Transport Committee on March 6th, 2014

[The Chair, Conservative, Larry Miller]

I call this meeting to order.

I'd like to welcome the minister here as well as department staff to answer questions. I just want to remind the members that the meeting is televised and after the first hour—I know the minister has cabinet later on and has to go—we have some committee business that we have to deal with. It shouldn't take long in relation to our study and the budget. We'll have to go in camera at that point.

With no further ado, I will turn it over to you, Minister Raitt.

[Lisa Raitt, Conservative, Minister of Transport]

Thank you very much, Mr. Chair.

It's great to be here today. It's nice to see everybody.

I'm going to take us through our main estimates and supplementary (C) estimates, but first I'd like to introduce who's at the table with me. I have Deputy Minister Louis Lévesque, Associate Deputy Minister Helena Borges, and our CFO for Transport Canada, Mr. André Lapointe.

I'm really grateful for the committee's work and its ongoing input into transportation issues. I continue to look forward to collaboration. I want to thank you for finishing up with Bill C-3 in a very expeditious manner so that we can continue moving that one through on a fast pace. I'm grateful for the committee's great work on that.

My officials and I are here to help explain how the funding that we're seeking is going to be a benefit to Canadians. As you know from the documents, we are seeking authorities in the amount of $1.656 billion.

The authorities that we're seeking for our 2014-15 main estimates are going to be directed to support some key priorities within our department. These are the priorities:

First, we will continue to refine and strengthen safety and security oversight for the entire transportation system.

Second, we're going to continue to contribute to our government's responsible resource development agenda.

Third, we want to improve Canada's competitiveness and critical transportation infrastructure.

Fourth, we will ensure that Transport Canada's policies, programs, and activities meet the needs of the transportation system in the long term.

Finally, we will adopt our government's efficiency and renewal measures.

I'm going to focus the rest of my opening remarks on some particular efforts that we have within Transport Canada. These are tanker safety, investment in key transportation infrastructure projects as part of our gateways and corridors strategy, and of course rail safety.

Turning to tanker safety, we are strengthening our tanker safety regime because we know it protects Canadians and the environment both today and tomorrow. We are anticipating higher growth in marine shipping for oil in Canadian waters, so in the main estimates, you'll note that we are requesting additional authorities in the amount of $15.8 million for world-class oil spill response. This is a 686% increase from the authorities that were sought in last year's main estimates.

What the regime is based on is this: we want to stop spills from happening in the first place. We want to clean them up if they ever happen, and we want to hold polluters liable for those spills.

This regime introduces new measures, such as increased inspections of foreign tankers in Canadian waters, expanded air surveillance and monitoring of ships in our waters, and a new incident command system to allow the Canadian Coast Guard to respond more effectively to incidents.

To help us achieve a world-class tanker safety system, we have an independent expert panel led by Gordon Houston, the former CEO of Port Metro Vancouver. The panel submitted its first report in November. It made 45 recommendations on how to strengthen the oil spill preparedness and response regime. We take this panel report very seriously and we are engaging communities, the marine industry, and provincial governments about the recommendations that the panel put forth.

The panel's work is going to continue. It's reviewing oil tanker safety measures in the Arctic, as well as marine transport of hazardous and noxious substances. I expect to get a second and final report later this year.

Recently I was in British Columbia and I was able to fly in one of the planes that's operated by our national air surveillance program. I met the team that does that work for us. It's quite the experience. It really did give me an opportunity to appreciate the importance of having those eyes in the sky to see what's happening in the water in very fast time and to see the great work that's being done in this program. I'm really happy that we're doubling funding for the program. That allows the team to significantly increase the number of hours the planes are in the air so that we can better monitor our coasts and ultimately deter potential polluters.

I was told by the team that they were actually the experts who were brought down to the gulf when we had the incident with respect to Deepwater Horizon and the spills. They were the eyes in the sky for the United States and provided all the data because we had that capability and the United States didn't. I'm very proud of this program and I know the great work that they do.

Turning to transportation infrastructure projects, economic action plan 2014 recognizes the importance of both trade and investment in Canada's economic future. The role of Canada's transportation system and infrastructure network is to support domestic and international trade in those markets. Through the main estimates we're seeking $702 million to support some important infrastructure projects through the gateways and corridors funding program.

We focus on supporting international trade with the U.S. and other key partners by ensuring integrated and efficient transportation systems across all modes.

We have to work with the other levels of government and the private sector to do so. We're investing in important infrastructure projects at border crossings and we're bolstering our efforts to coordinate infrastructure investment planning as part of our government's beyond the border initiative. We know that if we improve at the border, cross-border trade will go a long way to ensuring continued economic growth for Canada.

Finally, I would like to turn my attention to what is my top priority, and that's railway safety improvements. In the aftermath of Lac-Mégantic, our government focused on three elements of railway safety, very much like the world-class tanker system: prevention, preparedness and response, and liability and compensation.

One of the first things that happened was that Transport Canada directed rail companies to enhance the safety and security of their operations and to revise rules to apply to all freight trains and equipment, not just to locomotives.

Our government is also accelerating development of and amendments to regulations that are based on the recent amendments to the Railway Safety Act, including those regulations to require railway companies to obtain railway operating certificates once they've met baseline safety requirements, as well as allowing for the administrative monetary penalties because that adds an extra additional enforcement tool in the act.

Transport Canada is also accelerating the development of railway grade crossing regulations. The regulations were published in the Canada Gazette, part I, on February 8 for a 90-day comment period.

When we do these things, what we're saying is that we are committed to a safe rail transportation system,not only for our communities but in general for Canada's economic well-being as well.

We have directed companies that import or offer for transport crude oil to conduct classification testing of that oil and make the results available to Transport Canada. We've directed them to update their safety data sheets that they provide to the department's Canadian Transport Emergency Centre, or CANUTEC.

Our actions on railway safety have also included working with the other federal stakeholders. While the Transportation Safety Board of Canada continues to investigate the Lac-Mégantic derailment, it has delivered three key recommendations to improve the transportation of dangerous goods by rail and will provide its final report later this year.

On the last part, with respect to liability and compensation, I feel strongly that we have to hold polluters accountable for accidents, and that as Canadians, we should not be expected to cover the cost of damages. To this end, Transport Canada is consulting stakeholders on how to strengthen the existing liability and compensation regime for rail.

We want to make sure that in the event of an incident, there are sufficient resources available to adequately compensate victims, pay for cleanup costs, and protect taxpayer funds. This complements recent consultations by the Canadian Transportation Agency into the insurance coverage it requires of federally regulated railway companies when they issue the certificates of fitness to them.

To improve prevention, we have published, for comment, new regulatory standards for the DOT-111 railcars. These standards include using thicker steel for the cars, added top fittings, and head shield protection.

As well, Transport Canada has received and published reports from three industry-led working groups who were asked to examine various factors relating to the transportation of dangerous goods, and officials are reviewing these reports now.

We have to work with the United States because both countries need to ensure that the appropriate testing requirements and criteria for crude oil shipments are similar and that they apply proposed new and more stringent tank car construction standards to a broader range of products.

Finally, I want to assure the committee that our response standards on the transportation of crude oil are as rigorous as they need to be, given the increased volume of oil being shipped by rail. To achieve this Transport Canada is working with the Transportation of Dangerous Goods General Policy Advisory Council to develop requirements for the emergency response assistance plan for crude oil.

While all these actions demonstrate how we are working to strengthen the safety of railway transportation together, we have to remember that in general, statistics do show that Canada has one of the safest transportation systems in the world, and what we're doing is just reinforcing a great system and ensuring that safety remains a priority.

The initiatives I've outlined today demonstrate that our government is working to maintain transportation that is safe, secure, efficient and environmentally responsible. We do take this responsibility seriously, and we do welcome input from the committee regarding these efforts.

That concludes my remarks, Mr. Chair. I'd be happy to take any questions from the committee.

[The Chair, Conservative, Larry Miller]

Thank you very much, Minister.

We'll now move to Mr. Mai.

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

Thank you very much, Mr. Chair.

Madam Minister, Deputy Minister, Assistant Deputy Minister and Associate Deputy Minister, thank you all for being here today.

Madam Minister, you have already addressed the issue of rail safety. You talked about the Lac-Mégantic tragedy and DOT-111 tank cars. You mentioned there were three reports, including one that deals specifically with those cars. As you mentioned, the Transportation Safety Board of Canada has had some concerns about those cars for quite some time now, and has made some recommendations. Following the Lac-Mégantic tragedy, it indicated that that was one of the problems.

You talked about working with our partners south of the border. However, can you tell us if a timeframe has been established for taking these cars off the tracks? If so, will that happen now, in five years or in 10 years? I would like clarification, because many people are concerned about this.

[Lisa Raitt, Conservative, Halton, ON]

I agree with you. That is one of the key issues with respect to what we term “means of containment” when you're moving dangerous goods.

If you take a look at the studies we've published, which came back from the advisory council, you can see there are some similarities, but nobody gives a timeline in there. It really is up to us in Transport Canada to determine what we think is a good starting point for the discussion.

In the U.S., they're having discussions around a 10-year timeframe. That's too long. We do agree on that.

We also agree that we have to phase out those earlier DOT-111 models. Some of these cars are 40 years old. They were built in 1974.

We take the matter really seriously. We are in the process of digesting what's in those reports. Officials are preparing to consult with industry on a timeline, but I am mindful of the fact that in January we heard back from the Transportation Safety Board on this matter and it said that statutorily I had 90 days to report to it. There are some clear deadlines for me, and we are working towards those for sure.

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

Thank you very much.

I would like to move on to the Canada Post file.

The main estimates talk about $22 million. On December 11, 2013, Canada Post announced a five-point action plan. During a meeting of the Standing Committee on Transport, Infrastructure and Communities, we learned that there had been no real consultation with the corporation's partners, such as the Canadian Federation of Independent Business, and that charities were not consulted.

One of the problems raised has to do with lettermail service for businesses—

[Jeff Watson, Conservative, Essex, ON]

On a point of order, Mr. Chair, with due respect, Canada Post is not part of the main estimates, nor was it part of the opening comment.

I'm sorry, was it? Fair enough.

I stand corrected, I'm sorry. It wasn't in her opening comments is what I meant to say.

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

That's why I mentioned the $22 million at the beginning.

One of the problems that affects businesses, and especially small businesses, is the 15% to 35% increase in the cost of lettermail service, which is one of Canada Post's most lucrative services. This will lead to a job erosion rate of at least 6% in small businesses. Small businesses hire about 800,000 people. Thus, nearly 50,000 jobs in small businesses will be lost because they will not have time to adjust to that increase. In the past, rate increases were about 3% a year.

Madam Minister, when you decided to support Canada Post, did you study the possible repercussions this plan would have on small businesses and charities?

[Lisa Raitt, Conservative, Halton, ON]

I think it's important to note that Canada Post is in here along with the purpose, because we do have $22.2 million going from the government to Canada Post, which is supposed to be self-sufficient. We do so because we want to make sure we can continue to deliver parliamentary mail and material for use by the blind. I know that the opposition knows all about the use of franking in our government.

To answer the question though, I will say that Canada Post is facing the realities of its decreased mail volume, and they have developed a five-point plan, on which they consulted. They consulted across the country. They went to town halls.

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

Thank you very much.

I'm sorry for interrupting you, but I see that you will not change your position on that plan.

I will therefore move on right away to the question of infrastructure.

When it comes to investing in infrastructure, is the federal government looking for ways to maximize the economic benefits for the Canadian manufacturing sector? For instance, with regard to the Champlain Bridge, our trade partners, the United States and other countries like China, have some concerns. The United States has the Buy American Act.

[The Chair, Conservative, Larry Miller]

Mr. Mai, can I just remind you that the ministry of infrastructure isn't her responsibility, but if she wants to respond to it, she can.

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

On that point of order, the minister actually mentioned trade and investment support and that's part of what Transport Canada is doing.

Are there any policies in place to guarantee economic benefits for Canada? For instance, in the case of the Champlain Bridge, if the iron and steel were purchased from Quebec and Canadian companies, that could really help that industry.

[Lisa Raitt, Conservative, Halton, ON]

With respect to the Champlain Bridge, although my officials at the table can answer the question, I have the Detroit River international crossing and that is subject to a series of agreements between ourselves and the United States. I would look to my officials on the specifics of that one because there has been a lot of discussion already around the Detroit River bridge.

[Louis Lévesque, Deputy Minister, Department of Transport]

The infrastructure work that will be funded by Infrastructure Canada and the work related to the new bridge over the St. Lawrence will comply with the procurement rules in place. Those rules allow Canadian businesses to bid, obviously, while fully meeting our international trade obligations.

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

In other words, the government has not established any policies to guarantee any economic benefits for Canada, while the United States has the Buy American Act, among others.

I will hand it over to Ms. Boutin-Sweet.

[Lisa Raitt, Conservative, Halton, ON]

We take the view that investment is important in order to ensure that we're helping with the borders and stuff. We do expect that the spin-off effects will be beneficial for Canadians in general. We also need to balance that with getting the best value and ensuring that we have an open process in procurement. Those things go into it.

With respect to the closing of our borders or the shrinking of our world in terms of a policy to favour one over another, we don't have that. We believe in ensuring that we have general procurement that abides by transparency, accountability, and best value for the dollar. We are very confident in our Canadian companies' ability to compete. We're very good at it.

[The Chair, Conservative, Larry Miller]

Mr. Mai, your time is running out now.

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

What about the time used on the point of order?

[The Chair, Conservative, Larry Miller]

We didn't take that time away from you. If you have one last comment, I'll allow it, but just for a few seconds.

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

Yes, just a few seconds for Madame Boutin-Sweet.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

I had a number of questions on infrastructure, but since they are political in nature, the minister would not be able to answer.

For instance, regarding the Building Canada fund, there are many things the municipalities would like know about the P3 fund or the federal funding that is capped at one-third.

Since the witnesses here today cannot answer those questions, I wish to move the following motion:

That the Standing Committee on Transport, Infrastructure and Communities invite the Honourable Denis Lebel, Minister of Infrastructure, to appear before the Committee regarding the Main Estimates 2014-15 at the earliest available opportunity following the tabling of Part III (Plans and Priorities) 2014-15, and that this meeting be televised.

[The Chair, Conservative, Larry Miller]

For your information, Ms. Boutin-Sweet, Mr. Lebel was asked but couldn't attend today. He indicated that he could—pardon me?

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

It wasn't for today.

[The Chair, Conservative, Larry Miller]

I realize that. I'm just saying this for your information. In my last discussion with them, they were trying to come up with a date. Okay?

We'll now go to Mr. McGuinty for seven minutes.

[David McGuinty, Liberal, Ottawa South, ON]

Good morning, Minister and officials. Thanks for being here.

Minister, we only have seven minutes together. I wish we had more time.

Minister, I've always believed that the government has an obligation to get the big things right. I know that you would agree with me that anyone can talk a good game. Governments can talk a good game, cabinets can, and ministers can. I've always believed in following the money. If you want to know where a government's priorities are, follow the money.

I'm going to ask you a couple of very pointed questions, if I could. I'm going to put to you some numbers from your public accounts of last fall. Aviation safety was cut 11%, from $222 million to $198 million. Marine safety was cut 25%, from $75 million to $56 million. Road safety was cut 5.5%, from $23 million to $22 million. I acknowledge rail safety did see a paltry increase from $32 million to $34 million. I would put to Canadians that you're spending more on economic action plan advertising, $42 million this year, compared to $34 million on rail safety.

Minister, how do you explain these cuts to safety?