Bill C-34 (Historical)

David Collenette Minister of Transport

Mr. Speaker, I rise on a question of privilege raised in the House on March 1 by the member for Port Moody--Coquitlam--Port Coquitlam concerning a report on the grain handling and transportation system for the 2001 crop year, pursuant to subsection 50(3.2) of the Canada Transportation Act.

I sent you a letter on Friday, Mr. Speaker, to explain my position since I was unable to respond on March 1. With the consent of the House I propose to table the letter. I sent a copy to the hon. member and to my colleagues, the House leader and Minister responsible for the Canadian Wheat Board, and the Minister of Agriculture and Agri-Food.

I would like to clarify the matter that was raised by my hon. friend. The government's policy reforms on the grain handling and transportation system announced on May 10, 2000 included a commitment to hire an independent private sector third party to monitor the system

The intention was for the independent monitor to provide information to the Minister of Transport, the Minister of Agriculture and Agri-Food, the Minister responsible for the Canadian Wheat Board, and other interested parties on the impact of the 2000 policy reforms and on the overall performance of the system.

The Canada Transportation Act was amended in the summer of 2000 to implement the government's policy decision. This included amendments to facilitate grain monitoring.

An amendment to section 51 of the act authorized the Minister of Transport to communicate information, including confidential information, for the purpose of monitoring the grain handling and transportation system. The amendments also specifically added monitoring the grain transportation handling system as a purpose for which regulations on transportation related information could be made under section 50(1).

The government accepted an opposition amendment, and that is very important here, requiring the Minister of Transport to table in parliament a report on the monitoring of the grain handling and transportation system. The amendment is contained in subsection 50(3.2).

I note that the obligation to table a report in parliament under subsection 50(3.2) is conditional on the Minister of Transport making regulations pursuant to paragraph 50(1)(e.1) and the minister using or communicating the information provided under the regulation for the purpose of monitoring the grain handling and transportation system.

The obligation to table a report on the monitoring of the grain handling and transportation system is clearly contingent upon the happening of certain events. Those events are the making or the amending of regulations under the authority of subsection 50(1) subsequent to the coming into force of the obligation and the use or communication of information under those regulations for the purpose of monitoring.

As regulations have not been made or amended under the authority of subsection 50(1) and since the coming into force of the obligation, there is no legal requirement to table a report.

Rather than resorting to regulations to force industry stakeholders to submit information to the minister to share with the grain monitor, the preferred approach was for industry stakeholders to voluntarily provide information directly to the grain monitor.

I also note that the carriers and transportation and grain handling undertakings information regulations were made pursuant to section 50 and have been in place since 1996. No substantive amendments have been made to these regulations since December 1999.

I wish to emphasize however that it is the Minister of Transport's intention to release a report on grain monitoring and to make copies available to parliamentarians as soon as possible once I have received the annual report for crop year 2000-01 from the grain monitor, Quorum Corporation.

Quorum Corporation was hired last summer through a competitive process to perform the duties of the grain monitor and one of its main responsibilities is to prepare an annual report on the performance of the grain transportation and handling system. The report is to be submitted to the Minister of Agriculture and Agri-Food, the Minister responsible for the Canadian Wheat Board and the Minister of Transport.

The implementation of the grain monitoring program has been fairly complex and has taken a considerable amount of time primarily as a result of work related to the development of a comprehensive database that includes information from the railways, the grain companies, the Canadian Wheat Board, the Canadian Grain Commission and the Canadian Ports Clearance Association.

The information and data received by the monitor provide an objective basis for conducting analysis. This is the first time such an extensive database and analysis has been put in place for monitoring the grain handling and transportation system. Once the process and database are established it is expected that Quorum Corporation will be able to submit its annual report on a more timely basis.

Generally speaking, grain moved well in the 2000-01 crop year and is moving well so far this year.

I might add that was a prediction that my colleague, the Leader of the Government in the House of Commons, and I made during the discussions on Bill C-34 two years ago.

The Canadian Transportation Agency has determined that the grain revenues for CN and CP for crop year 2000-01 were under the revenue caps established as part of the May 2000 policy decision. As well, the Canadian Wheat Board and the grain companies have implemented new commercial arrangements to cover the logistics of wheat board movements.

Quorum is in the final stages of preparing the annual report for crop year 2000-01. As noted above, it is my intention to release a report on grain monitoring and to make copies available to parliamentarians as soon as possible once he has received the report from Quorum.

I would hope that these remarks would clarify the alleged question of privilege raised by my hon. friend. I submit that there is no prima facie case, that I have met all the statutory requirements and met them faithfully.

James Moore Port Moody—Coquitlam—Port Coquitlam, BC

Mr. Speaker, I rise on a question of privilege to charge the Minister of Transport with contempt for his failure to comply with a legislative requirement compelling him to table a report on the monitoring of the grain transportation handling system in the House.

In June 2000 the government passed Bill C-34 that amended the grain provisions of the Canada Transportation Act. Subsection 50(3.2) of the new act reads:

The Minister must prepare, within six months after the end of each crop year, a report on the monitoring of the grain transportation and handling system and cause the report to be tabled in each House of Parliament on any of the first fifteen days on which that House is sitting after the Minister prepares it, if the Minister

(a) makes a regulation under paragraph (1)(e.1); and

(b) uses or communicates the information provided under the regulation for the purpose of monitoring the grain transportation and handling system.

The government hired Quorum Corporation to monitor the grain handling and transportation system and has fulfilled parts (a) and (b) of subsection 50(3.2) of the Canada Transportation Act.

The crop year ends July 31. Therefore, the six month period mentioned in subsection 50(3.2) ends on January 31. According to my count 15 sitting days after January 31 is February 28, yesterday.

On November 21, 2001, the Speaker delivered a ruling in regard to a complaint by the member for Surrey Central who cited 16 examples of where the government failed to comply with legislative requirements concerning the tabling of certain information in parliament. In all 16 cases raised on November 21 a reporting deadline was absent from the legislation and as a result the Speaker could not find a prima facie question of privilege.

However, the Speaker said in his ruling at page 7381 of Hansard :

Were there to be a deadline for tabling included in the legislation, I would not hesitate to find that a prima facie case of contempt does exist and I would invite the hon. member to move the usual motion.

I have established that the legislative requirement provided for in subsection 50(3.2) of the Canada Transportation Act includes a deadline for the tabling of a report on the monitoring of the grain transportation handling system. I have also established that the legislative deadline has not been met. Therefore, a prima facie question of privilege does exist. Accordingly, I am prepared to move the appropriate motion.

James Moore Port Moody—Coquitlam—Port Coquitlam, BC

Mr. Speaker, I rise to speak to Bill S-33, an act to amend the Carriage by Air Act. The bill exists for only one purpose. It adds the convention for the unification of certain rules for international carriage by air signed at Montreal on May 28, 1999, as schedule VI to the Carriage by Air Act.

Bill S-33 is the third transport related bill to be tabled in the House since September 11. It is the third transportation focused bill to avoid such timely and important topics as the death of airline competition in Toronto, Montreal, Halifax and St. John's; the collapse of Canada 3000; the launch of Air Canada's Tango, and the urgent need to address present airport security concerns.

The Minister of Transport has laid before parliament three bills since September 11: Bill C-34 on September 26 to create the transportation appeal tribunal, Bill C-38 on October 25 to amend the Air Canada Public Participation Act and Bill S-33 on September 25 to update an airline liability convention passed in 1929.

All are important but none are of any real urgency whatsoever to everyday Canadians. The government has allowed the Standing Committee on Transport and Government Operations to hold hearings and pretend to be working on weighty matters. Meanwhile across the country an airline went bankrupt, thousands of people at Canada 3000 and Air Canada lost their jobs, Canadians called for air marshals on flights, and the travelling public called for better and tighter airport security.

I hope the Standing Committee on Transport and Government Operations will consider these matters within the context of meaningful legislation because they are the transport related topics foremost in the minds of Canadians and, most important, to encourage Canadians to keep flying.

I shall focus my attention on the task at hand which is the consideration of Bill S-33. If anyone is wondering why this subject should concern the House, the answer is found on the back of every airline ticket issued for international travel. There are two pages in English and French right beside the coupon that the airline takes when it issues a boarding pass. It includes the following notice:

If the passenger's journey involves an ultimate destination or stop in a country other than the country of departure the Warsaw Convention may be applicable and the Convention governs and in most cases limits the liability of carriers for death or personal injury and in respect of loss or damage to baggage.

The reference to the Warsaw convention invokes a legal regime that governs the process by which airline passengers or their families may make a claim against an airline for death or injury resulting from an accident during an international trip. The process was designed in 1929 to build confidence in the fledgling air industry and it consisted of two main planks.

First, article 28 allowed a claim to be brought in one of three places: the carrier's head office, the place where the ticket was bought or the place of destination. For example, in the case of Air India 182 which was destroyed by a terrorist bomb on June 23, 1985, the family of a Buffalo resident travelling from Toronto to London on that fateful flight could bring a claim in Buffalo where the ticket was bought; in London, the place of destination; or in Mumbai, India, the airline's principal place of business.

Second, article 22 made the airline liable for death or injury to passengers and limited this liability to 125,000 gold francs, then worth roughly $138,500 in today's Canadian currency.

In essence the convention was a great idea. On the one hand claimants did not have to travel halfway around the world to present a claim, as inevitably one of the potential places to present a claim was nearby. On the other hand airlines were prima facie liable for injury or death to passengers so claimants did not have to go through a lengthy or complex trial to get the money.

As many of today's airport security procedures around the world reflect the aftermath of September 11, the 1929 Warsaw convention was very much a creature of its time.

A decade earlier, from June 14 to June 15, 1919, Captain John Alcock and Lieutenant Arthur Whitten Brown made the first non-stop aerial crossing of the Atlantic. Five years earlier, on April 26, 1924, Imperial Airways initiated daily London-Paris air service. Two years earlier, on May 21, 1927, Charles A. Lindbergh astounded the world by landing in Paris after a solo flight from New York across the Atlantic in The Spirit of St. Louis .

In the year preceding the drafting of the Warsaw convention both the first U.S.-Australia and the first California-Hawaii flights landed safely at their destinations.

In 1929 a several hundred mile long trench was dug in the Arabian desert so that Imperial Airways could launch a service from London to Delhi via Cairo and Baghdad without the pilots getting hopelessly lost while flying over the vast expanse of sand. On September 24, 1929, James H. Doolittle became the first to fly from takeoff to landing entirely by use of instruments and radio aids and without reference to the ground.

The venerable DC-3 had not yet flown. It would be a decade before Pan American Airways would fly the first trans-Atlantic passenger service. Some of the engineers who would build the 747 four decades later had not yet been born.

In 1929 KLM turned ten, Qantas turned nine, Imperial Airways turned five and Lufthansa turned three. Trans-Canada Airlines would not be created for another eight years. To say that the international airline industry was in its infancy is a huge understatement.

The Warsaw convention boosted consumer confidence in the airline industry at the very moment that confidence was needed most. Like most countries, Canada ratified the Warsaw convention and implemented it in domestic law by adding its text as schedule I of the Carriage by Air Act.

The years passed, technology improved and airlines became safer. Where once airline accidents seemed to be a daily occurrence, better training, aircraft construction, navigation and instrumentation led to a vastly improved safety record. The safety was so improved that on March 26, 1940, U.S. commercial airlines completed a full year of flying without a fatal accident or serious injury to a passenger or crew member.

Two other technologies would dramatically improve both airline safety and passenger comfort. The first of these was the Boeing Stratoliner, which made its maiden flight on July 8, 1940. It had a pressurized cabin which allowed it to fly at altitudes of up to 20,000 feet thereby avoiding turbulence. The second was the Boeing 707 which made its maiden flight on July 15, 1954, introducing the world to the jet age.

The years passed and accidents still occurred although safety had dramatically improved. In an 18 month period between October 1952 and April 1954 six de Havilland DH-106 Comets crashed at various airports in Italy, India, Pakistan and Africa.

A new engineering concept called metal fatigue was discovered, as was the inadequacy of the now 25 year old liability limit in the Warsaw convention. Legislators began to realize that the Warsaw convention needed a touch up right about the same time that Boeing engineers were putting the final touches on the 707 prototype.

The buying power of the 125,000 gold francs also declined rather dramatically and what had once been seen as a quick, fair settlement was now rather paltry. On September 28, 1955, negotiators from around the world met at The Hague for the purpose of modernizing the Warsaw convention. The result of the negotiations was The Hague protocol and article 11 doubled the former liability limit to 250,000 gold francs, largely restoring its buying power.

Canada ratified the protocol and included its text as schedule III to the Carriage by Air Act. For a short time it appeared that the Warsaw convention, as amended at The Hague in 1955, would be a success. However with growing inflation the buying power of 250,000 gold francs began to wane.

There were two further attempts to modify the convention: the Guadalajara convention of September 18, 1961, and Montreal Protocol No. 4 of September 25, 1975. Neither raised the liability limits, although Canada ratified both by adding them as schedules V and IV respectively to the Carriage by Air Act.

In the absence of further amendments to the Warsaw convention which might raise the liability limits, skilful lawyers tried a variety of means to get around the limits.

Article 3 of the convention required the delivery of a passenger ticket and required that the ticket contain “a statement that the transport is subject to the rules relating to liability established by the convention”. Moreover, article 3.2 of the convention required the carrier to deliver a ticket in order to avail itself of the provisions which limited its liability.

As early as 1965 in Warren v Flying Tiger Line, the U.S. court of appeal, second circuit, considered whether a passenger had to be given a ticket including the statement of limited liability prior to boarding the plane.

At around the same time another line of cases was studying the fascinating question of how large the print had to be in order to give the passenger true notice of the limitation of liability. In 1966 the district court of New York heard the case Lisi v Alitalia and decided that four point print was too small, leaving open such crucial questions as what font and type size might be acceptable.

Font and type size arguments were a favourite way of getting around the liability limitations. For many years they were a principal weapon in any court case against a carrier, especially when the ticket stock had been printed in another country and was being examined in a U.S. court.

In both Canada and the United States the issue of type size went all the way to the supreme court. In 1979 the Supreme Court of Canada in Ludecke v C.P.A.L. permitted 4.5 point type. In April 18, 1989, the U.S. supreme court in Chan v Korean Airlines stated that carriers would no longer lose the benefit of the convention's liability based on type size arguments.

Nonetheless it was obvious that $20,000 U.S. was an inadequate amount to compensate a family in Europe or North America for the death of a loved one, notwithstanding that the $20,000 could be got almost immediately without the need to go to trial.

Thus lawyers began to explore article 25 of the Warsaw convention which excluded limited liability in cases where the airline was guilty of wilful misconduct. The article essentially said that there were cases in which the airline's negligence was so great that the Warsaw convention limits should not apply. In other words, had the airline taken reasonable measures, the accident would not have happened and the passengers would not have died.

This line of argument has been used in virtually every case involving suspected terrorism or the shooting down of an aircraft such as Air India 182, Pan Am 103, EgyptAir 990 and Korean Airlines 007.

Claimants who manage to prove that an airline was grossly negligent can get more than $20,000 U.S. in compensation from an airline for the wrongful death of a passenger. In virtually every other case claims are limited to $20,000 U.S., unless the passenger was travelling to, from or via the United States.

America has a higher standard than the rest of the world. While the rest of the world explored ways to get around the $20,000 limit, the U.S. imposed the Montreal agreement on all international carriers serving the United States. The agreement dates from May 13, 1966, and raises the Warsaw convention liability limit to $75,000 U.S.

As part of the agreement the following text appears in airline tickets of virtually all international carriers serving the United States:

Advice to international passengers on limitation of liability. Passengers on a journey involving an ultimate destination or a stop in a country other than the country of origin are advised that the provisions of a treaty known as the Warsaw convention may be applicable to the entire journey, including any portion entirely within the country of origin or destination.

For such passengers on a journey to, from, or with an agreed stopping place in the United States of America, the Convention and special contract of carriage embodied in applicable tariffs provide that the liability of certain carriers, parties to special contacts, for death of or personal injury to passengers is limited in most cases to proven damages not to exceed U.S. $75,000 per passenger, and that this liability up to such limit shall not depend on negligence on the part of the carrier.

For such passengers travelling by a carrier not a party to such special contacts or on a journey not to, from, or having an agreed stopping place in the United States of America, the liability of the carrier for death or personal injury to passengers is limited in most cases to approximately U.S. $10,000 or U.S. $20,000.

Back in 1966, Canada could have followed America's lead and insisted on similar or even identical wording to be applied to all travel to, from and via Canada. This was not done.

Today, some 35 years later, the government presents Bill S-33 through which the government essentially ratifies the Montreal convention which creates a new higher liability regime. If and when the Montreal convention enters into force, Bill S-33 would automatically raise the liability limits on all round trip international flights originating in Canada and on all flights between Canada and another ratifying country.

The Montreal convention was concluded on May 28, 1999, and to date only 12 nations have ratified it. Canada will be the 13th. Both Mexico and Japan ratified it over a year ago, while in the past year Canada has done nothing. Neither the United States nor any of our trading partners, except for Japan and Mexico, have yet ratified the treaty and it will likely not come into force until they do. The convention needs another 17 ratifications before it enters into force, and this could take decades. For example, Montreal protocol No. 4 was concluded on September 25, 1975, but did not enter into force until June 14, 1998, some 23 years later. Thus, there is no urgency whatsoever in Bill S-33.

The government has waited until today to ratify the Montreal convention and could wait several more years. The higher liability limits of the Montreal convention do not apply to anyone until 30 countries ratify it. There really is no rush for the legislation.

If the government really wanted to increase the Warsaw convention liability limits beyond the current paltry sum of $20,000, it would do well to follow America's lead and adopt a regime similar to the U.S. government's imposed Montreal agreement of 1966, which is what it did. Thirty-five years have passed and it is not too late to follow America's lead.

To my knowledge our government has never considered such a step so one can only conclude that raising the liability limits is not a burning concern for the government. In the meantime, the higher liability limits do apply on Canada-U.S. transborder flights and on all travel via the United States.

The Montreal convention raises the Warsaw convention liability limit from around $8,300 U.S. to roughly $135,000 U.S. For that reason alone we should support Bill S-33 which would ratify the Montreal convention and make it an instrument of our domestic legal system.

The Montreal convention also makes it easier for claimants to get their hands on the money and deals with such modern day realities as code shares and e-tickets.

Bill S-33 is a good idea but it is not one that is more urgent than the aviation security legislation which the American congress passed just this past week.

Since September 11 my office has been flooded with calls relating to airline competition, the need to improve airport security and to put air marshals on planes. Rather than debate the issues that are foremost on the minds of Canadians, our government has chosen to update a 72 year old treaty.

Bill S-33 is worth supporting but, like so many other transport related bills brought before the House since September 11, it does not address a pressing concern. We will support the bill but in supporting it I want to clearly state that it is time the House considered aviation security legislation today. That issue, unlike the modernization of the Warsaw convention, is foremost on the minds of Canadians.

This is the third non-urgent transport related bill that the House has seen since September 11. While we will support it, it is no more urgent than the other two. It lets the government claim to be working while adopting largely motherhood legislation that will have relatively little immediate impact on most Canadians.

It is time to stop posturing. It is time to stop the busy work and get down to the transport issues that concern Canadians. At committee I will be calling for the bill to be passed as quickly as humanly possible so that we can be ready to deal with the aviation security legislation that Canadians have called for each and every day since September 11.

We support Bill S-33 as it is important legislation, but within the context of what the country is facing, what the air industry is facing and what Canadians want this place to address vis-à-vis aviation security and competition in the air industry, the legislation is of little concern to Canadians.

Ben Serré Timiskaming—Cochrane, ON

Mr. Speaker, now I understand why the Alliance Party has a popularity level lower than interest rates. If the constituents of members of the Alliance hear the way they are talking today, I understand why the party is at 6% in the polls.

The changes, which came into effect at the beginning of the current crop year following indepth consultations, essentially shifts the system from being an administered one to one that is more commercial, in the sense that it will be governed by contracts between the main industry players.

In fact, amendments to the Canadian Transportation Act as outlined in Bill C-34, and changes to how the Canadian Wheat Board will operate under the new system, will create an operational context that will provide increased accountability and be more transparent, efficient and competitive.

Also, as a result of these amendments, the rail companies have a statutory obligation to reduce revenues from regulated grain transportation by 18% from what they would have been had we not acted. In addition, recognizing the impact on rural roads from these changes, the Government of Canada is providing a further $175 million in new money over the next five years to the western provinces for road infrastructure.

Let me sum up by pointing out that the Canadian Wheat Board sells western Canadian wheat and barley to more than 70 countries worldwide. As Canada's fourth largest exporting company in terms of dollar value of export sales, it had gross sales revenue in 1999-2000 of $4.5 billion. It is Canada's largest net earner of foreign exchange and is the largest single exporter of wheat and barley in the world.

All of this explains why a great majority of western Canadian producers support the Canadian Wheat Board as the sole exporter of their wheat and barley.

I believe that the House has spent enough time debating this issue, which was already debated in detail and rejected only three years ago.

The bottom line is that western Canadian grain producers were given the power to run the Canadian Wheat Board themselves. If the producer-elected board of directors is dissatisfied with any of the wheat board's operations, it has the power to change them.

James Moore Port Moody—Coquitlam—Port Coquitlam, BC

Mr. Speaker, this Sunday will mark two months since the tragic attacks in the United States where commercial airliners were used as weapons.

In the past two months the House and Senate transport committees have studied three transport related bills: Bill C-34 to create a transportation tribunal, Bill C-38 to amend the Air Canada Act and Bill S-23 to update an airline liability convention passed in 1929.

Airport security is the top priority of the industry right now. Yet no legislation at all has come forward from the transport minister. When will the transport minister show leadership and table legislation to get people flying again so we can have first tier security in our skies?

Val Meredith South Surrey—White Rock—Langley, BC

Mr. Speaker, I am pleased to stand and speak on behalf of the coalition for Bill C-34. I hope my colleague from the NDP is not disappointed in the fact that the legislation will do nothing to allow her province or any other province to bring the issue of infrastructure to the government's attention.

I believe I am the only speaker today who attended the committee meeting when the legislation was reviewed. It is a piece of legislation that just responds to decisions that the government has made with regard to the aviation acts, the marine acts and the rail acts. The bill has no presence at this point with the trucking transportation network.

I am pleased to hear that the minister is looking at other legislation regarding transportation. One concern I have had over the years is that there has been a dire lack of a transportation plan by the government. I am hopeful that the legislation we can look forward to receiving is an indication that the government actually has a plan for transportation in Canada. I hope that plan for transportation looks at transportation networks on a continental basis and not just from a national level, although our attention is at a national level.

I am hopeful that the minister respects, and the legislation shows that he does, that each modal of transportation does not operate in isolation. They all interconnect one way or another.

Bill C-34 is basically a housekeeping piece of legislation and is probably long overdue. The aviation tribunal, the predecessor of the tribunal being established, has been successful in meeting the requirements and concerns of the aviation industry.

I am hopeful that reputation and response will continue through marine and rail modals. I am hopeful that the appointments to be made will take into consideration that we need expertise not only from aviation, but from the other modes of transportation as well.

I suggest that the timing of this is probably very appropriate as there have been changes to the marine transportation which may down the road cause some concerns that decisions might be made by governments that want to be challenged.

We had the marine legislation brought before us over the last year and a half which made changes to the way that operates. This tribunal will broaden its scope and will allow the marine industry to question some of the decisions that are made as a result of that legislation. The timing is very good for this particular change.

I mentioned at the committee that we had been assured by the department that it had received input from the marine and rail industries as to the tribunal and the operations it would be partaking in. We understand from government officials in transportation that the concerns of those industries have been addressed and that this legislation is acceptable to them. Having not heard from either the rail or the marine industry, the committee believed that they it was right in moving forward and giving the government its assurance that we would be supporting this.

I am pleased on behalf of the coalition, to give the government our support for increasing the responsibilities of the tribunal to include the marine and the rail industry. We look forward to another successful tenure for those people who are appointed to the tribunal and that they help the government make the right decisions to move the transportation industries forward in the future.

I urge the minister to look at transportation planning from a broad perspective, including all modals, not just nationally but also continentally.