Transport Committee on Dec. 2nd, 2014

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

All right, thank you very much.

You raised the question of liability. We're all concerned and we do want the polluter pays principle to be applied. Can you tell us more about what the system is right now and how we can improve it so we're sure that at the end of the day it won't be taxpayers who will have to foot the bill?

[Michael Lowry]

Yes, absolutely. The system that was imposed in the original amendments to the Canada Shipping Act, which brought the spill response regime under the control of Transport Canada and the federal government, is where you first start to see this polluter pays program implemented. With the measures that the government introduced in May, what they're trying to do is to strengthen that program.

There are three levels to the liability. The shipowners have to have a liability and they're required to have insurance that covers that liability. Transport Canada is responsible for checking to see that those certificates do exist. That liability depends on the size of the vessel.

Once that is exhausted, there is international money available. That's about $1.14 billion. Once that's exhausted, then the Canadian fund kicks in. Initially that was up to $161 million. The government made recommendations that entire fund would be available for up to $400 million. Barring that, if we go past that, the government has also proposed a levy that's reintroduced onto industry to recover any costs that would potentially go back to the taxpayer. Right now you're looking at $1.5 billion available in case of a spill.

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

Mr. Whitworth, you also spoke about liability. What's your perspective on that front?

[Jonathan Whitworth]

The previous speaker is correct. The vessel owners, especially with dangerous goods, have to have quite a stiff amount of insurance that we pay for, which I think is understandable. For shipowners, especially of operating tankers along the coast, which is the first layer that the gentleman just mentioned, it's called a COFR, certificate of financial responsibility. That alone is another billion-plus dollars' worth of liability that is covered. I think when you add the three components up, it's actually in excess of 2.5 billion dollars' worth of liability from the large tanker operators.

I feel comfortable that there are large pockets of money available, God forbid, if they are required.

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

Thank you.

Also, just to correct, or to add on to what Mr. Komarnicki has mentioned, just to be clear, according to the public accounts numbers, there was a reduction of almost 28% of the budget for marine safety, if we look at 2010-11 compared to the 2013-14 budget. In terms of marine safety, there has been a decrease in investment from the government.

That brings me to this point, Mr. Whitworth. You said that 64% of the investigations were not followed up. Actually you raised some, for my part, alarming issues regarding inspections. It's something we saw in rail safety, and that's something the government hasn't really responded to well because they've been hit by the TSB.

Is it possible to have either the figures or numbers you mentioned regarding inspection by Transport Canada for marine safety? Those numbers you raised, can we have them? Are they public?

[Jonathan Whitworth]

I would imagine that you could go to Transport Canada and ask about that inspection regime. As I mentioned, it was in November 2011. I'm sure, with that date and that requirement of those two inspections, you'll be able to find that data.

Ms. Young brought up a good point a minute ago. Those 64% of the failures were with small operators in the north part of the coast. I'm worried about them because, as a mariner and as a man who previously sailed aboard vessels, I worry about the safety of others. We're talking about a smaller pool of vessels in the north that we are concerned with in regard to this regulatory gap, I would say.

We don't see it applying to the major port here in Vancouver, but I do definitely see this as a concern in the north.

[The Chair, Conservative, Larry Miller]

Thank you.

We'll now move to Mr. Watson for five minutes.

[Jeff Watson, Conservative, Essex, ON]

Thank you to our witnesses.

Once again, to clarify the funding numbers, 80% of the purported decreases that the members opposite keep quoting are due to efficiencies, things like decreases in bureaucratic travel and professional service costs, and transfers of program responsibility dollars that follow to another department, for example, environmental assessments going to a relevant other government agency. They're not front-line services.

We did hear from departmental officials who, when under cross-examination by Mr. McGuinty, actually admitted that the TDG directorate got an increase in its budget, from $13 million to $20 million. It proves that you can have efficiencies while targeting to front-line safety services.

I want to start with Mr. Whitworth. You've testified today that there are no longer any joint blitzes being carried out by Transport Canada with the RCMP. Having no blitzes doesn't mean there's no inspection or audit activity anywhere on the west coast by Transport Canada. Is that correct?

[Jonathan Whitworth]

Oh, that's absolutely correct, yes. I was referring to this kind of blitz comment, but the inspections, yes, they're going on.

[Jeff Watson, Conservative, Essex, ON]

Right. We want to be clear for the public who are listening that in fact inspections and audit activities do occur.

You think it's important, of course, and perhaps this committee could make a recommendation, that such enforcement blitzes be restored, based on risk, I guess, for the classes of ships, or the area of traffic, or the geographic area where it makes the most sense to do that. Is that something you would support, Mr. Whitworth?

[Jonathan Whitworth]

That's exactly what I would support, and you are correct.

[Jeff Watson, Conservative, Essex, ON]

As far as the delegation of authority by Transport Canada to the classification societies to do inspection and audit is concerned, do you support that particular measure, Mr. Whitworth? How many of your ships would fall into the class size that would be captured by the classification societies?

[Jonathan Whitworth]

It's currently all the ferries in our ferry fleet and, I would say, the six largest vessels in our boat class. They all have the delegation of authority from Transport Canada. I would say it was a little bit of a rocky start at the beginning, because I think Transport Canada and the classification societies were probably trying to find their footing. However, I can tell you that in the last year and a half it has been a success for Transport Canada. Instead of taking the role of doing all those inspections and getting that work done, it now just supervises them, which is a much smaller role, and it lets the classification societies do the work. It was a rocky start to begin with, but I would say over the last year and a half to two years it's been going quite well.

[Jeff Watson, Conservative, Essex, ON]

Is the remainder of your fleet inspected and/or audited by Transport Canada directly?

[Jonathan Whitworth]

Yes, because they are under the tonnage requirement for delegation of class.

[Jeff Watson, Conservative, Essex, ON]

Are the vessels that you're concerned about restricted to a particular...? I think you mentioned a certain geographic area where a number of your competitors may be escaping these types of enforcement blitzes, or perhaps an area where the enforcement blitzes should be restored. Are any of those ships...? What class are we talking about? What size are we talking about? What type of ship are we talking about? How many of those would be captured under the classification society inspection regime? Would it be a similar percentage to your own?

[Jonathan Whitworth]

The vessels that I was alluding to and concerned with are all small transport vessels, mostly tugs doing barge towing and log towing, so they're much smaller.

[Jeff Watson, Conservative, Essex, ON]

Are they like a 40-foot tug, that kind of thing?

[Jonathan Whitworth]

You got it. They have a two- to four-person crew, and I would say none of them meet the criteria for classification.

[Jeff Watson, Conservative, Essex, ON]

Right, but in terms of the way the regime is crafted, they should be inspected and/or audited by Transport Canada according to some schedule, if you will.

[Jonathan Whitworth]

That's correct.

[Jeff Watson, Conservative, Essex, ON]

Mr. Lowry, I'm going to ask this question both of you and of Mr. Whitworth.

Ships that are calling on Canadian ports are required to have a contract with a certified response organization in the event of a spill or cleanup. It was suggested that ships that are transiting waters but not calling on a Canadian port don't necessarily have to do that. Is that correct, and if so, should they be required to?

[Michael Lowry]

That is correct, and that is what happened with the Simushir, because it was not calling on a Canadian port. It was merely transiting our waters, so it wasn't required to have a—

[Jeff Watson, Conservative, Essex, ON]

It wasn't transiting Canadian waters until it blew into the waters, though. Isn't that correct? I am talking about those that are purposely transiting Canadian waters. That might be a little bit different.

[Michael Lowry]

If it is not calling on a Canadian port, it is not required to have a membership agreement with a response organization.