Transport Committee on Oct. 28th, 2014

[The Chair, Conservative, Larry Miller]

I'll call the meeting to order.

With us in the room we have from the Canadian Passenger Vessel Association, Mr. John Chomniak and Mr. Dan Duhamel; from the Canadian Shipowners Association, Mr. Robert Lewis-Manning and Debbie Murray, thank you for being here. Welcome to all of you.

By video conference from Burnaby, we have from the Council of Marine Carriers, Phillip Nelson.

I am going to start with Mr. Chomniak or Mr. Duhamel.

With that, welcome back, committee members.

I'm going to turn it over to Mr. Chomniak. Are you going to speak first?

[Capt John Chomniak, President, Canadian Passenger Vessel Association]

I am.

[The Chair, Conservative, Larry Miller]

Okay, you have ten minutes or less, please.

[Capt John Chomniak]

I'll do my best.

Good morning.

Thank you for the invitation to sit with you today and to voice the concerns of the small business owners and operators of passenger vessels in Canada. While there are numerous concerns regarding SMS, safety management systems, the transportation of dangerous goods is very minimal within the association.

Please allow me to introduce myself and my colleague. My name is John Chomniak, and I'm currently the president of the Canadian Passenger Vessel Association. Here with me today is Captain Dan Duhamel, a past president and director of the CPVA and a small business owner and operator here in Ottawa.

The CPVA is an association of day boat operators, dinner cruise boats, charter boats, and overnight cruise vessel operators, as well as a small number of short-run ferry operators. The CPVA currently has within its membership 70 companies, operating 368 vessels and transporting about 10 million guests each year over our six-month operating season. The average size of a vessel within the association is less than 150 gross tons, capable of carrying fewer than 200 passengers.

The regulatory cost of operating these vessels is becoming quite cost prohibitive. That's right; the regulations that are imposed on small business owners are putting many of those small business owners and operators on the brink of closure. To my knowledge, there are four companies that will close their doors and chain their vessels to the dock, not expecting to operate next year.

While the safety of those on board must be paramount, we cannot continue to sign international agreements, bring them back to Canada, and try to enforce them on a domestic fleet. It just will not work.

Since Transport Canada introduced safety management systems to the marine sector in Canada, it has done what it is supposed to do: identify the risks before they become larger issues. Having an SMS in place is an extra layer of protection to help save lives and maintain vessels, all while keeping the industry safe.

While SMS is a global standard, part of ensuring that the standard is met is the auditing of the SMS program on board each vessel. At the moment, there are not any Transport Canada marine safety inspectors capable of fulfilling the audit of an SMS aboard a Canadian flagged vessel. The only persons qualified to carry out an audit of an SMS on vessels in Canada are duly authorized persons from one of the five recognized organizations or classification societies. If one of the five recognized organizations is willing to accept your vessel to be inspected by their classification society and not Transport Canada, they would require a completed SMS prior to being accepted into their organization.

However, the alternative security program does not favour the small business owner. If your vessel is not within the five metropolitan areas of Canada or was not built within the last 15 years, they do not want your vessel within their organization. Once declined, they are handing you back to Transport Canada and its inspection services regime. Again, Transport Canada is not qualified at auditing SMS programs of Canadian vessels.

It was Transport Canada that came forward to us with various SMS models and produced the framework to allow a simplified SMS to be introduced, while ensuring that the simplistic approach still worked within the guidelines of the basic SMS model. Even within this model, individual companies would have to find better ways to prevent hazards and then be able to update the SMS to include those dangers.

We, the CPVA, do believe that having a working SMS makes good business sense. However, here's the challenge. When you mandate the vessel owner-operator to comply with having an SMS, even if the Transport Canada inspector is capable of auditing the vessels, do they have the time to carry out the audit? In this day and age, when we, the owner-operators, and Transport Canada are trying to reduce the amount of paperwork that is produced, this venture actually increases the workload in an area within Transport Canada that we believe is well short of manpower.

You should look at the basis of what SMS is. This risk assessment should be looked at within Transport Canada marine safety.

We presently have one of the safest marine industries in the world and, as operators, we do not want to intentionally jeopardize that, but as lawmakers, you are in fact doing so. You are increasing the risk by allowing the number of Transport Canada marine safety inspectors to be reduced, thus allowing the risk to increase. We as business owners know that it is our livelihood on the line, and we must ensure that we stay in line or above the requirements. It is worse when there are so many regulatory bodies with their hands in our pockets, both provincially and federally, that owners and operators are having a hard time staying afloat.

We are our own economic, environmental, and safety stewards. However, we must all ensure that good working practices prevail and that we are accountable for such. But being a small business owner can lead to a blinded view of what may be right in front of you. Without this ability to have an outside source to audit the SMS and evaluate it, whether it is Transport Canada or a member of a classification society, then there is no room for improvement. If one does not have a preventive or corrective action to manage, there is no SMS in place. Then, who is liable?

With that said, the international safety management code only requires vessels over 500 gross tonnes, travelling on an international voyage, to have an SMS. Of the thousands of passenger vessels in Canada, only a handful are over 500 gross tonnes, but none of them travel internationally and have to meet those requirements, that I am aware of.

Over the last few years, Transport Canada marine safety has been working with the CPVA to ensure that owners and operators begin the process of producing an active SMS. While the majority of the CPVA members have or are in the process of producing an SMS, there is still one issue that has to be resolved: who will audit it? Will it be someone from Transport Canada who is familiar with the vessel, or someone from a classification society who has only worked on large ocean-going vessels and has never worked on a vessel of our size or where it is used?

While there are issues in having enough Transport Canada safety inspectors to inspect or audit any vessel, it is also becoming difficult for owners and operators to ensure that their annual inspection of their vessels maintains some continuity from year to year. This continuity must be maintained on the regulatory side as well as the financial side of any business, especially for these mom-and-pop operators, but also the inspection services of Transport Canada.

Everybody wants a safely run and operated business. With any business, the financial aspect must be examined, but what is the true cost of operating a safe vessel?

Thank you for allowing the Canadian Passenger Vessel Association to come before you today. We look forward to doing it again to help our industry and those who ride aboard our vessels.

Before we take your questions, I would like to invite you, Mr. Chairman, or perhaps the minister, to our annual conference of the Canadian Passenger Vessel Association. We meet next month in Toronto and at that time the members come together with the regulators to discuss regulatory issues affecting the industry. We would be able to hear many of those issues first-hand.

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you very much. Thank you for staying within the time. I appreciate that.

We'll go to the Canadian Shipowners Association, Mr. Lewis-Manning, for 10 minutes or less, please.

[Robert Lewis-Manning, President, Canadian Shipowners Association]

Thank you very much, Mr. Chairman and committee members, for the invitation to speak to you today on this very important topic.

I am the president of the Canadian Shipowners Association, and I'm joined today by Ms. Debbie Murray, who is our director of policy and regulatory affairs.

We're here today to talk to you primarily about safety management systems already employed by our members as well as about industry safety, and to answer questions you may have. We want to convey the message that the marine mode has a strong and more than sufficient safety regulatory regime with a track record to show it. We would propose that the system is ready to handle Canadian economic growth and commodity movement in a safe and reliable fashion. We want to ensure that any future regulations or legislation are proportionate to the risk, are not excessively burdensome, and are levied equitably against all modes of transportation.

Our member companies own Canadian ships. They are larger ships, generally over 20,000 tonnes. They employ only Canadian mariners, and they pay Canadian taxes. They operate in the very unique and demanding Canadian waterways of the Great Lakes, the Saint Lawrence River, the east coast of Canada, and the Canadian Arctic. They operate 86 vessels and last year carried over 50 million tonnes of bulk cargo, including petrochemicals, iron ore, coal, grain, aggregate, and general cargo. Our membership conducts what is called short-sea shipping in Canada and North America.

If I can leave you with any message today—and I don't want to bore you with too many acronyms—it's that we support safety management systems, and we've been using them for over a decade. It's a prerequisite for being a member of CSA that you have one or that you are moving towards having one.

Obviously, safety and protection of the marine environment are our first priorities for our membership, and that shows. Our customers expect it and demand it. It's good business to be safe. Data shows that marine safety has improved, and our track record is good and defendable, especially over the last decade.

Transport Canada data shows that there were no reported in-transit dangerous goods marine-related incidents between 2006 and 2011. In terms of collision-related injuries and fatalities per tonne kilometre, our mode had the lowest number of both from 2002 to 2011.

Most of the cargoes carried by our membership would not be classified as dangerous goods according to the International Maritime Dangerous Goods Code. However, we do carry some petrochemicals. Given the potential for future growth in this sector, it is in my membership's interest to ensure that this committee and other decision-makers are aware of the current regime and practices of my membership and the effectiveness of these.

Our membership is confident that the current safety regimes and voluntary safety management systems are appropriate to the risk presented. We do not believe, given the track record, that increased regulation or stringency is required. We think we're doing a good job and we continually review our practices.

Canadian flag vessels are governed by the domestic regulatory regime administered through Transport Canada, which is shaped by and incorporates 33 protocols and conventions from the International Maritime Organization. This very extensive safety regulatory framework covers everything from vessel construction to the training of highly qualified personnel. Our members are also required to develop emergency procedures and agreements with certified response organizations, to be responsible for our acts at all levels of management, and to have the required liability insurance coverage and access to national and international compensation funds.

All seafarers must have certificates or licences as well as general seamanship, and they must undergo regular medical exams. Transport Canada sets these standards for minimum crewing, and our vessels adhere to these standards or go beyond them. It is also important to note the close relationship between shipowners, Transport Canada, the class societies, the Canadian Coast Guard, the St. Lawrence Seaway Corporation, and ports. This is really part of our safety and marine safety culture, and the Canadian industry does it very well.

Finally, and, I would suggest perhaps most important in addition to this extensive safety system, are the people we employ. They are Canadian mariners who have been educated in Canadian colleges, and they develop a very keen knowledge of the currents and contours of our inland, coastal, and Arctic waterways. Some move from ship to shore and work in corporate offices, and some even work at Transport Canada and the Canadian Coast Guard.

Safety management systems augment our industry's aforementioned regulatory regime. The domestic commercial fleet was exempted from the implementation of SMS in 2002. Most of our domestic commercial fleet, as I mentioned, already has an SMS in place, and the remainder are working towards having one.

Transport Canada is in the process of revising these regulations to make SMS mandatory for domestic vessels, and we understand that the revised regulations may be gazetted as soon as 2015.

Our membership does not see their SMS as one of documents; they are living documents that are consistently improving, evolving, and developing, based on a rigorous audit schedule, both third-party and internal, and by keeping eyes on industry best practices as well as applying lessons learned from other modes of transport and land-based industries. These are living documents that our crews use every day.

I would not say that SMS has singularly been responsible for safety in the marine mode. Safety has been the result of previously described international and domestic legal and regulatory frameworks, industry innovation, training, and a culture of safety. Indeed, I would suggest that if anything were to enhance safety it would be the reduction of any duplication in red tape. I know the government is working towards that objective. Filling out forms multiple times, often with the same data, does not serve to reduce risk. This is something that we can all work towards improving.

We understand that the committee is considering what additional measures should be taken to further improve the adoption and integration of SMS in all transportation modes. Given that we compete primarily with other modes of transportation in the domestic and continental bulk and petrochemical market, we would argue that the adoption and integration of SMS and any other safety regime must be equitable and applied equally to all modes of transport. The burden of compliance reporting and the stringency levels must be fair and based on appropriate levels of risk. We would also advise that the committee recognize the highly evolved framework and safety culture currently in place and build upon it for further success.

Thank you again for the opportunity to speak to you today.

[The Chair, Conservative, Larry Miller]

Thank you very much.

For the committee's information, technicalities go beyond.... We're still hoping that we're going to be able to get Mr. Nelson by video, but in the interim we're trying to hook it up so that we at least have audio with him. We'll just have to work with it. It's out of our control. We'll leave it up to the experts.

With that, Mr. Mai, you have seven minutes.

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

Thank you, Mr. Chair.

I would like to thank the witnesses for joining us today. Unfortunately, I am going to have to talk about procedural matters.

Mr. Chair, you know that the committee has cancelled three meetings at which we were supposed to discuss the issue of the transportation of dangerous goods by water. We know that the issue affects a lot of people at the moment. People are concerned and Canadians want information.This is the ideal time to get more information and to hear from witnesses on the issue. But three meetings have been cancelled, as we know.

Mr. Chair, why do we not study these issues at subcommittee meetings rather than talk about them here and waste the witnesses' time?

I would like to know what is going to happen. Are we going to be able to make those meetings up? A lot of people are concerned, whether it is about Cacouna and all the transportation of dangerous goods on the St. Lawrence, or about what is happening on the west coast. We want information.

Mr. Chair, can you explain to us what is happening?

[The Chair, Conservative, Larry Miller]

Certainly, Mr. Mai, and you could have had these answered a long time ago. All you had to do was call me. You have my phone number.

We have tried very hard—the clerk has tried very hard—to get these meetings. Time and again, witnesses—many of them your witnesses as well—could not attend. There were a number of events.... I will let the clerk explain better. It was a combination of things. It sure as heck wasn't from lack of trying. We had two different meetings—three?—and I believe that the notice even went out for them, and we had to cancel because the witnesses cancelled on us at the last minute.

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

Let me mention this, Mr. Chair.

We know that initially the list that came out was done way back when we first started the study. We came up with a revised list. We spoke to the witnesses who we were suggesting and they told us that they were not contacted.

I have to admit that this is a new list that we came up with, but when we heard that there were issues and that some of the witnesses could not appear—not just those from the NDP, by the way—we actually revised the list. We have contacted the witnesses. They've said that they have not been contacted. We also see that there are no meetings.

Can you at least tell us whether or not the meetings will take place again?

[The Chair, Conservative, Larry Miller]

Yes, they will. The clerk is in the process of inviting them.

As for the new list, and this goes for all parties, the way we're dealing with the original list is exactly that: the original list. We are going to do our best to go through that. I told you, I believe at the last meeting, that if we need more witnesses we will move into the new list that you've sent us, and I believe we have some from some of the other parties. I think it's only fair that we deal with the original list first. If it turns out that some of those can't come, we will replace them with some off the new list.

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

For instance, what I see is that the Canadian Shipowners Association was not on a previous list.

If we deal with the next meetings with the trucking industry, can I ask the chair if we could have the full list when we deal with the transportation of dangerous goods on the road?

[The Chair, Conservative, Larry Miller]

I thought you had that list, Mr. Mai, but the clerk just told me that we were contacted by the witness you just mentioned and, because we're having trouble getting meetings, the witness was invited.

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

Let's pretend, Chair, we had witnesses who were willing to come and who were not contacted.

[The Chair, Conservative, Larry Miller]

But they were not on the original list.

All you had to do was call me, Mr. Mai. If you want to make a scene here today about it, fine, but I could have answered it.

Mr. Watson, go ahead.

[Jeff Watson, Conservative, Essex, ON]

Chair, I will add that this is poor form, with witnesses actually here who have given their time before the committee. We could have requested a business time at the end of the meeting in order to discuss the particular issue about scheduling.

Chair, I will presume that the meetings weren't scheduled. The original work plan is still proceeding. That is, there are a certain number of meetings that will be devoted to each particular sector, as we're able to fit witnesses into that. Second, and you can clarify this for me, I believe that to make this more efficient, a decision was taken with the clerk to, if necessary, shift modes so witnesses could appear when in another mode witnesses couldn't appear, in order to keep the committee efficient and on track for our December deadline. Is that correct?

[The Chair, Conservative, Larry Miller]

That is correct.

What everyone has to understand is that we did our best, until as close as we could. You can't leave it until the morning of or the day before to cancel a meeting. We tried to leave our options open as long as possible. For example, for last Thursday's scheduled meeting, I believe it was even late on the Tuesday or Wednesday morning when we finally made the decision that we were not going to get any witnesses here, so we cancelled it. It hasn't been a very easy situation but, as chair, I have to make a decision every now and then. We did have one witness, but we thought it wasn't going to be a very valuable meeting, and the witness agreed to come again and will be here again. As I said, we're trying to work through a tough situation.

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

Again, Chair, I understand that these are tough situations. It's not a complaint about your work or the clerk's work; it's wanting to make sure that the public and people who want to come here are being heard. That's all I want to say. Again, I'm sorry for bringing up procedures.

[The Chair, Conservative, Larry Miller]

Okay.

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

For the CPVA, Captain Chomniak, you've been really critical of Transport Canada. I think you've raised some issues that have been heard before. The Transportation Safety Board has come up with pretty much what you said, saying that there is a lack of oversight and there are some issues with respect to inspectors. Even the Auditor General said that. That was more regarding rail, but we see the same problems happening here. You've confirmed that on the ground there are issues with auditors not having the capacity or even people from Transport Canada not having the qualifications. Is this something that happened a long time ago? Again, it was raised by the TSB. Have you seen any changes or any improvement, or is it the contrary? What's the trend here?

[Capt John Chomniak]

It's not that the inspectors we see are not qualified; they are more than qualified to do their job. One of our biggest partners is Transport Canada. It works very well with us. It knows the industry. But in the ability for the SMS to be actually audited, Transport Canada is not qualified to do it. It goes back to the lack of manpower within TC marine safety to do that reasonably.

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

It is of concern. I mean we've seen cuts in Transport Canada's budget. Again, if we make the parallel with rail, there are issues with inspectors on the ground. What the TSB came out with after Lac-Mégantic is that Transport Canada will sometimes audit the SMS but will not look at whether or not it's really being effective or how it's being applied.

When you speak of auditors not being qualified, can you expand on that?

[Capt John Chomniak]

Under current regulations, the inspectors working with Transport Canada marine safety are not qualified, and nor is it within their parameters, to audit an SMS. The only ones allowed to do so go through the classification societies, of which there are five in Canada.

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

What about inspections? You say that you have an inspection every year, but one of the problems is that it's not always—

[Capt John Chomniak]

No, every vessel within Canada is inspected on a yearly basis or quadrennially, every four years, depending on the age of the vessel. But within that inspection regime there are certain things the inspector has to look at. There is a timeline for him to keep within in order to get that audit done. For the majority of times, that inspector is away from the office; not only the local office, but he has to travel to get to the vessel itself.