Bill C-30 (Historical)

Canada-European Union Comprehensive Economic and Trade Agreement Implementation Act

An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures

This enactment implements the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States, done at Brussels on October 30, 2016.
The general provisions of the enactment set out rules of interpretation and specify that no recourse may be taken on the basis of sections 9 to 14 or any order made under those sections, or on the basis of the provisions of the Agreement, without the consent of the Attorney General of Canada.
Part 1 approves the Agreement and provides for the payment by Canada of its share of the expenses associated with the operation of the institutional and administrative aspects of the Agreement and for the power of the Governor in Council to make orders in accordance with the Agreement.
Part 2 amends certain Acts to bring them into conformity with Canada’s obligations under the Agreement and to make other modifications. In addition to making the customary amendments that are made to certain Acts when implementing such agreements, Part 2 amends
(a) the Export and Import Permits Act to, among other things,
(i) authorize the Minister designated for the purposes of that Act to issue export permits for goods added to the Export Control List and subject to origin quotas in a country or territory to which the Agreement applies,
(ii) authorize that Minister, with respect to goods subject to origin quotas in another country that are added to the Export Control List for certain purposes, to determine the quantities of goods subject to such quotas and to issue export allocations for such goods, and
(iii) require that Minister to issue an export permit to any person who has been issued such an export allocation;
(b) the Patent Act to, among other things,
(i) create a framework for the issuance and administration of certificates of supplementary protection, for which patentees with patents relating to pharmaceutical products will be eligible, and
(ii) provide further regulation-making authority in subsection 55.‍2(4) to permit the replacement of the current summary proceedings in patent litigation arising under regulations made under that subsection with full actions that will result in final determinations of patent infringement and validity;
(c) the Trade-marks Act to, among other things,
(i) protect EU geographical indications found in Annex 20-A of the Agreement,
(ii) provide a mechanism to protect other geographical indications with respect to agricultural products and foods,
(iii) provide for new grounds of opposition, a process for cancellation, exceptions for prior use for certain indications, for acquired rights and for certain terms considered to be generic, and
(iv) transfer the protection of the Korean geographical indications listed in the Canada–Korea Economic Growth and Prosperity Act into the Trade-marks Act;
(d) the Investment Canada Act to raise, for investors that are non-state-owned enterprises from countries that are parties to the Agreement or to other trade agreements, the threshold as of which investments are reviewable under Part IV of the Act; and
(e) the Coasting Trade Act to
(i) provide that the requirement in that Act to obtain a licence is not applicable for certain activities carried out by certain non-duty paid or foreign ships that are owned by a Canadian entity, EU entity or third party entity under Canadian or European control, and
(ii) provide, with respect to certain applications for a licence for dredging made on behalf of certain of those ships, for exemptions from requirements that are applicable to the issuance of a licence.
Part 3 contains consequential amendments and Part 4 contains coordinating amendments and the coming-into-force provision.

[John Barlow, Conservative, Foothills, AB]

We put Bill C-30 through immediately and own-motion powers.

Transportation Modernization Act

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, it is pleasure to rise today and speak to Bill C-49 and the motion put forward by the government.

The message I want to get forward today is really about what brought us here and whether Canadian agriculture had to go through all this pain and suffering when we really did not achieve much at the end. What is disingenuous with the entire process is that over the last several months the Minister of Transport and the Minister of Agriculture were telling our producers, stakeholders, and shippers to hang on and be patient, that once Bill C-49 was passed it was going to resolve all of their problems and we would not have a grain backlog in the future.

I am going to speak more on the agriculture side than I will on some of the other elements of Bill C-49.

The inaction by the ministers and the government on this issue for almost a year has been mind-boggling. Last June my colleague, the shadow minister for transportation, put forward a list of amendments that would have addressed many of these problems we are facing, but they were turned down. Now we have them back on the table from the Senate. They went through the Standing Committee on Transport, Infrastructure and Communities and again through the Senate. Now they are here, and the Liberal government is saying it will be supporting a number of those amendments. I am not sure what changed over those 10 months; the Liberals could have supported those amendments last June, but they did not.

It was the start of time after time when the Liberals were given numerous options to get Bill C-49 through the process as quickly as possible, as well as to address many of the problems that our grain farmers across western Canada have been facing. Every time the Liberals were given an option to address the situation, which became a crisis in January and February, they did nothing.

Last summer, we encouraged the government to extend the provisions of Bill C-30, the Fair Rail for Grain Farmers Act, which extended interswitching and mandatory minimum volumes, a process that we had in place in 2013-14 when we went through the previous grain backlog. This addressed many of those problems. Our stakeholders, producers, grain terminals, and shippers were satisfied. They were quite pleased with that process. It gave the rail lines some accountability to ensure that they were able to move grain as well as other products, whether it was lumber, mining, or oil and gas. We want to make sure that all our producers have an opportunity to get their commodities to market.

In the fall, when Bill C-49 was first brought to the House, we saw that it was a massive document and that it was going to be extremely difficult to get any sort of consensus on a bill that dealt with everything from video recorders and locomotives to an air passenger bill of rights to interswitching. How were we possibly going to be able to find some sort of satisfaction among all stakeholders and within all the different points of view in our industries, let alone here in the House of Commons or in the Senate?

At that time we saw that this was going to be an issue. With the size and the scope that Bill C-49 entailed, we knew that getting it through that process with any sort of expediency was going to be nearly impossible. Once again we provided what I thought was a thoughtful resolution to the Liberal government, which was to split Bill C-49 into two bills. We would take many of the aspects of the bill that had to do with grain and grain transportation through the process as quickly as possible. Some of the other contentious issues that had to do with airline rights and other issues would take longer to go through the process, but we knew there was no time crunch or time sensitivity of the kind that there was on the grain side.

Last fall, with a larger-than-average harvest and the challenges CN and CP were facing in terms of meeting the contracts, we saw the rail line numbers dipping with each weekly report that was coming out.

We raised the alarm bells last fall that this was going to be a problem. We encouraged the government to split Bill C-49. I recall being in this House last October making almost the same argument that we were not going to get Bill C-49 through this process in a timely fashion to prevent another grain backlog. Again, it fell on deaf ears.

The result of that inaction last October, before we got to this point, was rail service that put us in a grain crisis. It is a crisis that still exists today. I do not think we can miss that point. Although we are here now, no problem has been resolved. We have road bans across the western provinces. We have more than 30 transport ships off the coast of British Columbia waiting for product. Those demurrage costs of $10,000 a day and up are now being passed on to the producers. Who will pay those additional costs that are now being passed on to our farmers across western Canada?

We have to keep that in mind as we have this discussion and this debate today. The crisis our farmers have been facing since last fall is still there, and it is not going away anytime soon. It is going to impact their fall season. They cannot move grain right now. Many of them are finally in the fields seeding. Road bans are in place in many of the western provinces, inhibiting their ability to actually transport grain to the terminal.

They are watching us today with a lot of focus on the decision we will be making in this House. How are we going to address the problems they are facing? The crisis has become so bad that our most recent report says that almost half a billion dollars' worth of grain is sitting in storage bins across western Canada. That is grain that our producers and our farmers cannot sell. They are unable to sell their product and get it to the terminal and then to the coast.

These same farmers who are unable to sell their product still have bills coming in. There are mortgage payments, lease payments on land, equipment purchases, and input costs as they try to get ready to start seeding. There are programs in place through Farm Credit Canada and the advanced payments program, essential programs that are in place to help in these times of extenuating circumstances.

I know that our producers do not want to have to rely on those assistance programs for a product they work hard all year to plant and harvest and are now trying to sell, but are unable to because of logistics.

As my colleague from Guelph said, we had an emergency meeting of the agriculture committee. I want to commend my colleagues on that committee for agreeing to have that emergency meeting with many of our stakeholders.

One of our witnesses at that meeting was a young farmer from Saskatchewan. I thought he put it quite well. He said, “We have to face so many uncertainties when we are in agriculture: uncertain weather, uncertain input costs, uncertainty when it comes to the commodity prices. The one thing we should be able to rely on is a reliable transportation system, which we do not have right now.”

One of the key issues with Bill C-49 is that it does not resolve those problems. We have gone through this entire process. As I said earlier, the Liberal government, the Minister of Transport, and the Minister of Agriculture and Agri-Food, through this entire process, have said that we should be patient, because Bill C-49 would address all the problems. Then just a few weeks ago, we had both ministers admit publicly that Bill C-49, indeed, will not resolve a lot of the problems that have been raised.

The government is asking our producers to suffer through yet another grain backlog, which should never have happened. The government had all the tools in place to address this problem, yet it did nothing. I can understand the frustration of our producers across the western provinces. They are looking at us today to take action to ensure that they never have to face this sort of issue again.

We have had many of our grain, barley, and pulse growers here over the last couple of weeks as they have had their days on the Hill. They have raised some other points that I do not think we have talked enough about as we have gone through this process. Not only is this grain backlog causing them to suffer because they are not able to sell their product, it is tarnishing our reputation as a reliable trading partner around the world. A lot of our producers are not getting a premium price for their product, because for all intents and purposes, Canada does not have a reputation for being able to get their contracts out in a timely fashion. We cannot meet our commitments to other countries. When prices are high in the fall, in October, November, and December, we should be selling our crops. We are not getting them to market, to the terminals, and to the west coast until the spring, sometimes a year later, so we are missing out on those premium prices, because we have an inept logistical system and an inept transportation system, a transportation system that has very little to no accountability.

Earlier today, the Minister of Transport was talking about one of the amendments the Senate had brought forward, which I think is critical. It is on “own motion powers” for the Canadian Transportation Agency. That was an amendment brought forward at the standing committee for transportation. It was an amendment brought forward by many of our stakeholders. They want accountability for the rail lines. If there are issues, and our stakeholders see issues, the Canadian Transportation Agency, once it receives a complaint, or even if it does not receive a complaint, can take action to try to address some of those key issues. It is a key part of Bill C-49.

The Minister of Transport earlier today spoke very highly about this part of the bill when he said that we are giving the CTA its own motion powers, which will make such a critical difference for our producers. In fact, in the amendment the Liberal government has put forward, there are no own motion powers. It states in the amendment that the authorization goes to the Minister of Transport. He will be the one who decides if the CTA can take action and put forward some guidelines, a template, on what action can be taken.

Let us put that into a perspective that I think all of us in the House today can understand. That is like my parents saying, “You know what, son? You can do whatever you want with your life, as long as it's okay with mum and dad”. That is what the Liberal government's own motion powers are in Bill C-49. Who is going to give that any credence? There is supposed to be some accountability in Bill C-49 for our shippers. However, this only comes into effect if it is okay with the Minister of Transport. It is okay for people to make their own decisions, but they have to ask the minister first. That has nothing to do with own motion powers. It is really quite hollow hearing that this is going to be a critical part of the bill, because it is taking the arms of the CTA and tying them behind its back.

As we have gone through this process, every step of the way we have offered the Liberal government a solution. My colleague, the shadow minister for transportation, has offered another solution today. She has brought forward an amendment that will concurred the Senate amendments to get this bill passed as quickly as possible.

We are not saying that we agree with every aspect of Bill C-49. In fact, I think we have heard in the debate today that there are still some significant issues with the bill. We also listened to our stakeholders. They need something that will give them some piece of mind that there is going to be some sort of legislation in place to help them address some of the problems they are facing.

We have had stakeholders like the CFA. They represent 200,000 farm families. The Grain Growers represent 50,000 active producers, and they are asking for no further delays on Bill C-49. They want it passed immediately. That is what my colleague's motion today will do.

We want to ensure that we can get this bill passed as quickly as possible. Again, every time we have offered an option or a solution to get this bill through the process, the Liberals have put in yet another step and delay.

They are saying today that if they do not support our motion, and they want our support to pass their amendments and the minister's motion, this all of a sudden will be a quick process. That is simply not the case. If the Liberals do not accept our motion and they pass theirs, Bill C-49 will go back to the Senate, and the Senate will have to agree to the Liberals' amendments. It is yet another obstacle to keep Bill C-49 from passing. This is going to be a ping-pong ball that will go back and forth, or maybe not. Maybe the Senate will agree to the Liberal amendments, but we do not have any assurance of that.

There are amendments they could have passed almost a year ago. There have been opportunities put forward to pass Bill C-49, or, what preferably would have been the case last fall, to extend Bill C-30, and we would never have faced any of these issues.

I am really encouraging our colleagues across the floor to support our motion today, pass the Senate amendments, go right to royal assent, and give our stakeholders the assurances they are looking for to ensure that they can get their job done. What this comes down to is our stakeholders' inability to get their products to market. We have a great deal of concern that this will spill into the fall as farmers get ready for next year's harvest. That has been the disconcerting part of it all.

I think my colleague across the way can understand the comments we heard at our emergency meeting last month on the grain backlog. Many of those witnesses came forward and said that they have given up on it this year. They know that they are not going to get their grain to market and are hoping that this does not impact next year's harvest and next year's shipping season.

I want to highlight that this bill is certainly not perfect. There are lots of concerns about what is in Bill C-49. I want to read some comments from the Premier of Saskatchewan, who has been extremely vocal in his concern about Bill C-49 and the problems it has caused in Saskatchewan. We have seen that Nutrien has just announced that it has laid off or is laying off more than 600 employees, which is going to impact maybe up to 1,300 employees in rural Saskatchewan. The Saskatchewan Premier said, “This is a direct result of the federal government not taking action where there is a huge problem, and they have the clear authority to fix it.”

What have the Liberals done in response to that? They have done nothing. Once again, they want to put this bill back to the Senate, which would delay this process even further.

We have to highlight the financial impact these delays have had. Again, $500 million in grain is sitting in storage bins across western Canada, not getting to market. We have now seen the job layoffs in Saskatchewan at Nutrien, and that is just one company, one potash company. Certainly there will be others that will be facing similar problems.

This is having implications for rural communities. If farmers cannot sell their grain, and they cannot get it to market, it means they do not have money in their pockets to spend in our small communities. That is grocery stores, gas stations, and little movie theatres. That is charities, ball teams, and fundraisers. Those are the things that are suffering because our farmers do not have money in their pockets. They cannot get their grain to market, and that is a direct result of the inaction of the Liberal government when it comes to this grain backlog.

The Liberals could have stopped it a year ago. They could have stopped it in the fall. They could have taken action with an order in council in January or February. Every single time, they have stuck up for the rail duopoly.

With Bill C-49, there is no accountability. Why have the Liberals made our grain farmers suffer through yet another grain backlog? When it comes down to it, they have really done nothing.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I would like to thank the minister for joining us today, as well as all of the departmental officials. I know you do very good work on behalf of Canadians and I appreciate your joining us today. My question, obviously, will be for the minister.

For weeks, Minister Garneau, farmers and the Province of Saskatchewan have all been asking you to support an order in council to force the railways to clear the rail backlog that has plagued Canada's rail system this winter, yet you have refused to do so.

To be clear, this is not the first time you have refused to act in the interests of our farmers and shippers. When you introduced Bill C-49, Conservative members requested that the bill be split so that the rail measures in the bill could be studied in an expeditious manner. When you refused, we then called upon you to extend Bill C-30 to ensure that there would be no legislative gap, and again you refused. Finally, when the opposition members proposed reasonable technical amendments to Bill C-49 to address the concerns raised by numerous witnesses, again the Liberal members did not support them.

My question to you, sir, is this: how much more funding would the Department of Transport have needed to request in the supplementary estimates (C) in order to draft, execute, and implement an order in council as requested by numerous farm organizations and provincial governments?

[Sean Fraser, Liberal, Central Nova, NS]

Mr. Speaker, there is no question that this is an urgent issue. I met with agricultural producers and shippers who said we need to do this. Their top recommendation during the course of the study was this could be a little better, that could be a little better. All sides have different things that they would like to see improved. That is a good sign to signal that we have achieved a balance. The number one recommendation that I heard was to get it done quickly.

We have revisited Bill C-30 prior to sunset at the transportation committee and extended it initially. The status quo is that there are no rules in place. What we need to do is step on the gas with every member of this House, I hope, to signal clearly to the other house that we need to move this legislation through quickly. I anticipate that we will be voting on this issue before too long and I hope we have the support of the entire House to ensure that shippers from across Canada have remedies to get their product to market, indeed before winter sets in.

Motions in amendment

[Martin Shields, Conservative, Bow River, AB]

Mr. Speaker, I have already heard a lot of people speak about Bill C-49. I had the privilege of attending the hearings in September when I subbed in for that week. I found the hearings incredible in the sense of the knowledge that was shared by all of the experts, as well as the learning, and collegiality among all parties listening and questioning the people there. Having said that, I put some notes down on paper. I am not as well spoken as the previous member, so I will refer to my notes extensively.

Bill C-49, the transportation modernization act, makes large-scale changes to how transportation is regulated in Canada. It is an omnibus bill. It makes big changes to rail, air, and marine port authorities. The question is, does it make all the right ones?

I would like to discuss the complicated set of changes Bill C-49 makes to rail in Canada. The changes to the long-haul interswitching this bill makes replace the provisions introduced by the previous Conservative government, which extended interswitching distance to 160 kilometres. Those provisions expired on August 1. I remember well the winter of 2013-14, and the reason why these changes were made at that time.

This is a significant challenge. It needs to be dealt with sooner rather than later. The shipping industry has been left in limbo since that time. Shippers and producers rely on those tools to ensure access to competing railways. Without them, they lose an important bargaining chip in negotiating prices with railways. Some would say they were not used that much. On the other hand, they were there as a bargaining tool.

This directly hurts competition and can even result in no produce being moved at all in some areas. That' is what happened in the Peace country in 2014. That is why the Fair Rail for Grain Farmers Act was necessary to address the situation in 2014.

Therefore, new interswitching provisions are long overdue. Unfortunately, it is far from clear whether this bill meets its objective of improving shipper and producer options with the 1,200-kilometre interswitching tool. The system introduced through Bill C-30 was popular with shippers. It provided the certainty of a regulated rate up to 160 kilometres. Bill C-49 proposes changing this so that the interswitching rate over 30 kilometres will be decided by the CTA on an ad hoc basis. The witnesses I heard at the transport committee preferred the 160-kilometre regulated rate system we already had.

The 30-kilometre interswitching rate will be set each year. It takes into account the railroad's infrastructure needs across their entire network. This could increase the rate paid by shippers.

The rate-setting regime this bill introduces needs to be designed to ensure that shippers have access to competitive rates. As designed, the rate will be derived from comparable traffic that is subject to captivity. This system needs to concentrate on a concrete review mechanism to ensure it is actually working for shippers. The government cannot just design this system and leave it to its own devices. Without a sunset clause, which we heard asked for many times, or predesignated review dates in two to three years, there are absolutely no guarantees for shippers and producers that they will benefit.

As it stands, there is simply too much uncertainty about the impact of the newly redesigned interswitching provisions. They need to be reviewable and they need to be timely. We need them implemented now.

Speaking of captive shippers and producers, it is noteworthy that the nearest interswitching location for many shippers and producers in northern Alberta and B.C. would be in Kamloops-Vancouver corridor. The other exclusionary zone is from Quebec City to Windsor. Interswitching is not allowed beyond 30 kilometres in these areas. For these captive shippers, the new interswitching provisions will do nothing to yield more competitive rates and improve competition. This is a serious problem. These captive shippers and producers have no choice but to use one company to which they are effectively held hostage.

It is important to remember that railways in Canada operate in a near monopoly situation. This situation could put shippers and producers at a real disadvantage. The provisions of Bill C-49 that allow shippers to request a contract from a railway, with reciprocal penalties, offers the chance to foster more competition.

However, the penalties need to be designed to acknowledge that the railways have much greater economic power than the shippers. Bill C-49 is intended to encourage the efficient movement of shippers' traffic while creating a system that is fairly balanced between the shipper and the railway. Therefore, the government needs to take a clear position that because of the difference in economic power, railways would be penalized at a higher rate than shippers. One dollar to a shipper versus one dollar to a railway is very different. Giving both the same fixed penalty would not be reciprocation. The railway simply would not face a meaningful penalty for failing to fulfill its service obligations.

The lack of short-line rail is also a pressing issue. There are very few left, and they are a critical component, where they do exist, of our infrastructure. Without them, we need to rely on trucking, which is hard on the roads in municipalities and worse for the environment.

When the railway does not operate efficiently for shippers, the whole supply chain is impacted. This we heard a number of times. They need to collaborate and plan with the whole chain, or the system does not work efficiently. If the respective parties plan their supply chain, the whole system has a chance to be more equitable and efficient. If a producer contracts with a shipper for a specified date, then gets a call that the cars will be showing up a week late, that is a problem, and the producer pays the penalty. The cars then show up late at their destination, and the producer is often the one who ends up suffering for it. When railways do not get their cars where they are supposed to be on time, that incurred cost goes back to the producers. They are held ransom by the whole system.

What I heard in committee when this bill was being considered was a lot of talk about adequate rail service. This bill needs to do more than strive for adequate. The government has expressed a desire to increase agriculture exports by 40%. Transportation needs to work much better, or increasing the amount of produce will be irrelevant. Canadians need and expect great rail service. We need an efficient system that ensures that cars show up and ship grain on time.

We all are aware that NAFTA negotiations are ongoing. It is therefore remarkable that the government would allow the new 1,200 kilometre interswitching distance to increase U.S. rail access to Canada at regulated rates. The U.S. could access this Canadian traffic without reciprocity. It seems like weak negotiating on the part of the government to give up this leverage before NAFTA negotiations are concluded.

With regard to air travel, Bill C-49 introduces some interesting provisions. It would take the ultimate authority on joint-venture decisions away from the commissioner of competition, which was mentioned by others, and would give it to the minister. It would further require the minister to take into account the public interest. This is a broad and extremely subjective term. We currently have an independent, non-partisan public official making the decisions to promote competition. The bill may introduce a needless political component to the decision-making process.

Bill C-49 would also allow the Canadian Air Transport Security Authority to sell security screening services to airports. When large designated airports that already have security screening services buy additional screening, that cost is shifted to the airlines. The airlines then pass it on to consumers. This provision would essentially be a veiled tax on air travellers.

I respect that the government intends to benefit air passengers by introducing this bill. However, it would leave what compensation passengers would be entitled to from the airlines to the discretion of the minister and the CTA. This would be extensive government intervention. We cannot risk those well-intentioned measures actually making air travel more expensive through ad hoc decisions. The CTA would have to determine on a case-by-case basis if a service breach was the fault of the airline or of any other factors. We need a charter of rights. We need it up front. People need to know what the compensation factors are, not to be judged ad hoc.

The administrative costs of implementing this legislation could be large. Again, it is a large omnibus bill, with many parts to it. Do we have all the right parts in it? I think not. There are other things that could have been done and should have been done.

[Martin Fournier]

There was no consultation on Bill C-49.

As we mentioned, there were consultations about the economic agreement with Europe from the time when it was signed. Before it was signed, there was no national consultation with industry. We know that international companies were consulted, but not the industry in Canada. So we can say that there was not really any consultation in that respect.

Once the agreement was signed, a working group met for almost two years. Almost everyone involved took part. Certain things that we asked for on a number of occasions appeared in Bill C-30. However, the main request was to establish this single body, and that was completely forgotten.

[James Given]

I am going to try to give you an answer without giving you an answer.

I've had many meetings. Everyone of course knows my concerns when it comes to cabotage, and Bill C-30, and CETA, and Bill C-49, and China and whoever the hell else we have on the list, but when it comes to consultation, this is part of the consultation process.

[James Given]

We've proven that they don't follow the same regulations when they're in Canada. There are two issues at play. The ship gets a coasting trade waiver. That covers the ship. The crew then apply for work visas through the temporary foreign worker program.

There are two separate issues. When we look at Bill C-30, as with Bill C-49, nothing is changing when it comes to the provisions under the immigration act for that crew. The problem is that the crew members are never told what their wages are supposed to be. They're never told what their rights are when they're working in Canada, because under the TFW program, for all intents and purposes, they're Canadians. They're never told any of this, and they're paid their regular wage, which is $2.50 or $1.90. They're paid that until someone catches them. Also, there's no enforcement. No enforcement officer goes down unless they get a call. If you're a foreign crew member and you don't know that, or you're too afraid to call because of repercussions, you're not going to make that call.

We've had some very good discussions with the ESDC over the last little while where we're going to change some of that process. However, ESDC was also very clear with us that it doesn't chase a shipping company around the world to try to collect our tax, because they should be paying taxes while they're in Canada. The taxation issue on a foreign ship is a big one, along with crew costs.

[James Given]

I'll attempt it, just because I like to talk.

Bill C-30 deals with the EU and with CETA and is limited to EU first and second registry vessels. If you look at the expansion of the movement of empty containers, it's being opened up to any flag vessel, which would be Panama, Liberia, all of the FOC flag states.

I look at a flag such as that of the Marshall Islands, which many ships that would be trading in this trade fly. The actual flag state of the Marshall Islands is in Reston, Virginia. That's where you pay to get the Marshall Islands flag mailed to you. It goes, then, from the European Union to all flag states.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I want to thank our witnesses for joining us today. It is good to turn our attention to another part of Bill C-49 which sees the Coasting Trade Act amended.

I have a couple of questions. They're probably broad questions that any one of you could answer. The first is, can you identify for this committee how Bill C-49 goes further than Bill C-30?

[Martin Fournier, Executive Director, St. Lawrence Shipoperators]

Madam Chair, ladies and gentlemen members of the committee, thank you for giving us an opportunity to share our comments and concerns with respect to Bill C-49, and more specifically the amendments proposed to the Coasting Trade Act.

I will introduce myself. I am Martin Fournier, Executive Director of St. Lawrence Shipoperators, an association whose mission is to represent and promote the interests of Canadian ship operators in order to support their growth and ensure the development of shipping on the St. Lawrence River.

St. Lawrence Shipoperators consists of 15 members—15 Canadian ship operators that have a fleet of more than 130 vessels that employ Canadian sailors. The fleet navigates the St. Lawrence River, the Great Lakes and the east coast, in addition to serving the Atlantic and Arctic provinces. Our members provide thousands of people with quality jobs and generate significant economic spinoffs in Canada.

According to a study carried out by the Council of Canadian Academies, the Canadian shipping industry employs between 78,000 and 99,000 individuals and generates between $3.7 billion and $4.6 billion in employment income. Just the activities of the inland fleet, which operates on the St. Lawrence River and in the Great Lakes—the area generally covered by our members—create more than 44,000 direct jobs and generate more than $2 billion in provincial and federal revenues. Therefore, the domestic marine industry plays a a key role in the competitiveness and prosperity of Canada and of the entire North American economy.

It is important to point out that marine transport operations between various Canadian ports are covered under the Coasting Trade Act, whose aims include supporting domestic marine interests by reserving the coasting trade of Canada to Canadian registered vessels. That information comes directly from Transport Canada's website. Among other things, the act stipulates that transportation between two Canadian ports must be provided by Canadian-flagged vessels with Canadian crews.

In the United States, since 1920, the Merchant Marine Act, better known as the Jones Act, has been protecting the U.S. domestic marine industry by ensuring that coasting trade is handled by U.S.-built vessels that are U.S.-flagged and U.S.-owned, and are operated by U.S. crews. Many other countries around the world, including European countries, have laws that protect their market.

It should be noted that, during the negotiations that led to the economic agreement with Europe, countries of the European Union did not open their market to Canadian ship operators. Only Canada agreed to concede a portion of its market, with no reciprocity.

When a country opens its market to foreign partners that do not operate based on the same rules and are not subject to the same requirements as Canadian ship operators with Canadian-flagged vessels, that favours foreign ship operators at the expense of the very competitiveness of our ship operators and domestic interests.

According to a study carried out in 2015 by Ernst & Young and Innovation maritime, the crew costs for European vessels authorized to operate in Canadian waters under the economic agreement represent only 30% of the costs of a Canadian crew. The wage gap between Canadian crews and crews from other countries, including those provided for under Bill C-49, will be even larger.

This is the second time in less than a year that amendments have been proposed to the Coasting Trade Act. The first time was under Bill C-30, which concerns the implementation of the economic agreement with Europe. The second time was through this bill, which makes certain concessions for the European Union that are criticized by the domestic marine industry.

Canada must also take action to protect its marine industry and refuse to give up its market to foreign companies. This is a matter of the vitality and sustainability of Canada's domestic shipping industry.

I want to mention that, during the latest electoral campaign, the Liberal Party wrote to us that it had no intention of amending the Coasting Trade Act and even recognized the importance of the act for the market. St. Lawrence Shipoperators feels that free trade agreements generally benefit the Canadian economy and supports Canada's efforts to increase trade and the competitiveness of its economy. However, we are concerned about the consequences of loopholes in the Coasting Trade Act and concessions made in trade agreement negotiations that affect the domestic marine sector.

St. Lawrence Shipoperators and its members, as well as a number of stakeholders and industry representatives that participated in the work of the industry-government working group on the implementation of the economic agreement, have repeatedly expressed their concern with regard to the system's effectiveness and the measures currently in place to monitor and effectively control foreign vessels' coasting trade activities. Many examples and situations justify those concerns. The addition of new coasting trade activities in the economic agreement or any further opening of the Coasting Trade Act is of little comfort in that regard.

We have requested the establishment of an oversight system on a number of occasions. The request was also made to the Standing Senate Committee on Foreign Affairs and International Trade, which studied Bill C-30. There was even a recommendation to that effect.

So it is essential that an oversight system be established and that it include all the government departments and agencies involved, meaning Transport Canada, the Canada Border Services Agency, the Canadian Transportation Agency, Immigration, Refugees and Citizenship Canada, and Employment and Social Development Canada.

St. Lawrence Shipoperators has always been opposed to any opening of the Coasting Trade Act that would allow foreign vessels to transport cargo between two Canadian ports. Unfortunately, we are witnessing a gradual erosion of the act.

This market is reserved for Canadian vessels that, pursuant to regulatory requirements and Canadian standards, are designed, built and refined to handle the numerous challenges of navigation in Canadian waters and waterways. With their adherence to those standards, some of the highest in the world, Canadian vessels are making navigation safe and protecting the environment. These national vessels are operated by crews that are solely and exclusively composed of Canadian mariners, who are among the best qualified and best trained in the world. They are knowledgeable of and experienced in navigation in Canadian waters and they are aware of the challenges inherent in sailing here. Reaching those high standards ensures greater safety and respect for the environment. But that comes with significant operating costs that Canadian shipowners must bear, unlike many other foreign owners.

The particular circumstances of the Great Lakes and the St. Lawrence Seaway, economically and in terms of both maritime and environmental safety, requires that the protection measures, of which the Coasting Trade Act is part, must be maintained.

So it is important to preserve maritime jobs and the expertise that has been built in Canada over centuries. Opening the Coasting Trade Act is risking the loss of priceless knowledge and economic wealth that is of direct benefit to companies and workers here.

For those reasons, St. Lawrence Shipoperators and its members oppose any opening of the Coasting Trade Act and any change to it. We are asking for a single body to control and oversee cabotage activities to be conducted in Canadian waters by foreign vessels.

Thank you.

[Sarah Clark, Chief Executive Officer, Fraser River Pile & Dredge (GP) Inc.]

Thank you.

Good afternoon. My name is Sarah Clark, and I serve as president and chief executive officer of Fraser River Pile & Dredge, located in Vancouver, British Columbia. Our company proudly conducts dredging operations in B.C. and across the country. I would like to thank the chair and the honourable members of the committee for hearing us today.

I'm actually here to speak to you on behalf of a coalition of dredging companies that operate from coast to coast. I'm going to share my time today with my friend and colleague Jean-Philippe Brunet, the executive vice-president of corporate and legal affairs for Ocean group of Quebec. We sincerely thank you for the opportunity to present our views on the consequences of amending the Coasting Trade Act as outlined in Bill C-49. For us, this is a fresh opportunity to be heard on the impacts of the amendments to the Coasting Trade Act, an opportunity we previously had in respect to amendments to the same act, under Bill C-30, the Canada-E.U. comprehensive economic trade agreement implementation act.

To be very clear from the onset, the Canadian dredgers are eager to compete in a marketplace fuelled by healthy trade relationships. We simply ask that we continue to compete on a level playing field, where risks and opportunities are equal for all. Unfortunately, CETA was a bad deal for Canadian dredgers. There's no reciprocity for us in the European market, but there's streamlined access for Europeans in the Canadian market. We therefore submit that Bill C-49 represents an ideal opportunity to address this inequity and provide workable policy solutions.

Let me say a few words about the dredging industry in Canada and the critical role it plays for Canada as a maritime and trading nation. Ours is a geographically expansive country that relies on a complex transportation network to move people and goods. As stated by Minister Garneau on May 16 of this year, Canadians rely on the economically viable modes of transportation to travel and move commodities within the country, across the border, and to our ports for overseas shipments. At his announcement regarding the trade and transportation corridors initiative on July 4, Minister Garneau highlighted the digging of deepwater ports as being critical to the development of Canada's north, underscoring the essential role dredging plays in the creation and maintenance of our transportation network and, as a result, our national and economic sovereignty.

Opening routes to Canadian and international shipping vessels brings consumer goods to Canadian markets and takes our export products around the world. Without dredging, ports in major cities across the country would be inaccessible to global trade and transportation. Industry operations, both coastal and inland, would not be able to function. The companies that comprise our coalition actively comply with rigorous government regulations concerning labour, environmental protection, safety, and operating standards while regularly submitting to routine major inspections that are amongst the most rigorous in the world. Canadian dredging companies also provide well-paid, middle-class salaries, which in turn fuel local economies across the country.

We are here with you today to do our part to ensure that the Canadian dredging industry is provided a level playing field on which to compete sustainably and responsibly, to create more jobs, and to continue to contribute practically to Canada's economic success. Unfortunately, these important goals have been put at some risk by the effect of the proposed amendments to the Coasting Trade Act contained in Bill C-49. Proposals in Bill C-49 are of course contingent upon the coming into force of elements of Bill C-30 on September 21, 2017. We understand that the spirit of CETA reflects the wishes of both governing bodies and peoples to create better economic ties and a more prosperous future. We support the government's effort to expand trade and to make our economy as vibrant as possible. At the same time, we wish again to express our concerns about the negative impact. We believe the amendments to the Coasting Trade Act contained in Bill C-30 unfairly advantage foreign dredging companies at the expense of Canadian firms, Canadian workers, and ultimately, Canada's transportation infrastructure. Bill C-49 builds on a foundation laid by Bill C-30 that is highly problematic for Canadian dredgers.

As I've said, we are fully prepared to compete. We do so every day in our industry, both in Canada and abroad. Under CETA, there was no negotiated reciprocity for our industry.

CETA opens up the Canadian market to European firms while keeping the European market closed to Canadian dredging firms. This would normally be considered an unpleasant by-product of doing business in the global market, but several factors intervene to create a situation where non-Canadian firms could gain a structural and market advantage over Canadian firms. If a level playing field is not created and maintained, Canadian dredging companies will face structural disadvantages when bidding on contracts, as we pay market rates and benefits that reflect the skills of our crew members in Canada.

For example, foreign crews are typically compensated at about a third or less of the rates we pay. In 2015, the average monthly salary for a chief engineer on a Canadian vessel was $15,000 U.S., while the same position on a Dutch crew was about $7,000 U.S. As salaries represent about one-third of our vessel's operating costs, non-Canadian companies will operate at a significant advantage over Canadian companies, leaving Canadian seafarers out of work. In this scenario, the playing field is inherently uneven, to the detriment of Canadian companies, and, ultimately, to our employees and their families.

Prior to Bill C-30, foreign-flagged vessels were required via the Coasting Trade Act to obtain a coasting trade licence. Jim outlined that process very well in his presentation, which would include paying duties, and following shipping conventions, worker visa requirements, and employment standards. However, even that structure faced monitoring and enforcement challenges. Under CETA, non-Canadian dredgers will have greater access to our waters, and therefore greater opportunity for non-compliance.

Before making our key recommendations, I will now ask my colleague, Jean-Philippe Brunet, to say a few words about Quebec in particular.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Bill C-30, the Conservative bill.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Thank you very much, Madam Chair.

Good afternoon. I am just passing through the committee.

One thing struck me in Mr. Pellerin's comments. The Conservatives introduced a good bill, Bill C-30, specifically about what you call interswitching. Now we have a Liberal mish-mash that is going to have consequences for small businesses and to threaten jobs.

My first question would be for Madam Stuhldreier. I hope I pronounced her name right.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

My thanks to our guests for joining us and for sharing their expertise with us.

When we do this kind of study, consensus is relatively rare. But we seem to be getting one on long-haul interswitching. Some people don't want it just because it's not competitive and others don't want it because it's not effective.

It is occurring to me that Bill C-49 is not achieving that objective at all. If we were to rethink the objectives of interswitching, where should we start from? Should we go back to what was proposed in Bill C-30 or should we correct Bill C-49 so that it includes a provision on interswitching that favours those who need it?