Transport Committee on Feb. 11th, 2014

[Tim Meisner]

Yes.

If there's an amount of $500 million in claims coming in, and they're all valid claims, the first step, as Mr. Marier said, is that all claimants are treated equally. They would probably get 80¢ on the dollar as a first step.

If the government decides that it wants to step in and make up the difference, it can choose to do so, but there's no requirement for that to happen.

[Jeff Watson, Conservative, Essex, ON]

If it doesn't step in, who pays the rest?

[Tim Meisner]

The ones that experienced the damage would pay the difference, yes.

[Jeff Watson, Conservative, Essex, ON]

Thank you. Okay.

I have some questions on the Aeronautics Act amendments related to civilian and military crashes.

Was that covered at all today? Nobody made an opening comment on that.

Is anybody prepared to answer questions on that?

[Dave Dawson]

They're not here today.

[Jeff Watson, Conservative, Essex, ON]

Fair enough.

Moving along, I have a question on the administrative monetary penalties. Currently, as you stated, the only two options for dealing with non-compliance are to either prosecute a regulatory infraction through the court, or suspend the certification of non-compliant response organizations.

While that may be a costly route, it is a very serious route, if you will, in terms of expressing enforcement. Are you concerned at all that the inclusion of administrative monetary penalties could be perceived as either weakening the approach to enforcement or simply allowing administrative monetary penalties to be the cost of doing business, if you will, for those who may violate, or polluters? Is there any concern there in that regard?

[Sylvain Lachance]

No, sir. Those options are still open to us, either decertification of the response organization or prosecution in court. Those are still open, but there's nothing in between right now, between doing nothing and decertification or prosecution in court. We are adding new tools to our tool kit to enforce things that need enforcement but may not require going to court or decertifying a response organization. It allows us to be a lot more effective in an enforcement.

[Jeff Watson, Conservative, Essex, ON]

What kind of violation would a $250 fine be for, and what kind of violation for a $25,000 fine? I mean, $250 on its surface doesn't sound like much. What would that be for?

[Sylvain Lachance]

Of course the nature of those infractions will be set out in regulations. We'll consult our stakeholders and everybody when we need to set those classes of infractions.

However, just off the top of my head, for an outboard motor that's not working or that should be working, $250 sounds like something that could be accurate.

For $25,000, it could be, let's say, a major piece of equipment that's not working; an accumulation of infractions or violations that need redress and are more serious; equipment that is in bad shape and so on; not having proper equipment; not having the quantity of equipment they say they should have; and so on.

As I said, though, all those infractions will have to be determined through regulations.

[The Chair, Conservative, Larry Miller]

Thank you, Mr. Watson. Your time has expired.

Mr. Braid, you have seven minutes.

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

Thank you to our officials for being here this morning.

Mr. Dawson, I will start with you and the aviation industry indemnity act.

Could you outline what and who would trigger the process for the minister to issue an indemnity? How would that process work?

[Dave Dawson]

The key word here is that it's a contingent liability, so it's in place. Assuming there is an event, the person who is harmed brings forward a claim, and that claim is assessed as to whether or not it's valid. Then the process would be, as for any other insurance claim, to look at the actual detailed claim and evaluate it and process it. The money would come out of the central revenue fund.

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

Is this always done after the fact?

[Dave Dawson]

It's done after the fact.

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

Is there any sort of proactive mechanism if we know that an aircraft is going into a high risk situation, or is it all after the fact?

[Dave Dawson]

That was what I was trying to outline in the case where the government wants to send a jet into a place to bring out some Canadian citizens or something. It's a contingency. It's there if something happens. It's there if needed. Then if something did happen, all of the money would be straightened out after the fact.

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

Very good. What was the impetus for these particular changes?

[Dave Dawson]

In 2001, as I described in my paper, the industry withdrew. It slowly came back, but the costs are still quite high and it's difficult for the air industry participants to obtain this insurance at a reasonable rate.

The other factor is that this has been going along with the royal prerogative—I think it's been renewed about 10 times—and there's pressure to stabilize it and come up with a longer term solution that allows the minister, if needed, to act on fairly short notice.

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

Have there been more recent geopolitical situations—

[Dave Dawson]

—that would drive this?

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

—that have inspired this?

[Dave Dawson]

No.

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

Okay.

[Dave Dawson]

It's just been dragging on.

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

You mentioned an amended indemnity. In what cases would an indemnity be amended?