Evidence of meeting #69 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was c-49.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Cam Dahl  President, Cereals Canada
Bob Masterson  President and Chief Executive Officer, Chemistry Industry Association of Canada
Jeff Nielsen  President, Grain Growers of Canada
Kara Edwards  Director, Transportation, Chemistry Industry Association of Canada
Fiona Cook  Executive Director, Grain Growers of Canada
Pierre Gratton  President and Chief Executive Officer, Mining Association of Canada
Joel Neuheimer  Vice-President, International Trade and Transportation and Corporate Secretary, Forest Products Association of Canada
Karen Kancens  Director, Policy and Trade Affairs, Shipping Federation of Canada
Brad Johnston  General Manager, Logistics and Planning, Teck Resources Limited
Sonia Simard  Director, Legislative Affairs, Shipping Federation of Canada
Gordon Harrison  President, Canadian National Millers Association
Jack Froese  President, Canadian Canola Growers Association
Steve Pratte  Policy Manager, Canadian Canola Growers Association
François Tougas  Lawyer, McMillan LLP, As an Individual
James Given  President, Seafarers' International Union of Canada
Sarah Clark  Chief Executive Officer, Fraser River Pile & Dredge (GP) Inc.
Jean-Philippe Brunet  Executive Vice-President, Corporate and Legal Affairs, Ocean
Martin Fournier  Executive Director, St. Lawrence Shipoperators
Mike McNaney  Vice-President, Industry, Corporate and Airport Affairs, WestJet Airlines Ltd.
Lucie Guillemette  Executive Vice-President and Chief Commercial Officer, Air Canada
Marina Pavlovic  Assistant Professor, University of Ottawa, Faculty of Law, As an Individual
David Rheault  Senior Director, Government Affairs and Community Relations, Air Canada
Lorne Mackenzie  Senior Manager, Regulatory Affairs, WestJet Airlines Ltd.

3:10 p.m.

An hon. member

That's a great question.

3:10 p.m.

Lawyer, McMillan LLP, As an Individual

François Tougas

I'm embarrassed to admit that I don't actually know the answer to that question. It's rare that I don't have an opinion, but I don't.

3:10 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

Thank you.

3:10 p.m.

Liberal

The Chair Liberal Judy Sgro

That's it. You've been a great group of people. Thank you very much.

I wouldn't want to have to rate all the panels, because all of you have been very informative.

We will now suspend for our next panel to commence.

3:25 p.m.

Liberal

The Chair Liberal Judy Sgro

Could all the members please take their seats? Thank you very much.

Welcome to our next witnesses. We will very much appreciate listening to you and having your very helpful comments, I hope, on Bill C-49.

We will open the floor with the Seafarers' International Union of Canada. Mr. Given, would you like to start off?

3:25 p.m.

James Given President, Seafarers' International Union of Canada

Thank you very much, Madam Chair. Thank you for having us here today, members of the committee.

My name is Jim Given. I am the president of Seafarers' International Union, and I'm also chair of the Cabotage Task Force worldwide for the International Transport Workers' Federation. .

The SIU is concerned about the proposed amendments to the Coasting Trade Act that build upon amendments to the act put forward through the CETA implementation bill, Bill C-30. They will allow, for the first time, foreign vessels to engage in maritime cabotage without first having to obtain a coasting trade waiver.

The Coasting Trade Act requires that no foreign ship or non-duty ship engage in cabotage without a licence. The broad definition of coasting trade under the act means that maritime activity of a commercial nature in Canadian waters is restricted to Canadian-flagged vessels, including the carriage of goods and passengers by ship from one place in Canada to another. Under the current system, a foreign ship may be imported into Canada to engage in coasting trade if the Canadian Transportation Agency, on application, determines that no available or suitable Canadian-flagged or Canadian-crewed vessel can be used for the required operation.

Changes to the Coasting Trade Act by Bill C-30 will now allow foreign ships owned by European Union citizens or flagged by a European Union member state to engage in the following cabotage activities without a coasting trade waiver: transporting empty containers between two Canadian ports, dredging activities, and the carriage of goods between the ports of Halifax and Montreal as one leg of the importation or exportation of goods to or from Canada.

In addition, subclause 70(1) of Bill C-49 would further amend the Coasting Trade Act to allow any foreign vessel, regardless of flag, to perform the repositioning of empty containers between Canadian ports without obtaining a coasting trade licence.

As a labour union that represents Canadian seafarers working in the Canadian seafaring industry, the SIU cannot support these amendments, because they actively undermine legislation in place to support the domestic Canadian maritime industry and Canadian shipowners.

We strongly support maintaining the current coasting trade waiver system, which already includes a waiver system for foreign vessels. This method ensures the fair practice of giving Canadian shipowners who employ Canadian seafarers the first right of refusal for any available work.

The SIU has previously stated that giving away cabotage rights to the European Union through CETA was an unnecessary concession that has the potential to cause harm to the Canadian seafaring industry.

Canada already has a liberalized version of maritime cabotage, and further relaxation of these restrictions, specifically those involving dredging and feeder services between Canadian ports, does not benefit Canadian shipowners or Canadian seafarers who depend on competitive Canadian labour and domestic market trade for their livelihoods.

Further to these issues are the specific concessions allowing both first and second registry vessels to gain access to the Canadian market. As announced by Minister Garneau, the proposed amendment to allow the movement of empty containers by any vessel, regardless of flag, was done at the request of one shipping federation in Canada, which represents very few or no Canadian-flagged shipping operators. While the SIU does not speak on behalf of Canadian shipowners, it is troublesome to us and our membership that the majority of proposals and concerns from Canadian shipowners and Canadian seafarers appear to have been ignored in favour of one organization representing global shipping agents in Canada.

The domestic maritime industry is a source of direct and indirect employment for over 100,000 Canadians. When discussing global shipping, it is important to distinguish that the Canadian vessel registry, or Canadian first registry, is much more advanced in terms of working conditions and requirements than the majority of global maritime flag states. Global shipping is a highly unregulated industry and one that has seen deteriorating labour and wage conditions define it increasingly over the years. For example, some first registries, and many second registries, are qualified by the ITF, the International Transport Workers' Federation, as being flag of convenience vessels. What this translates to is an underpaid and under-represented work force of mostly third world seafarers who work in an unsafe and unregulated industry with few to no working regulations in place.

In Canada, a maritime accident involving an FOC vessel could lead to months or even years of trying to track down the true owner just to begin the process of seeking compensation, which we know, through experience, is never actually achieved.

Second vessel registries are so under-regulated that a vessel registered in a second registry of an EU country is not even permitted to operate cabotage inside its own flag state. Allowing second registered vessels to operate cabotage inside another country's domestic market is not a common practice and not one Canada should be responsible for initiating.

This is a major global issue that has yet to be dealt with in a sufficient and acceptable way to secure the safety and well-being of all seafarers. To allow this sort of shipping to take place, unrestricted, inside Canada’s domestic maritime industry would be unprecedented. The SIU of Canada is actively involved in securing the rights of all seafarers working in Canada. We will work diligently to ensure that any foreign vessel brought into Canada to operate in Canadian cabotage is in compliance with federal standards of labour, and ensure that foreign crews are being paid the prevailing industry wage and being protected as stipulated by the temporary foreign worker program.

We remain concerned about oversight when it comes to foreign vessels operating in Canada. Establishing an effective monitoring and enforcement regime will be essential to ensure full compliance with the conditions and requirements of the new market access provisions of the Coasting Trade Act. In order for Canadian domestic stakeholders to remain competitive, there must be a system to ensure that foreign operators are strictly adhering to Canadian rules and standards, including labour standards and prevailing wage conditions for the crew, and not flag state law.

Again, the SIU's priority is to ensure that Canadian workers have opportunities for employment in the Canadian maritime industy. We believe the proposed amendments to the Coasting Trade Act contained in Bill C-49 undermine the importance of maintaining cabotage restrictions in place to protect Canadian maritime transportation, strengthen commercial trade, and maintain a qualified pool of domestic maritime workers. While securing employment opportunities for Canadian seafarers remains the primary mandate for the SIU, we also have a responsibility to ensure that all seafarers, both domestic and foreign, are properly treated. Canadian seafarers have an international reputation for being the most well-trained and highly qualified maritime workers in the world. As such, Canadian seafarers and Canadian vessel operators should reserve the right to retain the first opportunity to engage in any domestic maritime operations prior to permitting access to foreign operators.

We remain committed to working with our partners in government in order to establish a workable and acceptable solution to the growing amount of trade in Canadian ports. We believe Canada’s international trade ambitions can be achieved while supporting a strong domestic shipping policy that does not facilitate unrestricted market access to foreign vessel operators. Without a strong Canadian domestic fleet crewed and operated by Canadians, our country would be dependent on foreign shipping companies to move goods to, from, and within Canada, with no commitment to uninterrupted service.

On behalf of the Seafarers’ International Union, we once again thank the committee for having us here. I will close by saying that this is a very welcome change to be sitting at this table in front of the committee. We thank you for that.

3:35 p.m.

Liberal

The Chair Liberal Judy Sgro

You're welcome.

Next is Ms. Clark from Fraser River Pile & Dredge.

3:35 p.m.

Sarah Clark Chief Executive Officer, Fraser River Pile & Dredge (GP) Inc.

Thank you.

Good afternoon. My name is Sarah Clark, and I serve as president and chief executive officer of Fraser River Pile & Dredge, located in Vancouver, British Columbia. Our company proudly conducts dredging operations in B.C. and across the country. I would like to thank the chair and the honourable members of the committee for hearing us today.

I'm actually here to speak to you on behalf of a coalition of dredging companies that operate from coast to coast. I'm going to share my time today with my friend and colleague Jean-Philippe Brunet, the executive vice-president of corporate and legal affairs for Ocean group of Quebec. We sincerely thank you for the opportunity to present our views on the consequences of amending the Coasting Trade Act as outlined in Bill C-49. For us, this is a fresh opportunity to be heard on the impacts of the amendments to the Coasting Trade Act, an opportunity we previously had in respect to amendments to the same act, under Bill C-30, the Canada-E.U. comprehensive economic trade agreement implementation act.

To be very clear from the onset, the Canadian dredgers are eager to compete in a marketplace fuelled by healthy trade relationships. We simply ask that we continue to compete on a level playing field, where risks and opportunities are equal for all. Unfortunately, CETA was a bad deal for Canadian dredgers. There's no reciprocity for us in the European market, but there's streamlined access for Europeans in the Canadian market. We therefore submit that Bill C-49 represents an ideal opportunity to address this inequity and provide workable policy solutions.

Let me say a few words about the dredging industry in Canada and the critical role it plays for Canada as a maritime and trading nation. Ours is a geographically expansive country that relies on a complex transportation network to move people and goods. As stated by Minister Garneau on May 16 of this year, Canadians rely on the economically viable modes of transportation to travel and move commodities within the country, across the border, and to our ports for overseas shipments. At his announcement regarding the trade and transportation corridors initiative on July 4, Minister Garneau highlighted the digging of deepwater ports as being critical to the development of Canada's north, underscoring the essential role dredging plays in the creation and maintenance of our transportation network and, as a result, our national and economic sovereignty.

Opening routes to Canadian and international shipping vessels brings consumer goods to Canadian markets and takes our export products around the world. Without dredging, ports in major cities across the country would be inaccessible to global trade and transportation. Industry operations, both coastal and inland, would not be able to function. The companies that comprise our coalition actively comply with rigorous government regulations concerning labour, environmental protection, safety, and operating standards while regularly submitting to routine major inspections that are amongst the most rigorous in the world. Canadian dredging companies also provide well-paid, middle-class salaries, which in turn fuel local economies across the country.

We are here with you today to do our part to ensure that the Canadian dredging industry is provided a level playing field on which to compete sustainably and responsibly, to create more jobs, and to continue to contribute practically to Canada's economic success. Unfortunately, these important goals have been put at some risk by the effect of the proposed amendments to the Coasting Trade Act contained in Bill C-49. Proposals in Bill C-49 are of course contingent upon the coming into force of elements of Bill C-30 on September 21, 2017. We understand that the spirit of CETA reflects the wishes of both governing bodies and peoples to create better economic ties and a more prosperous future. We support the government's effort to expand trade and to make our economy as vibrant as possible. At the same time, we wish again to express our concerns about the negative impact. We believe the amendments to the Coasting Trade Act contained in Bill C-30 unfairly advantage foreign dredging companies at the expense of Canadian firms, Canadian workers, and ultimately, Canada's transportation infrastructure. Bill C-49 builds on a foundation laid by Bill C-30 that is highly problematic for Canadian dredgers.

As I've said, we are fully prepared to compete. We do so every day in our industry, both in Canada and abroad. Under CETA, there was no negotiated reciprocity for our industry.

CETA opens up the Canadian market to European firms while keeping the European market closed to Canadian dredging firms. This would normally be considered an unpleasant by-product of doing business in the global market, but several factors intervene to create a situation where non-Canadian firms could gain a structural and market advantage over Canadian firms. If a level playing field is not created and maintained, Canadian dredging companies will face structural disadvantages when bidding on contracts, as we pay market rates and benefits that reflect the skills of our crew members in Canada.

For example, foreign crews are typically compensated at about a third or less of the rates we pay. In 2015, the average monthly salary for a chief engineer on a Canadian vessel was $15,000 U.S., while the same position on a Dutch crew was about $7,000 U.S. As salaries represent about one-third of our vessel's operating costs, non-Canadian companies will operate at a significant advantage over Canadian companies, leaving Canadian seafarers out of work. In this scenario, the playing field is inherently uneven, to the detriment of Canadian companies, and, ultimately, to our employees and their families.

Prior to Bill C-30, foreign-flagged vessels were required via the Coasting Trade Act to obtain a coasting trade licence. Jim outlined that process very well in his presentation, which would include paying duties, and following shipping conventions, worker visa requirements, and employment standards. However, even that structure faced monitoring and enforcement challenges. Under CETA, non-Canadian dredgers will have greater access to our waters, and therefore greater opportunity for non-compliance.

Before making our key recommendations, I will now ask my colleague, Jean-Philippe Brunet, to say a few words about Quebec in particular.

September 13th, 2017 / 3:40 p.m.

Jean-Philippe Brunet Executive Vice-President, Corporate and Legal Affairs, Ocean

Good afternoon.

The dredging market in Quebec is very small. We are talking about some 200,000 cubic metres out of a total 3 million cubic metres in Canada. The dredging season is very short—from April to June and from September to November. There are not many major contracts. A number of us are competing for those contracts. The largest contract would be about 50,000 cubic metres. Those are the contracts Europeans are interested in securing. They are not interested in small contracts.

However, those 50,000-cubic-metre contracts help us depreciate the equipment that requires a lot of investments, as well as offer small marinas good prices.

It should be understood that 80% of the global market, with the exception of China and the United States, is controlled by four European dredgers. They call the shots around the world. They have very significant response capabilities.

We work all along the St. Lawrence River. We go to small and large places. We provide our employees with very beneficial jobs, helping them have a very worthwhile career. We are also trying to develop the foreign market to ensure that we can employ them year around.

Thank you.

3:40 p.m.

Chief Executive Officer, Fraser River Pile & Dredge (GP) Inc.

Sarah Clark

Today, we've highlighted a number of issues associated with the proposed and recently enacted amendments to the Coasting Trade Act. However, we would not come to you with problems were we not also prepared to recommend solutions we believe are reasonable and fair to all.

First, we ask that this committee recommend to the government the establishment of an operational enforcement protocol, led by Transport Canada, binding on the deputy ministers of all relevant departments and agencies. I wish to be clear that we are not seeking the establishment of a new enforcement arm of government. To do so would not be fiscally prudent or organizationally necessary. We simply ask that the government take note of the number and seriousness of the enforcement issues at play where foreign crews on foreign-flagged vessels are concerned. These include temporary foreign workers through IRCC and CBSA, a labour market impact assessment through ESDC, tax administration through CRA, safety inspections through Transport Canada, labour practices through ESDC, and workplace health and safety issues through ESDC, to say nothing of wage disparity and pressure.

Departments must speak to each other, and they must co-operate rapidly and meaningfully in order to enforce an intersecting group of important laws. It's not enough just to have done that inspection of the vessel or to check for its basic safety. We are assured that many of the positions on our vessels would be subject to visas for temporary foreign workers, and to be able to fully police that will take an effort of coordination across departments. After two years of engagement with the government, we have yet to see a concrete plan of action for enforcement. Right now, interdepartmental coordination is not governed by a clear process. It is under-resourced and puts the onus on the industry and workers to help police our waters. To us, this seems unacceptable for Canada as a modern maritime trading nation.

Second, we ask the committee to seek from the Government of Canada a firm commitment that enforcement will be funded appropriately and meaningfully, to ensure that Canadian dredgers can compete on a fair and level playing field with non-Canadian vessels, whether it be with respect to—

3:45 p.m.

Liberal

The Chair Liberal Judy Sgro

Ms. Clark, my apologies for interrupting. Could you do your closing remarks? We've passed your 10 minutes.

3:45 p.m.

Chief Executive Officer, Fraser River Pile & Dredge (GP) Inc.

Sarah Clark

Yes. Thank you.

Our final recommendation is that this committee seek a firm commitment from government in the form of a formal mandate to Canadian NAFTA negotiators to seek reciprocity with the U.S. and Mexico for Canadian dredgers and related operators.

Let me be clear. In the wake of CETA, what is at stake here is the basic viability of the Canadian dredging industry. Reciprocity is the entire point of free trade. Let Canada be a champion of full reciprocity on the water for our industry, our workers, and all who seek to make Canada a world leader in dredging and maritime trade.

We thank committee members sincerely for their consideration.

3:45 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you, Ms. Clark.

We now have Mr. Fournier, from the St. Lawrence Shipoperators.

3:45 p.m.

Martin Fournier Executive Director, St. Lawrence Shipoperators

Madam Chair, ladies and gentlemen members of the committee, thank you for giving us an opportunity to share our comments and concerns with respect to Bill C-49, and more specifically the amendments proposed to the Coasting Trade Act.

I will introduce myself. I am Martin Fournier, Executive Director of St. Lawrence Shipoperators, an association whose mission is to represent and promote the interests of Canadian ship operators in order to support their growth and ensure the development of shipping on the St. Lawrence River.

St. Lawrence Shipoperators consists of 15 members—15 Canadian ship operators that have a fleet of more than 130 vessels that employ Canadian sailors. The fleet navigates the St. Lawrence River, the Great Lakes and the east coast, in addition to serving the Atlantic and Arctic provinces. Our members provide thousands of people with quality jobs and generate significant economic spinoffs in Canada.

According to a study carried out by the Council of Canadian Academies, the Canadian shipping industry employs between 78,000 and 99,000 individuals and generates between $3.7 billion and $4.6 billion in employment income. Just the activities of the inland fleet, which operates on the St. Lawrence River and in the Great Lakes—the area generally covered by our members—create more than 44,000 direct jobs and generate more than $2 billion in provincial and federal revenues. Therefore, the domestic marine industry plays a a key role in the competitiveness and prosperity of Canada and of the entire North American economy.

It is important to point out that marine transport operations between various Canadian ports are covered under the Coasting Trade Act, whose aims include supporting domestic marine interests by reserving the coasting trade of Canada to Canadian registered vessels. That information comes directly from Transport Canada's website. Among other things, the act stipulates that transportation between two Canadian ports must be provided by Canadian-flagged vessels with Canadian crews.

In the United States, since 1920, the Merchant Marine Act, better known as the Jones Act, has been protecting the U.S. domestic marine industry by ensuring that coasting trade is handled by U.S.-built vessels that are U.S.-flagged and U.S.-owned, and are operated by U.S. crews. Many other countries around the world, including European countries, have laws that protect their market.

It should be noted that, during the negotiations that led to the economic agreement with Europe, countries of the European Union did not open their market to Canadian ship operators. Only Canada agreed to concede a portion of its market, with no reciprocity.

When a country opens its market to foreign partners that do not operate based on the same rules and are not subject to the same requirements as Canadian ship operators with Canadian-flagged vessels, that favours foreign ship operators at the expense of the very competitiveness of our ship operators and domestic interests.

According to a study carried out in 2015 by Ernst & Young and Innovation maritime, the crew costs for European vessels authorized to operate in Canadian waters under the economic agreement represent only 30% of the costs of a Canadian crew. The wage gap between Canadian crews and crews from other countries, including those provided for under Bill C-49, will be even larger.

This is the second time in less than a year that amendments have been proposed to the Coasting Trade Act. The first time was under Bill C-30, which concerns the implementation of the economic agreement with Europe. The second time was through this bill, which makes certain concessions for the European Union that are criticized by the domestic marine industry.

Canada must also take action to protect its marine industry and refuse to give up its market to foreign companies. This is a matter of the vitality and sustainability of Canada's domestic shipping industry.

I want to mention that, during the latest electoral campaign, the Liberal Party wrote to us that it had no intention of amending the Coasting Trade Act and even recognized the importance of the act for the market. St. Lawrence Shipoperators feels that free trade agreements generally benefit the Canadian economy and supports Canada's efforts to increase trade and the competitiveness of its economy. However, we are concerned about the consequences of loopholes in the Coasting Trade Act and concessions made in trade agreement negotiations that affect the domestic marine sector.

St. Lawrence Shipoperators and its members, as well as a number of stakeholders and industry representatives that participated in the work of the industry-government working group on the implementation of the economic agreement, have repeatedly expressed their concern with regard to the system's effectiveness and the measures currently in place to monitor and effectively control foreign vessels' coasting trade activities. Many examples and situations justify those concerns. The addition of new coasting trade activities in the economic agreement or any further opening of the Coasting Trade Act is of little comfort in that regard.

We have requested the establishment of an oversight system on a number of occasions. The request was also made to the Standing Senate Committee on Foreign Affairs and International Trade, which studied Bill C-30. There was even a recommendation to that effect.

So it is essential that an oversight system be established and that it include all the government departments and agencies involved, meaning Transport Canada, the Canada Border Services Agency, the Canadian Transportation Agency, Immigration, Refugees and Citizenship Canada, and Employment and Social Development Canada.

St. Lawrence Shipoperators has always been opposed to any opening of the Coasting Trade Act that would allow foreign vessels to transport cargo between two Canadian ports. Unfortunately, we are witnessing a gradual erosion of the act.

This market is reserved for Canadian vessels that, pursuant to regulatory requirements and Canadian standards, are designed, built and refined to handle the numerous challenges of navigation in Canadian waters and waterways. With their adherence to those standards, some of the highest in the world, Canadian vessels are making navigation safe and protecting the environment. These national vessels are operated by crews that are solely and exclusively composed of Canadian mariners, who are among the best qualified and best trained in the world. They are knowledgeable of and experienced in navigation in Canadian waters and they are aware of the challenges inherent in sailing here. Reaching those high standards ensures greater safety and respect for the environment. But that comes with significant operating costs that Canadian shipowners must bear, unlike many other foreign owners.

The particular circumstances of the Great Lakes and the St. Lawrence Seaway, economically and in terms of both maritime and environmental safety, requires that the protection measures, of which the Coasting Trade Act is part, must be maintained.

So it is important to preserve maritime jobs and the expertise that has been built in Canada over centuries. Opening the Coasting Trade Act is risking the loss of priceless knowledge and economic wealth that is of direct benefit to companies and workers here.

For those reasons, St. Lawrence Shipoperators and its members oppose any opening of the Coasting Trade Act and any change to it. We are asking for a single body to control and oversee cabotage activities to be conducted in Canadian waters by foreign vessels.

Thank you.

3:50 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you all very much.

We'll move on to our first questioner, Ms. Block.

3:50 p.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Thank you very much, Madam Chair.

I want to thank our witnesses for joining us today. It is good to turn our attention to another part of Bill C-49 which sees the Coasting Trade Act amended.

I have a couple of questions. They're probably broad questions that any one of you could answer. The first is, can you identify for this committee how Bill C-49 goes further than Bill C-30?

3:55 p.m.

President, Seafarers' International Union of Canada

James Given

I'll attempt it, just because I like to talk.

Bill C-30 deals with the EU and with CETA and is limited to EU first and second registry vessels. If you look at the expansion of the movement of empty containers, it's being opened up to any flag vessel, which would be Panama, Liberia, all of the FOC flag states.

I look at a flag such as that of the Marshall Islands, which many ships that would be trading in this trade fly. The actual flag state of the Marshall Islands is in Reston, Virginia. That's where you pay to get the Marshall Islands flag mailed to you. It goes, then, from the European Union to all flag states.

3:55 p.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Would anybody else like to provide an answer?

No? Okay.

I thought I heard one of you say that you had received assurances that the Coasting Trade Act would not be amended during the review of the Canada Transportation Act. Were you consulted, then, on the amendments that you see in Bill C-49?

3:55 p.m.

Executive Director, St. Lawrence Shipoperators

Martin Fournier

No, we were not consulted about Bill C-49.

3:55 p.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Okay.

Then I would ask, can you provide me with either a real or a hypothetical example of what will happen if this provision passes? What are some of the implications of this to your industries?

3:55 p.m.

Executive Director, St. Lawrence Shipoperators

Martin Fournier

At the beginning, when we heard what was included in the economic agreement with Europe, one of our concerns was that it was going to open a crack in the Coasting Trade Act. We were afraid that the crack would grow bigger. Bill C-49 shows that our fears were justified, because we are told that opening the Coastal Trade Act to the shipping of empty containers does not just apply to European vessels, but also to vessels of all flags.

So we can already see the crack getting bigger. What is coming next? We do not know, but we are expecting other demands along those lines that will widen even more the scope of the concessions that have been made as part of the agreement with Europe.

3:55 p.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Does anybody else want to answer that?

3:55 p.m.

President, Seafarers' International Union of Canada

James Given

When you look at the industry as a whole and you start opening up cabotage to foreign carriers, it has a snowball effect. The rates conditions and working conditions on board foreign-flag vessels, and some of these are actually first registry European vessels, second registry European vessels, and especially Ethos sea vessels, are far below what the standard is in Canada.

We have vessels that are currently... There's one in Vancouver where the wage rates on board are as little as $2.50 per hour. We have other scenarios where we go from $1.75 an hour and up. When you look at the working conditions, the safety conditions, the environmental standards, and everything else on board these vessels, it's very lax.

There is no international control on flag of convenience vessels. That's why they're called flag of convenience. The owner of the vessel is in one country. The beneficial owner, the registered owner, is in another country. Their crew could be from three or four different countries. The insurance agent is from another country. There are layers and layers in order not to get to that real beneficial owner.

I'll keep this brief. We've had situations where people have been hanged on board ships, on flag of convenience ships, in order for them to avoid Canadian standards or any other standards. There is a huge discrepancy and there is no control over what goes on aboard those ships, because a lot of it is left to flag state control.

When you look at the flag of convenience countries, the flag state control does not exist. A seafarer who is injured, a seafarer who is cheated wages, a seafarer who has anything on board that ship, who lacks food, who lacks anything, has to look at an outside resource such as the ITF in order to try and get that fixed, and it's a long difficult process because it's the Wild West in shipping.

Shipping was the first globalization industry, and we certainly understand trade. We understand everything else. Our industry is built on trade, but you cannot compare Canadian flag and Canadian conditions, which thank God we're in Canada, to an FOC or a foreign-flag vessel.

4 p.m.

Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Do you have something to add?

4 p.m.

Chief Executive Officer, Fraser River Pile & Dredge (GP) Inc.

Sarah Clark

I have a good example of this. The current vessel that we use now for dredging the Fraser River was purchased from one of the European dredging companies. It was flagged in a port of convenience. We spent millions of dollars to bring that vessel to Transport Canada's safety standards, especially in the area of fire separation which was non-existent within the vessel. Not only did we bring it up to current Canadian standards so that the crew were protected should a fire break out on the vessel, the crew is also trained to a very high level in firefighting. When they're out in the middle of the Fraser they can't rely on someone coming to rescue them, nor in the middle of the St. Lawrence.

Our crews are doing two fire drills a month covering scenarios that they may encounter in engine rooms, etc. It's not simply an exercise with a fire extinguisher. They are fully trained firefighters on board. They are already on a vessel that has been brought up to today's standards. What Jim is saying is those vessels that we're competing against or we could be competing with, are not built necessarily to the standards, nor are they training their crews to those standards.