Transport Committee on Nov. 21st, 2017

[Ken Veldman]

I think you're absolutely correct in terms of its impact on current operations. It's a relatively insignificant impact. I think the concern from our perspective is more looking into the future.

I mentioned in my comments that we are seeing, certainly from an Alberta perspective, a strategic push to more refined fuels. Within those refined fuels there are a number of by-products that come out of that production process, and if we're looking to maximize value, it's not about just taking light fuels. There are also heavier fuels, and those are the types of fuels that would be impacted in terms of the schedule as it's currently written up within the legislation.

[Bradley Trost, Conservative, Saskatoon—University, SK]

Without a pipeline, could this impact rail shipments? Generally we think of fuels and liquids as being shipped by pipeline, but some are shipped by rail. Could this have an economic impact on shipping by rail? I don't know what products could be shipped or exported by rail in the Prince Rupert area, but is that a potential economic impact?

[Ken Veldman]

When you're looking at refined fuels, yes. The primary mode of transportation would likely be rail.

[Bradley Trost, Conservative, Saskatoon—University, SK]

Okay. You're saying that this could have a real impact there.

Ms. Spahlinger, you said earlier in your remarks that one of the potential results of this legislation is that it could make it more risky to do business in Canada. You said that as part of your presentation, and then you moved on.

Could you elaborate, and give examples of how this would make things more risky? Would it make it more risky for your sort of business? Would it make it more risky for other sorts of business? Talk to a politician who.... I was a geophysicist, but I wasn't in the corporate world. How will this impact making business decisions for your company and others?

[Marina Spahlinger]

I think it's really around certainty. As somebody mentioned earlier, for us it's important to have a certain level of certainty when we conduct business and when we look at future projects.

One of the aspects I mentioned was that there seems to be a lack of scientific evidence for including these products in the legislation to begin with. As well, there is concern about the kinds of doors it will open up in the future for other products. The area itself can be quite expensive in which to develop projects, so maybe you would start looking at other areas where it would be less pricey to develop a project and where there would be more certainty.

There are a lot of aspects that I guess somebody else within Vopak would be more qualified to talk to you about.

[Bradley Trost, Conservative, Saskatoon—University, SK]

You touched in your response on something I was going to ask everyone about. You talked about the scientific basis of this.

Be it in the regulatory aspects of this bill or in the legislative aspects of this bill, do you think it would be wise to have some sort of objective scientific definition of how products are included?

Again, I'm new to the committee, and the first time I really looked at the bill was today. From what the witnesses have said today, I'm getting the impression that you don't know what the objective criteria were for including the various products in it. I'll take a response both from the port authorities and from the people here at the table.

Have you thought about what you would like for a scientific objective or where we could look to find amendments that would fit those criteria?

[Marina Spahlinger]

Yes—

Go ahead, please.

[Ken Veldman]

I think you've likely touched on our primary concern with the legislation as it's written. It's not that we have a position on a moratorium one way or the other, but the reality is that there is a lack of evidence as to why certain products were included in the schedule, and that comes back to the fact that there really hasn't been a quantification of what that risk is, and specifically the risk of incidents, as opposed to the quantification of effective cleanup.

Absence of evidence as to why a product is deemed unfit to be shipped off the north coast makes it a piece of legislation that is difficult to sustain in the long term, because there isn't a measure as to what we're actually trying to achieve in terms of marine safety.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Veldman.

Sorry, Mr. Trost; you're almost a minute over. Mr. Hardie is next.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Thank you.

Actually, thanks to Mr. Trost, we'll just continue on with that line of questioning.

With regard to the scientific evidence, certainly there was a process to identify what they call the persistent oils. From everything I've seen—and I'm no scientist, either, so we're all on the same basis there—it's very clear that even if you go back to the Exxon Valdez or what came out of the Nathan E. Stewart, diluted bitumen is a nasty bit of stuff if it gets into the water.

Do you agree, Mr. Veldman?

[Ken Veldman]

I would agree, but I would also focus on one of my comments, which is that there is a very good question as to what that risk of it getting into the water is. That quantification of the risk of incident is missing from this conversation.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Well, yes, and I guess if you were to talk to some of the indigenous communities, they would say that if it's not being shipped, there is no risk—period, zero, and never. That seems to be the position they take.

I'm sure that having been asked to give some testimony here, you've been looking at the world through the eyes of a port operator. Have you had any opportunity to speak to proponents of doing this versus opponents of doing this in your neighbourhood?

[Ken Veldman]

I have, very much so. As you may imagine, there are a wide variety of opinions as to what's acceptable risk and what isn't. However, the reality is that risk can be quantified, and if you're looking to achieve zero risk, then you're correct that zero transportation is really the only way to achieve that.

That said, if our appetite for risk is zero, that has very broad ramifications for shipping off the coast in general.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

In the absence of a pipeline, to move any kind of product from Alberta to the port we would have to rely on rail. Would there be the rail capacity to service the larger tankers that could come in absent a moratorium?

[Ken Veldman]

Yes. We don't see CN's mainline capacity as being any kind of a limiting issue for any type of cargo, including potential liquid bulk.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

To the metro Vancouver port, I almost got this question in the last time.

You mentioned that there hasn't been any kind of significant increase in the number of ships going in and out, but some of the people working on the pilotage side are saying that those ships are larger now, that in fact the amount of cargo going into and out of the port of Vancouver has gone up quite substantially simply because the ships bringing that cargo in are a lot bigger. Is that true?

[Peter Xotta]

Yes. In fact, I should have extended my comments by confirming that the volume of cargo has increased substantially over the last 20 years. In the most recent calendar year, we handled about 140 million tonnes of cargo. Four million tonnes or so was liquid bulk products. The average vessel size has increased across all sectors over that period of time, and that's why the total volume has increased substantially, but the number of vessel calls has not.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Good. I'm glad we got that straightened out.

You mentioned, sir, that it's good to be able to rely on “unbiased” sources for information. I think that's the term you used. Where, pray tell, do you find those?

[Peter Xotta]

Specifically I was referring to the recently developed—in the last two years—Clear Seas Centre for Responsible Marine Shipping. It's an agency that was created to inform this conversation.

Frankly, I would say that there are a number of relevant sources out there that could provide commentary on this issue. That's just one agency. It happens to be something that is jointly funded by government and some industry, but it has a representative board that is intended to bring a balanced perspective to this dialogue. It's just one source that could opine on some of these issues. In fact, they're prepared to do research to support the dialogue.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Hardie. The time is up.

Thank you very much to our witnesses for participating today.

The meeting is adjourned.