Transport Committee on Oct. 7th, 2014

[The Chair, Conservative, Larry Miller]

I would like to call our meeting to order. I'd first like to welcome our witness by video conference, Ms. Legars of the Shipping Federation of Canada.

Live here in the room, we have Mr. Serge Buy from the Canadian Ferry Operators Association.

I apologize to both of you for the delay, but votes sometimes happen around this place.

We'll get right to it and I think, Ms. Legars, we're going to send it to you for 10 minutes or less, please.

[Anne Legars, Vice-President, Shipping Federation of Canada]

Thank you for inviting the Shipping Federation of Canada to testify on this matter today.

The Federation has represented ocean shipping in Canada since 1903. We represent all segments of ocean shipping from coast to coast.

The world fleet that serves Canada represents the vast majority of commercial ships’ calls and of the freight volumes carried on Canadian waters. We can say that ocean shipping is the carrier of Canada’s world trade.

I will first have a very quick introduction to provide an overview of ocean shipping's regulatory framework.

The world fleet, which serves Canada and all the other countries in the world, is operated under various flags and is governed by a wide range of international conventions, especially the International Maritime Organization and International Labour Organization's conventions. These conventions are implemented in Canada through domestic legislation, mainly the Canada Shipping Act, 2001. These conventions are enforced by both flag administrations and port state administrations. Here, I will open a parenthesis before I go further to remind you what flag administrations and port state administrations are and what they do.

So what is a flag administration? Before allowing a ship to fly its flag, a flag administration must ensure that the ship meets all the international standards set out in the conventions ratified by its country and that the ship possesses all the relevant certifications. It's here that we have the classification societies that play a key role because these certifications are issued by classification societies, which are specialized marine engineering firms that play a key role in the shipping industry by developing technical standards or rules for the design and construction of ships, approving designs against their standards, and conducting surveys during construction to ensure that the ship is built in accordance with the approved design and rule requirements. A ship cannot be insured or brought into operation until it has been certified by a classification society recognized by the flag state.

Then we have the port state administrations. Port state administrations carry out inspections and enforcement of foreign ships that call at their ports. In Canada, the port state administration is Transport Canada Marine Safety. They do so as part of regional international enforcement networks. Canada is part of two such networks, the Paris MOU and the Tokyo MOU. The Paris MOU is an enforcement network of 27 countries that covers the coastal states of the North Atlantic Ocean and the Tokyo MOU is an enforcement network of 18 countries that covers the coastal states of the Asia-Pacific Region.

I have to underline at this point that the U.S. is not a member of either of these networks. But it still does port state control to enforce international conventions and shares its enforcement information with the other port state administrations and networks.

The annual reports on enforcement of each of these regions are available on the website of each of these networks. Transport Canada also publishes its data on port state control and statistics as well as the U.S Coast Guard. In an appendix that I have sent to the clerk, I put the links to all these reports and the enforcement abilities.

So I close the parenthesis. This was just to introduce how the regulatory framework is shaped for ocean shipping.

Now we'll go the heart of the matter, which is the transportation of dangerous goods by sea; and in another section I will address safety management systems in transportation by sea.

Regarding the transportation of dangerous goods by sea, we remind you once again that all ships carry bunkers as fuel. In addition, over one quarter of the total volume of cargo carried around the globe by ships comprises oil or oil products. On top of this, many other dangerous goods are carried by ships as cargo, such as fertilizers and chemical products carried in bulk, packaged dangerous goods, etc.

The three pillars that have already been mentioned with respect to the management of transportation risks—safety, preparedness and response, and liability and compensation as a third pillar—also apply to the issue of transportation of dangerous goods by sea. However, my remarks today will address only the first pillar, which is the one of marine safety. The issue of preparedness and response for HNS products will be addressed in the soon-to-be-released report of the tanker safety expert panel. We already shared our views on the liability regime for HNS cargo when we testified before this committee with respect to Bill C-3, which is now in the Senate.

To go back to marine safety and dangerous goods by sea, all ships, whatever they carry, have to comply with many international standards, the most important of which are contained in the SOLAS convention, which is the safety of life at sea convention, and the MARPOL convention, which is on marine pollution, both from IMO, the International Maritime Organization.

These conventions contain provisions that are generally applicable to all ships, as well as specific provisions that are applicable to specific types of ships, including tankers. More specifically, the IMO has developed construction standards for oil tankers, for gas tankers, and for ships carrying dangerous chemicals in bulk. The IMO has also developed the international maritime dangerous goods code, known as the IMDG code, which was developed in 1960 and applies worldwide to the transportation of dangerous goods by sea. The code is mandatory and is updated every two years. We also have the STCW convention on crew training and certification. Part V of this convention addresses special training requirements for oil tankers, chemical tankers, and liquefied gas tankers.

The IMO conventions, including the IMDG code, are implemented in Canada via the Canada Shipping Act, 2001, and related regulations. The IMDG code is also implemented via the Transportation of Dangerous Goods Act.

The IMDG code provides essentially for the classification of dangerous goods into nine classes, subdivided into divisions. It sets out principles and detailed recommendations for individual substances and sound operational practices, including terminology, packaging, labelling, stowage, segregation, handling, and emergency response action. These conventions are enforced in Canada by Transport Canada, via port state control for the international fleet, as part of the enforcement networks I mentioned earlier.

Statistics that are available on the website, and that I recap in the appendix that has been circulated to the clerk, show that there are very few deficiencies with respect to the carriage of dangerous goods, and that tankers have the best performance of all ship types.

With regard to safety management systems in transportation by sea, we have an international safety management code, known as the ISM code, which requires the shipowner or any person who has assumed responsibility for the ship to establish a safety management system. This code was developed under the auspices of the IMO, and it became mandatory in 1998 for all ships over 500 tonnes engaged in international voyages. It is also enforced by both the flag states and port state control.

The purpose of the ISM code is to provide an international standard for the safe management and operation of ships and for pollution prevention. It is based on an assessment of risks, the establishment of appropriate safeguards, documented procedures and instructions, and continuous improvement.

The functional requirements for a safety management system must include safety. There are six main functional requirements: a safety and environmental protection policy; instructions and procedures to ensure safe operation of ships and protection of the environment in compliance with the relevant international and flag state legislation; definition of levels of authority and lines of communication between and among shore and shipboard personnel; procedures for reporting accidents and non-conformities with the code’s provisions; procedures to prepare for and respond to emergency situations; and procedures for international audits and management reviews on board and ashore at least every year.

A ship cannot trade internationally without an ISM certificate issued by its flag state. The certificate is issued for a period that cannot exceed five years and is subject to at least one intermediate verification by the flag administration or by an organization recognized by the flag administration. The ISM certificate will also be inspected by port state inspectors.

The Tokyo MOU statistics show that about 1% of inspections found deficiencies with the ISM code that needed attention. The Paris MOU statistics show that about 3.7% of inspections found deficiencies with the ISM code. If there is evidence of major non-conformity with the code, the certificate should be withdrawn by the flag administration. The ISM code has been assessed as a successful tool for the enforcement of the safety culture throughout the shipping industry worldwide.

In a nutshell, this is the framework under which the ocean shipping operates with respect to the transportation of dangerous goods by sea and safety management systems. What is of paramount importance for the international industry is the global consistency of this framework, and the consistency and transparency of the enforcement efforts related thereto.

Thank you for your attention.

[The Chair, Conservative, Larry Miller]

Ms. Legars, could you wrap up.... Oh, are you finished?

[Anne Legars]

Yes, I'm finished.

[The Chair, Conservative, Larry Miller]

Okay, thank you very much.

We'll now move to Mr. Buy. You have 10 minutes.

[Serge Buy, Chief Executive Officer, Canadian Ferry Operators Association]

Thanks very much, Mr. Chair.

I promise I will try to stay within the 10 minutes for my presentation.

I want to thank you for having invited us to speak here. I know I'll diverge a little from my presentation, but I think it's really important for the ferry sector to be represented and be able to talk to this committee about various issues.

Good morning, ladies and gentlemen, and very soon, good afternoon. First, let me thank you for inviting the Canadian Ferry Operators Association to make a presentation to this committee.

It is somewhat of a special occasion for us. For the past few years, if not the past decade, the ferry sector was completely absent from any discussion on the parliamentary level related to transportation. That's of concern to our sector. However, ferry operators play an essential role in Canada's transportation infrastructure. A lot of you know that from having ferries in and close to your ridings. However, let me give you some quick numbers that you may not be aware of.

Ferry operators transported over 47 million passengers in Canada in 2013. As a comparison, the airline sector transported about 60 million. There isn't a huge difference between the two. Close to 17 million vehicles were on board ferries in the same year. About 10,000 people are employed by ferry operators across the country. Over 25,000 jobs are indirectly linked to ferry operations. There are close to 180 ferry routes in Canada, with the biggest use of ferries being in British Columbia, followed by Atlantic Canada, Quebec, Ontario, and then the Prairies and northern Canada.

Our members transport a variety of passengers, from foot passengers to large transport trucks, from individuals getting on board on their daily commute or to catch a plane to the truck that delivers essential supplies to a remote community. We indeed serve a variety of communities, linking parts of major urban centres in Vancouver and Halifax, taking passengers to airport islands in Toronto and Prince Rupert, and reaching far and remote communities in Labrador, northern Manitoba, northern Saskatchewan, and northern British Columbia. That is the reason we must keep ferries safe. We are proud to say that, in general, the ferry sector has an impeccable record when it comes to safety.

In 2011 and 2012, the Transportation Safety Board reported no ferry accidents involving injury or fatality. In 2012 only 14 minor incidents involved ferries. That's a major reduction from the previous years. Most important of all and relevant to this specific discussion, we have no record of any major accident involving the transportation of dangerous goods.

For ferries, the transportation of dangerous goods regulations provide the regulatory framework to operators in the transportation of dangerous goods. Some operators also look for guidance to the international dangerous goods regulations developed by the International Maritime Organization.

In general, the Canadian Ferry Operators Association is pleased with the existing regulations. However, there are a few areas of concern that could be addressed.

The first is clarity. Some of the regulations are not clear to operators, and a thorough review needs to be done to ensure clarity and to allow our operators to implement them properly. The regulations are not easy to interpret, and this makes it difficult on occasion for our members to follow them.

As an example, there is an issue of inconsistency on what defines a short-run ferry. In the federal regulations it's three kilometres, in the marine safety regulations it's five kilometres. We believe that the issue came from the fact that it used to be three miles. Some have translated three miles to three kilometres, others have changed three miles to five kilometres. This is an issue of consistency and clarity; the problem is that it means a lot to our ferry operators when that's not clear.

The implementation of regulations is another issue. Another example that I can give you is that exemptions were made to allow unplugged containers to be transported by ferries with no more than 25 passengers on short runs in some remote communities. This was withdrawn, bitterly, by one inspector recently, and that created congestion in that community and made it difficult for people to move on and off an island. That needs to be fixed as well. A lot of it depends on the voluntary declaration by transport truck drivers. That's an issue on occasion: whether or not the records are kept properly, whether or not certain things are missing.

While our members do their own inspections and verifications, more due diligence on inspecting transport trucks before they enter a ferry would help. You don't want to have an issue when you're between Vancouver and Victoria.

The training of our members' staff is essential and our members regularly invest thousands and thousands of dollars to ensure the safest operations possible.

We're proud of our record and look forward to collaborating with you in the future on the betterment of our transportation infrastructure.

Thank you, Mr. Chair.

[The Chair, Conservative, Larry Miller]

Thank you very much.

With that we'll go directly to questions.

Mr. Mai, for seven minutes.

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

Thank you to all our witnesses for being here today. Again, as the chair said, we apologize for being late because of the votes.

I'll start with Ms. Legars of the Shipping Federation of Canada.

Your organization submitted two documents: “Canada's Oil Spill Preparedness, Response & Prevention Regime”, which was submitted by the Shipping Federation of Canada in 2012, and another document.

What you came up with are suggestions and recommendations to make sure that things are safer. What you did in 2012 and also in 2013 was to ask that the original environmental team oil spill response exercise be re-established to provide for effective planning and response to incidents. Are you familiar with that recommendation and can you talk more about it?

[Anne Legars]

Yes. I remember that we made this recommendation at the time. I don't remember the exact details of it because we worked as a team on that. I was not the only one to work on that document.

However, this was before the tanker safety panel exercise that led to a report issued last fall by the tanker safety panel. Basically, we adopted the various recommendations made by the tanker safety panel at the time, and that's the only thing that I'm able to recall around this specific issue.

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

Do you know in practice if it was actually applied? Yes, I agree that it was part of the 40-something recommendations, but do you know if in practice that has been applied? Have you followed-up?

[Anne Legars]

It's something that I can take note of and can respond to the committee.

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

Looking at it, it is really making sure that we have more information.

It was one of the recommendations made by your organization and one we often hear about in the sector.

This is also related to the transport of dangerous goods by rail. Regardless, we're talking about the fact that there could be more information, whether from municipalities or stakeholders. That was in one of your previous recommendations.

Can you talk about the challenges and what can be done to improve the situation by collaborating with stakeholders at several levels and responding to accidents?

[Anne Legars]

We think the three-pillar approach mentioned earlier is the right way to go. We start with the first pillar, which is everything to do with marine safety, to prevent accidents. That is the most important pillar.

The second pillar is secondary to the first, but it is important nonetheless. It is about knowing what to do if something happens and making sure we are ready to deal with it.

The third pillar, liability and compensation, is the lowest priority.

In general, the system makes sense and works. That is what we told the expert panel on oil tankers. We made a number of recommendations to improve it because all systems have to be reviewed continuously and improved anyway. It's a process, a continuous improvement philosophy. However, in our industry specifically, we have to stay in sync with all of the international conventions. Our ships are constantly sailing from one country to another.

With respect to the issue we are discussing today, the transport of dangerous goods, which includes petroleum products, of course, even though it is much bigger than that, we think that the system is strong and healthy overall.

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

Since I don't have much more time, I'd like to move on to another topic.

One of the recommendations you had was that the Canadian Hydrographic Service should undertake more soundings and should produce new charts especially for the Canadian Arctic.

Today the Commissioner of the Environment came out with a report that was pretty hard on the government. It says that Canada's northern strategy does not provide a vision for safe marine transportation. The report clearly states that none of the departments examined had a strategy in place to support safe marine transportation in the Arctic. This is especially worrisome because vessel traffic is increasing in the Arctic.

Also, specifically with respect to the Canadian Hydrographic Service, the report states that many higher-risk areas are inadequately surveyed and charted. The assessment very clearly states that less than 25% of the paper charts in the Arctic are good. The Canadian Hydrographic Service estimates “that about one percent of Canadian Arctic waters are surveyed to modern standards”.

Are you familiar with the recommendations that your organization made with respect to the Canadian Arctic?

[Anne Legars]

Yes, of course. I cannot say more than that, but we've been recommending for a number of years that the charts need to be updated to make sure they are up to modern standards and so on and so forth. We know the Arctic is huge and it is more difficult to chart there, but it's something that needs to be done and it's something that we've been relaying to the government on a regular basis.

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

Very briefly, can you just quickly tell us why it's important to have updated information so we can understand in practice?

[Anne Legars]

It is because that's a basis. It is very difficult to navigate without charts. You need to have very good charts. It is even a legal requirement to have charts on board and to have the latest updated version. Those are actually the basics of navigation—to have a ship and a chart. You need to know where you are going. That's very basic. I don't know what else I can say.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We now move to Mr. McGuinty for seven minutes.

[David McGuinty, Liberal, Ottawa South, ON]

Good morning, Ms. Legars.

Mr. Buy, good morning.

Ms. Legars, can I start with you very quickly?

For your Shipping Federation of Canada members, is shipping traffic generally up or down?

[Anne Legars]

Yes, there's generally a big difference depending on how you count it. If it's by ships or by tonnage, the ships tend to become bigger and bigger, and therefore to carry the same tonnage you need fewer ships. But the tonnage is definitely up. The number of ships is going up too but less than the tonnage, because the ships are getting bigger.

[David McGuinty, Liberal, Ottawa South, ON]

So the tonnage is up, the number of ships is up, and the number of voyages taken is up as well. Is that correct?

[Anne Legars]

Well, the number of ships and the number of calls are about the same thing. We count calls rather than ships.

[David McGuinty, Liberal, Ottawa South, ON]

In 2013 you carried 47 million passengers and 17 million vehicles. Is that stable? Is it up?

[Serge Buy]

It's fairly stable. We saw a little decrease in 2011-2012. I think we're seeing a little bit of a pickup in 2013.

[David McGuinty, Liberal, Ottawa South, ON]

Madam Legars, can you tell me whether the IMO inspector audits Canadian SOLAS vessels' safety management systems?