Debates of Feb. 19th, 1998

Small Business Loans Act

[The Deputy Speaker]

I advise the House that we will now begin 10 minute speeches without questions or comments.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, it is a pleasure today to speak on Bill C-21, an act to amend the Small Business Loans Act.

There are several parts to this act. The reason Reform is opposing it is primarily because the act is not living up to sound fiscal principles. The auditor general has repeatedly said that the SBLA needs revamping. It has numerous loopholes in it that waste the taxpayers' money.

One of the things which greatly surprises us is that the auditor general's reports, the independent audits of government functions, ministries and programs, are never listened to. Sound constructive principles are continually put in these very good documents of the auditor general. Does the government listen to them? No. Not only no, but virtually never.

Looking back in history the number of times the auditor general's reports have been listened to and acted upon by the government can be counted on one hand. And if it is not in the amount of thousands of dollars, it is millions and billions of dollars that these programs have cost. I find it unfathomable.

This is not neurosurgery. The solutions are there yet governments, be they Liberal or Conservative, have repeatedly and consistently ignored these constructive solutions that would enable the government to spend the taxpayers' money in a wiser fashion. Many of these ideas are not difficult to implement. They would be very cost effective and very useful not only for the public but also for the people working within these ministries.

We have a number of observations from the auditor general's report that I would like to bring up which are critical of the SBLA. He found that under the SBLA the taxpayer was on the hook for $210 million. These are moneys that were lent by lenders to people and which the government, that is the taxpayer, picked up the tab for. Why should the taxpayer be subsidizing the lenders which are the banks? The banks have made record profits recently, in the billions of dollars, and they have been subsidized in the order of $210 million by the taxpayers of Canada. Does this make sense? This is idiocy. It does not have to happen.

We approve the extension of the SBLA because providing loans in a responsible fashion to small businesses so that they can get on their feet is exceedingly important. Small businesses provide employment, not only for the people who starting them but also for the people they employ. It is a good idea.

The bad idea is that the lender is not forced to adhere to strong principles. What is worse is that there is nothing in the program to force the government to do an audit or an analysis of whether the money that is being lent is being lent properly by the lender or whether the borrowers are being assessed in a judicious fashion. The auditor general showed that under the SBLA lenders were not being audited properly. There is nothing in the program to force lenders to analyse borrowers properly.

As a result 40% of the loans made under the SBLA would have been made anyway. Taxpayers are on the hook for $210 million. It is unnecessary. That money could be used for many other useful programs or it could be applied to debt reduction. It is a waste of taxpayer money.

There is no doubt that job creation figures have been inflated as much as five times to add justification to the program. That is not useful. We are advocating that the government take the initiative to ensure that the SBLA is audited, that borrowers are audited, that lenders are audited and that there is accountability. At the end of the day this program like any program is paid for by the public. It is paid for by the hard working, overtaxed public.

We owe one thing to members of the public and that is to spend their money wisely and responsibly. The SBLA is an example, as demonstrated by the auditor general, of a program where this is simply not happening.

I would like to add some constructive suggestions to those that have already been made. First, the SBLA eligibility requirements and conditions should produce the expected results. There is no effective analysis, as I mentioned, and no cost benefit analysis.

Second, it is important to define the expected level of incrementality. Are we seeing an increase in the number of businesses that would not normally get loans other than through the SBLA program? In other words, is the SBLA doing what it is supposed to do? Again there is no analysis.

Third, there should be full cost recovery. If we manage to get full cost recovery what will happen is that the money which is lent will be returned to the program to be used to provide money to other small businesses. Obviously when $210 million are lost there will be less money to lend to other small businesses. Those who are treating the program irresponsibly are not only compromising the public. They are also compromising other small businesses that wish to avail themselves of the program.

Fourth, Industry Canada should assess whether the lender is exercising due care. The lender is the bank. Banks sometimes do not engage in good fiscal practices when lending money. The claim from the lender must be assessed. It must be shown that the lender is exercising due care.

Fifth, the interest paid to lenders is too high. Interestingly enough, while this is a loan provided by the government, the lending rate can be prime plus 3%. The banks are not exercising due care. They are saddling the taxpayer with an interest rate that is prime plus 3%. That is not fair. It is taking advantage of the taxpayer.

Therefore it is important that we decrease the interest rates being charged by lenders. I am sure that is something the government will be very interested in. Some banks look to the program as a cash cow.

Sixth, better information on the performance of the SBLA is required. Parliamentarians must have the information to assess the SBLA. That is an important criticism by the auditor general.

I would like to make some general comments about the economy. Providing loans and start-up money is very important for small businesses. It overcomes one of the obstacles facing small businesses. There are larger obstacles that all businesses face, that is the amount of red tape they have to deal with. The government has to take a leadership role and work with the provinces to cut the red tape which has managed to put more barriers between east and west Canada than north and south.

We must decrease taxes. If we visit small businesses in our community what mantra do we hear? “I can't hire. I can't train because all the money goes to my taxes. If I had less tax I would be able to hire more people, train more people, invest in my business and become more competitive, not only within the confines of our country but also internationally”.

The barriers of high taxes, the barriers of excessive rules and regulations not only compromise competitiveness within our country but compromise competitiveness internationally.

If the government would like to take one international issue to heart which is exceedingly important, there are two major fracture lines through Japan and Indonesia right now. The solutions are out there on the table from the International Monetary Fund, which have been given to both countries. They are not acting upon it because of a failure in leadership. The only way they will act on domestic changes is through international pressure.

One can argue that domestic issues are for a country to deal with. However, if Japan and Indonesia fail to deal with their domestic problems an economic tsunami will come across the Pacific Ocean and smack into Canada. It will be a significant and major impediment to our ability as a country to thrive economically.

I conclude by saying that we disagree with Bill C-21. I hope the government will take the constructive suggestions members of the Reform Party have put forward, implement them and build a better SBLA program for all Canadians.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the yeas have it.

And more than five members having risen:

[The Deputy Speaker]

Call in the members.

And the bells having rung:

[The Deputy Speaker]

At the request of the chief government whip, the division stands deferred until Monday at the conclusion of the time for Government Orders.

Canada Shipping Act

[Herb Dhaliwal, Liberal, for the Minister of Transport]

moved that Bill S-4, an act to amend the Canada Shipping Act (maritime liability), be read the second time and referred to a committee.

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, as always, I consider it a privilege to rise in the House to bring attention to an important piece of legislation.

Bill S-4 is an act representing shipowners liability for maritime claims in general and for oil pollution damage in particular. Transport Canada has made a strong commitment to updating the legislation which governs the shipping industry. Bill S-4 now before us deals with the modernization of the marine liability regimes contained in the Canada Shipping Act.

The bill deals with maritime liability and proposes to increase the compensation available to Canadian claimants, in particular for claims related to ship source pollution damage. In contrast to the current regime for oil spills, these amendments to the Canada Shipping Act will establish shipowners liability for environmental damage and allow for the cost of preventive measures taken in anticipation of a spill.

The legislation was originally introduced as Bill C-58 in the last parliament by the former transport minister. However the bill died on the order paper and was reintroduced in the Senate last October as Bill S-4.

The bill amends part IX and part XVI of the Canada Shipping Act. Part IX deals with global limitation of liability for maritime claims, while part XVI deals with liability and compensation for oil pollution damage.

The amendments to part IX of the Canada Shipping Act are based on the 1976 convention on limitation of liability for maritime claims and its protocol adopted in May 1996 under the auspices of the International Maritime Organization, the IMO.

As I stated earlier, the proposed legislation will increase ship owners limits of liability and improve considerably the amount of compensation available to claimants involved in maritime accidents. These limits are calculated on the basis of the ship's size and apply to all claims arising from the same accident. This enables shipowners to assess their potential liability, which is an essential condition for commercial insurability.

The regime of global limitation contained in part IX of the Canada Shipping Act applies to all ships including pleasure vessels. The current limit of liability for loss of life or personal injury for owners of vessels below 300 tonnes, which includes most pleasure vessels, is only $140,000.

As members can appreciate, this limit is totally inadequate and the new limit for vessels below 300 tonnes has been set at $1.5 million, which is more in line with the liability levels long established in the automotive sector.

[Greg Thompson, Progressive Conservative, Charlotte, NB]

Mr. Speaker, I rise on a point of order. I believe that if you look very clearly at the rules of the House we have a parliamentary secretary basically standing up and defending legislation that would put millions of dollars in the pocket of the Minister of Finance. I think there is a collusion of interest here.

[The Deputy Speaker]

I think the hon. member knows that this is not a point of order. The parliamentary secretary is introducing a government bill, which is quite proper for him to do.

I think it is quite wrong for the hon. member to rise on the guise of a point of order to engage in a debate essentially about what is contained in the bill.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, an hon. member cannot on a point of order in the House make accusations against a cabinet minister. He cannot accuse someone of committing acts that are either illegal or otherwise, stand there with impugnity, make a statement and not be forced to withdraw and just leave it at that.

I would ask Your Honour to review what was said by the hon. member. I believe that language is unacceptable. If he were to try it outside the House, he might have a rather unpleasant surprise.

If it cannot be said outside and defended, perhaps he should be a bit more prudent with what he says in here.

[Greg Thompson, Progressive Conservative, Charlotte, NB]

Mr. Speaker, I am using the word potentially. If you examine, Mr. Speaker, what happened in question period yesterday, this was the focus of question period all day yesterday.

[The Deputy Speaker]

I think the hon. member has made his point. Perhaps he said potentially. I thought he used words like that although I cannot remember the explicit words. I did not think the words were as serious as the government House leader suggested in his remarks.

I believed it was not a point of order and I ruled it out of order on that basis.

I am prepared to review the blues to see if something that was completely wrong happened. If something improper has happened I will come back to the House and deal with it. I have ruled the point of order out of order in any event and I invite the hon. parliamentary secretary to resume his remarks.

[Stan Keyes, Liberal, Hamilton West, ON]

Mr. Speaker, I thank the government House leader for his intervention. Quite frankly, I am used to the accusations, innuendoes and unproven circumstances from the hon. member for Charlotte so it does not really trouble me very much.

In fact the hon. member is quite confused because this bill and its contents have nothing at all to do with the discussions in the House yesterday on a completely different bill and a completely different issue. As usual, the hon. member for Charlotte is confused and misled.

The convention I speak of also provides special provisions for the liability of shipowners to their passengers. This will be a new feature in our legislation which will apply to passenger vessels, ferries, tour boats and other vessels where passengers are carried on a ship under a contract of passenger carriage.

Concerns were raised in the last Parliament that such a provision might not cover all passengers travelling by ship in Canada, specifically those carried without a contract of carriage. In response to these concerns the Standing Committee on Transport proposed an amendment to Bill C-58 to ensure “persons other than crew carried on a ship without a contract of carriage” will benefit from the same regime of liability. This is of particular importance where passenger ships are hired by individuals or organizations for special occasion use by their clients, guests or employees, or where carriage of passengers by water is provided as part of land tour or hotel packages.

Bill S-4 also modifies some provisions of the convention in order to better meet Canadian requirements, in particular in respect of the application to all ships and the application to any person in possession of a ship. These modifications have been made in conjunction with the definition of shipowner to ensure that the new regime will continue to apply to all vessels, seagoing or not, and also to people who have possession of a ship, for example ship repairers.

The Canada Shipping Act currently establishes limitation of liability for owners of docks, canals and ports. This regime is strictly domestic in nature and provides a reciprocal balance to the regime applicable to shipowners in the sense that both shipowners and dock owners can limit their liability against each other.

This regime has been maintained in Bill S-4 with the following amendments. The limits of liability have been increased. The right to limit liability has been extended to servants and agents of the owners of docks, canals and ports in order to achieve uniformity with a similar provision respecting the agents and servants of shipowners. We have removed any reference to the nationality of the largest ship for the calculation of the limit of liability to achieve a more flexible application of this provision which currently uses for this calculation the largest British ship in the area of the accident.

Before I turn to the second issue presented in the bill, the regime of liability and compensation for oil pollution damage, I will address the economic implications of the amendments to the Canada Shipping Act in respect of the global limitation of liability. In respect of commercial vessel owners, those who are insured in mutual protection and indemnity associations, generally known as P and I clubs, will not likely see any substantive change in their insurance rates since the coverage already provided by these associations is unlimited.

Some commercial ship owners who are not currently insured in the P and I clubs may experience an upfront increase in insurance cost as a result of this revision of limits proposed in Bill S-4. In most cases the actual impact will depend on actual claims experienced under the new limitation regime.

The same applies to pleasure vessel owners. The vast majority of them are already insured to the level of liability proposed in this revision, while others will have to seek additional insurance to be fully protected against the new limits.

The adjustment that is likely to occur in the pleasure vessel insurance market under the new regime is not expected to raise the cost of pleasure vessel insurance to a level that would approach the level of other types of personal insurance, especially auto insurance. Most pleasure vessel owners already carry a liability insurance in the range of $1 million so they should not expect any increase in their cost of insurance as a result of this new legislation.

The second issue in Bill S-4 is the revision of the existing regime of liability and compensation for oil pollution damage. This regime was last revisited in 1989 when Canada implemented and acceded to the 1969 international convention on civil liability for oil pollution damage and the 1971 international fund convention. The 1969 convention established the liability of owners of laden tankers for oil pollution damage while the 1971 fund convention provided complementary compensation to the extent that protection under the 1969 convention was inadequate.

In addition to participating in the international oil pollution compensation fund, Canada has its own domestic compensation fund called the ship source oil pollution fund.

This is a fund of first resort for all claimants for oil pollution damage in Canada and in waters under Canadian jurisdiction. Canadian contributions to the international fund are paid from the ship source oil pollution fund.

The 1969 and 1971 conventions were updated in 1992 when protocols were adopted under the auspices of the International Maritime Organization. Under the 1992 protocols, the amount of compensation available for pollution damage caused by oil tankers was increased from $120 million per incident to approximately $270 million.

A number of other important changes were made in the 1992 protocols to improve the original conventions. Shipowners are now liable for the cost of reasonable measures of reinstatement where oil pollution from a ship results in damage to the environment.

The geographic scope of application of the convention will now include the exclusive economic zone of Canada which extends 200 nautical miles from shore. The protocols also extend the convention to claims for preventive measures taken before a spill to prevent or minimize pollution damage.

Finally, this convention now also applies to empty tankers with specific reference to the voyage subsequent to the voyage during which it was carrying oil.

Bill S-4 will implement the provisions of the 1992 protocols, thus increasing the level of compensation available to victims of pollution damage caused by oil tankers in the future.

The proposed legislation will enable Canada to follow many other countries that have terminated their membership with the old regime and moved quickly to the 1992 regime.

Until Canada follows suit, we will continue to be exposed to higher contributions to the international fund due to the reduced membership in the old regime.

I therefore strongly urge this House to consider this important legislation expeditiously. The sooner Canada can accede to the new regime, the better.

I would like to take a moment to discuss the amendments proposed to Bill S-4 by the Senate. These amendments remove from the bill a proposed modification to the definition of pollutant, which raised concerns among the industry representatives who appeared before the standing Senate committee on transport and communications.

This amendment to Bill S-4 will allow more time for discussion between the government and the industry on the definition of pollutant and whether it should be modified in the future.

I am pleased to endorse, on behalf of the government, the amendments made to this bill. I urge others to do so.

In conclusion, the changes I have outlined here for the Canada Shipping Act would not have been possible without the continued support of our stakeholders.

During our consultations, Transport Canada officials have spoken at length with shipowners, passengers, cargo owners, the oil industry, marine insurers and the marine legal community.

I take the opportunity to thank these industry groups for their participation in this reform. Their strong support of this bill has been very gratifying for all those involved.

I know the House of Commons Standing Committee on Transport is involved in the study of rail passenger transportation in this country. Due to the importance of moving quickly on this legislation, I would hope that my colleagues and I can move to spend a day on Bill S-4 in committee so that we can deal with it expeditiously partly because also we have dealt with this bill in its old form before the dissolution of the last Parliament.

The industry has indicated to us that it has been there, it has done that, it has talked to the committee and now it wants to move forward with this piece of legislation.

I look forward to my colleagues on both sides of this House coming together and moving quickly with the legislation when it comes before committee.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Madam Speaker, I concur with what the Parliamentary Secretary to the Minister of Transport said. He has given a good review. There are some points I want to add.

This morning what cuts this side of the House to the core is when the hon. member mentions that it was the Senate that brought in amendments to this bill.

I would be remiss not to mention my colleague who brought up the point of order earlier. I am not going to discuss the ruling of the Chair but I do want to reinforce a statement for everybody in the hopes that never again in the history of this Parliament at least a Bill goes to the Senate and the Senate makes the amendments before it comes back to the elected officials.

This practice is totally archaic, totally not in touch with today's reality. That really bothers me. I am not afraid to go into the standing committee on transportation and discuss with the hon. member the welfare of the industry across Canada. This side of the House is insulted to the highest degree when my hon. colleague raises many issues with regard to this bill.

Section 53 of the Constitution Act states the rules concerning the breach of the privileges of this House. I want to read this into the record because it directly concerns me. Standing Order 80(1) states:

All aids and supplies granted to the sovereign by the Parliament of Canada are the sole gift of the House of Commons, and all bills for granting such aids and supplies ought to begin with the House, as it is the undoubted right of the House to direct, limit, and appoint in all such bills, the ends, purposes, considerations, conditions, limitations and qualifications of such grants, which are not alterable by the Senate.

Whether we like to admit it our not, we are dealing with millions of dollars. This is nothing small. We are talking about liabilities up to $270 million. For that reason I feel very sad that we have to come back to the committee and discuss amendments that came from the Senate. That was totally unnecessary. To members on this side of the House it is considered a total insult to being elected officials.

I have a few more comments with regard to this before I get to the bill itself. The Senate was restricted from originating money bills in 1867. It is a fine point of law whether this is a money bill or not. It is not a money bill in some terms but because it deals with the potential of government expenditures that is a question we have to address.

Introduction of bills in the Senate gives the Senate more legitimacy as unofficial, unelected people. It gives it more legitimacy or as much legitimacy in this bill as members on this side of the House and members of the standing committee on transportation. I beg the hon. member, please do not do this again in the life of this Parliament. Please do not ignore the people on this side of the House who are elected. It is not that we are going to oppose this bill. We are not going to oppose the bill.

I have every reason to believe what the hon. gentleman has said, that it has received the support and consultation of the stakeholders. That is the good part. I will be asking that question when we are in committee, if all the stakeholders have been consulted. There will probably be some more.

I beg the hon. member please, on behalf of this House, on behalf of Canada, do not put this bill to the Senate before it comes here.

The hon. gentleman has done a good job, as well he should because he has been with this bill for a long time. There are some things that I would like to add that perhaps the hon. gentleman has not added.

Bill S-4 is designed to increase the compensation available to public and private Canadian claimants, for maritime claims in general, and particularly for claims related to ship source oil pollution. As a result of these amendments in S-4, the maximum compensation available against the international oil pollution compensation fund would more than double. It has doubled to the point of $270 million.

I might say that Bill S-4 enables Canada to accede to several international conventions on marine liability. Thus it harmonizes, and I emphasize the word harmonizes, the Canadian maritime liability legislation with that of the other major maritime nations and previous legislation really did not do that. In that respect there is support of the Reform Party because it brings the bill up to date.

I want to mention some key features. This bill provides for a substantial increase in shipowners' liability limits. In this era there are ships that are double and triple the size of former vessels using our harbours, international waterways and Canadian waterways. Maybe the liability limits are not even high enough, but at least it recognizes that.

The bill creates a procedure for rapid amendments, and that is a good point. I do not know how rapid they can be, but when we think back to the terrible oil disaster off the British Columbia coast with the Exxon ship, it was a long drawn out procedure. Hopefully this bill will speed that up because Canadians in particular, and people around the world I am sure, are more environmentally conscious of these things than they have ever been before.

Another thing I would like to mention is that the bill adds a provision for liability limits for those small ships that still ply our harbour. The limits of the liability adjust to the size. It is like the limits for a Honda car adjusting to a Cadillac. Maybe my hon. colleague over there has a Cadillac, I do not know. He does not. But if he did have, he would have to pay more in liability limits.

It also makes special provisions for liability of shipowners to their passengers. My hon. colleague mentioned that in this case most of these people already carry a fair amount of liability insurance. I am wondering though if it would not be a good idea to jot down as a memo that we need to take a look at that.

A million dollars liability insurance. Is that $1 million per person? I am not quite sure what is meant by that. There needs to be assurance that these boats are carrying enough liability insurance because passengers are more important than cargo. We need to take a look at that.

The bill extends the application of maritime liability rules to all ships at sea and inland. That is important. It is not just the oceangoing voyages. And it extends, as my hon. friend has mentioned, the exclusive economic zone. Even in the recent events of the last few days maybe we need to take a look at that as well. As our industry grows and as Canada becomes more of a lead player in this particular field, we should take another look at that particular area.

Modern day communications have made it possible that we now have a day to day means by which we can be in communication, much more so than ever before. With the use of modern communications techniques, radar and so on, the global limitations of liability therefore become a very important economic instrument in the operation of any ship. We agree that the clauses as they relate to that become very, very important.

Raising the maximum compensation, what I worked out is $120 million to $270 million, some may think is pretty hefty, but if we look at the scope of the act, some may even argue it is not high enough. It is certainly not too high. As I mentioned earlier, when we have these huge boats now doubling and tripling the capacity, this is not out of order and maybe it is not high enough.

I say to the Parliamentary Secretary to the Minister of Transport there is a need to further solidify Canada's place in the international maritime community. We are very big players now. I suggest to the hon. member that we may get to be an even bigger player.

As Canada grows there is no question that our part of the maritime industry is going to increase. Because of this, through the implementation of both sets of conventions and the protocols, and quite frankly I think there has been very limited negative feedback concerning the contents of this bill and its predecessor Bill C-58, the reaction that I and my party would have is that we will support the bill.

There is one principle in particular that I would like to inform the hon. minister about. It has a theme which this party adopts and that is user pay. I believe that is within this bill and we can support it on that merit.

Bill S-4 appears to be a sound bill. It strives for a balance between the shipowners and the claimants which appears to be fair. But we still have to allow time for the standing committee to send out the message that if anyone else, a stakeholder, has an interest, they will be advised that they can appear before the committee.

The bill exposes the shipowners' insurance companies to major financial liability. It also provides for a transfer of payments out of Canada's ship source oil pollution fund to the international oil pollution compensation fund. It is questionable that a bill with such ramifications should indeed come from the Senate.

I would like to share this with the hon. parliamentary secretary as it relates to this bill. This bill indirectly relates to Bill C-9 because they use the harbours, the insurance claims and so on. I refer him to page 14 of the act. At the bottom of page 14 it talks about the right that is exercised, that there are reasonable grounds to believe there are records in dwelling houses related to the reporting of contributing to oil spills and all of that. I am not disputing that but it is something that is really difficult for me to imagine at this time.

I hope none of Canada's oceangoing vessels are involved in this but Canada's ports are now a major entry point for the worst type of pollutant this society has. We can clean up an oil spill. It is very costly but eventually we can clean it up. We cannot totally erase the damage. It is there. But on a recent national television program it was shown in graphic detail that coming through our ports are large amounts of hard drugs. They come into Canada and find their way into the U.S. market.

I would hope that in committee we could take a look at this catastrophe. It is hard to clean up a young person's life which has been ruined by drugs. If we in Canada are truly going to say no to drugs, if we are going to have our schools say no to drugs and if parents are going to say no to drugs, then it is incumbent upon all the players involved, including the shipowners with this bill and the port authorities with Bill C-9, to get serious about this.

The hon. member may say that is not relevant, but I believe it is. If we can search a house to obtain records to prove that someone has used a boat to bring in oil which has polluted this country, then the same thing should exist here, in co-operation with other branches of the government, and we should have the same power to say no to drugs at Canadian ports. As a Canadian citizen I was hurt when I watched that program.

Reform will be supporting this bill. However, I would like to reiterate that it should not have originated in the Senate. Please introduce legislation in this House.

[Paul Mercier, Bloc, Terrebonne—Blainville, QC]

Madam Speaker, Bill S-4 was first debated in the Senate, as its name indicates. I can therefore think of no better way of opening debate than by going over what was said at third reading in the Senate on December 16.

This bill will improve our liability regimes for maritime claims. The proposed legislation consists of two sets of amendments, those relating to limitation of liability for maritime claims in part IX of the Canada Shipping Act, and those relating to liability and compensation for oil pollution damage in part XVI of the same act.

In both cases, the amendments will provide implementation of international conventions of which Canada is a signatory. First, our current legislation concerning limitation for maritime claims is contained in part IX of the Canada Shipping Act and is based on the international convention adopted in 1957.

The limits of liability set out in that convention and, by this very fact, in our legislation, are very low, too low. This helps neither claimants nor shipowners. In fact, current limits are so unsatisfactory that, most of the time, claimants have had to take legal action to try to go above the limits to obtain adequate compensation. This has often resulted in long and protracted litigation with uncertain results for both the claimants and shipowners.

It is very difficult for a shipowner to assess his potential liability. With higher realistic limits of liability as proposed in Bill S-4, it will be much easier for all parties involved to settle claims amicably.

The new regime of liability for maritime claims is based on an international convention adopted in 1976 and its protocol adopted in 1996. The 1996 protocol to the convention contains a new procedure, for future amendments of limits of liability, which responds to concerns raised in the past that the method of revision of the limits was too cumbersome and costly. It will now be easier to amend the limits in the international convention.

In addition, as with the regime of limitation of liability for maritime claims, it will now be feasible to increase the limits of liability for oil pollution damage by order in council.

The adoption of Bill S-4 will enable Canada to follow many other countries which moved rapidly, more rapidly than we did, to the 1992 regime and, as a result, terminated their membership in the old regime in May 1977, with effect from May 1998.

I will now give a brief description of the articles designed to achieve these objectives, beginning with those having to do with general maritime claims, as implemented by the Convention on Limitation of Liability.

Article 1 defines those persons entitled to limit liability under the convention. They are the same as those in the current legislation, i.e. shipowners, charterers, persons having an interest in or possession of a ship, and managers and operators, but the benefits of the convention are extended to salvors who are not operating from a ship.

Very briefly, article 2 defines the types of claims subject to limitation of liability under the convention.

Article 3 defines the types of claims excepted from limitation under the convention. These are primarily claims for salvage, etc.

Article 6 sets increased limits of liability for all claims other than those mentioned in article 7, covered by the convention and arising on any distinct occasion.

This now brings me to claims for pollution by oil or other pollutants. The definition of “Convention ship” is extended to include ships with persistent hydrocarbon mineral oil from an earlier cargo, and the definition of pollutant is amended to include aquatic organisms and pathogens.

Clauses 4 and 5 also amend the definition of “ship” to indicate clearly that it applies to vessels navigating Canadian or inland waters.

Clause 6 extends the application of part XVI to Canada's exclusive economic zone or that of any other party to the Convention.

Finally, clause 10 significantly increases the responsibility of the owners of Convention ships by setting the limits prescribed in 1992, which were amendments to the Convention of 1969. This means an increase of 326% over the limits of the 1969 Convention and of 125% over the recovery permitted under the 1971 Convention. This is a very significant increase.

In order to achieve the objectives set, the bill implements, as I said, the conventions of 1976 and 1996. It also implements, I should point out, the 1992 protocol amending the International Convention on Civil Liability for Oil Pollution Damage and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage.>

Finally, this bill amends various provisions pertaining to the Ship-source Oil Pollution Fund. It is therefore a total overhaul to ensure compliance with the Convention signed by Canada—a slightly tardy realignment of Canadian legislation with these conventions.

The Bloc Quebecois is happy to see that the government, hounded by the obligation to implement the conventions it has signed, must concern itself with making shipowners more responsible. We are obviously in favour of increased responsibility. We still have the memory of the unfortunate Irving Whale episode fresh in our minds. It cost the taxpayers of Canada and Quebec over $30 million to raise that barge, which makes it seem that the people of Canada and of Quebec were more responsible for the shipwreck than the shipowners themselves. One can see how ridiculous it all got.

Such situations must be avoided in the future. It is not up to the government to compensate for the laxness of certain irresponsible companies. Legislation must be therefore put in place to avoid such incidents in future. Hydrocarbon pollution is not the taxpayer's responsibility. We support the polluter-pay principle, precisely in order to stop companies causing serious environmental damage from getting away scot free.

There is, however, a need for a clear differentiation between the government implementing a user-pay system and a polluter-pay system. Where user-pay is concerned, we remember all too clearly the bad decisions made recently by the federal government concerning charges for Canadian Coast Guard services. The government did not agree to carry out impact studies before the new rates were set, thus refusing to heed 75% of the people consulted.

The government divided Canada into three zones: west coast, Atlantic coast and St. Lawrence—Great Lakes, for which it set different rates. As a result, Quebec is disadvantaged because it is charged more in order to cover part of the costs of the services to Newfoundland, the province of origin of the minister behind the bill.

Moreover, charging for Coast Guard services will impact heavily on Quebec and Canadian ports, because United States bound vessels using the St. Lawrence and the seaway but not putting in to any Canadian port do not pay for Coast Guard services. This measure detracts a great deal from the competitivity of Canadian and Quebec ports.

The current government decided to pass on the bill to shipowners and to local port authorities, without first doing something about the management of the coast guard.

It is not easy to apply the principle of financial and environmental accountability to shipowners. The government will have to maintain its principles, while keeping an open mind to make changes in the application of the act, should it trigger some perverse effects.

The Minister of Transport must not act like his colleague, the Minister of Fisheries, who remains so stubborn. He has to be open to change, while preserving his goal of making shipowners and their creditors accountable.

In conclusion, the Bloc Quebecois agrees with the principle underlying Bill S-4. However, we look forward to the next stages, when we will hear those most concerned by the bill and, if necessary, use their comments and reactions to make it a better act.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

Madam Speaker, I want to say a few words on the bill before us.

We are discussing a bill to amend the Canada Shipping Act, a maritime liability bill, which my party supports. Bill S-4 is part of the Canada Shipping Act reform. Parts of the Canada Shipping Act are old and out of date with today's realities. The NDP believes it is time to modernize the Canada Shipping Act. The revision of the existing limitation of liability for maritime claims is a very important step toward the modernization of this legislation.

With respect to limits for general maritime claims, the existing regime under the Canada Shipping Act is largely based on a 1997 international convention relating to the limitation of liability of owners of seagoing ships or vessels. The limits on liability set out have naturally lost value as a result of inflation over the years. Most maritime nations consider the limits of liability set out in 1957 inadequate. That is understandable since 1957 was more than 40 years ago. Inflation was very high periodically during those years. In the late seventies inflation hit more than 15%.

The 1957 convention was replaced by the 1976 convention on limitation of liability for maritime claims and its 1996 protocol as a global standard for the limitation of liability for maritime claims.

As members from the Reform Party, the Bloc Quebecois and the government have pointed out, these amendments to the Canada Shipping Act implement the provisions of the 1992 protocol to the 1969 convention on civil liability for oil pollution damage and the 1971 convention of the international fund for the compensation of oil pollution damage. We support many aspects of this bill.

The hon. member for Souris—Moose Mountain made a point I agree with. I want to say a few words about the point I agree with for members of the Reform Party. That may seem kind of odd. He is already wondering what this point is.

He made the point that it is very unfortunate that this bill originates not in the House of Commons but in the Senate. The government is introducing more and more legislation from the Senate. I think that is a real affront to democracy. Why should we be debating this piece of legislation which does not originate here?

We are the elected members of Parliament coming from five different parties in the House of Commons. The Senate is not elected, not accountable and not democratic. Its members are there from when they are appointed to the age 75. I think that is a real affront to democracy.

I am shocked by the government across the way introducing more and more legislation from the Senate. Why does the Prime Minister not screw up his courage and put on the order paper a bill to abolish the existing Senate? That is exactly what the Canadian people are asking for.

Senator Thompson is only a catalyst, the tip of the iceberg. He is not the only senator who hardly ever shows up in the Senate. He is not the only Senator who is not elected. None of the senators is elected or accountable. It is a real affront to democracy to have a legislative body in the 20th century, almost the 21st, that is not accountable. It is a hangover from the feudal days of the past and it is about time we abolish that particular Senate.

No wonder some people think this place is a farce. The people are telling us to abolish that unelected place. The people of Canada want their say and they want to speak out. It is about time we, the members of Parliament, said no, enough is enough. We, as members of Parliament, should say we are not going to take it any more, enough is enough. We are going to originate bills in this House through a democratic and transparent process, which is exactly what it should be.

We should just stop right now in protest. Therefore I move:

That this House do now adjourn.