarlais: I guess I wanted it from the horse's mouth. I wanted to hear from you that you wouldn't support that kind of an effort.

Mr. David Collenette: You can call me a horse and say I have a horse's mouth—

Mrs. Bev Desjarlais: I didn't mean that in a nasty way—

Mr. David Collenette: —but I'm pleased to say that the horse's mouth is right here. We went over this at the department some months ago, in preparation for this legislation, and I think the explanation given really has to stand up.

Mrs. Bev Desjarlais: Okay. I'm just curious: we're talking about the shipping conferences, and maybe everybody here knows this except me. How many shipping conferences are there, and which lines belong to which specific conferences?

Mr. David Collenette: Jerry.

Mr. Jerry Rysanek: It's a shrinking group. A couple of years ago there were about 19 conferences operating in Canadian trade, and currently there are about 15. I don't have a list of conferences by name, but we would be happy to provide it if you wish.

Mrs. Bev Desjarlais: And how many lines are involved?

Mr. Jerry Rysanek: About 35.

• 1655

Mrs. Bev Desjarlais: So there are only 35 lines involved in 15 conferences?

Mr. Jerry Rysanek: That's right, within the conference system. But of course there is a large non-conference system too.

Mrs. Bev Desjarlais: That was my other question.

Mr. Jerry Rysanek: Together, about 120 lines serve Canadian ports.

Mrs. Bev Desjarlais: So we actually have more non-conferences lines than conference lines—but we're gearing our legislation to the conferences. Is it based on size?

Mr. Jerry Rysanek: I don't want to say it's based on size. The fact that we have a Shipping Conferences Exemption Act reflects the industry history. There used to be a very large group carrying an enormous portion of our trade. That's shrinking, but we still need the legislation.

Mrs. Bev Desjarlais: Thank you.

The Chair: Thanks, Bev. You were just out of time.

Mr. Shepherd has been waiting patiently, so I'll give Mr. Shepherd five minutes for the Liberals.

Mr. Alex Shepherd (Durham, Lib.): Just a comment. As somebody who was run down by one of those personal water craft, and almost had my daughter killed, I'm less laissez-faire than some of my Canadian Alliance colleagues towards safety in our waterways.

I want to ask a simple question. I think we've been going around and around these confidential contracts. In the preamble to the Shipping Conferences Exemption Act, it says the individual conference member will not be obligated to provide notice to the other conference members or divulge any detail of a service contract.

So if a conference member and a shipper enter into a confidential contract, why doesn't the legislation simply say that you cannot divulge that to the rest of the conference members?

Mr. Jerry Rysanek: I'll try to respond to your question from a policy point of view.

The situation is that the new law will allow for agreement between two parties outside the conference system. When the line is in a confidential service contract, it's quite clearly acting outside the conference system.

So on the one hand you have a shipping client and on the other you have a shipper, and they enter into a private contract. The law says you do not need to disclose that contract to the members of that conference.

Now, you're asking why we don't go a step further and prohibit the member from disclosing it to the conference. I think we're struggling with the issue from a policy point of view, because in that situation we would actually be trying to regulate private contracts. Non-conference lines—of which I think we have a majority today—entering into private contracts with shippers, which happens everyday, do not have to disclose anything to anyone. And they're certainly not compelled to keep it to themselves.

So the issue here is whether this law is a suitable framework to actually prohibit them from discussing rates, when they operate outside the conference agreement.

Mr. Alex Shepherd: But I think what we're trying to do is evolve this legislation to a more competitive environment. Doesn't that negate the implication you're trying to promote, which is to create more private confidential contracts? The shippers don't know that the contract won't just go back through the system again. So why don't you try to protect the general public from the knowledge that the conference will then have access to this information?

Mr. Jerry Rysanek: Philosophically, I have no problem with what you're saying. This issue has been brought to our attention, and we're just trying to see whether this is the right instrument. We would be trying to regulate the behaviour of two parties to a private contract, entered into outside the act.

So the act would in fact be saying, “You shall not tell your conference members about something done outside of the conference”. We have to see whether this is the proper vehicle.

This is not in the legislation of other countries we've looked at. There has been some argument that the U.S. has legislation of similar purpose, but as far as we can see it isn't there. There is a difficulty—

• 1700

Mr. Alex Shepherd: You don't object to that. You don't have a big objection to somebody trying to amend the legislation to do that.

Mr. Jerry Rysanek: I don't think there is a matter of objection. We certainly are trying to develop provisions that improve competitiveness. We just have to see whether in fact this is the way to do it and whether prohibition as opposed to a discretion—you do not need to say it—is something that should be done in this act, and we had some doubts. We also have to talk to our legal experts about it.

The Chair: One minute, Alex.

Mr. Alex Shepherd: That's all.

The Chair: Thank you very much. I'll go to the Canadian Alliance then for five minutes.

Mr. Brian Fitzpatrick: I think Mr. Shepherd and me are probably more in agreement than disagreement. I think there are some pretty strong provisions in the Criminal Code already in terms of alcohol use when operating a pleasure craft; there are criminal negligence, dangerous driving provisions, and so on. So for people who really operate motor vehicles in an asinine manner with a disregard for the safety of other people, I think we have some tough laws already in place to deal with that. The question is how much more do we need under this act to shore up what we have in the Criminal Code?

I certainly agree with Mr. Shepherd's point on the conventions. If we really want more competition in the shipping industry, the carrier industry, what would be wrong with that little innovation of putting a prohibition into that legislation?

The overall thing I'm questioning.... I'm not an expert on international shipping and so on, but we have some pretty major economies in this world, the U.S., Japan, Europe, and so on. It would seem to me that it would be in all of those countries' interest to get together and decide what kind of cooperative action they can use to break an international cartel or monopoly situation.

We certainly try to do it domestically. We have a Competition Act that says competition is in the public interest and it's a real good thing. I'm wondering what steps we've tried to take with the G-7 and other countries to say these conventions are not good for our shippers. What sort of cooperative action by treaty can we do to eliminate this sort of pariah, or whatever you might want to call it?

Mr. Jerry Rysanek: The Shipping Conferences Exemption Act in itself does not exist by a specific international treaty; it's by a common shipping policy—

Mr. Brian Fitzpatrick: I understand that.

Mr. Jerry Rysanek: —of almost all members of the OECD.

From time to time they get together. There was a major discussion about this type of legislation in the OECD last May, a year ago, and both sides of the equation came to the table and there was a debate about coordinated action, if not to abolish legislation of this type, then to review it, to modify it, to change it. But I'm afraid I have to report to you that nothing came of it. There is still a very solid view among most of our trading partners that this legislation, as you see it, is something that's necessary and has to be maintained.

The debate continues. There is another conference on this same subject later in this year and issues will be brought forward again, but I don't see, certainly in the immediate future, any major change at the international level such as you're talking about.

Mr. Brian Fitzpatrick: I find this astounding. Are you suggesting to me that the official position of a country like the United States is that they support an international cartel or monopoly through these conventions to fix prices on shipping internationally? I find that astounding. That doesn't seem to be in their nature, in the way they deal with things.

Mr. Jerry Rysanek: As astounding as it may be, that's exactly what the situation is in the United States. In fact, as we might have said in the briefing material, the amendments to the Shipping Conferences Exemption Act are inspired by changes in equivalent legislation that are still maintained in the United States. It's the Ocean Shipping Reform Act of 1998; they still have that legislation as well.

• 1705

Mr. David Collenette: The fact is, Mr. Fitzpatrick, that the U.S. is not as embracing of free trade, fair play, and free enterprise as one might think. To paraphrase George Orwell in Animal Farm, all animals are equal, but some animals are more equal than others. In the United States, that can be applied to the free enterprise system. The fact of the matter is, there are interests in countries, our major trading partners, as Mr. Rysanek has said, that prevail upon those governments not to introduce legislation. So we can be the boy scouts we love to be and abolish the Shipping Conferences Exemption Act. We would then be putting many of our own people at risk, so I don't think we want to do that. But time is taking care of this outmoded kind of an arrangement.

Mr. Brian Fitzpatrick: Notwithstanding your description of the U.S., I think Mr. Gates, Mr. Rockefeller, Standard Oil in New Jersey, an airline industry, major league baseball, and telecommunications, as well as a few others who might take issue with the point that they don't encourage competition in their economy.

Mr. David Collenette: Don't talk to me about competition in the U.S. air industry. I'll be here all night telling you it doesn't exist.

The Chair: Thank you, gentlemen. You're out of time, Brian.

I'll move to Monsieur Laframboise of the Bloc Québécois.

[Translation]

Mr. Mario Laframboise: Thank you very much. I have two questions and I would appreciate having clear answers.

Section 188 stipulates that ships must have an oil pollution emergency plan. Is that right, Mr. Streeter?

Mr. B. Streeter: Yes.

Mr. Mario Laframboise: Then, it says that, in case an incident occurs, they have to take reasonable measures to implement the emergency plan. If they have to have a plan, why don't we make it an obligation for them to implement it?

The issue of liability is dealt with in another bill. I agree, we discussed the issue of responsibility when we reviewed Bill S-2. If section 188 does not make it an obligation for them to implement their plan, I think that, when the time comes to decide who is liable, they could justify any response by saying that they had a plan and that they have taken all reasonable measures to implement it. After all, if they have a plan, why don't we make it an obligation for them to implement it?

Mr. B. Streeter: If something really serious occurs on a ship, usually, at the time of the incident, the first thing the master thinks about is the crew and the people on board. He tries, first, to save their lives; second, if possible, he tries to minimize damages to the ship; third, he implements his plan. There is also an emergency plan for other incidents that can occur at sea. So first, he tries to save lives, second, to stabilize the ship, and third, to implement those measures that could minimize the pollution. This is why we say "reasonable". It's because incidents are never the same and usually, the master thinks first of the crew and the people on board.

Mr. Mario Laframboise: Then, he'll be able to defend himself by saying he did something else...

Mr. B. Streeter: As soon as everything is okay, he implements his pollution prevention plan.

Mr. Mario Laframboise: Okay. I'm going to go back to section 98 which deals with the hiring agency. It says:

98. If the authorized representative of a Canadian vessel entered into an agreement with another person to provide crew members, that other person shall, in lieu of the authorized representative or the master with respect to those crew members, comply with the obligation of the authorized representative or master [...]

Here, it says clearly that, in the end, the authorized representative is not responsible for these kinds of things. It's the person who has been hired who becomes responsible.

Mr. B. Streeter: In any matter involving the crew, it's the crew member who is the authorized representative for our punitive actions, if need be, or any action taken first by the crew against the ship. But that person is still the link between the authorized representative and the ship.

• 1710

Mr. Mario Laframboise: I'd like you to ask your legal experts to review this responsibility issue and tell us if the shipowner is still liable. And could you forward this report to the committee?

The way I read this section, the transfer of responsibilities puts the onus on the person who does the hiring. It's this person who is responsible of what is described in paragraphs (a) to (d) and in paragraph (e), that is “pay expenses”. This would mean that the representative or the person who does the hiring is responsible, among other things, for the payment of expenses for crew members who have been discharged , in other words, those expenses described in paragraphs (a) to (e).

Mr. B. Streeter: Mr. Gauthier can answer your question.

Mr. Mark Gauthier (Senior Counsel, Legal Services, Department of Transport): Mr. Laframboise, we would be pleased to give you an answer in writing.

On the face of it, if you look at section 98, it does create an obligation which does not proceed from a penal provision, which is not a civil obligation, but which follows rather from the act or from regulations, and the breach of which is punishable under section 102 of the act, in particular, paragraph (f), where it says that a penalty can be imposed.

As Mr. Streeter was saying, even if there is a penalty provision, if crew members are not paid, they can turn against the shipowner in a civil suit. You have to differentiate between civil obligations and regulatory obligations.

[English]

The Chair: Mario, you're just about out of time, so I'll try to get you back in the rotation.

To Mr. Gauthier, any material that is furnished comes through the chair so it is distributed to all members, not just one member.

Mr. Hill of the Canadian Alliance has the floor.

Mr. Jay Hill: Thank you, Mr. Chairman.

I want to get back on this business for a minute so I can clearly understand this fact that somehow we're constrained, or I'm getting left with the impression we're constrained, by international conventions and agreements.

My understanding is it has taken something in the order of 14 years to bring forward these amendments that are contained in Bill C-14. How long a time period have we been working with this, dealing with this, putting this together?

Mr. Jerry Rysanek: Are we talking about the Shipping Conferences Exemption Act?

Mr. Jay Hill: Yes, Bill C-14. How long has this been in the works?

Mr. Jerry Rysanek: I can only speak about part 15.

Mr. Jay Hill: That's one part of it.

Mr. Jerry Rysanek: Yes.

Mr. B. Streeter: All of the amendments you see in Bill C-14 are probably the result of 20 years of different consultations, work, and updating, excluding part 15, which Mr. Rysanek wishes to speak about.

Mr. Jay Hill: So I'm underestimating when I say 14 years; it's more like 20 years that we've been working on this.

I can certainly understand, or try to understand, the frustrations all of you would be expressing then. You'd like to see the end of the tunnel.

But what I'm going to get at here is that, on this issue of ensuring that shipowners are held liable for all types of pollution, you say we can't get ahead of our international conventions, our international treaties and agreements, and what have you.

Then on the issue of imposing compulsory insurance, this is 20 years in the making, yet when the officials appeared before the committee and we asked them questions about it, they said they had to do a study. We've already been 20 years in putting this particular piece of legislation together. I know you have to differentiate between Bill S-2 and Bill C-14—you were just going to get to that.

The question I'm getting at is, why is this so? Is there some logical reason why we can't take the lead on some of this? If we're going to take that long to put together legislation trying to bring us up to yesterday on shipping laws, to bring us up to the same standards as other countries have, that seems to be part of the argument for Bill S-2, Bill C-14, and some of these other pieces of legislation. I don't have any problem with that.

But why can't we look a little bit to the future instead of what the minister said in response to a question posed by my colleague from the NDP, something—and I can't remember the exact term—along the lines of we want to proceed gradually.

• 1715

I'm not suggesting a quantum leap here, but on those two issues of ensuring that shipowners are held liable for all pollution—rather than going to more conferences and negotiations—is there some reason I'm missing why we can't actually take the lead on some of this stuff instead of just following along?

Mr. David Collenette: I would like to make the point that this bill was put out to stakeholders for something that was totally unique. I'm surprised to hear from the Alliance that they're advocating that Parliament get out ahead of the industry that is, in effect, being regulated here. The fact is that to make legislation work you have to have a notion of practicality of what is doable. Parts of this act go back to the British act in the 19th century.

Yes, there may be a gradualist approach in some respects, but there is a quantum leap here from parts of the 19th century thinking. In making a regulatory environment for any industry, you have to ascertain how that industry is going to cope from an economic as well as a policy point of view.

I appreciate that the Alliance wants to be bold in the way Mr. Hill is putting forward. I would say that we've been very bold, and this does not preclude a future amendment. This allows us, at least, to bring amendments forward in a much easier way, because we have made this quantum leap with this bill, which has been more than 20 years in the making. But to go too much farther than what is practical.... We can make all the laws we want, but are they enforceable? Are they reasonable?

I would submit that the process we have followed has brought us to the stage where this is not just catch-up, but where there is also a degree of foresight. You cannot get too far ahead of the industry—those people affected by the laws you are enacting.

The Chair: Thank you very much, Minister.

Thank you very much, Jay. Your five minutes is up.

Mr. Jay Hill: That's too bad.

The Chair: We'll come back to you. Hold that thought.

Anthony Tirabassi for the Liberals.

Mr. Tony Tirabassi (Niagara Centre, Lib.): I'd like to thank the minister and certainly his officials for appearing here before the committee.

As someone who is relatively new here, I understand that a form of this particular bill was tabled in June of last year. I understand that since then there has been dialogue with various stakeholders in the industry. I'm wondering what substantial changes—if any—have been made to this particular Canada Shipping Act since the original bill, which was tabled in June? I don't know which official would want to handle this question.

Mr. David Collenette: I'll let the officials answer in detail, but there have been some significant changes. This is the point I was making earlier in response to Mr. Hill. To have this bill out there has enabled the industry to take a look at it, and—with the hiatus of the election—to do a thorough analysis, in order to bring forward some specific changes. I'll let the officials talk about them. Some deal with the CSA, others with the shipping act itself.

Mr. B. Streeter: Thank you.

As I said earlier, I think a number of the substantive changes are in the area of fine-tuning of the enforcement scheme, particularly issues related to “knowingly” and “negligently” provisions, which are very difficult at times to prove. We have gone back to a common-law basis for that, so that we're not creating a separate regime.

We found some other issues that were very important. In the first go-round, we felt that a number of rights of seafarers were covered in labour legislation in Canada, so were not necessary to have in the bill. However, consultations with organizations like the Canadian Maritime Law Association convinced us that they were very important substantive rights. Although none of us were old enough to understand why they were there, they were important enough—very much so—to remain there. So many of those rights that protect seafarers that we felt were initially covered by the Labour Code in Canada were put back in.

• 1720

As I said earlier, in many aspects it's been a very constructive dialogue on both parts. It certainly has issues where we disagree. There are fundamental policy issues that we'll have good debate on.

Mr. Tony Tirabassi: If I could, I have another question. I know this was a problem at one time on our roads, and it was taken care of by way of different distinctions of licensing. But in order to understand, should this start happening in the marine industry, my question is, if a recreational vehicle is occasionally used for a commercial purpose, with which safety requirements must it comply?

Mr. B. Streeter: It must comply with a higher level of safety requirements, and it depends which those are; they may well be commercial.

I would equate it to a taxi. A taxi must comply with the requirements for a taxi at all times even if the owner is using it for Sunday afternoon pleasure.

But in terms of assessing it, if it were being used for pleasure, it may well be that the enforcing officer would apply a pleasure craft standard. It must be equipped to commercial vessel standard; it could well be enforced to the pleasure craft standard depending on the purpose.

Mr. Tony Tirabassi: But it must comply to the higher order.

Mr. B. Streeter: That's right.

Mr. Tony Tirabassi: Thank you.

The Chair: Mr. Bagnell, you had a question.

Mr. Larry Bagnell: This is for Mr. Gauthier, I think, just to follow up. It's too bad Mario has left, because I'm not sure—I didn't understand—you answered the question he was after. I thought he was asking...if an agency hires staff and let's say one of them is not qualified and something happens, the captain is not responsible because the agency hired the staff. I thought that was the question he was asking.

Mr. Mark Gauthier: Well, as I understood the question, Mr. Bagnell, there seemed to be some confusion, at least as I heard the dialogue, between the regulatory obligations and the civil obligations for non-payment of seafarers' wages.

What clause 98 seeks to do, in a certain regulatory manner, is to regulate that part of the industry, the crewing agencies. What it provides is a number of rights and obligations for those crewing agencies and, concomitant with that, a penalty provision for breaching that. I pointed out clause 102, which is the penal provision that accompanies clause 98.

The issue of unpaid seafarers' wages is dealt with basically elsewhere in the bill. If a seafarer is not paid his wages he still has a recourse under law against a ship to assert a lien, which, as Mr. Streeter has just pointed out, was one of the provisions that was restored to the bill. I was trying to draw a distinction between the civil and the regulatory.

Now whether or not that answers Mr. Laframboise's question remains to be seen perhaps, but that's the thrust in which I was proposing an answer.

Mr. B. Streeter: Perhaps I could follow up, just to say that specifically in the case of certification of crew, the authority is on the master to ensure that that individual has the qualifications, even though the crewing agency may supply that individual. It's more the civil obligations where he replaces the authorized representative. The competency of individuals on board a vessel is best left to the master.

The Chair: I'll go to Bev Desjarlais of the NDP. Nothing, Bev?

Mrs. Bev Desjarlais: No.

The Chair: We'll go to Jay Hill of the Alliance.

Mr. Jay Hill: Actually I just have more of a statement than a question.

Mr. Minister, you said that.... I guess I'm sort of advocating that we boldly go where no one's gone before, or something like that. On this issue of compulsory insurance and ensuring that all shipowners be held liable for all types of pollution—those are the two issues I keep coming back to today. I would think, in consultation with the industry, that it wouldn't matter if you did that today, next month, next year, or twenty years from now. They're probably not going to be too excited about either one of those two things being in law.

If I were a shipowner and there was a requirement that was very clear, that it wasn't ministerial discretion but it was within law that I be held liable for any and all types of pollution that my ship might create, or there was a requirement that I had to provide compulsory insurance the same way as all other modes of transportation, then I probably wouldn't be overjoyed about that. I don't think it would matter whether you did a study now or, as I say, sometime in the future. You're probably going to find that the stakeholders are not too excited about those prospects. I wonder if I'm off base on that.

• 1725

Mr. David Collenette: I hope you didn't get the impression that Canada doesn't show leadership in these areas. Just after I became minister, I chaired a meeting of port state control in Victoria, where we married the Paris and Tokyo MOUs together and set certain high standards. It was Canada's leadership that did this.

All I'm saying is that there has to be some balance. We can be as idealistic and forward-thinking as we want, but we have to deal with the practicalities of industries that have to operate within certain constraints. You're right that industry does not like to be regulated. On the other hand, they know that regulation must come. There must be some order in the marketplace. Therefore, within that context they are consulted. We have to make sure that regulations that are brought forward are practical and enforceable and can achieve the public policy goal we require.

Mr. Jay Hill: When it comes to the need for compulsory insurance, as there is in all other modes of transportation, wouldn't you think it's reasonable...?

I think there was general acceptance in the committee, and all five parties, not just the opposition parties, supported my amendment. But even in comments that were made by the Liberal government members, they couldn't argue against the need to have compulsory insurance so that every traveller on a ship would be comfortable knowing that the financial means were there should they be injured or lose their life and that the shipowner would be held responsible. I don't understand why—

Mr. David Collenette: I think we've had it explained before, but perhaps you would like to hear it again.

Mr. Jay Hill: Your explanation, sir, is that the stakeholders are not ready for it and there hasn't been an adequate study done of how this would impact on them. What I'm saying is I don't see that particular issue being any better 10 years down the road. They still won't want to do it if it costs them money.

Mr. David Collenette: It's not a question of that. We're breaking new ground in these areas, and we want to make sure the ground we're breaking is something that is practical and reasonable. Governments don't operate in a vacuum. We operate within the wider society. We have to make sure that if we are treading in new areas, we're bringing others along with us. We have to ensure that those regulations and laws we make can be discharged for the public good.

I don't know if you wanted to say some more on it.

Mr. Jerry Rysanek: I really do not know if I can add anything.

We certainly recognize, as I said, that the vast majority of shipowners have more than adequate insurance to meet their obligations. We also know that some of them may not have it, and that's the group that you and the committee talked about.

Before we can move on clause 39 to introduce the regime, I think it's fair to say that we have to see what we're doing. We don't have a precedent. We only have a precedent for oil pollution, where there is compulsory insurance. There is no other precedent we can follow.

When I refer to study, it's simply to say that we have to talk to the stakeholders and the insurance industry and to bring them on board. I know that many of them said it can be done like that, but some of them said no, it cannot be done like that. It will take time. I don't know if it would have been done in nine months. Certainly, it's a priority, and it's an important one to deal with.

Mr. Jay Hill: I'll just sum up because we're out of time. It's unfortunate that the same consideration that is being applied to shipowners couldn't have been applied to law-abiding firearm owners

Anyway, I'll leave it go at that. Thanks very much.

The Chair: Before we leave, I want to thank our guests: Mr. Minister, Mr. Troy, Mr. Gauthier, Mr. Rysanek, Mr. Streeter, Mr. Gautier, and Alex over to the right there. Thank you for coming. We appreciate your input.

• 1730

For the committee, you have a tentative work sheet there. We're still having some difficulty nailing down dates. The staff has been given the authority to try to get the people in for what they call the air day. We're trying to get the appropriate witnesses.

Mr. Jay Hill: I have a point of order, Mr. Chair. I think in deference to our guests we should note that they are dismissed, if we're going to continue with any other business.

The Chair: I just spoke up quickly because it looked like everybody wanted to run away. That's the only reason.

Mr. Jay Hill: Oh, I see. I just didn't want to keep them unnecessarily.

The Chair: No, we're finished. Thank you very much, gentlemen.

Mr. Jay Hill: I know you're all busy people.

The Chair: You just got it today so you might want time to consider it. We weren't going to go into a formal meeting.

Mr. Jay Hill: Without it being a formal meeting, after talking to the clerk, my understanding is that Thursday is going to be off now.

The Chair: We have a problem with witnesses. It's up to you as to what you want to do. We don't have the witnesses, and we're still working on tightening that up.

Mr. Jay Hill: I just didn't want you to run into a problem, Mr. Chairman, because usually when you cancel a meeting, all parties know about it. So that's why I raise it right now. Certainly, I would understand that there's not much point in holding the meeting if the witnesses can't appear.

An hon. member: Are we deciding on something about Thursday's meeting?

Mr. Jay Hill: Yes.

Mr. Brent St. Denis: I'm trying to hear over the din. I understand that we don't have witnesses lined up for Thursday.

The Chair: The clerk has notified me that they tried. They had one and they dropped out.

Mr. Brent St. Denis: Just looking at the number of sessions for Bill C-14 and the fact that we do want to get on with some stuff that the opposition and the government would like to do, I just wondered if you or the clerk could ask the opposition if they think we need all of those sessions on Bill C-14. That's all. If we do, we do. Do the opposition parties think we could get away with one or two sessions less by having more witnesses at a meeting? I'm only asking the question.

Mr. Jay Hill: Mr. Chairman, in what we have before us, the parliamentary secretary brings up a good point. We see three meetings—Thursday's being questionable—with witnesses for Bill C-14. Who are all these witnesses?

The Chair: Quite a few of them were submitted by the department, I think.

Mr. Jay Hill: Did I submit any names? I'm not aware of it.

Mr. Brent St. Denis: It may be that we can—

Mr. Jay Hill: Maybe my staff is doing things and I'm not aware of it.

The Chair: You're supposed to have that input.

Mr. Brent St. Denis: We have a list of witnesses.

Mrs. Bev Desjarlais: I think about 160 shippers are going to come before us on Bill C-14.

An hon. member: For separate presentations.

Mr. Marcel Proulx: Maybe we could have a Bill C-14 day.

Mr. Jay Hill: A Bill C-14 year.

Did you submit a bunch of names? Is that where these witnesses come from, Bev?

An hon. member: She's teasing.

Mr. Jay Hill: Why are all these witnesses appearing if nobody wants them to?

Mrs. Bev Desjarlais: Do we have a list of witnesses?

Mr. Jay Hill: Who put them forward?

The Chair: Paul, why don't you let our colleagues know exactly what is happening.

The Clerk of the Committee: We received the names of about 20 different organizations from the Department of Transport. We're in the process of contacting them and seeing if they want to appear before the committee.

The Chair: If the opposition wants to bring someone in, let Paul know.

Mr. Jay Hill: I don't. That's my point.

Mrs. Bev Desjarlais: I know that the Shippers' Council does plan on attending. They've already made representation on their own behalf to appear. I don't know how many representatives they'll have. Maybe we could get a list of who's coming so that we would know.

Mr. Brent St. Denis: Maybe Paul could give us the list of those who have said yes. We might agree, for instance, that these three can come together because they're all going to say the same thing. That's all I'm saying.

Mr. Jay Hill: Why did the ones scheduled for Thursday cancel?

The Clerk: For most of them it was because there wasn't enough notice by the time we started calling. There was only about a week's notice, so they weren't able to—

Mr. Jay Hill: I don't understand. Why does the department want to prolong this thing? If all these witnesses are being put forward by the department and if all of us were in agreement that right after the break we could go to clause-by-clause consideration and get done with the damn thing....

Mr. Brent St. Denis: Jay, if I might, in defence of the department, they probably looked at the complete list of stakeholders and were just saying, committee, here are all the names we have; you pick.

Mr. Jay Hill: If we're just going to have a parade of people saying how much they need the legislation, what do we need that for?

• 1735

Mrs. Bev Desjarlais: Have requests been received from some organizations? I was under the impression that the Shippers' Council had requested to appear. Have there been others as well?

The Clerk: Some organizations have contacted us, and I have contacted some.

Mr. Brent St. Denis: Let's just cut it off at the ones who have responded and the few you're waiting to receive a response from and go from there. If they're not that interested—

The Chair: And try to get them all in one bunch.

Mrs. Bev Desjarlais: But if we can handle this, just in case someone has an interest in—

The Chair: We'll get them all in one bunch, and we'll try to expedite that. That's what I'm hearing people say. They want to get on with it.

Mrs. Bev Desjarlais: But see how many first.

The Chair: That's fine. This is not firm.

Mrs. Bev Desjarlais: I don't want to hear ten in one day, either.

The Clerk: We have already tentatively booked for April 24, the first day back, roughly ten witnesses in a round table format.

The Chair: I take it that we are not going to meet on Thursday. We'll adjourn until April 24, after the break.

The meeting is adjourned.