Debates of Oct. 8th, 1996

Foreign Extraterritorial Measures Act

[Some hon. members]

Question!

[The Deputy Speaker]

The question is on Motion No. 1. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Deputy Speaker]

I declare Motion No. 1 carried. Consequently, Motion No. 2 is also carried by virtue of my ruling this morning.

Motion No. 1 agreed to.

[Bill Graham, Liberal, Rosedale, ON]

Mr. Speaker, I am pleased to rise today to speak on the second group of amendments to the anti-Helms-Burton legislation which was introduced in the House today.

Before turning to some of the technical purposes behind these amendments I would like to add to some of the comments which my colleagues in the House have made, particularly the hon. member for Terrebonne, the hon. member for Peace River and the hon. member for Burnaby-Kingsway. All of them have indicated that they are in agreement with the principles espoused in the bill and with the purposes of the amendments.

The hon. member for Terrebonne expressed some reservations in respect of the timing of the amendments. The hon. member for Peace River felt that we should be more aggressively pursuing action against the Americans. Perhaps he is getting the tanks in Peace River ready to drive down the highway toward the U.S. border. His grain trucks will be surrounded by mounted patrols. We will see what we can do in that respect.

I would like to remind members of the House about the principle reasons for which the bill was introduced and then turn to the amendments.

The hon. member for Peace River put it well when he said that we are entering into a period when we have to recognize that while we live in a world of free trade rhetoric, in fact, there are constant threats against the free trade regime of which the United States government purports to be the greatest proponent. The United States while talking free trade has long been an active user of other non-free trade vehicles.

The U.S. uses unilateralism, as it does in section 301 of the Trade and Tariff Act. It says to countries: "If you do not do it our way we are going to hit you with trade sanctions, even if it may be contrary to our international legal obligations". It does it particularly offensively when it uses extraterritorial measures as a way of trying to bring other countries to heel.

This is an old problem. We lived through this in the 1950s when Ford Motor Company was told under the U.S. export control laws that it could not export trucks to Red China from Canada, even though it was a Canadian company doing business in China. Canadian workers suffered and Canadian jobs were lost, but the U.S. made Canada do that because it was part of its foreign policy.

Similarly, anti-trust laws were applied in an extraterritorial manner to enforce American anti-trust laws which, however laudable they might be in their own way, when they are enforced in another country contrary to the espoused political purposes of that country are unacceptable.

As a result, in the last Parliament the Foreign Extraterritorial Measures Act was introduced and adopted by the House. It follows the model of British legislation and French legislation which has both blocking provisions in it and an opportunity to claw back excessive damages which have been awarded by United States courts. That is another unfortunate aspect of the American legal system. That legal system is such that it allows what are called treble damages claims.

This is the threat of Helms-Burton if we want to get into the legal nicety of it. The problem that Helms-Burton and much of this American legislation when it is applied extraterritorially represents is that a Canadian, a non-United States citizen, is threatened with a legal action in which $5 million in damages is claimed, multiplied by three, which is $15 million.

These are used as interim measures to drag people into the U.S. courts or ultimately to achieve what has been achieved to some extent by this Helms-Burton legislation, a chilling effect. It says to people that if they have assets in the United States, if they carry on business in the United States, the Americans are going to make it so expensive for them that it is not going to be worth their while to go to Cuba. It is not going to be worth their while to go to Libya. It is not going to be worth their while to go anywhere the Americans do not approve of. That is where we have problems with the Helms-Burton legislation.

We have problems with it because it has been applied in a way that is totally contrary to public international law. It gives a cause of action for expropriation not to people like the Americans who had property in Cuba at the time it was taken. That might be acceptable. But it gives it to people who were Cubans at the time. These actions will not be started by people whose property was expropriated. It will be started by their families, their grandchildren.

We sympathize with people whose property was taken. We do not believe that in public international law property should be taken, but it is very clear there have to be rules in public international law which set out the parameters under which actions of this nature can be undertaken. That is where Helms-Burton goes beyond and gives a cause of action for the political reasons the member for Burnaby-Kingsway alluded to in his speech to people who in normal situations would not have it. As such it is extremely troubling to international trading arrangements.

I have pointed out to my American colleagues what is going to happen if Canada decides to do the same thing for example with Ukraine. There are one million Ukrainians in this country. Why not give a cause of action about all the property that was taken in Ukraine? How would we ever be able to do business with Ukraine if we adopted that type of approach?

What will happen to the United States of America when China says to the United States of America that it is going to adopt Helms-Burton type legislation in respect of Taiwan? What will be the principled response of the United States of America when the Chinese government with all its force says to the Americans: "If you carry on business in Taiwan, you will not be able to carry on business here. We will do the same to you for the same legal reasons that you say you are using for Helms-Burton". What will be the response?

The Americans will have no response and that is why fundamentally the bill is not really in the interests of the United States of America. It is not in the interests of anyone who believes in an open trading system because if other countries choose to adopt similar measures, we will soon have created a world in which no business, no capital and no labour will be able to move around the walls that have been created by these treble damages actions.

The response we have in Bill C-54 is a principled response to that problem. It blocks American attempts to enforce the judgment here. It gives a clawback which we are not talking about in connection with these amendments. It also increases fines against companies which carry on American policy decisions out of this country instead of Canadian policy decisions.

We believe that an open trading system with Cuba is the best way to advance the cause of liberty in that country, the cause of human rights in that country, the cause of justice in that country. We have pursued those goals consistently and we will continue to pursue them. It is not something we are doing on behalf of Mr. Castro or some regime in Cuba.

This bill ensures an open trading system. We believe if properly applied it will ensure that we have open doors, that we will have cultural exchanges to enable the Cuban people to see the benefits of democracy, the benefits of an open system. That is the way in which we will achieve change in that country. We have applied that principle consistently in other countries, for example, Vietnam and China. There is no logical reason why the same approach cannot be applied in respect of Cuba.

The second group of amendments which I am presently addressing are basically of a technical nature. They address problems which relate to the fact that we have had to specifically make Helms-Burton unenforceable in Canada. I appreciate the acceptance of the amendments by the opposition parties. I appreciate their comments that these came forward after the bill had been introduced in our committee. The members were there when we discussed it.

It was felt on mature reflection that we had to address a specific problem. The problem is if we in Canada are threatened with a treble damages lawsuit in the United States, it is all very well to say: "When that is over, we will get an order from the Minister of Justice to block the application of that order in Canada and we will be safe in Canada". But our lawyers are going to ask us how we know we will get that order from the Minister of Justice, how do we know we will not be dragged into that American lawsuit.

The lawyers will probably say that we will have to go to the United States and defend ourselves. We will probably have to spend hundreds of thousands of dollars, maybe even millions of dollars, in these large, complicated United States lawsuits to defend against a claim which is unmeritorious and should be totally unenforceable in this country.

For greater certainty, the government has introduced a provision which says that right here and now, no judgment under Helms-Burton will be enforced in this country. This is a clear marker to enable Canadians doing business in this country to know that they do not have to participate in a U.S. lawsuit.

In my view, this and the other amendments which we are presently discussing on the same issue, are clearly a way in which we enable our citizens and others carrying on business here to know they will not have to participate in that expensive litigation game the Americans like to play. They will not have to worry about a treble damages lawsuit.

I will finish by making just one comment.

To conclude, I will make comment on the statements made by my colleague from Terrebonne. He said we have been waiting for seven months.

Mr. Speaker, you know, and members of this House know very well that international negotiations with the Americans are tricky and difficult. We acted very responsibly by waiting to see what the President of the United States was going to do, since he had a veto on this law.

As soon as it became apparent that the President would not exercise his veto authority on this law, we took action. We took action as soon as possible. We introduced this bill to the House at the opening of this session. We could have acted more rapidly, but I think we could not have acted reasonably to protect Quebecers and Canadians on the international trade issue.

[The Deputy Speaker]

Is the House ready for the question?

The question is on Motion No. 3. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Deputy Speaker]

I declare the motion carried.

(Motion No. 3 agreed to.)

[The Deputy Speaker]

The next question is on Motion No. 4. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Deputy Speaker]

I declare Motion No. 4 carried.

Motion No. 4 agreed to.

[The Deputy Speaker]

The next question is on Motion No. 5. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

Motion No. 5 agreed to.

[Doug Peters, Liberal, for the Minister of Justice]

moved that the bill as amended be concurred in.

[The Deputy Speaker]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Deputy Speaker]

I declare the motion carried.

(Motion agreed to.)

[The Deputy Speaker]

When shall the bill be read a third time? By leave, now?

[Some hon. members]

No.

[The Deputy Speaker]

There is not unanimous consent.

On the Order: Government Orders:

September 19, 1996:-The Minister of Transport-Second reading and reference to the Standing Committee on Transport of Bill C-58, an act to amend the Canada Shipping Act (maritime liability).

Canada Shipping Act

[David Anderson, Liberal, Minister of Transport]

Mr. Speaker, I move:

That Bill C-58, an act to amend the Canada Shipping Act (maritime liability) be referred forthwith to the Standing Committee on Transport.

Mr. Speaker, I am very pleased to begin debate on the bill, an act respecting ship owners liability for maritime claims in general and for oil pollution damage in particular.

The purpose of this act is to modernize Canadian legislation concerning the limitation of liability of maritime claims, which are set out in part IX of the Canada Shipping Act and with liability and compensation for oil pollution damage set out in part XVI of the same act.

The revision of the existing limitation of liability for maritime claims is a very important step toward modernizing this legislation.

This regime is unique to the marine mode. Its intent is to allow shipowners to limit the amount of their financial responsibility for certain types of damages occurring in connection with the operation of a ship. The limitation is calculated on the basis of ship size and applies to all claims arising from the same accident. This feature enables the shipowners to assess their potential liability, which is an essential condition for commercial insurability.

Over the years, the current limitation of liability as set out in the Canada Shipping Act has become hopelessly outdated.

The regime is based on an international convention adopted in 1957 and, consequently, the limits of liability have lost much in their value due to inflation.

This has led to constant efforts by claimants and the courts to find ways to break the limitation order and to recover fully the losses incurred.

Another area of concern is the limitation of liability to the owners of vessels of below 300 tonnes, including pleasure craft. Recreational boating has by far the largest number of accidents and these involve, many times, serious injuries and loss of life.

Therefore we need to raise substantially the current limit of liability which stands at approximately $140,000, which is applicable to pleasure craft so that claimants have a better chance of recovering their losses.

In short, the inadequacy of the limitation amounts, coupled with consistent efforts by claimants to break the limitation to obtain full compensation, is the principal reason for the revision of this regime.

Maritime claims were adopted by the International Maritime Organization to replace the 1957 convention. Because the limits of the 1976 convention have been eroded also by inflation, the International Maritime Organization revised the limits by a protocol adopted in May of this year. Thus, our proposal provides for the

adoption of new limits which meet fully Canadian needs at this time.

With regard to pleasure vessels, the proposed limit of liability of $1 million for loss of life or personal injury will be more in line with the liability levels long established in the automobile sector.

The new limit is not expected to have any dramatic impact on the insurance cost of pleasure vessels. As with other types of insurance, it will be the future claims experience of pleasure vessel owners which will determine the cost of their insurance under the new regime.

I will now turn to the second issue presented in this bill, the revision of the existing legislation concerning shipowners liability for oil pollution damage.

We have come a long way since the Nestucca and Exxon Valdez incidents on the west coast of North America which first brought home to us, particularly to those in my home province of British Columbia, the dangers of marine oil spills.

In British Columbia we have benefited from the province's role as an international maritime gateway, one whose dynamic ports channel millions of tonnes of goods around the globe.

On the other hand, we must live with heavy maritime traffic negotiating some of the narrowest passages in the world and bearing cargo that if spilled would spell disaster for our fragile and irreplaceable marine ecosystem.

More than 20 years ago in this House I founded the House of Commons Special Committee on Environmental Pollution.

From 1969 to 1973, along with various other groups including the Canadian Wildlife Federation, the Environmental Defence Fund, the Cordova District Fishermen's Union of Alaska and the Friends of the Earth in the United States, we were before the U.S. courts under the National Environmental Policy Act, 1969 to deal with the issue of the then proposed Alaska pipeline.

Our court activities were successful. We did, through the courts, require that an environmental assessment, including an environmental assessment of the marine aspects of that proposal, be done.

At the time there was an Arab oil embargo, an OPEC oil embargo, and President Nixon was determined to change the outcome of our legal case.

Therefore through a little used device in the American system which required the executive and legislative arms of government determining that their legislation should not go before the courts, we ultimately were denied the fruits of our legal victory.

Even so, I should add the issue was hard fought and in the final vote in the Senate of the United States there was a tie vote. Then Vice-President Spiro Agnew cast the deciding ballot against our case.

Nevertheless, the battle was worthwhile and success did come in a somewhat unexpected way. To obtain the approval of the line, many concessions were made.

With respect to the sea route, which is the major cause of concern for Canadians, many concessions were made with respect to the type of ships and marine safety. Yes, there was some eight years ago the Exxon Valdez incident. Yes, it is possible there will be another, but the risk to our coast was substantially reduced by that battle some 20 years ago.

In 1989 I again studied this matter for the provincial government. It gives me a great deal of satisfaction to recommend to the House my study at that time, which runs to 184 recommendations which I am sure members will find of interest.

It also gives me great pleasure at this time to bring forward the legislation that will do a great deal to deal with the issue of compensation. Bill C-58 will enable Canada to accede to the 1992 protocols on civil liability and the fund convention.

[The Deputy Speaker]

I am sorry, the hon. minister's time has expired. Is there unanimous consent to give him another minute or two?

[Some hon. members]

Agreed.

[David Anderson, Liberal, Victoria, BC]

I thank hon. members. I have only a couple of sentences left.

The amendments to the Canada Shipping Act contained in Bill C-58 will harmonize our Canadian maritime liability legislation with that of other maritime nations. Equally if not more important, the amendments will improve the amount of compensation available to claimants for maritime claims in general and oil pollution claims in particular.

[André Caron, Bloc, Jonquière, QC]

Mr. Speaker, I am pleased to speak on the motion to refer to committee before second reading Bill C-58, an act to amend the Canada Shipping Act.

As the minister indicated, this bill is to bring the Canada Shipping Act up to date and increase the shipowners' limits of liability to public and private claimants for oil pollution damage in particular.

The bill will also bring Canadian legislation in line with a number of protocols and international conventions signed over the

past 20 years. The Bloc Quebecois obviously agrees in principle with the objective of the bill.

I can tell you up front that all these fine principles will be carefully considered in committee to see if they are just as fine in practice.

In his speech, the minister mentioned the Exxon Valdez disaster.

We would have liked him to mention the Irving Whale disaster as well. As you know, decades ago, this barge sank off the Magdalen Islands. This summer, the barge was lifted. It was the property of a large Canadian corporation well known not only for its commercial activities, but also for certain characteristics that became known to the public after the owner died.

It became obvious that the owner, the promoter, the founder of the Company had made it clear to his heirs that, in business, what mattered was interest, but not public interest. The fact that the company benefitted from the support of the people and the legislation of the various levels of government in the province and the country where it was established did not count as much as the bottom line, interest.

On the positive side, this reminds us that a business is a business and, as such, it is ruled by its interests. The expression "corporate citizen" should be banned from our vocabulary. There are citizens, individuals who are dignified with the status of citizens, but, as committed as a business may be to the community, it does not have that dignity.

That is why I think we should ban the expression "corporate citizen". Without any negative or bitter attitude toward business, it is from this perspective that we will be examining the legislation. We will ensure that this act goes beyond the current one and makes shipowners more responsible, particularly when accidents result in the leakage of hydrocarbons in the waters.

It is very important to implement a recognized principle in our society, namely that the polluter must pay. This is indeed a popular principle, but we have to be careful. These days, to justify certain bills and given the new ideology, governments often say that polluters must pay and so should users, which seems perfectly normal.

However, implementing this principle is often much more problematic, as we recently saw in the legislation imposing user fees for Canadian Coast Guard services. As you know, the Bloc opposed a number of measures. We fought hard and people said time and again that, before imposing new fees, the government ought to first clean up the coast guard.

We were told about truly shocking administrative practices. Still, the Minister of Fisheries and Oceans dismissed all these arguments and did not follow up on any recommendation made by those who came to submit briefs. Seventy-five per cent of all those who submitted briefs and who made representations were opposed to the new fees. Eastern Canada, and particularly the St. Lawrence and Great Lakes region, is clearly penalized by this new fee structure.

This is how a commonly recognized principle in our society, namely that the user pays for the services provided to him, is applied. This principle was applied to justify measures which are harmful to a region of Canada, the St. Lawrence Seaway and the Great Lakes, but which benefit the Atlantic coast-but we will not get into this again.

The Bloc will carefully examine the bill in committee and keep in mind what happened with the Irving Whale .

To Canadians, it is totally unacceptable that a company could renege on its responsibilities, let the government, in other words the Canadian taxpayers, pay to refloat its barge and then have the government, pursuant to the current legislation, obliged to give the barge back to its owner. In a year or two, or maybe just in a few months depending on how long it will take to repair the barge, we might see the Irving Whale off the Magdalen Islands. It is outrageous, since it cost $30 million to Canadian taxpayers.

The government might be looking for ways to get compensated, but I do not think that current legislation gives it the power to do so. We will examine the bill in committee in the light of recent events. I think we will have some interesting amendments to bring forward, based on the briefs we will receive and the evidence the witnesses will give during the committee's hearings.