Canadian Heritage Committee on Feb. 6th, 2007

[The Chair, Conservative, Gary Schellenberger]

We'll move on to the next order of business, pursuant to Standing Order 108(2), a statutory review for the purposes of section 5.1 of the Canada Travelling Exhibitions Indemnification Act.

I think everyone received three recommendations in a package. On the first report—the list of exclusions, annual liability limit, coverage for transportation of insurable objects and accessories, and minimum threshold—I think that is the status quo. That is what we have right now.

I'm open for comment.

Mr. Abbott.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

I would recommend that the committee consider report number one. The reason is that if we take the most significant difference between these reports--between report number one and report number three—particularly on the minimum threshold—

As I recall the discussion, I may even have been a proponent in the discussion of taking a look at the fact that if you had the $50,000 to $500,000, it would give an opportunity for smaller exhibits possibly to be able to travel. But having made that suggestion, I'm now eating my words.

It strikes me that at $50,000 to $500,000, we would effectively be putting the Government of Canada in the general insurance business. We would have to work out premiums, actuarial rates--heaven only knows what.

Option one is not dissimilar to the provincial emergency preparedness arrangement, where at a particular point in a natural disaster or something the province has to come to the federal government. At a particular point it becomes very onerous on the provincial government. So as a standard, once it reaches whatever the number is—$1 million, $10 million, $100 million, I don't know what the number is—then the federal treasury simply steps up to the issue, because the federal treasury has far deeper pockets than do the provincial jurisdictions. You can't do an actuarial scale on whether there's going to be a hurricane or a cyclone or Hurricane Hazel is going to hit Toronto or whatever the case may be. It just becomes a fact that because the federal treasury has deep pockets, it will help.

Following that parallel--and I realize it's imperfect—then the purpose, as I understand it now, having had an opportunity to think about this a little bit more, of that $500,000 is that if you had an absolutely irreplaceable artifact, and it borders on a natural disaster kind of occurrence, the federal government will step up.

So that's the purpose of the indemnification. The purpose of the indemnification, if I may repeat myself, is not for the federal government to run actuarial scales and become a general insurer, which is option three and which is where I was going originally. Option three, as I say, brings in a totally different element to what the indemnification act is all about.

[The Chair, Conservative, Gary Schellenberger]

Mr. Angus.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Well, twice today I'll concur with my colleague Mr. Abbott. Until we move to public auto, I don't feel that we're in the position of becoming general insurers.

My concern over the dropping of the threshold—and that was something we were all very interested in—is that it was very unclear whether by dropping that threshold, the travelling exhibits that would have then been able to come in would actually be able to meet the criteria anyway because you have to have such a strict set of criteria. This is a very special fund that is used in a very specific set of circumstances. It's not a general fund for just moving art or historical exhibits back and forth. We have a very specific fund here.

I think that dropping the threshold to $50,000 would make it very difficult, first of all, for a small museum to be able to meet the criteria we have to maintain to be able to maintain insurance at $1.5 billion. So I think the program works. There are problems with it, but I don't know if dropping the threshold would work at this point.

[The Chair, Conservative, Gary Schellenberger]

Mr. Warkentin.

[Chris Warkentin, Conservative, Peace River, AB]

If we recall, I think the reason we were looking at this originally was to allow smaller museums to access some of these artifacts. What we heard from one of the witnesses—and I don't recall the individual's name, but maybe I would just refresh the committee's memory that we did hear from a couple of witnesses who basically said that, really, because of the criteria of the fund or the indemnification program, those smaller museums wouldn't be able to host these types of events anyway. They don't have the necessary environment within a lot of those museums and those art galleries.

So just to reinforce your point, it really isn't going to expand it for smaller facilities.

[The Chair, Conservative, Gary Schellenberger]

Mr. Kotto.

[Maka Kotto, Bloc, Saint-Lambert, QC]

I concur with Mr. Warkentin. I simply want to point out that the witness in question was the Société des musées québécois, which has been raising this problem for years. I really like report number 3, but regarding the list of exclusions, the all risk insurance, I would really like to know what that means. I presume that means that everything is covered. The list of exclusions in report number 1 is more appropriate because it is not always possible to ensure or ship works of art, under dangerous conditions, or to cover the transport in extreme weather and other conditions; it would be too expensive. That is the argument I want to make. I like report number 3 very much, except that I would use the list of exclusions from report number 1 rather than the one from report number 3.

[Marion Ménard, Committee Researcher]

Mr. Kotto, for your information, I will remind you of the presentation that the program managers made last June. I’m going to list the cases they mentioned, which are generally not covered. In the list of exclusions, we find normal wear, gradual deterioration, vermin, inherent vice, pre-existing flaws or conditions, radioactive contamination, wars, strikes, riots and civil commotion, and repair, restoration or retouching processes that have not been undertaken at the minister's request. Opting for all risk insurance would mean that all those elements I have just mentioned would be covered.

[Maka Kotto, Bloc, Saint-Lambert, QC]

That would entail what, potentially? Can we extrapolate, for example, a war’s impact on a travelling exhibition?

[Marion Ménard]

We can assume that the risk increases as soon as—

[Maka Kotto, Bloc, Saint-Lambert, QC]

That was my reservation. Thank you.

[The Chair, Conservative, Gary Schellenberger]

Okay.

We've all had an opportunity to voice our opinions on what we have before us. We have three reports.

No one has spoken on report number two, so would we just at least get rid of report number two—

So we put that aside and we're back to report number one and report number three. I would suggest that because report number one is number one, maybe we could go to a vote.

And if we vote on report number one first—

Yes, Mr. Scott.

[Andy Scott, Liberal, Fredericton, NB]

I have a question. There seems to be a little inconsistency in terms of the interpretation of the witness who was referred to. In one instance, I think it was argued that we couldn't access it anyway. The other witness gave the same testimony. He said this was something for which the gentleman had been fighting for a long time, and he was happy with number three.

I'm only trying to square this; I wasn't here.

[Chris Warkentin, Conservative, Peace River, AB]

Sure. I don't recall anyone saying it had been fought for or requested for some time. I recall hearing from a couple of people, including the folks from the indemnification program, that it was really an expansion. They basically said there hadn't been any major appeals for it to be changed.

At one point, I think this committee thought it would maybe make it more accessible, but then we heard that the criteria for the program wouldn't change the accessibility to the program just because of the facilities these smaller groups are housed in.

[The Chair, Conservative, Gary Schellenberger]

I think Mr. Kotto has one more comment.

[Maka Kotto, Bloc, Saint-Lambert, QC]

I just want to point out that it was not an individual who was fighting for this, but the Société des musées du Québec. The reason these people were doing this was to further democratize applications, because the initial threshold we had enormously limited the options for biology museums or for small museums whose potential would have allowed them to go show what they had elsewhere. The doors were closed to them. The issue was important to them. That is why I made this clarification. It was not one individual who intervened, but the Société des musées québécois.

[The Chair, Conservative, Gary Schellenberger]

Mr. Angus.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

The issue that had been raised, and I think we were all very partial towards moving in that direction when we were hearing the testimony, was that the high cost of insurance is now really affecting many museums, and small museums are finding it very difficult to get insurance now. So they were looking at this program as a possible means of alleviating that.

The problem when the testimony came through was that in order to be able to have a special indemnification fund for travelling exhibits worth up to $1.5 billion, you would have to have a very special set of criteria in order to meet that. Either we become, as Mr. Abbott said, general insurance brokers offering various sliding scales of indemnification for a very small museum wanting to move something down the road to another exhibit at $50,000, or we're moving a Picasso from New York City to an exhibit in Montreal. The program isn't set up to do both.

So $500,000 as the low end of the scale still allows the certain category of art and historical artifacts to move, but it becomes very difficult to expect any small museum to meet—because they have to have extremely stringent requirements. So far, if I recall correctly, there hasn't been a single payout. You have to really meet the criteria before you can even be eligible.

Whether or not a small museum, even if we offered it to them, would ever access it is very unlikely. So the status quo at this point seems to be the realistic option.

[The Chair, Conservative, Gary Schellenberger]

That being said, I would take the vote.

Those in favour of report number one?

Those against?

(Motion agreed to [See Minutes of Proceedings])

[Maka Kotto, Bloc, Saint-Lambert, QC]

Excuse me. I would have moved—but the vote has been held—that we have a point-by-point debate on the two reports we set aside, 1 and 3.

[The Chair, Conservative, Gary Schellenberger]

I think we've debated. We didn't go item by item, but I think we have a good consensus around the table. I called the vote.

[Maka Kotto, Bloc, Saint-Lambert, QC]

If you request the vote on report number 1 and it is adopted, there is not, in report number 1, the issue of the minimum threshold that is found in report number 3, which is an essential aspect for us.

[The Chair, Conservative, Gary Schellenberger]

I would like to clarify here that I called the vote and now we're in debate again.

[Maka Kotto, Bloc, Saint-Lambert, QC]

It’s because this report, it’s the status quo.