Bill C-52

Enhancing Transparency and Accountability in the Transportation System Act

An Act to enact the Air Transportation Accountability Act and to amend the Canada Transportation Act and the Canada Marine Act

Part 1 of this enactment enacts the Air Transportation Accountability Act , which creates a statutory framework to increase transparency and accountability in the air transportation sector, including by
(a) establishing requirements respecting the provision of information to the Minister of Transport by airport operators, air carriers and any entity providing flight-related services;
(b) requiring that airport operators take measures to help Canada meet its international obligations in respect of aeronautics, in accordance with directions issued by the Minister of Transport;
(c) authorizing the Governor in Council to make regulations respecting the development and implementation of service standards related to flights and flight-related services, including a dispute resolution process in respect of their development and publication requirements for information related to compliance with those standards;
(d) establishing requirements in respect of noise management committees and setting out notice and consultation requirements relating to aircraft noise;
(e) establishing requirements for airport authorities to create plans respecting climate change and climate change preparedness and authorizing the Governor in Council to make regulations respecting reporting requirements for those plans;
(f) requiring airport authorities to publish information respecting diversity among directors and senior management;
(g) providing a process by which to make complaints respecting notice and consultation requirements in relation to aircraft noise; and
(h) providing for an administration and enforcement mechanism that includes an administrative monetary penalty framework.
Part 2 amends the Canada Transportation Act to, among other things,
(a) authorize the Governor in Council to make regulations requiring certain persons to provide information for the purpose of supporting a transportation system that is accessible without undue obstacle to the mobility of all persons;
(b) allow the Minister of Transport and the Canadian Transportation Agency to make this information public; and
(c) authorize the Governor in Council to make regulations respecting a process for dealing with complaints relating to accessibility in relation to the transportation of persons with disabilities.
Part 3 amends the Canada Marine Act to, among other things,
(a) add principles that a port authority must observe when fixing port fees and a fee-related complaints process that is to be administered by the Canadian Transportation Agency;
(b) authorize the Governor in Council to make regulations respecting alternative dispute resolution in regards to disputes arising in respect of a lease relating to the operation of a port terminal; and
(c) allow the Agency to make rules respecting the fees to be paid in relation to the administration or enforcement of any provision of Part 1 of that Act, or the regulations under that Part, the administration or enforcement of which is the responsibility of the Agency.

Business of the House

[Karina Gould, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I do not want to commit to setting anything in stone, but I will commit to it being very likely that this will indeed be the calendar for next week.

This afternoon, we will continue report stage debate of Bill C-34 concerning the Canada Investment Act. Tomorrow, we will begin second reading of Bill C-52, the air transportation accountability act. On Monday and Wednesday, we will return to debate on Bill C-34.

Next Tuesday and Thursday shall be allotted days. I know that is what the member is particularly interested in. I am sure it is the best part of his week; I am not sure it is the best part of my week.

I would also like to inform the House that the Minister of Veterans Affairs will be delivering a ministerial statement on Thursday, November 2 to acknowledge the beginning of Veterans' Week.

[Marko Dekovic]

Bill C-52 is definitely a step in the right direction. It will, for the first time, give tenants and users of the port authorities the ability to at least ask and question the increases to the fees, the sizes of the fees or what is being done. I'm sure that there will be some little tweaks when we study and dig deeper into the bill, but it's definitely a step in the right direction.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

From your first read of Bill C-52, do you see that happening or are there concerns?

[Marko Dekovic]

Yes, the right balance is to be struck. I think that a cost analysis of these additional advisory bodies' oversights should be done. At the same time, additional powers that would be granted to port authorities to assess fees also need to be balanced with the kinds of powers they have and with transparency on what they do with those fees.

I think it's important to actually look at Bill C-33 in companionship with Bill C-52. It will be important to get Bill C-52 right so that the right level of transparency is provided to the tenants and the public about what port authorities do with the revenues they generate.

[Marko Dekovic]

I think it is not clear. There are some things that are moving more towards a government-centric authority, like with assessing fees, and Bill C-52, for example, is going to provide some greater transparency and oversight. There are other things that are basically allowing them to continue to have more private sector powers that are backed up by government. On some of the private sector profit-driven things that the port authority does, there are no corresponding guardrails. If you have a monopolistic quasi-private entity that also has government regulatory powers and no direct accountability to anyone, that is the challenge we've seen with some port authorities.

Again, to what was pointed out before by Ms. Gee, there are different sizes of port authorities. This is perhaps only applicable to larger port authorities. Smaller port authorities have different challenges, and perhaps that should also be looked at through this act, to actually target and revisit how port authorities are classified or even created.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Mr. Dekovic, I appreciated your perspective on the role of the private sector and your explanation on how ports operate. Obviously, Bill C-52 does allow for a little more transparency on how rates are set.

We've heard in previous testimony that the additional cost and administrative burden of some of the changes that are proposed in Bill C-33 could range up to $200,000 a year, for instance, for additional reporting and additional staff to oversee that. When the Vancouver Fraser Port Authority takes on a $200,000 additional bill, who pays for that in the end? Does that get passed down to you as a terminal operator? What is your understanding of how additional costs incurred by the port authority are paid for?

[Marko Dekovic, Vice-President, Public Affairs, GCT Global Container Terminals Inc.]

Thank you, Mr. Chair.

Thank you to the committee for inviting me to appear before you.

I'm the vice-president of public affairs at GCT Global Container Terminals, headquartered in Vancouver. We are the largest majority-Canadian owned container terminal in the country, and we are a tenant of the Vancouver Fraser Port Authority.

Bill C-33 was born from a chorus of voices from the private sector, labour unions and indigenous communities, all calling on the government to address the functioning of our supply chain and, specifically, the network of Canada port authorities. Since then, Bill C-52 has also been introduced. In some ways, it better addresses some of the shortcomings of Bill C-33.

Today, my comments will focus exclusively on the proposed changes to the Canada Marine Act within Bill C-33.

It is of utmost importance for all members of the committee to understand the current workings of our port system. Private sector companies operate port terminals handling various goods, including bulk, breakbulk, containers and autos, to name some. They assume all of the risks associated with investing in terminal infrastructure, acquiring and retaining customers, and navigating economic fluctuations. These private companies are tenants of port authorities, and port authorities impose rents—and collect rents—escalating fees and regulations upon those private sector operators, all while assuming little to no risk themselves.

As you review and potentially shape Bill C-33, I implore the committee to consider a fundamental question. Do you wish for port authorities to function as governance and regulatory bodies overseeing the supply chain with transparency, or would you prefer for them to remain as they are now, operating opaquely as monopolistic quasi-market players generating revenue for themselves without any real accountability?

This decision is crucial, as it will shape how you approach every aspect of Bill C-33.

For instance, consider the recommendation to modify the borrowing limits for port authorities. Increasing the borrowing limits for port authorities does not necessarily stimulate private investment; rather, it can deter it. This happens because port authorities must repay what they borrow with interest, and this cost ultimately falls on the shoulders of terminal operators, which in turn pass it to their customers, leading to potential inflation.

Port authorities should rarely need to borrow if they're fulfilling their mandate correctly, which is to facilitate trade and grow their private sector tenants. When the private sector is assured of its growth potential, it will invest. Port authorities can also use their lease agreements with tenants to encourage them to take on greater investment risk, thereby reducing the need for port authorities to borrow.

Consider the Vancouver Fraser Port Authority as an example. Over the past 20 years, its borrowing limit has increased three times faster than the volume growth, growing by 385% while volumes grew by 98%. Given this incredible borrowing, one would assume that the port functions incredibly well, but as many of us will have seen, recent global rankings have shown that's not the case. Therefore, it is evident that increasing borrowing by port authorities is unlikely to improve supply chain outcomes. Instead, we should focus on facilitating the private sector's desire to grow and expand. Port authorities should be asking, “How can we assist growth?”, rather than dictating what must be done and, at times, directly competing with private money.

Along the entire west coast of Canada, private sector terminal investment projects are waiting to proceed. The primary obstacle is most often government regulation and often port authorities' individual interests.

I commend the recent announcement by the port of Prince Rupert, which seems to have found a balanced approach. It's unlocked over $750 million in investment by collaborating with private terminals and rail operators and listening to customers.

Not to use a cliché, but the customer's always right. This is because, ultimately, the customer ends up paying. If we take that approach with our supply chain at a national level, we will succeed and potentially save a lot of taxpayer dollars.

In summary, it is crucial to get Bill C-33 right. To achieve this, you must decide whether you want port authorities to determine what is best for Canada or you want the government to have more input and provide guardrails. You must choose whether to unleash private investment or send a message that it will become more expensive to be a customer or a tenant of a Canada port authority due to increased regulatory burdens.

You must decide whether you want to potentially risk more taxpayer dollars by giving port authorities more borrowing powers, or you want to push increased collaboration and the identification of the right investment opportunities with the private sector.

Thank you again for the opportunity to address you today.

[Bonnie Gee, President, Chamber of Shipping]

Thank you, Mr. Chair, for the opportunity to appear before the committee once again.

The Chamber of Shipping represents ocean carriers, shippers and service providers that move Canada's trade to and from international markets.

Since the introduction of Bill C-33 in November 2022, there have been some developments that should be taken into consideration with respect to the initial intent of the bill. These include the passage of Bill C-47, the budget implementation act, the introduction of Bill C-52, and the establishment of the supply chain office that will facilitate the development of a national supply chain strategy as recommended by the national supply chain task force.

Bill C-47 amends the Canada Transportation Act, which enables the collection of information from any users of the national transportation system to ensure the efficiency and proper functioning of the national transportation system. Bill C-52, introduced in June this year, seeks to further amend the Canada Transportation Act, as well as the Canada Marine Act, to enhance transparency and accountability in the setting of port fees. These bills, together with the national supply chain office, should take precedence and are foundational to strengthening ports in Canada by supporting a cohesive and transparent data strategy that will improve supply chain responsiveness and agility.

While we recognize the intent of Bill C-33 is to improve how the Government of Canada manages disruptions, we would caution that taking a piecemeal approach to legislative amendments, without a national supply chain strategy, may result in some unintended consequences and create even more of an administrative burden for our members.

My comments will focus on the proposed amendments to the Customs Act, Marine Transportation Security Act and the Canada Marine Act.

The Chamber of Shipping supports the proposed amendments to the Customs Act, as we understand the need to expedite the movement of containers identified for secondary exams to immediately address potential health, safety and security risks. We strongly urge the Canada Border Services Agency to move forward with the adoption of less intrusive technologies to expedite the examination process and reduce the costs of the exams. CBSA, as the lead agency for public safety, must be adequately resourced to support the expansion of container facilities across Canada in a timely manner.

A report recently released by the City of Delta last month associates increased container traffic to the proliferation of drugs and elements of crime in communities. The report highlights concerns with the Marine Transportation Security Act, MTSA, and the fragmented approach to port security responsibilities. Amendments to the MTSA in Bill C-33 fail to strengthen the security framework and rather focus on expanding the mandate of the act to include direct and indirect risks to the health of persons involved in the marine transportation system and provide additional authorities to direct vessels.

Expanding the MTSA to regulate health risks that are already regulated under the maritime occupational health and safety regulations appears unnecessary. Furthermore, if there is a need to issue an emergency direction to a vessel of concern for health safety reasons, authorities exist within the Public Health Agency of Canada under the Quarantine Act. The intention and desired outcome of the expanded mandate of the MTSA require further explanation and clarification on how a health risk would be assessed and determined under the act.

We continue to raise concerns about the overlapping and duplicative regulations and authorities, particularly in the marine transportation sector. Canada takes a multi-agency approach that involves a network of departments, which often, from an industry perspective, results in confusion and inefficiencies in decision-making and direction. A country surrounded by three oceans requires a clear maritime authority that can eliminate gaps and confusion in marine safety, security and environmental protection, and strengthen Canada's global position as a trading nation.

The expanded purpose of the Canada Marine Act in the proposed amendments is supported. It will enable port authorities to maintain security and enhance the resiliency of supply chains in a manner that safeguards national security and promotes healthy competition dynamics.

With reference to the added purpose that enables port authorities to “manage traffic, including mooring and anchorage, in order to promote the efficiency of supply chains”, this is only relevant to vessels with import cargoes. It should be clear that vessels typically seen at an anchorage are waiting for Canadian export cargoes to arrive and are a symptom of an inefficient supply chain. The direct management of export vessels has no direct influence on improving the efficiency of the supply chain, but they are often used to improve the fluidity of supply chains by taking partial loads.

Other amendments to the Canada Marine Act appear to address governance concerns that are only specific to Canada's largest port, and, therefore, proposed amendments in Bill C-33 may be rather onerous for smaller ports. The bill does not address the variability in the size, operations and resource capacity of port authorities, nor does it assess each authority's capability to meet their legislated mandate. These recommendations, together with the suggestion to consider the complementarities of regional ports, were also documented in the “what we heard” report during the ports modernization review and were not captured in Bill C-33.

In western Canada, the 2022 revenues for the four port authorities range from $4.8 million to $305 million. The status of the existing 17 port authorities and possible new port authorities should be reviewed.

Thank you. That concludes my remarks. I look forward to the questions.

[Jacques Paquin, Executive Vice-President, Trois-Rivières Port Authority]

Good evening everyone, and thank you for this opportunity to speak to you on behalf of the Trois-Rivières Port Authority.

The Port of Trois-Rivières specializes in solid and liquid bulk and general cargo. Strategically located midway between Montreal and Quebec City on the St. Lawrence River, it serves the needs of many key sectors of the Canadian economy, including manufacturing, agri-food, mining and energy.

We were eager to learn about Bill C-33 when it was tabled. Although the Canada Marine Act, 1998, has created a solid network of Canadian port authorities, improvements are needed to ensure that they can keep pace with new economic, social and environmental realities. In this sense, we applaud this step taken by the government.

However, we must respectfully draw your attention to the fact that the proposed overhaul would not make it possible to achieve this objective. It would also not create the conditions necessary to better equip the Port of Trois-Rivières for current and future challenges. On the contrary, Bill C-33 and its extension, Bill C‑52, restrict the Trois-Rivières Port Authority's ability to fulfil the mission entrusted to it by the Canada Marine Act.

These bills increase the burden of accountability, resulting in substantial costs, particularly for medium-sized ports. Bill C‑33 imposes a model for consultation, but each port must have the latitude to adopt consultation mechanisms adapted to its unique environment and organization. The bill introduces changes to the appointment of board members that will weaken the governance of the Port of Trois-Rivières. The Canada Marine Act is based on the user pay principle, yet these bills will erode our ability to apply this principle. The presentations by my colleagues Ian Hamilton and Daniel-Robert Gooch speak volumes about the shortcomings of these bills.

For my part, I will be focusing on how important it is for the ports to work more closely together. Although this is a clearly stated government objective, there are absolutely no measures in Bill C‑33 to encourage these closer ties. And yet, increasing Canada's competitiveness does require greater co‑operation between ports, particularly for the St. Lawrence ports that depend on the river to reach overseas markets. None of the St. Lawrence ports alone can ensure the competitiveness of this crucial transportation axis for the Canadian economy. They are interdependent.

For Canada, the adoption of a new governance model based on collaboration would make it possible to improve administrative and operational efficiency for the benefit of all port customers. Concerted strategic planning would enhance what the port network could offer, optimize infrastructure, and expand the range of services, resulting in better positioning in both markets and supply chains. It would also make investment projects more attractive and less risky for lenders. This co‑operation could even extend to infrastructure operation and joint business development. Such an approach is fully aligned with the federal concept of trade corridors. The Government of Canada must create the right conditions for such a rapprochement, by providing clear mechanisms in the law.

Dear committee members, the Port of Trois-Rivières has been firmly rooted in its community for 141 years. The port authority's mission is to ensure that the objectives of the Canada Marine Act are met through sound management of the public infrastructure under its responsibility, while promoting commercial activity and regional and national development. If there's one thing we agree on, it's that the Canada Marine Act is in need of significant updating. Unfortunately, we feel that the proposed changes do not provide the leverage we need to accomplish our mission in line with the new reality in which we are evolving.

In creating the Canadian port authorities, the government gave itself autonomous management structures to administer its strategic ports. The Canadian port authorities are expected to operate these facilities for the benefit of the Canadian economy, to the highest environmental standards, and to be financially self-sufficient. This is what the board and management of the Port of Trois-Rivières strive to achieve every day. The last thing we need is a framework that will hinder our efforts rather than support them.

In closing, I want you to know that we share the government's objectives for modernizing the Canada Marine Act, and remain openly willing to collaborate on improving Bill C‑33.

Thank you for your attention.

[Daniel-Robert Gooch, President and Chief Executive Officer, Association of Canadian Port Authorities]

Thank you, and good evening.

Committee members, port authority colleagues, good evening.

Thank you for this opportunity to share our views on Bill C‑33. Canada's port authorities have long awaited modernization of the legislative framework they operate within, as it represents the single most important means of addressing Canada's impending and tremendous infrastructure gap. As announced last year in the final report of the National Supply Chain Task Force, this gap is expected to reach an estimated $110 billion over the next 50 years.

From a supply chain resilience perspective, Canada's ports must maintain existing infrastructure, support trade growth and be leaders in decarbonization of marine—already the most energy efficient means of moving goods.

Bill C-33 includes measures to allow for the development of inland ports. It creates the opportunities for ports to play more active roles in traffic management, and it clarifies that terminals situated within a port are works for the general advantage of Canada. These are all positives.

Bill C-33 also sends clear signals that the federal government prioritizes better engagement with communities and indigenous groups, with users, and a more active role in decarbonization.

Canada's port authorities are fully aligned with these priorities, but it will require significant infrastructure investment. This is where we have some concerns not only with Bill C-33, but also with Bill C-52, but that's for another day.

The sum of $110 billion in infrastructure at seaports over 50 years is a lot of money. Canada's port authorities have sought greater financial flexibility so that ports themselves would have the capacity to be nimbler in working with private investors and lenders in major infrastructure projects.

Ports are held back by strict borrowing limits, which is much lower than what private companies or even airport authorities of similar size can borrow, so projects are not funded at the needed level in a timely manner. Amending borrowing limits must be simpler, quicker and dynamic to changing conditions.

Unfortunately, it is not clear if the borrowing limit review process envisioned by Bill C-33 will be an improvement over the process in place today, which is time-consuming and lengthy. We're still seeking clarity on how this borrowing limit review will work and how it would be an improvement.

As members of the federal family, port authorities should be able to work much more closely with officials in Transport, Finance and Treasury Board, as appropriate, on things like this. It is our sincere hope that we will be brought into the room to help them develop this framework with the added insight of experienced port authority leaders. Literally billions of dollars are at stake, and we must get this right the first time.

We ask that this committee consider a motion as part of this review that port authority reps should be an integral part of the design of how borrowing limits would be reviewed if this bill passes.

Switching gears to governance, one area of grave concern to Canada's port authorities is the potential politicization of port authority boards through two clauses in the bill, both of which we would recommend that this committee remove. Comments from transport and from labour leaders on Monday reinforced our concerns on these proposed reforms.

Clause 104 of Bill C-33 changes the eligibility of port board directors to allow for active provincial or municipal employees to serve as directors. While the text does speak to barring those whose employment would result in a conflict of interest, we believe such a conflict would exist for virtually any active employee because of where their paycheques come from. While the risk could, in theory, be mitigated by strong guidelines on what constitutes a conflict, such guidelines would not have the force of law and could be changed or ignored by a future government. The only rationale we've been given for this amendment is that it would open eligibility for more candidates. That has never been a problem for our port authorities. Their biggest governance issue is having the qualified, user-recommended director candidates they put forward appointed in a timely manner.

Our biggest concern is with the ministerial designation of the port authority board chair in clause 105. We worked with the Institute on Governance to analyze the bill, and they found that this would be “significantly disempowering to the board given the strategic role of the chair as interlocutor with the CEO and the government”.

It must be remembered that the federal government created the Canada Marine Act and the Canadian port authorities back in the late 1990s for very good reasons: to make ports nimbler, financially self-sufficient and more responsive to user and community. These were worthy goals that the federal government at the time recognized it could not achieve when it was running the airports. Why would we want to undo that now?

We understand from the Minister of Transport's office that the government is willing to make two changes to the bill that we had requested: softening the prescriptiveness of advisory committee language so that it no longer requires three specific committees, and extending the deadline for quarterly reporting from 60 days to 90 days.

We appreciate the minister's willingness to make those changes, but we also recommend that clauses 104 and 105 of the bill be removed. They risk politicizing port authorities and undoing the gains government and ports achieved together since the Canada Marine Act was first put in place in 1998.

Thank you very much.

Air Transportation

[Omar Alghabra, Liberal, Minister of Transport]

Mr. Speaker, my hon. friend is correct. The aviation sector around the world has experienced significant disruptions over the last couple of years, and Canadian workers and travellers have felt it here at home.

We promised Canadians to take action on lessons learned. So far, we have strengthened passenger protection rights. We are working to modernize CATSA, and today I had the honour of tabling Bill C-52, which would enhance service standards for airports and airlines, and enhance transparency.

This is great news for Canadians. I look forward to working with my colleagues on advancing this important legislation.

Enhancing Transparency and Accountability in the Transportation System Act

[Omar Alghabra, Liberal, Minister of Transport]

moved for leave to introduce Bill C-52, An Act to enact the Air Transportation Accountability Act and to amend the Canada Transportation Act and the Canada Marine Act.

(Motions deemed adopted, bill read the first time and printed)