Mr. Speaker, I am pleased to rise today to address the amendment of thee hon. member for Prince George—Peace River. My comments could be taken as applying to the amendment of the hon. member for Windsor—St. Clair.
These motions seek to amend clause 39 of Bill S-2 by putting an obligation on the governor in council to make regulations requiring shipowners to provide evidence of insurance or other financial security covering their liability to passengers under part 4 of the bill.
During the hearings held by the Standing Committee on Transport and Government Operations concerns were raised regarding the absence of compulsory insurance provisions in the bill. Reference was made to systems of compulsory insurance in respect of passengers in other modes of transport and to those currently in place in the United States.
I would like to stress that the introduction of a passenger liability regime in Canadian law is the first and essential step for the introduction of compulsory insurance for passenger ships. Bill S-2 makes a quantum leap toward this objective as it establishes for the first time in Canadian law the liability of the shipowner for loss of life or personal injury to passengers. The bill provides specific levels of compensation to which each passenger would be entitled in the event of an accident.
Unlike other modes of transportation there continues to be no international agreement mandating insurance coverage for passenger ships. The International Maritime Organization is currently working on a compulsory insurance regime for passengers and Bill S-2 recognizes this in clause 39.
Clause 39 provides for governor in council authority to adopt regulations on compulsory insurance and thus enables Canada to adhere to a uniform regime supported by international insurance markets.
However Canada can act on clause 39 as soon as the bill is passed and unilaterally introduce a regime of compulsory insurance for all ships operating in Canadian waters.
There are some provisions in the United States on compulsory insurance, but its system does not provide the benefits that Bill S-2 is trying to achieve. The U.S. compulsory insurance scheme is not comprehensive as it only deals with ships that have overnight accommodation for 50 or more passengers. In addition, the amount of compensation provided depends on the capacity of the ship which generates different treatments of passengers.
For example, in respect of ships with overnight accommodation capacity of between 50 and 500, the U.S. regime requires insurance of $20,000 U.S. per passenger accommodation. This amount decreases with higher capacity ships so that a ship with a capacity of 2,000 the required insurance is only $12,500 U.S. per passenger accommodation.
In addition to these variations in the treatment of passengers, all types of day trip ferries, sightseeing ships, tour boats, et cetera, are not covered by the compulsory insurance scheme of the U.S.
The Canadian regime provides compensation of $350,000 per passenger. Large shipowners, particularly in the coastal ferry and cruise ship markets, are generally well insured with established insurers and have full coverage against liability as set out in the bill. Hence these shipowners should have no difficulty to obtain and maintain adequate insurance.
Similarly the vast majority of small shipowners and operators should not encounter any problems in the Canadian insurance market to secure insurance against the obligations under Bill S-2.
I am also aware that as the insurers would not be compelled to insure every ship, it is possible that some operators, particularly in the whale watching or white water rafting market, may find their premiums substantially increased. Under the new liability regime they may be considered uninsurable and forced out of business. Others may lose some competitive advantage against U.S. operators who are not required to have insurance.
As in the case of compulsory insurance and in the current insurance regime for oil pollution, the establishment of compulsory insurance for passenger ships may require the establishment of some safety net for claims arising from uninsured ships or from the failure of the insurers to meet their obligations. Thus a necessary part of any compulsory insurance regime would be the responsibility of the government to approve insurers as is currently done under the oil pollution regime.
I believe that shipowners would voluntarily act responsibly. The government would act as soon as possible following the passage of the bill on the development of appropriate regulations to give effect to clause 39. In fact government testimony in committee repeated that commitment.
This would ensure that all shipowners obtain and provide evidence of adequate insurance against their liability to passengers under part 4. The government's serious commitment to this objective was already demonstrated in our efforts in the field of oil pollution.
In part 6 of the bill there is a regime of liability for oil pollution damage caused by oil tankers. The regime includes provisions on compulsory insurance that shipowners must have before they are permitted to navigate in Canadian waters. The oil pollution regime is based on international conventions which Canada adopted in 1999. As a result, Canadian interests such as our environment are protected by a well established regime that has the full co-operation of international insurance markets.
This co-operation was essential since our domestic insurance markets do not have the capacity to provide coverage against the levels of liability for oil pollution established in the international convention. This example of our dedication to protect Canadians in the marine transportation field speaks for itself. While there is no equivalent international agreement on compulsory insurance for passenger ships, this would not prevent Canada from introducing such a regime at the national level.
In this instance, the emphasis would be primarily on smaller vessels which to a large degree can be insured in the domestic insurance market as was reported by some of the industry witnesses who appeared before the Standing Committee on Transport and Government Operations. We would take their advice and that of others potentially affected by the compulsory insurance system to make sure that we have examined every aspect of it and that we have put together a viable and workable regime.
Our goal is to ensure, first, that we have taken into account all interests involved and, second, that we have at the end a compulsory insurance system which is effective in its impact and efficient in its application.
As I have mentioned, the bill takes a giant step forward in addressing passenger ship liability and provides for an eventual solution to the concern raised by the opposition member. However, acting on clause 39 at this stage would be premature. The government will therefore not support either of the two proposed amendments.
The amendments could be detrimental to small passenger ship operators or unfair to the insurance industry. Measures will be taken as soon as the bill is passed to address this very important aspect of it. Given all that has been said, I reiterate that we will not be supporting the motion.