Transport Committee on March 21st, 2022

[Marc-Yves Bertin]

I could invite one of my colleagues, Julie Gascon, to speak to the protocols. In simple terms, while the Department of Transport and other partners monitor Canada's approaches, the final determination as to what to do if a vessel has been identified is a decision that is taken by the Department of Global Affairs. These are measures that have been taken under the Special Economic Measures Act. As you well know, this is an act that falls under the responsibility of the Minister of Foreign Affairs.

In that respect, it's fair to say, or it's actually appropriate to say, that the decisions are for the Minister of Foreign Affairs on the advice of her officials, but obviously in consultation with the support of other departments, such as Transport Canada.

[Terry Dowdall, Conservative, Simcoe—Grey, ON]

I don't know if someone can elaborate perhaps on the due diligence that was done on these potential impacts on the Canadian food supply, because certainly everyone is going to pay more. As you know, we're having a tough time now with inflation, and we have the CP rail strike. Who knows what it is, but people aren't getting products and this is just another thing. The price of fertilizer has already increased 60% to 80%. If we add a 35% duty on products purchased months ago, it means an effective doubling of the fertilizer prices. It will be difficult for our farmers, but it will be difficult again for the end-users.

I'm just wondering, has there been any discussion on the impact on the Canadian food supply?

[The Chair, Liberal, Peter Schiefke]

Please give a 15-second response.

[Marc-Yves Bertin]

Sure. I think it's fair to say that, when confronted with these types of decisions, the Department of Global Affairs needs to consult with a range of departments, including Transport but other departments as well, that would have a perspective to offer in terms of any commodity that may or may not be captured by a measure, or questions being asked about a commodity and the potential effects of the measures.

[Terry Dowdall, Conservative, Simcoe—Grey, ON]

Thank you for your answers.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Dowdall and Monsieur Bertin.

The next round of six minutes goes to Mr. Badawey.

Mr. Badawey, the floor is yours.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Chairman.

I want to expand a bit on the question that was just asked with respect to the supply chains.

Mr. Bertin, how do you feel the effect on the Canadian supply chain will occur in the next couple of months with what's happening right now?

[Marc-Yves Bertin]

As I mentioned earlier, Canada-Russia trade is relatively small and focused on a few commodities. I mentioned petroleum products, chemical products, iron ore and minerals. From that perspective, we can see that there is therefore a potential impact on certain commodities that are transported by vessels that are Russian-flagged or Russian-owned. From our perspective, just speaking to petroleum products, we're talking here about one of the largest commodities Canada imports from Russia. I also mentioned, of course, fertilizers.

That said, over the near to medium term, Canadian importers need to make sure that they're not contracting with operators or charterers of ships that are subject to the ban. I think the repeated communications around this provide Canadian importers with the foresight needed to organize their business dealings accordingly.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you.

I'm glad you brought that up about the shippers and the owners. It goes back to a question that Mr. Bachrach alluded to earlier with respect to ships that are owned by Canadian companies but are flagged under possibly Russian flags on the vessels.

Going a bit deeper into the weeds on that, how are you going to determine the ownership versus simply the flagging of each vessel? I guess to that same question, what would be the definition of “Russian vessel” with respect to the ownership and the flagging?

[Marc-Yves Bertin]

I'm going to turn the question over to my colleague Julie Gascon.

[Julie Gascon, Director General, Marine Safety and Security, Department of Transport]

Thank you very much, Mr. Chair.

Thank you, Mr. Bertin.

In terms of determining the ownership of the vessel, there are various ways. The simplest one is that the vessel is owned by Russia and has a Russian flag on its stern, so it's a Russian vessel. It can be owned by Russia, but registered in another country. That's also often very clear.

Where sometimes the analysis needs to be a bit more in-depth is when the vessel is being chartered, partly chartered or leased. That's where, with the maritime security operation centres' partners—the Coast Guard, National Defence, CBSA, the RCMP, Transport Canada, and the Department of Fisheries and Oceans—we do an in-depth analysis of all the elements that are received on this particular vessel and its cargo, and we time our analysis to the pre-arrival report, which is normally sent to the maritime security operation centre. Equipped with this analysis, we provide as much detailed information as we can to our Global Affairs colleagues, who make the final determination and may request additional paperwork if there is any concern in terms of whether the vessel or any of its charterers could meet the definition under the sanctions.

It is a complex operation, but supported by many departments to be able to have a thorough analysis of that vessel.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you.

With respect to the number of Russian vessels we see traditionally in Canadian waters, approximately how many Russian vessels will be affected by this ban? Of course, as was said earlier, that will give us some kind of gauge in terms of what the impacts on the supply chain will be. Approximately how many Russian vessels will be affected by the ban?

[Marc-Yves Bertin]

Thank you [Technical difficulty—Editor].

We're talking roughly about just under 75 vessels. Obviously, the calls can vary according to seasonality and the commodities that they're shipping[Technical difficulty—Editor]. I'd say that this represents roughly 1% of all vessel calls on Canada. That said, I think what's important to note is that the power of sanctions tends to be in the coordinated nature of the actions taken by Canada and other countries. They may be identical or variable, but if we take them together, we can see that, as the minister was noting, there's been a sizable impact on the Russian economy and its economic activities. AIS data, for example, information that we can see in terms of vessels, suggests that activities at Russian ports have declined since the start of hostilities by about 40%.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you.

With respect to the supply chain, I want to bounce back to that for a second, because I understand that a lot of other countries are putting forward bans. Do you see the impacts that are happening in other countries, the impacts to fluidity or the supply chains, happening with Canada as well, whether they're the same or different?

[Marc-Yves Bertin]

I come back to the fact that roughly 1% of vessel calls in Canada are Russian-connected, for the purposes of the ban. That said, there are various measures that have been instituted, as well as actions taken by some of the major shipping lines.

In terms of the impacts, sanctions obviously have some very material impacts in the way that supply chain actors operate to make sure that they don't run afoul of the various sanction regimes that exist around the world. What that means, therefore, is that a broad range of actors—whether those are bankers, insurers, shippers or what have you—have to scrutinize their dealings much more than previously, again to make sure they're on the right side of the law in these contexts.

What we're seeing is higher degrees of scrutiny, which can lead to delays. We're seeing some reroutings, but also, as I was mentioning, a certain decline in Russian port activities.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Bertin.

Thank you, Mr. Chairman.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Badawey.

Thank you very much, Monsieur Bertin.

Next we have Mr. Barsalou-Duval.

We now go to Mr. Barsalou‑Duval for six minutes. Go ahead.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

My question is for Mr. Girard, of NAV CANADA.

Mr. Girard, you talked about the Aeroflot flight in your opening statement. If I understood correctly, you said that there was some confusion over whether the flight was authorized to enter Canadian airspace since the FAA had not put in place a restriction. I assume the flight was leaving the U.S.

The FAA provided you with information and you communicated with FAA staff. When a flight enters Canadian airspace, do you check with the pilot or with the originating country?

I'd like you to clarify that for me.

[Ben Girard]

Thank you for your question, Mr. Barsalou‑Duval.

First, I want to make clear that there wasn't any confusion.

Before the flight, we spoke with Transport Canada and we asked the FAA to reroute the flight to keep it out of Canada's airspace. That's when the FAA controller indicated that they were aware of the NOTAM and that the aircraft was authorized to enter Canadian airspace because it was a humanitarian flight.

According to the procedures in place at that time for air traffic controllers—procedures supported and even mandated by the ICAO—we had to give the aircraft clearance because it had declared itself a humanitarian flight. The same rules would apply to a search and rescue or medevac flight. Those were the procedures in place at the time. The controller on duty followed those procedures and allowed the aircraft to enter Canadian airspace, in coordination with the FAA controller.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I gather, then, that humanitarian flights were authorized when the restriction was first put in place, but not anymore.

[Ben Girard]

Yes and no. The first NOTAM made no mention of humanitarian flights. Normally, those flights are allowed entry, in compliance with ICAO procedures.

As you pointed out, the NOTAM has since been clarified, and NAV CANADA was given authority to deny clearance to humanitarian, medevac and search and rescue flights, unless instructed otherwise by the government. Normally, NAV CANADA takes the pilot's word when they declare the purpose of the flight as humanitarian or search and rescue. NAV CANADA does not verify whether the declaration is true because it does not have that capacity. That's what happened at that time.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I realize that NAV CANADA doesn't have the capacity to verify declarations and takes the pilot at their word, but are there other ways to verify whether a flight is genuinely a humanitarian flight?

[Ben Girard]

Not on NAV CANADA's end. I would have to defer to the Transport Canada officials on that.

[Nicholas Robinson, Director General, Civil Aviation, Department of Transport]

Thank you, Ben.

Thank you, Mr. Chair.

The way Canada defines humanitarian or emergency flights is very clear in the CANSCA. That would be medevac, search and rescue, or those related to transport during an international emergency. In this case and in our reviews, we are concerned about how Aeroflot identified itself in its flight plan prior to departure from the United States, declaring a humanitarian flight. We're disappointed in the operator for trying to, as it would appear, circumvent the norms and practices within the aviation industry around the use of humanitarian flights. Humanitarian flights are for emergency purposes, to make sure we are able to prioritize flights into particular spots or put them in the front of the line, as it were, during emergency situations. In this instance, we don't see that. This action by Aeroflot is one that we're continuing to investigate, and we have a great deal of disappointment in its use of the humanitarian designation.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you for your answer, but I don't think I understand how Transport Canada determines [Technical difficulty—Editor].

If I take off in a plane, there's no way for NAV CANADA to know that, so I assume there are other authorities to which that information has to be declared in advance—in this case, Transport Canada.

Is that how it works?

How was the pilot of the aircraft able to declare that the flight was for humanitarian reasons and continue on their way?