Bill C-48 (Historical)

Oil Tanker Moratorium Act

An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia's north coast

This enactment enacts the Oil Tanker Moratorium Act, which prohibits oil tankers that are carrying more than 12 500 metric tons of crude oil or persistent oil as cargo from stopping, or unloading crude oil or persistent oil, at ports or marine installations located along British Columbia’s north coast from the northern tip of Vancouver Island to the Alaska border. The Act prohibits loading if it would result in the oil tanker carrying more than 12 500 metric tons of those oils as cargo.
The Act also prohibits vessels and persons from transporting crude oil or persistent oil between oil tankers and those ports or marine installations for the purpose of aiding the oil tanker to circumvent the prohibitions on oil tankers.
Finally, the Act establishes an administration and enforcement regime that includes requirements to provide information and to follow directions and that provides for penalties of up to a maximum of five million dollars.

[Marina Spahlinger, Manager, Regulatory and Stakeholder Relations, Canada, Royal Vopak]

Thank you, Madam Chair.

On behalf of Royal Vopak, I would like to thank you for the opportunity to provide comments regarding Bill C-48.

We are an international tank storage company with a 400-year history and a strong focus on safety and sustainability.

As an infrastructure and service provider, we ensure efficient, safe, and clean storage in the handling of bulk liquid products and gases for our customers around the world. Our purpose is to store vital products with care. We currently operate 66 terminals in 25 countries, with a combined storage capacity of 35.9 million cubic metres. Four of these terminals are located in Ontario and Quebec, and we recently expanded our business to British Columbia, where we have a 30% interest in a new propane export terminal that is currently being built. Including our joint ventures and associates, we employ a work force of over 5,500 people globally.

Canada is a beautiful country, and we feel privileged to be doing business here. We appreciate Canada not only for the business opportunities it presents but also for continuously striving to be an environmental leader. We certainly enjoy Canada's pristine environment and we perfectly understand why you want to protect it.

That said, many of our terminals around the world are located in or near pristine natural environments, and our experience has shown that economic development and environmental protection can go hand in hand.

Let's consider the economic context of this moratorium. According to Natural Resources Canada, Canada was the sixth-largest energy producer in the world in 2016, yet 97% of oil and gas exports from Canada were sent to the U.S. The National Energy Board projects that net exports of Canadian energy will continuously increase until 2040. However, domestic petroleum consumption in the U.S. is expected to remain relatively flat over that same time frame.

Meanwhile, the U.S. Energy Information Administration projects that China and India will drive a 39% growth in liquid fuels consumption in non-OECD countries from 2015 to 2040, and that's due to rapid industrial growth and increased demand for transportation.

The moratorium as it is currently proposed would cut off a direct route to take advantage of this Asian market. This will continue to expose Canada to steep discounts on energy products that it can only sell to the American market. This raises the question of why Canada would expose itself to such a serious economic risk, particularly when you look at other economic consequences of such a decision, such as forgone tax revenues or employment opportunities.

As it stands, the moratorium is not supported by an independent scientific risk assessment that justifies why crude oil or persistent oils are included in it. This creates uncertainty for us and leads us to wonder what other items could be included in the future.

Additionally, there is no end in sight for the proposed legislation, as it does not include an end date. It is safe to say that this moratorium, if implemented, would set a worrying precedent that could make it riskier to conduct business in Canada.

Seven initiatives are currently being conducted by the Government of Canada to increase marine safety that we hope are being considered as part of the development of this legislation. These include, for example, the creation of lower-impact shipping corridors in the Arctic and aerial response planning pilot projects to help Canada adopt a regional risk-based marine preparedness and response system.

At the very least, we respectfully ask that Bill C-48 be amended to include an end date to the moratorium, as well as the process and the criteria for the inclusion and removal of items from the list of persistent oils.

Madam Chair, Vopak is keen to contribute to both economic growth and environmental protection. We would therefore be happy to engage in further discussions and share our expertise, should that be of any use.

Thank you again for the opportunity to talk to the committee.

[Peter Xotta, Vice-President, Planning and Operations, Vancouver Fraser Port Authority]

Thank you very much, Madam Chairman.

Thank you for the invitation to make some comments. While the oil tanker moratorium act does not directly impact Canada's largest port from an operational perspective in Vancouver's Lower Mainland, the Vancouver Fraser Port Authority is pleased to provide our perspective and to respond to any questions the committee may have.

For context, the Vancouver Fraser Port Authority, like other Canadian port authorities, is established by the Government of Canada pursuant to the Canada Marine Act and is accountable to the federal Minister of Transport. Our mandate is to facilitate Canada's trade objectives by ensuring that goods move safely while protecting the environment and considering local communities.

With regard to Bill C-48, the Vancouver Fraser Port Authority assumes that government understands the potential economic impact for such a moratorium, given that there are very few suitable locations, particularly on the west coast, for movement of petroleum products, as was articulated by my associate from Prince Rupert.

Notwithstanding the fact that any future proposals would be subject to government's rigorous environmental and regulatory review process, this moratorium could create pressure on the southwest coast of British Columbia to develop capacity for future energy projects. In turn, that pressure could constrain capacity for other commodities that must travel through the lower gateway of the port of Vancouver, such as grain, coal, and containerized consumer and manufactured goods. Supply chains are complex, with multiple participants, and it's important to understand that other ports could not necessarily easily pick up the slack for one commodity or another.

Turning to the matter of tanker safety, I want to point out that tankers have moved safely into and out of the port of Vancouver for decades. Our related procedures go above and beyond the baseline requirements, and we revisit them regularly and update them. I'd be happy to go into more detail on that.

Even with the moratorium, the risk of spills from vessels with less than 12,500 metric tonnes of oil requires excellence in spill response. The port authority echoes its submission to the tanker safety panel of 2013, noting that the government has taken significant strides to address recommendations raised by that panel and by contributors like the port of Vancouver.

The oceans protection plan goes a long way to addressing our concerns. We're aware that the government is aggressively moving to ensure the Canadian Coast Guard is adequately funded to respond to and manage spills in local waters, including being trained and resourced to provide comprehensive leadership.

We also recommended that local communities and individuals, including aboriginal peoples, must be involved in spill response plan development, oversight, and response, and fisher personnel and their vessels must be incorporated into a response strategy, particularly in remote locations, to provide an additional level of support. We're certainly pleased to see government acting in this regard also, through the oceans protection plan.

We reiterate the need for strategic placement of appropriate spill response equipment in locations of higher risk, which would lessen response times and improve response capabilities. The announcement of new Coast Guard stations on the west coast is an important step in the right direction, if they are in a position to provide such response.

The port is also optimistic that government will continue to implement the recommendations of the tanker safety panel. We believe there is a good level of understanding that the moratorium is only part of the puzzle in protecting our precious coastlines.

Lastly, the port authority encourages the committee to consider the work of unbiased voices, such as the Clear Seas Centre for Responsible Marine Shipping, an independent research centre that promotes safe and sustainable marine shipping in Canada. Clear Seas has now been established for over two years and is well positioned to provide support to government in the event that it may need to consider future policy changes with regard to Bill C-48.

Again, thank you for the opportunity to comment. I look forward to your questions.

[Ken Veldman, Director, Public Affairs, Prince Rupert Port Authority]

I'm happy to. Thank you for inviting me here today.

I'll be focusing on the legislation's potential impacts on both current and future port operations and Canadian trade.

Measured by the value of trade that it facilitates, the Port of Prince Rupert is the third-largest port of Canada, and its volumes employ over 3,000 women and men in northern B.C. Competitive Canadian trade gateways not only add value to the industries, which use them for market access, but are significant economic generators themselves.

With respect to creating a moratorium on crude oil tanker traffic on B.C.'s north coast, we understand that protection of the marine environment is of paramount importance to Canadians. The environmental, cultural, and economic values associated with it are enormous. PRPA shares those values and considers environmental protection of lands and waters within the port to be a key element of its mandate.

It should be noted that the navigational approaches to and from the port are among the safest in Canada. This is a result of several factors, including relatively low marine traffic volume, uncongested and unrestricted marine approaches, a deep natural harbour, and short inland water transit times from the Triple Island pilot station. The low level of navigational risk has been quantified and validated by third parties.

Navigational risk is further mitigated by positive steps taken by PRPA, including investment in shore-based radar, navigational aids, real-time navigational data, and best-in-class practices and procedures that clearly describe rules to marine carriers for safe access to and from the port.

With that as context, I'd like to focus on the proposed schedule of products found in Bill C-48.

The list found in the schedule is very broad and has not been accompanied by demonstrable evidence as to why items have been selected for inclusion. There are potentially several trade opportunities that may be negatively impacted beyond the core objective of bitumen. In fact, the legislation has the potential to eliminate existing supply chains and proposed marine services, as well as unintentionally impact future Canadian imports and exports through Prince Rupert, which would have significant economic consequences for the country.

For example, the inclusion of slack wax, a feedstock that's used to create petroleum wax products for Canadian manufacturing, impacts a service and existing capital plant and equipment that has been successfully operating in the Prince Rupert harbour for decades without incident. A vessel that transports slack wax only discharges a portion of its cargo in Prince Rupert, usually below the 12,500-tonne threshold being proposed. However, the total volume carried by that vessel would be impacted by the moratorium, and this could eliminate the service from the port.

The legislation also does not recognize the potential for port services that handle, but are not exporting, heavy oil. For example, a proposed marine fuelling service that includes a 12,500-tonne bunker fuel storage barge in the harbour is currently undergoing an environmental assessment. The capability to fuel large marine vessels at anchor in the port is a critical strategic service that the port needs as it strives to grow Canadian trade. An arbitrary storage limit is a potential hindrance to the development of these kinds of services.

The committee should also be aware that the production of refined petroleum and natural gas liquids is forecast to expand in Canada. In the case of refined petroleum products, while the bill's schedule omits several refined products, it also includes many of the products of the same production process, such as heavier oils and lubricants. The inability to market and maximize value for those heavier products would negatively impact the total economics of the refinery. Similarly, the inability for a future liquid bulk terminal to offer a full slate of refined and natural gas liquids would negatively impact its investment case as well.

Lastly, Transport Canada also notes that amendments to the schedule could be considered, following a regulatory review that would primarily assess whether the ability to clean up a spill has improved. While these criteria are rational to include, the exclusion of criteria specifically related to the empirical risk of an incident spill is a significant oversight. In an extreme example, conditions could be created that eliminated all risk of an incident, yet a product would still be banned under the moratorium because of the challenges of cleanup. Given the strategic attributes of Prince Rupert and our advantage of being arguably the safest port on the west coast of North America, this is a significant oversight in the legislation.

We have the recommendations that follow for amendments to Bill C-48.

Number one, the legislation's schedule of commodities should be reviewed to ensure a full understanding of the trade, economic, and operational impacts of their inclusion.

Number two, the review should be based on demonstrable evidence for their inclusion and include robust consultation with industry and marine transportation experts.

Lastly, number three, the legislation should contain language that requires periodic quantified assessments of the risk of marine incidents in order to provide an improved context for the regulatory process of reviewing the schedule on an ongoing basis.

Thank you.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling to order meeting number 82 of the Standing Committee on Transport, Infrastructure and Communities, pursuant to the order of reference of Wednesday, October 4, 2017, on Bill C-48, An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia's north coast.

I'm very happy to welcome the officials here today to help provide the committee members with some very valuable information. From the Department of the Environment, we have Heather McCready, director general, environmental enforcement; Michael Enns, executive director, environmental enforcement; Marc Bernier, director, environmental science and technology laboratories; and Carl Brown, manager of emergencies science and technology section.

We also have, from the Department of Fisheries and Oceans, Gregory Lick, director general, operations. I have to acknowledge, since we're celebrating Navy Day and the Coast Guard, that Mr. Lick has received an award for his long-standing career and achievements and dedicated service to the Coast Guard. Congratulations, and thank you for your service.

We also have, from the Department of Natural Resources, Christine Siminowski, director of the Canadian oil, refining and energy security division, energy sector, and Kim Kasperski, director, environmental impacts, at CanmetENERGY.

Thank you all very much for being here today.

Ms. McCready, who would like to go first?

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Madam Chair.

Thank you to our witnesses for their testimony. It's been very interesting in the last couple of meetings to hear from aboriginal groups about their concerns and support, or non-support, for this particular legislation.

I want to clarify, Madam Chair, that I do not consider these to be consultations, in the sense of consultations and accommodation required under section 35 of the Constitution and under decisions of the Supreme Court and other courts of this land. This is a legislative committee made up of members of Parliament who are not part of the government. We are not part of the executive branch of government, and we certainly do not represent the crown here. The duty to consult and accommodate with aboriginal peoples rests with the crown, in particular the Governor in Council, the cabinet, the Prime Minister, and the Government of Canada. Since we do not represent the Government of Canada or the crown, I don't see these as consultations as required under Canadian law.

I wanted to clarify that, to make sure that the government understands that they can't hijack this process because they have avoided their responsibility to consult and accommodate with aboriginal peoples as part of Bill C-48. I make that point before I ask the witnesses further questions.

It was interesting to hear the testimony in the last two meetings. We had first nations witnesses who came before us at the last meeting indicating that they were against Bill C-48, and our witnesses today are clearly in favour of it.

I want to take a step back from your particular positions on Bill C-48, and talk instead about the process that led to Bill C-48. I think that's where I and others have concerns. That concern centres around the duty on the part of the government, the crown, the cabinet, and the Government of Canada, to consult and accommodate with first nations bands up and down the B.C. coast, as well as those first nations bands that would be affected along the interior corridors where oil pipelines might be built.

I want to know what consultations, specific meetings, the government held before it introduced Bill C-48 on May 12, with each of your groups that were specific to federal legislation introducing this tanker ban?

[Grand Chief Stewart Phillip]

I indicated in my previous remarks about the long ongoing battle to protect our communities from, as I described it, predations of the fossil fuel industry vis-à-vis pipeline ruptures and tanker spills. That's why we so readily supported Bill C-48 offering that measure of protection to the northern communities, but it's a no-brainer that there's a denser population along the south coast. The Juan de Fuca Strait, the Burrard Inlet, and the Fraser River Estuary, and certainly all of the people, deserve a similar measure of protection.

The thought of moving tankers through Burrard Inlet that is incredibly heavily congested just doesn't make any sense. We're expected to undertake all the risks for very little benefit, if any at all. The governments have to be willing to take on the responsibilities for making these hard decisions. That's why the vast majority of British Columbians are opposed to these heavy oil projects and the risks attached to them.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you, Chair.

I'll probably be splitting my time with Mr. Donnelly who has smarter and better questions than I do.

Grand Chief Stewart Phillip and Mr. Hill, it's good to see you. I hope your families are well.

Let me start with you, Mr. Hill. In Gitga'at territory there has been some conversation with some of your neighbours about the exemptions that exist within this bill and some concerns that have been raised. There has also been the suggestion that if we could implement this tanker ban in such a way that first nations would play a joint decision-making role, a joint implementation role with the federal government.... Words like reconciliation are thrown around a lot in this town. Do you think this would be a helpful aspect if the committee changed Bill C-48 to allow for that, to imagine that, to give first nations a seat at the table in implementing the tanker ban in a meaningful way?

[Sean Fraser, Liberal, Central Nova, NS]

You mentioned, I think, that 118 different groups make up the union. On an issue like Bill C-48 is there dissent amongst the groups and, if so, how do you reach a position as a union? Is it a majority vote? Is it a consensus that emerges after discussion or what's the process?

[Grand Chief Stewart Phillip]

My response to that is, as Mr. Hill has pointed out, we've been involved in the ongoing struggle to protect our territories from the industrialization, the predations, of the fossil fuel industry for a very long time. These are not new issues.

The Enbridge northern gateway battle was a decade. It attracted 19 lawsuits, similar to the Kinder Morgan Trans Mountain pipeline project, which also is facing 19 lawsuits.

These are deeply emotional, very volatile issues, and we've been very clear in our right, our fundamental right, our fundamental human right, to be able to protect the health, safety, and well-being of our indigenous peoples. That's what we've been doing for a very long time.

We were quite happy with the announcement that Bill C-48 was forthcoming, but again I point out that there are millions and millions of people along the southern coast—the Juan de Fuca Strait, Burrard Inlet, the Fraser River Estuary—who would be absolutely devastated by a catastrophic tanker spill or pipeline rupture.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair. I would like to thank all of our witnesses for joining us today. I think it's a very important conversation we're having with you folks, and, indeed, all of the witnesses we've heard from over the past number of weeks.

In testimony last week, we heard that the government did not properly consult as per section 35 of the Canadian Constitution with those first nations communities that were here last week.

I will throw this out to both of the gentlemen who have given opening remarks to find out if your communities or the communities you represent, Mr. Phillip, were properly consulted before Bill C-48 was tabled in the House.

[Grand Chief Stewart Phillip, President, Union of British Columbia Indian Chiefs]

Good afternoon to members of the committee.

On behalf of the Union of British Columbia Indian Chiefs, I'd like to read a brief statement.

Heavy crude oil pipeline and tanker projects pose an unacceptable risk to the health, safety, and livelihoods of indigenous nations throughout British Columbia and contribute to the negative environmental and health impacts experienced by indigenous peoples downstream of the tar sands, and of all people throughout the world, as a result of accelerating global climate change.

The Supreme Court of Canada has held that the crown's legislative power can and should be used to uphold the duties to indigenous peoples, and that both the federal and provincial governments have an obligation to uphold the honour of the crown.

My recommendations are as follows.

One, the UBCIC, the Union of British Columbia Indian Chiefs, has stated its strong support for the passage of Bill C-48, oil tanker moratorium act.

Two, the UBCIC supports the proposed amendments from West Coast Environmental Law concerning clause 6, ministerial exemption. It is the position of the UBCIC that the provision allowing exemption orders should be removed from Bill C-48, or at the very least circumscribed, for example, through engagement with indigenous peoples that satisfies the minimum standards laid out in the UN Declaration on the Rights of Indigenous Peoples, on time limits, public notice requirement, and opportunities for public comment.

Three, the UBCIC recommends that the committee seek further information from Transport Canada regarding the rationale for the 12,500-tonne threshold for the bill's prohibitions and consider whether the threshold ought to be lowered.

Four, the UBCIC recommends that the committee expand the moratorium area to include all sensitive marine habitats, especially where increased tanker traffic will bring increased threats to killer whales, in the form of noise pollution and declining marine environment, impacting the survival and well-being of killer whales and other vital aquatic species, including wild salmon.

As part of our package, we have a number of supportive Union of B.C. Indian Chiefs' resolutions that were passed by our chiefs and assembly: resolution 2017-15: protection of water, salmon, and health from diluted bitumen; resolution 2017-04: protection of orca whales and habitat; resolution 2011-54: support for the save the Fraser declaration, the coastal first nations tanker ban, and the indigenous laws banning crude oil pipeline and tanker shipments through B.C.; resolution 2010-11: opposition to the Enbridge pipeline project.

In conclusion, as an editorial comment, again we strongly support Bill C-48, but would suggest that the same level of protection be afforded to the more densely populated southern coast of British Columbia with respect to the same threats, for example, the Kinder Morgan Trans Mountain pipeline project and the Burrard Inlet and Fraser River Estuary.

Thank you.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Fair enough. You can be for or against Bill C-48 and still have some legitimate comments about the consultation regarding when it should take place.

It seems to me that further consultation might have taken place on the schedule itself. You mentioned in your comments that diesel fuel, gasoline, jet fuel, and so on will be allowed. If I know industry, the tankers that will carry diesel fuel, for example, are going to start to get a whole lot bigger.

I understand that you want to have comments and consultation on the regulation of it all, but shouldn't that all be put in the bill itself? When it's presented in an upfront way, a transparent way, you can have your comments beforehand on diesel and the fact that it's going to be unlimited. What are your thoughts on that?

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thank you very much.

For a bill such as C-48 to even reach the floor of the House of Commons, does consultation need to take place with affected communities such as yours, or can the government of the day bypass true consultation on a bill like this? What are your beliefs?

Either one of you can go ahead.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair. I have to say that from the past few sessions we've held on Bill C-48, one of the biggest concerns that has been brought to my attention is the impact on economic development for individual areas. I'm going to try to concentrate on those areas.

As evidence was presented to the committee, witnesses from Aboriginal Equity Partners and the Eagle Spirit Energy Chiefs Council expressed great concern about the high rates of poverty in many first nations communities. In their view, the proposed moratorium would deprive their communities of the economic benefit offered by the oil transportation projects, and undermine their efforts to become more prosperous and less dependent on federal government, or any level of government support for that matter.

My question to the folks here today presenting is, one, what are the main barriers to economic development in your community? What are you facing presently? Two, what role, if any, do you consider economic diversification to play in securing the future economic well-being of British Columbia's first nations communities?

[Sean Fraser, Liberal, Central Nova, NS]

One of the other issues that you mentioned was that you think Bill C-48 should extend to a transport ban and not just the loading and unloading at ports. One of the issues that was raised by a witness we heard previously was that there's a certain legal difficulty because there are disputed waters between Canada and the United States. Certainly, the U.S. would take the view that we wouldn't have jurisdiction to regulate in this area where there is currently the voluntary ban. Is there a workaround that you see around this potential difficulty of legislating in disputed waters that another nation lays claim to?