Transport Committee on Feb. 27th, 2014

[John O'Connor]

The amount that the SOPF would inject in any.... Right now, it only applies for oil. The amount they inject is set by Parliament, and you can set the amount where you want it. Right now it's approximately 160 million additional dollars. That may not be billions, but it certainly is better than no additional dollars. We certainly feel it's a step in the right direction.

If the limit of the fund should be increased, for instance, to $200 million or $250 million, or more, that could be looked into. We do not believe that saying it would be unlimited is realistic, but we certainly believe the extra funding should be available for HNS cargoes.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

That's great.

It leads me to my next question. There seems to be a bit of a disconnect between what you just said to me and when Mr. Watson was asking about your awareness of any spills that were over $200 million. You alluded to the fact that there were spills that were way over that.

I'm trying to wrap my head around why you would be supporting and promoting this convention when you have a sense that it's completely insufficient. I'm having a hard time understanding that.

[John O'Connor]

I could perhaps explain that better; I didn't mean to misstate it.

I probably shouldn't have even answered the question of whether there have been HNS spills over $200 million because we'd all have to look on.... There are ways of finding out, but what I'd like to say—

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

To clarify that for a second, we had Transport Canada officials here and they had done their research on it. They had done very extensive research, and there were no incidents over $200 million.

That's part of the reason we ratified the convention. I think we have to make sure we're staying with the facts here.

[John O'Connor]

First off, when you're talking about $200 million—why you pick that figure, I'm not sure—that's in today's dollars for us. If you had an event some years ago, less than $200 million would be more than $200 million today. I'm not sure where we would be going with that.

I'd just like to say that regardless of the Exxon Valdez, which by the way was apparently $5 billion, the oil conventions will not give us $5 billion in compensation if it ever happens in Canada. However, in our view and the association's view, that's no argument to say we should therefore not join the convention.

The fact is the convention provides for funding. Hopefully, we'll never need more; hopefully, we'll never need that much. But no matter how much we need, we at least are aware and sure that we'll have that much money available.

Regardless of what has happened in the past, we're looking to the future. If ever there were to be a spill, big or small, we would have access to that funding.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Obviously, we would want to be doing our homework. In looking at ratifying a convention, we're going to be looking at whether it has adequate coverage, and that has been ascertained at this point.

If we're talking about never having a cleanup that is greater than $200 million, we can talk about how that's in the past and we want to look forward, and we all should look forward. We also have a number that cannot necessarily be pinned down forever. That number can be adjusted over time if need be, just as you said that the ship-source oil pollution fund could be adjusted if need be.

What we're looking at is whether it's adequate at today's levels. I get the sense that if your organization strongly supported and promoted the HNS convention, you must have had a really good sense that it was adequate funding, or why would you have continued to support it?

[John O'Connor]

That's right. When I say that was adequate funding, it was funding that we felt was a realistic step forward.

You may have noted that the funding available for HNS is less than it is for oil. You may ask why that would be. Well, HNS are such strange products. The reason for that is that oil is a labour intensive cleanup, but HNS is not always. HNS cleanup may not always entail as much as oil cleanup because of the physical picking up of oil off the beaches, and so on. What we're saying is that it's making this funding available.

I'd like to add one point. If we were to not adopt this convention, not only would we not have access to the funding, but the limitation on the ship owner would be lower than it is in the convention. In other words, we would be getting less money out of the ship and no money out of the fund, and we'd be in a very much worse-off position.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Watson, for five minutes.

[Jeff Watson, Conservative, Essex, ON]

Mr. O'Connor, I want to return to your suggested amendments for a moment.

Effectively, if I understand this, you're not asking us to create a mirror fund for the chemical industry that would be the equivalent of the ship-source oil pollution fund, but the thrust of your amendments essentially ask us to enshrine in law that the ship-source oil pollution fund would be shared by the oil industry, the chemical industry, the fertilizer industry, and others. Is that correct?

[John O'Connor]

That is correct. It would be shared in the same way as the HNS fund contributions are shared.

Parliament can do what it wishes, but it would probably be the receivers of cargoes in bulk, not in cans of Ajax, but in bulk, who would be contributing, if ever there were to be a contribution requested. If you try to go into packaged HNS, little cans of stuff, it would be just too unwieldy. That's the change we made in 2010, because in the original 1996 convention, the contributions came from any cargo receiver, even cans of Ajax, whereas now we realize that it would be unwieldy to try to collect from those people, to try to follow those containerized cargoes. Rather, we went bulk. I think that's the same that, yes, SOPF would probably decide to do.

[Jeff Watson, Conservative, Essex, ON]

All right, and this is not a commercial endorsement of Ajax.

Is there a problem, then, with the concept of the oil industry, which pays into the ship-source oil pollution fund, funding a cleanup of a potash spill, or potash accident, or vice versa for that matter?

[John O'Connor]

First, the oil industry does not pay into the SOPF and has not paid a cent since 1976, as you know, so I don't think we should get too worried about what we're cleaning up.

Second, the point is that the oil industry itself is involved in things beyond oil. They are involved in shipping and receiving HNS bulk cargoes which are not oil.

Third, as far as cleaning up other things like fertilizer or whatever, our view is that the SOPF.... This is the beauty of limiting the amount. It's not unlimited, and we believe it shouldn't be because it's not realistic, but also, if it were to be unlimited then you could have theoretically a case where some spill of some product would empty the fund, and that to us is absolutely not what we're looking for. What we're looking for is an additional tier of funding. That's it.

You might have an oil company that would say they would rather have that money spent on products that they produce and ship, certain HNS and oil only, and not on any other product. They might say that, but in our view, it's not only going to be the oil receivers who would be contributing to a spill that the SOPF would cover, but all bulk receivers.

[Jeff Watson, Conservative, Essex, ON]

I think there are legitimate reasons why companies paying into the fund wouldn't want to support the cleanup of other industries and vice versa.

Thank you, Mr. Chair. That's all the questions I have.

[The Chair, Conservative, Larry Miller]

We have a few minutes. Everybody knows that we do have to be over at the House and the buses apparently are running a little slower because of the weather, so I am going to allow just one question from Mr. Mai, and one from Mr. Simms, and one over here. Mr. Simms doesn't want a question. Mr. Mai, go ahead with one question, please.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

I'd like to ask Mr. O'Connor a question. I would ask Mr. Wright, but I will go directly to you. In terms of language and in terms of Mr. Wright's recommendation with respect to extending the liability protection to responders and their agents, can you tell us if you agree with the recommendation? If you do, do you have any language for that, or any specific advice on how to amend Bill C-3?

[John O'Connor]

First, I would like to say that my association deals with maritime law. With respect to the proposed amendments in the Canada Shipping Act to extend Mr. Wright's company's liability to his agents, mandataries, etc., we support that. The problem with the bill originally was that when Mr. Wright's company was there, they thought they were going to be doing the shovelling themselves. They since have realized it's much cheaper to hire other companies to shovel for them under their direction. At the time, nobody thought about agents, as far as I can recall, but I think it's good that they have it. That's number one.

Number two, his recommendation that we would move inland and when Mr. Wright's company is working at, let's say, Lac-Megantic, where they worked very hard this summer—not the western, but the eastern branch of his company, they worked hard—and give them the same immunity there, we have no real view on that. But you have to be careful because there are constitutional issues here. When they are cleaning up a spill from a truck that has overturned on a highway in some province, can Bill C-3 give them immunity for what they're doing on that provincial land, under that truck spill? I don't think you can. I would say you should be careful about getting involved in that.

I have no language to propose because we're marine anyway.

[The Chair, Conservative, Larry Miller]

Thank you very much.

If there are no questions over here, I will thank our guests for being here, both in person and by video conference. Your testimony will go a long way in helping us all understand this. Thanks very much.

Everybody have a good weekend.

The committee is adjourned until our meeting next Tuesday.