Transport Committee on Feb. 27th, 2014

[The Chair, Conservative, Larry Miller]

I will call this meeting to order.

We have Mr. Sumaila with us in person. Thanks for being here.

Joining us by video conference are Mr. Wright, Mr. O'Connor, and Ms. Forté.

Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

Mr. Chair, I would like to interject for a second.

The main estimates were tabled in the House yesterday, I believe. From some discussion last night, I understand that Minister Raitt is able to appear—

[A voice]

They are being tabled today.

[Jeff Watson, Conservative, Essex, ON]

Okay, they're being tabled today.

I do know that Minister Raitt is able to appear for an hour on March 6 in relation to the main estimates.

[The Chair, Conservative, Larry Miller]

That's next Thursday.

[Jeff Watson, Conservative, Essex, ON]

That is.

We would still have an extra hour for clause-by-clause study, should we still need it, in relation to this bill. Rather than serve a notice of motion, I wonder if the committee is okay, by consensus, with her appearing that day for the second hour.

[The Chair, Conservative, Larry Miller]

Would members like her to appear that day?

[Some hon. members]

Agreed.

[The Chair, Conservative, Larry Miller]

Very good. The first hour will be the minister—

[Jeff Watson, Conservative, Essex, ON]

That's correct.

[The Chair, Conservative, Larry Miller]

—and if we haven't finish up clause-by-clause study on the bill, we'll go right to that immediately afterwards.

[Jeff Watson, Conservative, Essex, ON]

Mr. Chair, I thank the committee.

Also, I thank our witnesses for their patience as I interjected that business detail at the front end.

[The Chair, Conservative, Larry Miller]

Very good.

Go ahead, Mr. Mai.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

If we were to finish clause-by-clause study before that, would it be possible to have Minister Raitt for longer than one hour?

[Jeff Watson, Conservative, Essex, ON]

She's able to appear for an hour.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Well, it's good to have her here.

[The Chair, Conservative, Larry Miller]

I believe there's a cabinet meeting afterwards. That's why she prefers the first hour.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

[The Chair, Conservative, Larry Miller]

You're very welcome.

With that, we'll go to Ms. Forté or Mr. O'Connor, one or both of you, for 10 minutes, please.

[John O'Connor, President, Canadian Maritime Law Association]

Mr. Chairman, thank you for the invitation.

My name is John O'Connor and I'm the president of the Canadian Maritime Law Association, and I'm here to speak on behalf of the association. I'm accompanied by Dr. Sarah Forté, who is an environmental specialist, and who from time to time advises the association on the technical aspects of some of these issues that we don't necessarily understand as clearly as we should.

The Canadian Maritime Law Association, by the way, is part of a much wider network of maritime associations. The head outfit is called the CMI, or the Comité Maritime International, which was founded in the 1800s. Each country that is a participant has a national maritime law association. In Canada we have the Canadian Maritime Law Association, of which I'm the president this year. We have a committee that looks at environmental issues. The environmental issues include oil and HNS, hazardous and noxious substances.

Our committee has looked at Bill C-3, and we don't have a lot of comments. We would first like to say that we are only speaking to the marine aspects of the bill. There is an aviation aspect which the Canadian Maritime Law Association does not deal with, so we have no comments on that part.

We would also like to say that the convention that we call the 2010 HNS convention, the hazardous and noxious substances convention, is something our association has worked hard to promote. We were involved in different stages of the convention first adopted in 1996, and then amended by a protocol in 2010 to become the convention which is in the bill. Our association strongly supports the adoption of this convention by Canada. We hope the convention will be in force in the near future, and we hope Canada will be a party thereto.

We support the convention. We're certainly available to answer any questions anyone may have about any aspect of the HNS convention, but we basically recommend it be adopted, so we're happy to see it in the bill.

The bill, on the marine side other than the convention, amends the Marine Liability Act and the Canada Shipping Act for certain adjustments in both of these pieces of legislation. We have looked through the bill, and although we're willing to answer questions, we have no comments on the Canada Shipping Act portion of it. But we do have our main comment on the Marine Liability Act side.

That comment concerns liability, of course. As you will have appreciated, this bill is a bill about liability for mishaps with hazardous and noxious substances. It is not a bill about preparedness. In other words, it's not a bill that addresses how we are going to get ready to respond to a spill of some of these products. It's really a bill about liability; who is liable to pay for the cleanup or the removal, or any damages caused by a spill of these products.

We believe the sections of the Marine Liability Act this committee should look at very carefully are those sections of which there are six concerning the ship-source oil pollution fund, SOPF.

In Canada, unlike every other country in the world almost, we have a fund called the ship-source oil pollution fund which is an additional layer of protection for Canadians if ever there is a spill by oil. What the bill does is it expands the SOPF's role into the HNS convention, but only as it concerns oil. It does not expand the SOPF into the HNS world beyond oil. We certainly support the fact the SOPF would be available for oil spills under the HNS convention as it is right now, under the CLC, civil liability convention, but we have a suggestion to make.

The suggestion is we believe the ship-source oil pollution fund should be involved in HNS at large and not be limited just to oil. Why do we believe that? The SOPF is an additional layer of protection. It's not unlimited liability, but it's an additional amount of funding that is available should there be a mishap. It's already available for oil, and it will be available for the oil portion of the HNS convention, but in the act they have used terminology such as “as regards oil” or “concerning oil”.

In other words, they're limiting the SOPF's role to just oil under the HNS convention. We believe that those words should be removed. We believe that the SOPF should become Canada's additional protection, not only when oil is involved, but when any HNS cargo is involved. We believe that six sections of the act should be tweaked to that effect.

In case anyone is taking notes, those sections are 102(1), 103(1), 109(1), 117(1.1), 117(2.1), 117(2.2). These are actual section numbers, not clauses. I'm not going to read these sections to you, but I will say that in each of these sections there is wording such as “in relation to oil”, or “in respect of oil”. We would be willing to submit in writing a list of the exact wording, if you so desire.

All of those statements are made to allow the SOPF to get into HNS, but only with relation to oil. Our recommended change would be to remove that wording and to make the SOPF available for any HNS event, just as it's available for oil events already.

I had the pleasure last week of appearing before the expert panel on tanker safety. It's the second time I've appeared before them. They're doing a study with regard to oil, first, and now they're doing HNS. After the oil presentation, we had a good discussion with the committee. They brought out their first report. They recommend unlimited liability for oil on the SOPF, instead of limited, as it is now.

Frankly, in our association we're not big believers in unlimited liability. Although it looks attractive, it's virtually impossible to guarantee unlimited liability, for reasons which I can explain if anyone has questions. We feel that unlimited liability for the SOPF is probably not workable. To increase the limit of the SOPF, if that's the desire of Parliament, would be fine, but not unlimited.

At the second phase of the tanker safety expert panel, we made the same presentation as we're making now, that is, that we believe the SOPF should move into HNS at large. We had a debate about it. Mostly the debate was on how that will fit in with the preparedness that we're going to set up for HNS cargoes.

I believe we have a representative today from Western Canada Marine Response Corporation who may be able to give us some advice on this. Our view is simply that the SOPF should not be limited to oil. It should go across the board on all HNS cargoes.

With regard to preparedness, we believe that Canada has already adopted the oil preparedness and response convention. It will probably adopt the 2000 HNS protocol thereto and eventually come back to Parliament with another bill, this time about preparedness, about response organizations, such as that of the Western Canada Marine Response Corporation and what they can do to prepare for an HNS spill.

Our final point is that we believe a list of products that are shipped in or out of Canada in bulk should be made, and that list should be looked at with the response organizations. We're not talking about hundreds of products here; we're talking about a relatively short list of common products shipped in or out of Canada in bulk. We believe that the response organizations should tell us which ones they would be able to respond to.

Those are our comments, and thank you for the opportunity to present them.

[The Acting Chair, Conservative, Ed Komarnicki]

Thank you very much, Mr. O'Connor.

We'll now move to Mr. Wright.

[Scott Wright, Operations Manager, Operational Response Readiness, Western Canada Marine Response Corporation]

Good morning. I am Scott Wright, the response readiness manager with the Western Canada Marine Response Corporation. We're the certified response organization on the west coast. Thank you for the opportunity to talk to you about responder immunity.

By way of background, we'll talk a little bit about two significant incidents that happened both in Canada and in the U.S. in the late 1980s. Certainly the Exxon Valdez in Valdez, Alaska was a significant event that involved cross-border resources, people and equipment responding to that spill. As well, there was the Nestucca, which happened on the west coast of British Columbia. That also involved cross-border resources, people and equipment working on that spill.

In 1993, there were amendments to the Canada Shipping Act that gave us limited responder immunity, so it gave the response organizations that immunity.

In early 2000, there was a rewrite of the Canada Shipping Act. In error, there were some words left out that sort of took us back in time and the responder immunity was not available to our potential U.S. mutual aiders and responders.

Part of our annual preparedness activities involve exercising with our U.S. counterparts, both in Alaska and in Washington state.

During those exercises, a significant amount of time is used up looking at how to resolve the responder immunity issue, rather than working on the incident itself and moving on and working on what we would do during those incidents together.

So it certainly does detract from the purpose of the exercise to work together on what the response would look like.

The fix, as has been discussed, is the amendments to Bill C-3. It's currently before the commons committee and this should correct the issues. However, Bill C-3 also needs to be taken a bit further. We believe it should also take into account umbrella legislation where we have responder immunity when there's a ship not present.

We have the resources to respond to marine incidents, whether it comes from a pipeline, rail, or a truck, and we believe we should be granted responder immunity if those events occur. We also support recommendation 22 of the tanker safety expert panel. We also support the recommendation from the Standing Senate Committee on Energy, the Environment and Natural Resources, which calls for the umbrella legislation for responder immunity.

That's my opening statement. I can take questions at your convenience.

[The Acting Chair, Conservative, Ed Komarnicki]

Thank you for that presentation. We have one more presentation, from Mr. Sumaila.

[Dr. Rashid Sumaila, Professor, University of British Columbia, Fisheries Economics Research Unit, As an Individual]

Thank you very much for inviting me to come here. It's always a pleasure for us in the universities to come and share some of the ideas and the research outcomes with high-level leaders like you. Thank you for that.

I am a professor of ocean and fisheries economics at the University of British Columbia, so a lot of what I will say will be to give you some information about this area of research, not only from me and my group, but from colleagues around the world.

What I thought I should start with is why it is important that we keep Canada's seas safe. I don't think I have to belabour this. You guys know this, and that's why this whole effort is put in place. I thought I would talk about the Salish Sea on our west coast just to emphasize how important the seas are to Canadians in terms of economics, ecology, culture, and even spiritual values. These are really central to Canadians, so protecting the seas is crucial, both for us and for future generations.

The Salish Sea is a valuable body of water made up of the Strait of Georgia in B.C., Puget Sound in Washington state, and even some cross-border waters straddling the U.S. and Canada. Hundreds of rivers flow into this sea creating biologically and ecologically rich areas. It includes several estuaries, islands, inlets, and several kilometres of valuable shoreline. This sea is home to many marine mammals, including the southern resident killer whales, at least 200 species of fish, including our famous sockeye salmon, 1,500 species of invertebrates, 100 species of marine birds, and hundreds of species of marine plants. This is just one sea. You can expand this all over the country. It's very valuable stuff.

Importantly, the region is home to about seven million people whose livelihoods are supported in various ways by this sea through fishing, recreation, tourism, and all sorts of things. In fact, it's estimated that in 2011, $7 billion was contributed to the GDP just from tourism alone connected to this sea, supporting 130,000 jobs. These are very important parts of Canadian property, if you like.

Now on the risk of an oil spill, this is always a question: how risky is it? Generally, a formal definition of risk is the chances of something happening and the consequences of that happening. Those two are the elements of risk. If you look at the data, surprisingly the chances are quite high. Between 1996 and 2006, there were 205 tanker-related oil spills of over 51 barrels in size totalling 2.7 million barrels of oil spilled into the world’s oceans in that decade alone. These are considered large spills.

Closer to home, we already heard about the Exxon Valdez, where 275,000 barrels were pumped out of there. There are reports that some of the consequences are still being faced there, even though a lot of effort has been done to clean it up. This is huge when it happens.

According to the research we have, the coast of southern British Columbia and the Gulf of St. Lawrence are the most vulnerable in Canada in terms of large oil spills. These two parts of the country need to be watched very closely.

The cost of response can be very high. ExxonMobil paid about $3.8 billion, in 1990 U.S. dollars. Today, that’s about $6.5 billion just to try to clean things up and make things like they were before. The cost can be very high.

The question of who pays for this was touched on by previous speakers. There are a number of layers. There are four tiers of ways to have coverage in case of an oil spill. When I look at the numbers, roughly the total amount available from all these four tiers is about $1.35 billion Canadian. There’s a conversion to be made because usually quite a number of them are through special drawing rights. You have to do the conversion, but roughly about $1.35 billion to $1.5 billion is the total available after we have problems.

Who pays for this? We have mechanisms to cover up to $1.35 billion, but as I gave you in the example from the ExxonMobil incident, about $6.5 billion was needed to do the cleanup. We're not even talking about what happened in the Gulf of Mexico. In fact, I and my colleagues estimated that if there were to be a large spill in B.C. from the northern gateway pipeline, the cost of the cleanup and the losses could be up to $9.6 billion. We're talking about large numbers. If you look at what we have available, it's quite low compared to the potential costs that will come. If these coverages are not able to cover it, who will bear the cost? It's usually the taxpayers and also citizens who are directly impacted. We need to check that in terms of the new bill.

To conclude, after all the reading I have done, it seems to me that currently our response capacity is limited and insufficient, and most of the time they are not tested. We don't even know what'll happen, really, if something happens, so some simulations need to be done to try to understand. I know that in B.C. the City of Vancouver is trying to do this, to simulate this kind of thing to see what is likely to happen.

There is the big example from the Kalamazoo River tar sands spill of 2010. They thought they could clean it up in two months, but it took them two years to actually do something significant. Their cost estimates were overrun, straight through. We need to watch that. In high-risk, high-value areas, I don't think it is acceptable to simply meet the minimum levels of compliance with the international agreements, and I think that's why we have this effort here, because Canada needs to look at this from the Canadian perspective and try to protect our oceans.

Finally, the U.S. and other countries are actually watching us to see what we are doing. Recently, President Obama ordered the U.S. Coast Guard to conduct a study to look at the potential risk to the U.S. from oil spills in southern B.C. We do this for ourselves, but also because others are watching us, and we need to put in measures that really will put us on top, so nobody can go after us for whatever reason.

Essentially, these are my comments to give you information, hopefully. You see that I avoided all the loyalist stuff because I'm an economist and I stick with the research.

Thank you very much for giving me this opportunity.

[The Chair, Conservative, Larry Miller]

Thanks, Mr. Sumaila.

We'll now move to questions.

Mr. Mai, you have seven minutes.