Transport Committee on May 7th, 2019

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call to order meeting 141 of the Standing Committee on Transportation, Infrastructure and Communities. Pursuant to Standing Order 108(2), we are studying the subject matter of clauses 225 to 279, in part 4, divisions 11 and 12, of Bill C-97, an act to implement certain provisions of the budget tabled in Parliament on March 19, 2019 and other measures.

Good morning to everyone. From the Association of Canadian Port Authorities, we have Wendy Zatylny, President. From British Columbia Coast Pilots Ltd., we have Roy Haakonson, Captain and President; and Rob Stewart, Captain and Vice-President. From the Corporation des pilotes du Saint-Laurent Central Inc., we have Alain Arseneault, Captain and President. Finally, from the Cruise Lines International Association, we have Michael McGarry, Senior Vice-President, Global Government Affairs.

I understand that there's a conference for pilots happening and that some of them have joined us in the audience today. Welcome to all of you.

We will now move to our witnesses.

Ms. Zatylny, would you like to lead off?

[Wendy Zatylny, President, Association of Canadian Port Authorities]

Thank you very much, Madam Chair.

Good morning, honourable members.

On behalf of the Association of Canadian Port Authorities, we'd like to thank you for the invitation to speak to you today about the proposed amendments to the Pilotage Act.

Our association has been involved in the Pilotage Act review since its beginning, and we are pleased to have another opportunity to express the views of our members on another stage in this important process.

Our 18-member Canadian Port Authorities work very closely with pilots to ensure the safe and efficient movement of vessels in and out of Canada's ports. With the four pilotage authorities on the east and west coasts, the Great Lakes and the St. Lawrence, our members move over 330 million tonnes of cargo per year, both in containerized, bulk and break bulk form.

Without a doubt, pilots are a critical element in a safe, efficient marine transportation system, and they provide an important service to our members and the marine industry. By working with carriers and ports, pilots share the objective of protecting the marine environment and ensuring fluidity in marine commerce.

With this as a foundation, and given the long-standing challenges within the pilotage system, we are pleased with the Pilotage Act amendments and see them as a step in the right direction. The amendments provide a framework for modernizing pilotage that will reconcile protection of the marine environment, the use of technology, accountability, cost-effectiveness and reliable marine commerce.

To begin, like many of our marine colleagues, we are particularly pleased with the inclusion of a set of principles that will guide decision-making, and hopefully implementation. The principles are a positive example of this collective effort by industry stakeholders and government, and will provide a framework for modernization of pilotage that is safe, efficient, cost-effective, self-sustaining and incorporates tested and proven technologies.

ACPA and its members are also very encouraged by the move to develop a nationally standardized pilot certification program, which would extend and build upon the proven regime now established in the Great Lakes. This would allow crews that have the same knowledge and experience as government-mandated pilots to navigate their ships. Many of these mariners already become pilots and are extremely knowledgeable of local waters due to their frequent transits of such waters. Such a regime could greatly reduce the cost of marine shipping without compromising safety, and could eventually stimulate marine shipping within the Seaway.

Given our positive perspective on the amendments, the remainder of our comments today are aimed at highlighting a few caveats as the implementation of the legislation hopefully moves forward.

One of the biggest changes being brought to the pilotage regime is the centralization of regulatory responsibilities at Transport Canada. While we are supportive of the movement of regulatory authorities to Transport Canada, our members seek reassurance that decisions will be made with a full regard for local knowledge and operating conditions, and that the optional responsiveness that is now the status quo, and that is fundamental to safe and efficient operations, will remain, if not even improve.

To this end, it'll be imperative that Transport Canada receives sufficient funding to support the additional staffing required, that the staffing be done in such a way as to ensure strong links to local port authorities, and that adequate training time be allocated before Transport Canada fully assumes its new responsibilities.

Our members would like to see a mechanism developed that will allow for port authorities' input into the granting of waivers for compulsory pilotage in port waters. In the past, situations have arisen whereby waivers have been issued for vessels that don't have complete knowledge of local regulations, such as those set out in a port information guide.

Given existing strong local relationships, port authorities are able to liaise with the local pilotage authority to manage such vessels to ensure safety of operations within port waters. With the amendments proposing that issuance of waivers be centralized and standardized at Transport Canada, members are concerned that they will not have a local connection to work with to manage any challenges that may arise.

Similarly, our members request the development of a mechanism for ports to participate in the rapid investigation of an incident in port waters. The current system vests primary responsibility for investigating incidents with the Transportation Safety Board, which has the sole regulatory right to collect all relevant details and data related to an incident. The TSB considers this information proprietary.

Given the thoroughness of the investigation process, it takes upwards of a year or more for the TSB to file its report. However, in the interim, the behaviours or conditions that led to the incident can persist while the investigation is under way.

The situation is currently mitigated by the involvement of local pilotage authorities in the investigations, and the pilotage authorities are able to work with the port authorities to more rapidly identify causes and effect interim solutions.

[The Chair, Liberal, Judy Sgro]

Ms. Zatylny, can we have your closing remarks?

[Wendy Zatylny]

Absolutely.

Basically, what we want to ensure is that as things are centralized at Transport Canada, whether it's in accident investigation or in issues such as a reporting of non-compliance—that is, non-availability of pilotage services that affect traffic vessel management within port waters—there is a good loop and that port authorities have the opportunity to be part of this process so that we can ensure a good connection to and a maintenance of local knowledge and local relationships to effect real-time local solutions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go on to the British Columbia Coast Pilots.

Mr. Haakonson, would you like to begin?

[Roy Haakonson, Captain, President, British Columbia Coast Pilots Ltd.]

Madam Chair and honourable members of the committee, thank you for having the B.C. Coast Pilots at this meeting.

Captain Stewart and I are both licensed B.C. coast pilots. It's a company of local experts dedicated to protecting our coast, since the mid-1800s, by supplying unbiased, independent expertise on behalf of the government, the people, to the shipping industry.

British Columbia is home to one of the most pristine and ecologically sensitive marine habitats in North America, but it is also one of the largest economic portals of Canada. As Canada moves towards amending the Pilotage Act, the coast pilots strongly support the need for a clearly defined purpose clause ensuring that the Canadian public's expectations will be met.

The proposed addition to the Pilotage Act declares that navigational, public and environmental safety be at all times the primary concern, not only when it is practical or adequate. There is no value in a strongly worded economic policy if the public and the first nations do not support or trust the government and industry to protect their inheritance, livelihood and a healthy environment. These are actually basic principles that all Canadians live by.

The wording of the proposed purpose clause clearly shows the Government of Canada recognizes that a national pilotage system must ensure the highest standards of public and environmental protection. This is essential to ensure clean waterways and sustainable economic development.

However, caution must be exercised before introducing any change into a high-performing system such as the Canadian pilotage regime. This is especially the case at a time of great public concern about safe navigation and the marine environment, particularly in the context of proposals to exponentially increase tanker traffic on the west coast. As Mr. Grégoire noted in his review of the Pilotage Act, “the public grows steadily more risk-averse and the 'social licence' for marine transportation declines”.

When B.C. Coast Pilots first recommended adding a purpose clause to the act, our suggestion caused objections amongst many participants. The coast pilots felt strongly that the review's objectives of modernization, along with the oceans protection plan, made such a clause a natural and necessary addition. Although there continue to be suggestions to dilute this commitment to the public and environmental safety, the B.C. Coast Pilots remain confident in the wisdom of the current language and the benefits it will bring to the Pilotage Act.

Perhaps no single issue highlights the increased public awareness of B.C.'s west coast than the plight of the killer whales. The vulnerability of this species has resonated with the public throughout Canada.

Our long-standing relationship with the coastal communities through the regional pilotage model has allowed a mutual appreciation of concerns to be developed over the years. BCCP has been intimately involved in the port's enhanced cetacean habitat and observation initiative, and has also worked closely with the DFO and Transport Canada.

The Pilotage Act has undergone an extensive review leading to the proposed changes. However, some interests continue to press for more control and a reduction of costs, in statements that are not always grounded in fact.

For example, we have repeatedly emphasized the need to refer to the independent study that Transport Canada contracted with the AIM Group, which states that in 2016 the magnitude of pilotage costs for Canada's largest port, Vancouver, was 0.018% of the total value of maritime trade. AIM reached the clear conclusion that pilotage does not negatively affect Canada's competitiveness.

The B.C. Coast Pilots support the amendments as they uphold the principles of pilotage—of safety and independence—and we look forward to a meaningful, ongoing engagement in the coming months.

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Arseneault, please, for five minutes.

[Alain Arseneault, Captain, President, Corporation des pilotes du Saint-Laurent Central inc.]

Good morning, Madam Chair and honourable members of the committee.

The Corporation des pilotes du Saint-Laurent central brings together the pilots on the St. Lawrence between Quebec City and Montreal, including the port of Montreal. With 112 pilots and 14 apprentice pilots currently enrolled in the rigorous 24-month training program, the corporation has one of the largest memberships in the country. I personally am a pilot between Trois-Rivières and Montreal, and Vice-President, Laurentian Region, of the Canadian Marine Pilots Association. I also chair its committee on research, innovation and pilotage techniques. I therefore invite you to ask questions on those subjects.

During the review of the Pilotage Act, there was a lot of talk about the costs of and need for a piloting system in terms of Canada’s economic competitiveness. So let’s look at the facts.

In the last five years, the consumer price index has increased by 11.7%. In that time, pilotage fees on the St. Lawrence have increased by only 8.1%. In the same period, the volume of cargo in the Port of Montreal increased by 28%, reaching 39 million metric tonnes in 2018. This is the fifth consecutive record year. In those five years, there were approximately 110,000 pilotage assignments on the St. Lawrence River, with no significant incidents; 99.8% of those assignments took place with no delay attributable to the pilots. This is against the concurrent backdrop of ever-increasing average vessel size. Between 2007 and 2017, the size of the vessels between Quebec City and Montreal increased by 45%.

For Canada, pilotage is a judicious and essential investment. In a context where shipowners pass their costs on to consumers, pilotage costs about $6 per year per Canadian consumer. A cost-benefit analysis of pilotage showed that the return on that investment is about $120 per year per Canadian.

St. Lawrence pilots welcome the amendments to the act. The proposed compliance regime offers the promise of greater impartiality in decision-making and more systematic enforcement of the act. The emphasis on technology also plays into what is already a major strength of the system. Canadian pilots are recognized internationally for their leadership in navigation electronics and innovative pilotage technologies.

On the St. Lawrence, we played a key role in the establishment of initiatives allowing safe transit of ever-larger vessels in situations that could not have been foreseen only a few years ago, such as two-way night-time traffic into Montreal in the winter. These successes can be attributed to our expertise in rigorous risk analysis studies, comparative analysis, and simulator trials, as well as to our consultations with government bodies and users.

We also welcome the fact that the Pilotage Act, 2019, recognizes the environmental concerns of Canadians.

On the St. Lawrence, the complexity of local issues such as winter navigation, high tides, ever-present shallows, the narrowness of some sectors in relation to the size of the vessels, traffic density, and the proximity of riverfront properties, require a very high level of knowledge of local waters.

The act maintains a rigorous approach, with the result that those navigating commercial vessels demonstrate great skill. This is true not only for the pilots, but also for the captains of Canadian vessels who want to obtain a certificate allowing them to pilot their own vessels.

On that point, contrary to what some have suggested, a certification program for pilots on the St. Lawrence already exists. The program has been updated over the years to make it more accessible. However, it is important to remember that the program, which includes a requirement for a command of French, since communications on the river are mainly done in French, to serve the public interest, not the interests of the pilots and the industry. This is our raison d’être. We are independent experts, mandated by the government to ensure that the public interest is predominant on the waters of our river. The act reaffirms that responsibility and we humbly accept it.

Thnak you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Arseneault.

Mr. McGarry.

[Michael McGarry, Senior Vice-President, Global Government Affairs, Cruise Lines International Association]

Thank you, Madam Chair and committee members. On behalf of the 14-member cruise lines of Cruise Lines International Association-North West & Canada, I would like to thank the committee for this opportunity to comment on the proposed amendments to the Pilotage Act contained in Bill C-97.

CLIA represents cruise lines sailing Canada's coastlines from the Atlantic and St. Lawrence Seaway to the Arctic and Pacific coastal waters. Our industry has a major, positive impact on Canada's economy and supports businesses and communities up and down these coastlines.

Crew members and passengers invest in travel, accommodations and supplies as they make their way to and from our ships, and they support local businesses when they spend money on excursions, food, supplies and souvenirs at our many ports of call. Cruise lines boost local businesses as they provision their ships with food and beverages, fuel and other supplies, and they invest in local port services and spend money on ship repairs, maintenance and equipment.

Overall, our industry contributes $3.2 billion every year to Canada's economy, and I believe the clerk has distributed the information I provided that outlines our economic contributions.

The Pilotage Act and Canada's overall pilotage framework have gone largely untouched for almost 50 years, during which our industry has evolved dramatically. Members of the CLIA welcome the government's proposed legislative changes, particularly those that aim to help standardize safety rules, rationalize costs, strengthen governance, support innovation and enhance public transparency.

The cruise industry supports pilotage in Canada as a valuable enhancement to the safety and security of passengers and vessels. We know that pilots will continue to play an important role within Canada's marine safety network.

For CLIA member cruise lines, maritime operational safety, the safety of our guests, and the safety of ports the cruise ships visit are their top priority. CLIA member cruise lines have an exceptional safety record, and as an industry we continue to raise the bar through a continual evolution of enhanced best practices and industry policies.

We join with pilots in their unwavering commitment to safety. While the safety records of the pilotage authorities are strong, improvements are needed with respect to the efficiency of pilotage services. We believe that Canada's modernized pilotage regime must focus on enhancing productivity, adaptability and supporting the adoption of new technologies to help ensure the continued competitiveness of cruise lines in Canada.

We were pleased to see much of this addressed at the outset of these amendments in the proposed purpose statement. Throughout the act's review, CLIA raised concerns about the monopolistic structure of pilotage services and the upward spiral in pilotage costs at a rate that far exceeds the rate of inflation. Our members welcome changes that will bring transparency and impartial decision-making to contracts that determine fees for these mandated services.

The evaluation of risk and risk mitigation in Canadian waters can be very uneven between different pilot regions. CLIA supports removing regulatory functions from the pilotage authorities, bringing them into line with other federal agencies, and freeing them up to focus on safety, efficiency and administering pilot services. We are optimistic that these changes will support greater standardization and consistency in the management of risk.

CLIA appreciates that the voices of our member lines have been included in the long-awaited review of the Pilotage Act, as well as your committee's review of these proposed legislative amendments. Overall, we welcome these changes. We also wish to emphasize that there will be more work to do with respect to the development of a modernized pilotage regulatory framework to give effect to this new legislation and ensure intended outcomes are met.

CLIA looks forward to the opportunity of contributing collaboratively with government throughout this process.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. McGarry. We move on to Ms. Block for six minutes.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I welcome all of you here this morning and thank you for your testimony.

What we do know, what we've learned and what we are aware of is the fact that the Pilotage Act has not been reviewed for a number of decades. It was definitely time to do a review of this act. We've heard from witnesses that they feel it was a comprehensive review and that there were lengthy consultations around the changes that are being prescribed in the BIA.

While we understand all of that, we do think it's interesting that these recommendations are being brought forward in the budget implementation act. We've also heard testimony from some that this translates into quick passage. We've been encouraged to make that happen as a result of the fact that there does appear to be support for the changes that are being suggested in the BIA.

To be very clear, for us, the time frame for this review is quite short. Our recommendations, should we manage to get any passed at this committee, would be sent to the finance committee, which would make the decision—not the Minister of Transport. I think it should be noted that it will be up to the governing members on this committee to agree to put forward any recommendations to the finance committee. However, we will endeavour to ensure that some of your concerns and recommendations are at least proposed here at this committee.

Again, my understanding also is that the wording in the act and the changes that have been made in this act reaffirm our commitment to safety in the industry.

My first question will go to you, Ms. Zatylny. Will these changes to the Pilotage Act make Canadian ports even safer?

[Wendy Zatylny]

I'd like to say that we believe that Canadian ports are very, very safe to begin with, but certainly, the changes that would be brought in, the amendments proposed through this act, we believe would continue to enhance the ever-present movement towards ever greater safety.

The reality is that the marine environment is changing all the time. The ships are getting bigger. As my colleagues noted, there are a lot more transits being done. That's a continuously evolving landscape, but yes, we believe that these changes will serve to continue to enhance safety in Canada's ports.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Second, would a blanket moratorium such as Bill C-48, which imposes a ban on tanker traffic on B.C.'s northern coast, be good for our Canadian reputation and our economy?

[Wendy Zatylny]

Well, Bill C-48, the ban, has been challenging to address. Certainly, the scope of the surface area was limited, such that two of the port authorities were not included. They're not caught up in that ban, other than in areas that we are flagging on the regulatory side: to be careful about issues, say, that you don't catch a bunkering, for example, or transportation of diesel.

I believe that in practical terms there is still the ability to continue to move oil. The signal that it sends internationally on its own would probably not have that much of an effect, because it aims to preserve the important space on our west coast, but any kind of reputational decision is made within a much broader context. The concern we have is that it, plus the current discussions around various pipelines, plus all of the other ranges of prohibitions or challenges to development, may end up negating Canada's positive reputation abroad.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I appreciate that and recognize that you are here representing all ports within Canada as the Association of Canadian Port Authorities.

Beyond the moratorium that is being imposed on the northwest coast of British Columbia, and perhaps the impact on Canada's reputation, when we were studying Bill C-48 we had witnesses appear before this committee who were recommending that we impose a moratorium along the entire coast of British Columbia. Then there were those who have asked, if it's for the coast of British Columbia, what about the Great Lakes and St. Lawrence Seaway, or the east coast? You can see how this does then begin to have a bit of a negative impact on our reputation—I think it certainly would internationally.

I will put this another way. How reliant are the port authorities on the reputation of our shipping industry that product can be moved safely in and out of your ports?

[The Chair, Liberal, Judy Sgro]

Ms. Block's time is up.

Possibly, as you're answering some other questions, you could attempt to answer Ms. Block's question at that time.

We'll move to Mr. Iacono.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you, Madam Chair.

My thanks to the witnesses for joining us this morning.

Mr. Arseneault, modernizing the Pilotage Act is necessary to ensure effective, responsible and safe pilotage services, thereby guaranteeing Canada’s competitiveness in trade.

In a news release last April 10, you were optimistic in welcoming the initiatives in the reform of the Pilotage Act. You also mentioned the independence of professional judgment.

Can you tell us how modernizing the Pilotage Act will guarantee that independence?

[Alain Arseneault]

Thank you for that question, Mr. Iacono.

Yes, indeed, the bill as proposed will extend the existing act that guarantees the decision-making independence of pilots, in the sense that pilots serve the Canadian public. They do not serve shipowners, unlike certificate holders, who might work for a shipowner, for example.

When pilots are carrying out their pilotage tasks, their decisions are free from all commercial pressure. The decisions that pilots make every day on the bridges of Canadian vessels are independent, as guaranteed by the current act and the proposed, amended act. The act guarantees that independence in decision-making, because pilots are not accountable to the captain or the owner of the vessel, or to anyone else. They are accountable to the Canadian public.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

In your opinion, does the modernization mean that traffic and cargo shipments will increase even more?

What form will the innovation take in regard to the modernization?

[Alain Arseneault]

The current framework, and the one that is proposed, should ensure Canadians, in a practical sense, that marine traffic will continue to grow in Canada, but in a safe and responsible way. You can read the proposed amendments. The preamble mentions using technology effectively in order to improve the safety and the efficiency of the shipping.

As I said at the outset, this is something we have already been doing in Canada for a number of years. Pilots have always been on the cutting edge of technology. We use the most advanced technologies not only to maintain the levels of security that Canadians will accept, but also to improve the efficiency and the free flow of transportation in Canada in general. Particularly on the St. Lawrence, as I said, where the free flow of the traffic has improved by 45% in the last 10 years, thanks to the advances in technology that Canadian pilots use.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Safety is number one, of course, in that marine safety is at the heart of the proposed changes. We cannot ensure growth and competitiveness in Canada at the cost of safe transportation.

How will these proposed changes ensure both marine safety and environmental protection on the St. Lawrence?

[Alain Arseneault]

I believe that the compliance regime proposed in Bill C-97 is an extremely rigorous process in which Transport Canada and the minister are given very well designed compliance powers. By their very nature, they will guarantee the levels of safety that Canadians expect. You can see it all in the new compliance regime.

Also, by protecting the very nature of the pilotage service as set out in the current act, including the pilots' independence in decision-making, we can ensure that marine transportation in Canada will be conducted safely and with environmental protection, which is a concern that Canadians rightly have.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

How will this change your profession, in your opinion?

[Alain Arseneault]

That is an excellent question, Mr. Iacono.

I believe that the act will allow Canadian pilots to continue to flourish in a booming professional environment. For Canadian pilots, this new legislation will allow us to develop our industry, as we have been doing for a number of years, not only at home, but also abroad. Canadian pilots are recognized internationally for their creativity and their reputation in marine navigation.

The new act will give us the tools to continue our development in that regard.