Transport Committee on Oct. 28th, 2014

[Capt John Chomniak]

It's the process in which to have it audited that I don't agree with.

[David McGuinty, Liberal, Ottawa South, ON]

Go ahead, Mr. Lewis-Manning.

[Robert Lewis-Manning]

Simply, yes, it should be mandatory—

[David McGuinty, Liberal, Ottawa South, ON]

It should be made mandatory.

[Robert Lewis-Manning]

—for our subsector of the industry. I realize there would be challenges to implementing such a regime, but I don't think any of those challenges are impossible. Industry and government adapt over time, and I'm convinced that our industry would be able to adapt, and I'm sure that capability could be developed.

[David McGuinty, Liberal, Ottawa South, ON]

You said in your comments, “customers demand it.” You also said, “it is a competitive advantage” for the sector.

[Robert Lewis-Manning]

There are lots of reasons that justify it.

[David McGuinty, Liberal, Ottawa South, ON]

There are lots of economic reasons.

[Robert Lewis-Manning]

Absolutely.

[David McGuinty, Liberal, Ottawa South, ON]

Tell us more about those economic reasons.

[Robert Lewis-Manning]

The economic reasons are about maintaining your customer base and developing new ones, so that makes sense. Do I have figures to give you? No, I don't. But in overall market access, it certainly makes sense to our customers to maintain the strictest safety regimes.

[David McGuinty, Liberal, Ottawa South, ON]

The challenge we have as parliamentarians is that, if we look at the budget numbers, we've seen a 25% cut between the last two fiscal years in marine safety expenditures at the federal level at Transport Canada. That's one quarter. We're now talking about moving toward a mandatory SMS, which I expect would compel proper audits with trained auditors and inspectors, trained and capable of understanding your vessels. The challenge we're facing now, as you understand it, is that it would have a knock-on effect. You're still saying that, for the benefit of the sector, for the benefit of your travelling public, for the benefit of the materials and goods you ship and transport, this is a good place to go.

[Robert Lewis-Manning]

I am saying that. I don't want to speculate about any cuts to budget allocation and where that has happened, because there are efficiencies that have been gained as well. It's impossible for me to say that it can't be done or it can be done within the current framework. I will let you know that part of the relationships in our subsector of the marine industry are so close that they understand—they being Transport Canada and the class societies that they devolve down a lot of the inspections to, the vast majority of them—and know our industry so well that I can't imagine it would be a significant learning curve to adopt a mandatory SMS or auditing scheme.

[David McGuinty, Liberal, Ottawa South, ON]

What's my time?

[The Chair, Conservative, Larry Miller]

Just a little less than a minute.

[David McGuinty, Liberal, Ottawa South, ON]

Tell me, Mr. Lewis-Manning, about the companies that own the vessels. You said they are shipping petrochemicals, coal, grain, and other tricky materials, I take it, other risky materials, did you?

[Robert Lewis-Manning]

When you say risky, I'm going to make an assumption that we're talking about the consequences of a marine accident.

[David McGuinty, Liberal, Ottawa South, ON]

That's correct.

[Robert Lewis-Manning]

Yes, some of that. Absolutely.

[David McGuinty, Liberal, Ottawa South, ON]

Would they feel more comfortable and confident from a liability perspective, from a compliance and due diligence perspective? Would they feel more comfortable working within the parameters of a mandatory SMS and proper auditing?

[Robert Lewis-Manning]

I don't think they'd feel more comfortable because they already go above and beyond, especially in the petroleum industry of the marine industry. There are other organizations globally and other industry organizations outside the marine industry that vet potential carriers of petroleum products. There is an incredible amount of scrutiny, and unfortunately that scrutiny came from very bad lessons like that of the Exxon Valdez, but that part of the marine industry has evolved dramatically in 15 years.

Would they feel more comfortable? No. Are there other people and other stakeholders that would probably feel more comfortable? I would say yes.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We'll now go to Mr. Komarnicki for seven minutes.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Thank you, Chair.

I'll start with a first question to Mr. Chomniak. I have a note here that you said you strongly recommend the use of SMS for some of the obvious reasons we've heard. I understand you take some issue with the fact that they're not audited; your vessels are inspected, but they're not audited. I gather your concern is that the third parties that are capable of auditing are in five metropolitan areas, I think you said. So there's a lack of third party auditing possibilities. Secondly, you're saying that maybe just inspecting a vessel is not the best use of personnel by Transport Canada because they should be cross-trained to do audits as well.

Am I understanding you correctly in all of those points?

[Capt John Chomniak]

Very much so. The biggest issue is that a lot of our vessels within our association are not within close proximity to a Transport Canada marine centre. So the inspectors have to go out into the field to visit the ship and inspect it. And then if they have to bring in another person to audit the SMS—as I mentioned these are generally mom-and-pop operators and the cost of having that third party, the classification society, come in and audit it, with some of the quotes people have received—would essentially throw them out of business. But the ability to have the Transport Canada person continue on their inspection process and audit the SMS would be a much better use of the time and efforts of that inspector.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

I appreciate that's being done in the rail industry. I'm not so sure why it couldn't be done in the marine industry. I would take your recommendation then that some effort be made to train the inspectors so they could indeed do an audit and you would be addressing the concern that you've raised with us this morning.