Transport Committee on May 13th, 2014

[David McGuinty, Liberal, Ottawa South, ON]

Ms. Pham, I asked the minister that question. He refused to give me an analysis. Thank you very much for that.

[The Chair, Conservative, Larry Miller]

Mr. McGuinty, your time has expired.

[David McGuinty, Liberal, Ottawa South, ON]

We'll come back to that, Mr. Chair, I hope.

[The Chair, Conservative, Larry Miller]

Mr. Watson, you have seven minutes.

[Jeff Watson, Conservative, Essex, ON]

Thank you to our officials for appearing today as we look into clauses in the budget implementation act, Bill C-31, that apply to matters of substance to this committee, the Standing Committee on Transport, Infrastructure and Communities.

The Canada-U.S. Regulatory Cooperation Council is an initiative created out of the beyond the border agreement between our Prime Minister and President Obama back in 2011. The goal, obviously, of the RCC, which has, I believe, 29 different regulatory cooperation initiatives under the council, has been to engage not only government but also business and other stakeholders in ways to improve harmonization on matters that would be largely administrative in nature, some regulatory in nature, to achieve enhanced economic cooperation and competitiveness and to do so in a way that doesn't sacrifice safety. I think the public has to understand that this is also the important goal here.

I understand, from the industry's perspective—I come out of the auto industry; I worked on the assembly line at Chrysler prior to being elected to Parliament—Canada represents about 9% of the North American vehicle market. Regulatory differences or unique standards, be they in fuel economy or other areas, require corporate decisions about whether products can be offered in a particular market, whether or not they're likely to abate the cost of these changes in different segments of the North American market, or whether or not they have an entire North American market to abate the cost of regulatory forced improvements in their production.

First, from the government's perspective, why should we be concerned with harmonization of safety standards? Second, is it only to align with U.S. standards, or are there cases where the U.S. should be aligning with our standards? Third, is the U.S. considering any type of similar regulatory change to allow their system to be nimbler, for the same purpose that we're seeking?

[Donald Roussel]

Mr. Chairman, I will talk generally about rule harmonization and the challenges we have overall.

In all domains—it's not just transportation of dangerous goods by rail; it's also in the marine world and in the aviation world—we try to have the highest possible level of standards. In both the marine and aviation domains, we're dealing with international organizations, the International Maritime Organization and the ICAO, the latter located in Montreal. With these organizations, we have the chance to develop international standards that are adopted across numerous nations. The IMO has 169 members.

When it comes to TDG, transportation of dangerous goods, and rail, we are in the context of North American standards, and it requires a significant amount of dialogue with the U.S., in particular. On a continuous basis, we try to influence the U.S. regulators, but bear in mind that we're dealing with quite a giant and we need significant support at the highest level. The RCC does that particular work for us.

Working with our counterparts on both sides of the border on specific items of harmonization helps us level the types of requirements that we get and also looks at best practices on both sides of the border. They have been fairly beneficial so far, and we'd like to continue with these aspects.

[Jeff Watson, Conservative, Essex, ON]

On the question of the problematic DOT-111 cars, the minister has issued direction under her authorities under the act—or there has been, I should say, direction issued under the authorities currently in the act. But this is not a matter that would bypass the Canada Gazette, part I, would it?The phase-out of DOT-111s or their use, particularly of the 5,000 tanker cars that are insufficient for any use for the transportation of dangerous goods; when it comes to making a permanent regulation related to that, that's not an issue that's going to bypass Canada Gazette, part I. That's a matter that would.... That's not a minor change, if you will.

Is that a fair assessment, Mr. Roussel?

[Donald Roussel]

Yes, that's a fair assessment when we're dealing with major regulatory changes that get significant impact financially but also on the operations and safety of the overall regime. The type of amendment that we're looking at is sometimes administrative in nature, or where we have a significant level of consensus, Mr. Chairman, that has been achieved among the industry, the stakeholders, and the officials. We're not looking at having something of large magnitude that will use the flexibility we're looking at here.

[Jeff Watson, Conservative, Essex, ON]

By way of a real world example, you suggested that this prepublication regime has been applied in other areas outside of the transportation of dangerous goods, for example. Do you have other examples of how this directive has actually been able to cut through, on the one side, and determine what are minor issues and what are not? Do we have any examples in other areas outside of the transportation of dangerous goods where this directive has been functioning to separate what's minor from major?

[Donald Roussel]

Yes. For example, in the House, we have the Standing Joint Committee for the Scrutiny of Regulations. We do have significant requests from that committee. Those are either adjustments to the English, the French, or they request us to go back into the policy intent. Many of those regulations are already passed through the House. It's a matter of getting them out as rapidly as possible to respond to this.

[Jeff Watson, Conservative, Essex, ON]

Rather than taking six months to correct the French text, to align it better with the English, or vice versa, this type of an application now will allow that to be expedited by bypassing Canada Gazette , part I and going right to Canada Gazette, part II.

[Donald Roussel]

Yes, and in other elements that are more critical which deal with emergency situations where we want to make fast corrections, we have flexibility and an emergency directive, of course, but sometimes we have to address elements that are related to the regulations themselves. Significant consultations do take place with the proponent, but we want to act as rapidly as possible. This is the point that is at stake here.

[The Chair, Conservative, Larry Miller]

Thank you, Mr. Roussel.

Mr. Braid, for seven minutes.

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

Thank you to the representatives for being here today.

I have some questions for the team with respect to the Champlain Bridge.

Ms. Pham, are you part of a dedicated team on this file?

[Thao Pham]

There is a dedicated integrated team working on this file. The team is composed of expert professionals from Transport Canada with experience in bridges. We also have experts from PPP Canada, with expertise in the market and bringing together the P3 experience. We have colleagues from Public Works and Government Services Canada as part of the team as well. They bring experience and expertise on the procurement process, ensuring that we do have a fair, open, and transparent process for this project. Also, we have a dedicated team of legal counsel from Justice Canada.

The team was brought together in January. We are working full-time on this project.

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

Would you agree that the team has all the required representatives, departmental representatives, all the required resources, to get this project done?

[Thao Pham]

The team has come together over the last couple of months. Indeed, we are working very well together. We have reached many milestones already. The first one is in the procurement process. The first stage is the request for qualifications. That is the first major step in moving forward with the procurement in the selection of the winning bidder. That step has been achieved. We have received submissions from international and Canadian builders. We are in the process of assessing those submissions. The next stage will be to prepare the request for a proposal and to move forward with that in the summer.

I think that having a dedicated team of four departments coming together and working full-time on this project has been extremely helpful in moving the project forward and meeting timelines.

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

Thank you for that update and that status report.

It's unfortunate that there appears to be a lack of optimism on the other side of the table with respect to the status of this particular project.

As I understand it, the original timeframe to conclude the Champlain Bridge was actually 2021. Our government has moved that forward, from 2021 to 2018. How have we managed to accelerate that timeframe?

[Thao Pham]

The first stage is that there was time put in the planning period. We have been working very closely with our top consultant in the engineering area, and also the legal consultants as well. In terms of advancing that timeline, we did spend a lot of time in terms of planning the next stages. Therefore, we're now rolling out those stages. It is of course an accelerated timeline, but based on the advice of our P3 partners and also the PPP Canada experts, they have determined that the timeline we're working under is very accelerated and ambitious but it is doable.

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

Ms. Pham, you mentioned the P3 aspect of this, and I want to inquire about this component as well.

Why is the project being procured as a P3, and what are the advantages of that?

[Thao Pham]

Mr. Chair, we did an assessment, comparing the traditional method with respect to the P3 methodology. The studies and the analysis have shown that the P3 would generate better value for Canadian taxpayers. We are expected to have cost savings in the order of 5%, to I think it is 18% of the project costs.

The P3 advantage, first of all, is that because the private partner will enter into a contractual agreement with the government, there will be very strict and stringent clauses and conditions with respect to meeting the timeline and the budget as well. Otherwise, there will be penalties for the private partner. Therefore, there is an incentive for the private partner to meet that timeline.

The other thing is that for an infrastructure of this scale and magnitude, the P3 will also give us the advantage of ensuring that at the end of the concession period, and throughout that period, the maintenance and operation of the major infrastructure will meet high standards; otherwise, there will be penalties. The Government of Canada can withhold payments as well. Therefore, having a private partner build, maintain, and operate an infrastructure of this scale is certainly an advantage in terms of making sure that at the end of the contractual period the infrastructure is given back to the government in very good shape.

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

Thank you.

The proposed act in Bill C-31 deems the new bridge to be “for the general advantage of Canada”.

Could you please explain that term and why it's of general advantage to Canada?

[Thao Pham]

Mr. Chair, the Champlain Bridge and the new bridge for the St. Lawrence is the only instance in Canada where the federal government owns a bridge that is located within a province—an intraprovincial bridge. Given the fact that normally an infrastructure of this type would belong to the provincial government, we want to ensure in this case that in building the bridge and in accelerating the construction of the bridge, we do have the authority and control over the bridge so that we can go ahead without any delays, given that we want to have a new bridge in operation in 2018.

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

You also indicated in your presentation that the various provisions in the act will provide for “legal certainty”.

Could you elaborate on that? Could you perhaps give an example of a legal uncertainty, if you will, that will be avoided?

[Thao Pham]

Certainly. I will speak generally and then ask my colleagues Marc Brazeau and Nicholas Wilkshire to add to my answer.

The first example is that normally ministers do have authority to enter into agreements within their purview. In this case, for the minister responsible for the bridge we have included provisions to ensure that there is absolutely no doubt that the minister has the authority to enter into agreements with various parties, such as the province, municipalities, and other organizations, to ensure that we have all of the agreements in place to prepare all of the work necessary for the construction of the bridge. Again this provides certainty.

There are other examples as well with respect to the authority for the Minister of Public Works and Government Services to award contracts. Then again, given the fact that the Minister of Public Works has the authority under the Department of Public Works and Government Services Act, but given that this project is built as a bridge, there might be interpretation that it does not constitute a public work per se under the other act.

Those are the areas in which this bill would provide clarity.

Marc.