Transport Committee on Feb. 11th, 2014

[Dave Dawson]

There's a program in place right now, for instance, and if this bill passes and we go live January 1, 2015 or 2016, let's say we pick some numbers, and we say industry must pay for the first $100 million and then everything after that.... That's given today's conditions.

If the conditions, for example, got worse and the insurance became more expensive for them, the government might say, “We should kick in some more money to help it be more feasible to them”. Opposite to that, the insurance rates in the market could go down, in which case the government could say, “Why should we pay money towards this problem? You guys are on your own. We amend the program.”

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

What's been the reaction of stakeholders with respect to these proposed changes?

[Dave Dawson]

They think it's the right idea going forward.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Who are those stakeholders?

[Dave Dawson]

They are airlines, airports, Nav Canada, and all of the service providers to those.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Great. Thank you.

Ms. Nakatsu, I have a quick question for you. I want you to feel included as well today. Thank you for being here.

I suspect that this very simple change ensuring the effective date for the GIC appointment for those appointed to port authorities is very standard. Is that the case with many other GIC appointments?

[April Nakatsu]

Yes.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

The effective date is included?

[April Nakatsu]

All the other GIC appointments in the Transport portfolio are effective when the GIC makes them effective. The port authorities are currently the only exception to that rule.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

This is a cleanup, if you will.

[April Nakatsu]

That's right.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Very good.

Mr. Meisner, regarding amendments to the Marine Liability Act, I also wanted to ask you about stakeholders.

You specifically mentioned in your opening remarks that stakeholders are very supportive of these proposed amendments. Again, could you outline who those stakeholders are, and also explain why the stakeholders are supportive of these proposed amendments?

[Tim Meisner]

The stakeholders, I think, can be put into two categories. The first is the shipowners. We consulted quite extensively with the marine sector and shipowners through their various associations, such as the Canadian Shipowners Association and the Shipping Federation, and I think they were very positive. The second category would be the importers and exporters of chemical products or HNS that are covered, and again they are very supportive.

I think basically, to cut to the chase, they would be supportive because it gives them access to an international fund that is shared among other countries and contributed to so that any particular country's shipowner would not have to foot the full bill. It would be spread out among many parties. It's looked at as a positive sharing of the potential pollution among the international shipping companies and the regime.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Is the international fund a brand new mechanism, or how recent is it?

[Tim Meisner]

There's an existing mechanism called the international oil pollution compensation funds, the IOPC, which is run out of London. It handles the oil spill regime. In all likelihood the secretariat that handles those types of administrative matters would also handle the HNS funds as well.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

You mentioned that Canada has been showing some leadership in terms of driving this fund forward. Could you elaborate on that?

[Tim Meisner]

I would say it would be leadership in driving the convention forward. The convention was first tabled and agreed to in around, I think, the mid-1990s. Certain countries presented some challenging issues with regard to enabling it to come into law, so Canada took the lead in bringing these countries together to try to resolve the issues that were outstanding and came up with an agreement that actually turned into the existing convention. It has had a pretty good reception from other countries across the world.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

As I understand it, with these amendments, the principle of polluter pays is fundamental. There will be increased insurance coverage. You mentioned an existing domestic fund, and now there will be access to an international fund. Is that correct?

[Tim Meisner]

That's correct. Just to be clear, the domestic fund would not be accessible for all products, but just for the persistent oil products.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

How would we know which mechanism or which fund to use, and in what cases might they all potentially apply or interact?

[Tim Meisner]

This is what the administration of the IOPC in London, the organization that I mentioned, would be setting up: who would be paying; who would be levied. It would be their responsibility. The 6,500 substances that are covered are under IMO provisions, and the IOPC is linked with the IMO. They, along with the insurance companies, have the administration to figure out who pays, when, and into what fund.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

How much time do I have left, Mr. Chair?

[The Chair, Conservative, Larry Miller]

You are over time.

We'll now move to Mr. Sullivan for five minutes.

[Mike Sullivan, NDP, York South—Weston, ON]

Thank you, witnesses.

The overview you've provided us, attached to the clause-by-clause analysis, states very clearly that the intent of the act is to set limits of liability. I guess that's what we're hearing, that there's an upper limit of $400 million essentially. It may be a little bit more than that in terms of the hazardous and noxious substances. We'll get to ship-source liabilities at some point in the future when that bill comes forward.

The expert panel on the ship-source liability regime has suggested as their recommendation 23 that the current limit of liability per incident—they're talking about the ship-source oil pollution fund—should be abolished. The fund should process and pay for all admissible claims subject to the consolidated revenue fund's consent to loans in favour of the ship-source oil pollution fund for amounts sufficient to allow all admissible claims to be paid to claimants.

The loans would then be reimbursed with interest to the consolidated revenue fund from future revenues of levies on oil transported by ship to, from, and within Canada. Would that be an appropriate way, if we can amend this bill, to put in a more effective limit on unlimited hazardous and noxious substance liability?

[Tim Meisner]

I have to clarify one point. You mentioned the limit of liability being $400 million. The limit of liability would be the $185 million, which would be the insurance that the shippers are prepared to carry.

Also, you mentioned the tanker safety expert panel's report, which, I believe, focused basically on preparedness and prevention recommendations. It also made a couple of recommendations pertaining to liability and compensation. We also had a separate study done on specific liability and compensation that made similar recommendations on removing the limit of liability. Those recommendations are still under review, and no decision has been made yet as to whether we're going to move forward with those recommendations or not. I think it would be premature to say whether that recommendation could even be applied to the HNS as well.