Proceedings of the Standing Senate Committee on Transport and
Issue 4 - Evidence
OTTAWA, Tuesday, December 9, 1997
The Standing Senate Committee on Transport and Communications, to which was
referred Bill S-4, to amend the Canada Shipping Act (marine liability), met
this day at 4:05 p.m. to give consideration to the bill.
Senator Lise Bacon (Chairman) in the Chair.
The Chairman: Our first witness this afternoon is Mr. Doug McRae from the
Canadian Board of Marine Underwriters.
Before we commence, I should like to mention that we received a number of
letters regarding Bill S-4. Copies of those letters, in both official
languages, were sent to the members of the committee. I suggest that they be
tabled with the clerk of the committee. The letters were from the following
associations: the Canadian Maritime Law Association, Canadian Shipowners
Association, and the Canadian International Freight Forwarders Association.
Is it agreed?
Hon. Senators: Agreed.
The Chairman: Please proceed, Mr. McRae.
Mr. N. Douglas McRae, Chairman, Legislation Committee, Canadian Board of Marine
Underwriters: Honourable senators, Mr. Jaques and I will share equally in the
presentation this afternoon.
Our association represents Canadian marine insurance underwriters in Canada. We
represent people who write both commercial and pleasure craft insurance, and we
are members of the international association known as the International Union
of Marine Insurers, which regroups the marine associations of the nations of
Marine insurance in Canada is quite important to us. Approximately 50 per cent
of the marine insurance business that emanates from Canada is written in the
Canadian market. On the liability side of marine insurance, an important player
is not a Canadian insurer but a group of mutual companies that write shipowners
liability insurance, known as the Protection and Indemnity Mutual Associations,
or P&I clubs. They are the most important players when considering liability
for large ships, particularly oil pollution liability coverage.
We do not have any comments to make with respect to the oil pollution aspects of
Bill S-4. We are mainly concerned with the legal liability concerns for the
smaller ships that are written in the Canadian insurance market and not the
ones that concern the larger ships and which are almost exclusively written in
the international markets, in particular by the protection and indemnity
associations. Our comments are limited to the kinds of ships that are insured by
I will now ask Mr. Jaques to comment on the principles of limitation.
Mr. Maurice F.L. Jaques, Past President, Canadian Board of Marine Underwriters:
The Canadian Board of Marine Underwriters are very much in support of the
principle of limitation -- not only the fact that it exists but also the fact
that it has existed for a long time. We also support the amendments and the
increased limitations. There is an international regime governing limitation;
but the limitations that are currently in force are woefully low, making it
more difficult for the settlement of claims. Efforts are continually being made
to find out how to try to break those limitations. If more realistic limits
were imposed, as they are now being proposed, the result would be a much clearer
picture in the marine insurance legislative claims activity. Consequently, it
would be much easier for us to settle claims.
Further details are contained in the paper that you have before you.
For those of you who have not read our written submission, the current
limitation could be as low as $140,000 for vessels up to 300 tonnes. That would
be a combination of bodily injury and property damage. Clearly, that limit is
very low and quite out of date.
It is worth repeating that, as a result, claimants can spend a lot of time and
effort trying to avoid that limitation. Higher, more realistic limits would be
much more appropriate and would make it much easier to reach settlement in
Mr. McRae: The capacity of the Canadian insurance market and that of
international insurers is completely adequate to cover the liability regime
that is being implemented by Bill S-4. As I mentioned before, the very large
ships are insured by the protection and indemnity associations and they are
able to provide limits of $500 million of coverage with respect to pollution,
and even higher limits for non-pollution events. The capacity of the Canadian
market for ships up to 2,000 or 3,000 gross registered tonnes, which are the
ones we insure, will be fully and adequately insured with limits of $10 million
to $20 million, and our market is able to provide those limits.
Pleasure craft insurers will be looking at somewhat lower limits than that --
perhaps $1.5 million for the average pleasure craft. The people writing
pleasure craft insurance will have no trouble providing those sorts of limits.
We also commented about the premium impact on commercial vessels. It is a very
competitive marketplace, being international, and people who do not like the
Canadian market are free to go offshore, and they do.
The impact of these changes of limit will be very minor. Essentially, we will
look for long-term claims experience. We feel that the savings in litigation
costs will offset the higher costs of the settlements. Over time, if claim
settlements increase as a result of Bill S-4, we would expect that premiums
would match them. However, as to the initial impact, there will probably be very
little change, if any, in the premium structures for Canadian shipowners.
For those who currently buy very low limits of insurance, there is quite a wide
market available for increased limits up to $5 million or $10 million at costs
ranging from as low as $25 to $50 for pleasure craft up to $2,000 to $3,000 for
a large commercial vessel. So there will not be much financial impact on
shipowners in Canada as a result of this bill; it will only make things much
easier for us.
As I mentioned, on the pleasure craft side these limits will be easily provided
with very little, if any, increased cost. In those areas, we are thinking that
$25 or $100 would adequately provide for the limits set in Bill S-4.
We should like to highlight a couple of sections of the bill that we think are
very useful. The amending provision allows for changes in the limitation
amounts without reference to a further act of Parliament. One of the
difficulties of getting this international convention adopted in Canada led us
to believe that it would be much easier if there were some regulatory method of
changing limits with time as inflation creeps up. The bill provides for that
very well in the proposed section 579.
Also, the interest rate provision in the proposed section 581 is very useful. It
stipulates the rate of interest, which will avoid difficulties in arriving at
the rate of interest to be applied to settlements.
Our conclusion is that this bill is an extremely valuable improvement in the
legislative framework for Canadian shipowners, Canadian insurers and everyone
who deals in the maritime sector. We hope, after a long wait, that this bill
will get passage expeditiously. Finally, we would like to thank the committee
for hearing us.
Senator Roberge: Thank you for joining us today and for sending us your brief in
advance to give us an opportunity to read it.
Are there any oil tankers on the St. Lawrence or Great Lakes which are not P&I
Mr. McRae: I do not believe so, sir.
Senator Roberge: Even the smaller ones?
Mr. McRae: I would have to research that with the officials at Transport Canada,
but I believe that all ships carrying a certain quantity of oil are required to
carry certification of financial responsibility before they enter Canadian
Senator Roberge: They would be obliged either to get tremendous insurance in
Canada or to join P&I?
Mr. McRae: Without exception they would be in P&I clubs which provide very
high limits and the certification required under the convention.
Senator Roberge: That is a must?
Mr. McRae: Yes.
Senator Roberge: Have you had any experience in other countries as it pertains
to the increase in premiums? What has happened in other countries when they
have had increases in premiums? Were they substantial or just normal increases?
Mr. McRae: I do not have the answer to that question, but my understanding is
that the cost of this protection indemnity insurance has been going down over
the years, not up. It is a very stable market. The limitation convention, the
Protocol of 1996, has just come in. I am not aware of any changes in P&I
premiums as a result of it.
The Chairman: While I understand that the liability-limit changes in this bill
reflect more up-to-date dollar figures, and are thus more fair to all, who
benefits most from the changes? Is it the shipowners, the insurance companies,
the cargo owners, or the public interest in general?
Mr. Jaques: Clearly, the prime beneficiaries will be people who are making
claims; in other words, the public, the shipowners, or whoever, as they would
have access to a regime which provides very clear guidelines. We anticipate
that it will require less legal activity and a clearer base from which to make
claim settlements involving injuries or property damage.
The Chairman: Does Canada do a good job with regard to negotiating the
international conventions on which laws like this are based? Are our interests
well protected and properly reflected in the results?
Mr. Jaques: I think Canada does an excellent job. Canada has highly respected
international business people in all sorts of areas. Through our activity in
groups such as the International Union of Marine Insurance, our views are well
The Canadian Maritime Law Association, which is a highly respected group, works
overseas with international counterparts and does a good job representing
Canada and portraying it as a responsible international citizen.
Senator Roberge: In your opinion, why did it take so long for Canada to sign on
to this international package?
Mr. McRae: We are in agreement that the delay was far too long. It took 17 years
of urging by our association and the Canadian Maritime Law Association. The
Canada Shipping Act is a long and difficult document. I suppose there was some
difficulty getting the necessary legislation passed. It was dealt with by
several different governments over a long period of time. It just seemed to be
difficult to come to grips with.
Mr. Jaques: The marine industry has had problems, generally, having
marine-related legislation passed by government. On the other hand, the current
legislative agenda includes a number of shipping-related bills. However,
generally, the marine industry has been very frustrated by the delays in having
a number of these things come to fruition. We perceive a lot of it as not being
a priority of government to get these things done. We are delighted to see it
now. If you look at the Order Papers, a number of marine bills are now coming
forward. Frankly, they are long overdue.
Senator Roberge: Having said all that, do you still believe that our reputation
in international waters is good?
Mr. Jaques: Yes, I do.
Senator Forrestall: There has been some controversy about the inclusion of a
definition of pollutant in this bill. Indeed, we will be making some changes to
it. I hope the typographical errors are not mental lapses. If they are, we will
have to go through the bill with a fine-tooth comb to find what else has been
Do you see anything wrong with including in Bill S-4 a definition of pollutant?
I am thinking in particular of the difficulties we get into with ballast water.
Mr. McRae: Senator, we are not up to speed on that issue. It is a new topic of
which I just became aware today.
Our organization supports the international approach to dealing with matters
such as the definition of pollutant. Therefore, we would probably support a
position of defining pollutant in accordance with the international convention
rather than having a made-in-Canada definition, something that might cause more
difficulties than it would solve.
Senator Forrestall: Would it be less wieldy if it were in the Canada Shipping
Mr. McRae: I believe that Bill S-4 would amend the Canada Shipping Act. The
difficulty that would exist lies with Canada having a definition of pollutant
that did not meet the definition of pollutant used by other countries.
International harmony would suffer by having everyone define pollutant in a
Generally, we support the international approach to keep law as internationally
harmonized as possible.
Senator Poulin: Presumably, higher liability costs will mean higher insurance
premiums to shipowners. What have shipping companies had to say about this?
Mr. Jaques: First, we would have to have a clear definition of what I would call
"large commercial shipping" which we have described here as generally
being covered by P&I clubs, which are international organizations. From the
Canadian point of view, we are dealing with smaller commercial vessels and
private yachts when it comes to liability.
At the moment, the market-place that deals with smaller vessels, including
pleasure craft, would be quite surprised at the low level of premium.
Primarily, our business is a reactionary business. Until we have statistical
bases on which to adjust premium levels at some time in the future, we will
include these higher limits for a very nominal fee. Our business does generally
react. It is the only way we can work. We must base our premiums on statistical
information. Until that comes along, we are prepared to start off in a very
Similarly, in terms of commercial P&I, they would treat it in the same way.
It is very much experience-rated.
The Chairman: Do you think this bill will help to simplify the task of a
claimant who loses cargo or suffers damage of some sort? The maximum amount
that can be claimed will be known, but perhaps from whom to claim will not
always be clear -- for example, in the case of a damaged container that has
passed through several hands. Could you comment on a situation such as this?
Mr. McRae: The thrust of Bill S-4 deals more with the harmonization of Canada's
regime for limitation of liability; in particular, the treatment of oil
pollutants. Therefore, it would be more in the line of the Carriage of Goods by
Water Act, I suspect, that we would look to for a definition of who the carrier
was and how a claim would proceed rather than under this particular bill.
The Chairman: The question of liability seems rather complicated to a lay
person. Although I believe you generally support the present framework, is it
not rather complicated? Perhaps this is inevitable where international
agreements are involved. Do you have any views on how matters might be
Mr. McRae: I am aware of an initiative within Transport Canada that might group
these international conventions under one bill as opposed to having them under
myriad sections of the Canada Shipping Act and separate acts. Perhaps there are
some moves that could be made to make it a little easier for people to sort
through the morass of legislation. I agree with you, senator, yes.
Senator Poulin: What would be the implication of us carrying on somewhat longer
under the old liability regime?
Mr. Jaques: It is a limitation factor with which we are concerned. As I
mentioned, in particular with regard to small craft, the current limitation is
about $140,000. That is the total, all-in figure for a particular incident,
accident or occurrence. Therefore, that would include bodily injury, major
bodily injury, collision damage and any other damage that could arise from a
particular incident. It is really not a satisfactory settlement for people who
have had a particularly serious injury. Our industry recognizes that it is
important for us to provide adequate coverage for individual accidents and, as
I say, in particular, bodily injuries.
Mr. McRae: We do not deal with it in our paper, but there is the important
aspect of Canada's adhesion to the new regime on oil pollution, which is
another important reason for the bill to pass. It is not one that is critical
to our association. However, it is important to Canada to get under the new
regime of oil pollution.
Senator Angus: I realize that you said earlier that you had not yet focused on
the issue of ballast water, since it just came to your attention today. Perhaps
we could put it another way. I think you agree that the main thrust of the bill
before us is to pass enabling legislation for Canada to accede to the
limitation of liability convention which is an internationally recognized treaty
in the area of limitation. On the other hand, it is to enable us to implement
the Fund Convention and the Civil Liability Convention, of 1971 and 1976
respectively, as well as the protocols. Do you agree?
Mr. McRae: Yes.
Senator Angus: In any one of those three international conventions, is there any
provision dealing with ballast water or defining pollutants as we find in this
Mr. McRae: Not to my knowledge.
Mr. Jaques: Not to my knowledge.
Senator Angus: Did you come here today believing that Bill S-4 was identical in
all substantial respects to Bill C-58 from the last Parliament?
Mr. Jaques: I think there are one or two minor modifications. However,
generally, it follows very closely on that bill. If you wish, we can single out
the specific areas.
Mr. McRae: This aspect of ballast-water contamination is certainly a brand new
Senator Angus: It is a new issue. Was it not in Bill C-58?
Mr. McRae: No, it was not.
Senator Adams: When we talk about liability, is it between the port and the
shipowner? As soon as you arrive at the dock is that port responsible? Does the
shipowner have liability?
Mr. McRae: I am sorry, sir, I did not quite grasp the thrust of the question.
Senator Adams: When we speak of liability, if there is someone who owns the
dock, such as if the government were to privatize -- or does the government
have liability if anyone were to be injured on the dock? I was wondering if
people work with insurance or liability, which is which?
Mr. Jaques: The main thing we are talking about is the liability attached to
shipping; in other words, whether the ships or the pleasure craft would legally
be held responsible. There are other areas as well, if I understand your
question, such as people working on the dock. We get into some areas where
Workmen's Compensation takes over, and there is a clear line there. That would
have to be determined in any one particular incident. However, where Workmen's
Compensation is involved, it takes precedence and they can determine if they
wish to further hold the ship responsible for that.
Otherwise, the definition of liability is fairly separate. One is liability
clearly attached to the ship while a ship is operating, and the other involve
shore matters, if I understood your question correctly.
Senator Adams: Normally a small business needs about $2 million in accident
liability but it is still responsible to pay a percentage of Workmen's
Compensation. Is there much difference between that and the situation where a
contractor pays his employees $6.25 an hour and he has a $1-million contract?
Does it work the same way?
Mr. McRae: I am afraid I cannot answer that question, I am not familiar with the
The Chairman: Our next witnesses are from the Shipping Federation of Canada.
They are Captain Ivan Lantz and Sonia Simard.
Ms Sonia Simard, Executive Assistant to the President, The Shipping Federation
of Canada: Honourable senators, just a few words on the Shipping Federation of
Canada. The federation represents owners, operators, charterers and agents of
vessels doing Canadian commerce overseas.
To be more specific, our membership includes about 79 companies which represent
over 90 per cent of ocean vessels trading to and from ports in Atlantic Canada,
the St. Lawrence River and the Great Lakes.
We are here to support those aspects of Bill S-4 that are aimed at bringing
Canada's maritime liability regime in line with the international convention on
As you are well aware, the essence of this legislation was introduced in the
previous Parliament under Bill C-58. The federation, along with other parties
within the marine community, supports the legislation.
Regrettably, Bill S-4 is not identical to Bill C-58 and it introduces a new
clause that creates or has the potential to create substantial problems for the
We are referring to the fact that Bill S-4 incorporates a clause that defines
pollutant as including aquatic organisms and pathogens. That inclusion has the
potential to expose our industry to significant unforeseen liability. We
believe that the department introduced those terms in an effort to address the
issue of introduction of harmful aquatic organism into our national water
through ship ballast.
A few moments ago, I heard some questions on the issue of ballast. I could take
a few moments just to the importance of ballast water for marine
What we are discussing here is water that is stored in specific tanks within a
vessel. The aim of ballast water is to immerse the vessel deeper so that it
will have increased stability and also increased handling capacity.
Ballast water is usually pumped out of the vessel during or immediately prior to
loading or unloading cargo. It is essential for the safe movement of vessels.
It is important to stress that the federation supports the government's attempt
to address the ballast water issue. However, we respectfully submit that Bill
S-4 is not the proper vehicle to address this complex matter.
I will summarize the four points that support that claim and thereafter we can
proceed to questions.
First, we believe that the definition of pollutant found in Bill S-4 leads to
significant consequences that have not been fully discussed or analysed. The
terms aquatic organism and pathogen, which are included under the definition of
pollutant are so general that they create a regime where any aquatic organism
that makes its way into the ballast water of a ship could be considered a
To be more specific, we could say that those terms are so generalized that they
would create an obligation or a requirement to have sterilized ballast water on
the ship to ensure that there is no exposure to liability. This is a measure
that neither Canada nor other countries that I am aware of have yet succeeded
Bill S-4 introduced a new definition of pollutant, one that could expose our
shipowners to a severe and significant level of responsibility. To be more
specific, we are speaking about criminal liability of up to $1 million and we
are also speaking about unlimited strict civil liability.
We should have referred in our brief to sections 677 and 678 of the Canada
Shipping Act. Those are the sections that state the unlimited strict civil
liability. We will be forwarding to the chairman a copy of those articles as
well. We state here our concern for the consequences and the fact that they have
not been fully discussed.
The second point we should like to bring to this committee concerns the process
that led to the adoption of that strict approach. Bill C-58, which is the
predecessor to Bill S-4, dealt solely with the issue of liability as provided
in international conventions. It did not include a definition of pollutant. The
way it is written in the current bill is that it was dealt with in an auxiliary
bill, which is Bill C-73, which was presented in the House of Commons for first
reading in the last Parliament. That bill died on the Order Paper.
Regretfully, the controversial definition of ballast water has been parachuted
into Bill S-4. Bill S-4, as you are well aware, is at a different level in the
Considering this process, we believe that the proposal to define aquatic
organism as a pollutant requires much more discussion with the industry; as
well, it has never been addressed by the House of Commons or the Senate.
Accordingly, we consider Bill S-4 to be aimed mainly at codifying the limitation
of liability as introduced in international treaties, and it should not deal
with a matter as controversial as the definition of pollutant as proposed.
Indeed, we fear that the introduction of that section could amount to
significant delay in the passage of Bill S-4 and that would serve neither the
industry nor the government.
Third, the approach of imposing strict civil liability seems rather severe
considering that, at this stage, a preliminary review has failed to identify
any other national legislation in which the definition of pollutant includes
aquatic organism; neither could we find strict liability penalties for the
discharge of ballast water.
Most countries are still considering the most efficient way to manage ballast
water. At the international level, countries are discussing a common approach
for operational requirements for ballast water. Should they exchange ballast
water at sea? Should they do it within a 200-mile zone? They are still
discussing how to safely exchange ballast water. Canada appears to be the only
country at this stage to consider using pollution penalties for addressing
discharge of ballast water.
Again, considering this approach, we submit that such an unilateral pact needs
to be discussed further. That being said, we would not like to leave this
committee with the impression that the federation does not wish to address the
issue of ballast water. On the contrary -- and this is our fourth and final
point -- we submit that Bill C-15, a bill in front of the House of Commons at
first reading stage, deals with ballast water and is the appropriate vehicle to
address this matter.
As you may be aware, Canada has already adopted voluntary guidelines for the
management of ballast water. Bill C-15 will give the government the regulatory
authority to transform those voluntary guidelines into mandatory requirements.
If Parliament wished to go one step further and address strict liability for
discharge of ballast water, the federation submits that any discussion on that
subject should be done under Bill C-15. We believe that this approach will be
the best means to ensure that there is a consistent approach to both liability
and ballast-water-handling requirements.
To conclude, the federation recommends that the provisions in clauses 4 and 5 of
Bill S-4 which define pollutant be deleted and that any discussion of ballast
water be conducted under the auspices of Bill C-15. We also recommend that Bill
S-4, once amended, be adopted, as soon as possible, to ensure that Canada's
maritime liability regime is at the same level as other international
Senator Forrestall: What percentage of your fleet is foreign registered? Could
you put a number on it?
Ms Simard: We represent foreign flag vessels. There are Canadian companies
dealing with foreign flag vessels, but most of our members are dealing with
foreign flag vessels.
Senator Forrestall: Perhaps I did not put it clearly. Do you have 90 vessels?
Ms Simard: We represent 350 steamship lines which may have many other vessels.
Senator Forrestall: How large is the Canadian-owned blue water fleet today?
Captain Ivan Lantz, Manager, Marine Operations, The Shipping Federation of
Canada: The Canadian Shipowners Association represents a Canadian domestic
fleet of "Great Lakers" numbering about 89 ships at this time.
Senator Forrestall: Those are just the lakers. We have no other blue water
Mr. Lantz: Those are just the lakers. I do not know how many offshore vessels
are Canadian-flagged and engaged in international trade offshore. It is in the
minority; that is for sure.
Senator Forrestall: That is here on the East Coast. That is on the lakes. What
about on the West Coast?
Mr. Lantz: I do not know.
Senator Forrestall: It is obvious that I will not get the size and shape of the
Canadian shipping industry out of either of you this afternoon. I am just
We are dealing with law and international law. I have no right to tread in these
areas, but I am concerned about the application of Canadian law to foreign
registered ships. I am interested in pursuit issues. What happens if we
contaminate the waters of -- although I do not know how you would do it -- New
York Harbour with pollutants from the ballast tanks of a Canadian-owned ship
registered in Bermuda? Would that make sections like this, in the Canada
Shipping Act or wherever, easier to facilitate?
Mr. Lantz: The Canada Shipping Act, in applying its pollution regulations and
provisions, deals with Canadian ships in any waters, including Canadian
flagships, and any ships in Canadian waters.
That is not an uncommon feature for marine law. That is how they deal with ships
trading internationally or domestically.
Senator Forrestall: You suggest that this should be dealt with under Bill C-15.
Is it not already there? Will Bill C-15 rely on this bill when it is
Mr. Lantz: No. Bill C-15 has a requirement, as described at page 4 of our
More specifically, Section 18 of Bill C-15 will provide the government with a
regulatory power "for preventing pollution by the discharge of ballast
water by ships, including pollution by aquatic organisms or pathogens".
That provision is in there so that the Governor in Council can make regulations
that will control the way in which ballast water is managed, discharged,
exchanged at sea, or whatever other requirements may come along. However, since
Canada has been the author of ballast water management since 1988, it is highly
desirable that we have what we have authored within our own legislation.
Ms Simard: I should like to reply to two points in your question. First, you
were referring to the U.S. and pollution in the Port of New York. It may be
important to be aware that the U.S. has its own guidelines which are becoming a
mandatory requirement for the handling of ballast water; thus, the U.S. has
also taken the path of addressing the problem of the discharge of ballast water
through operational requirements dealing with ballast water and not through
pollution penalties as Canada is suggesting here.
Second, what we have suggested is not specifically to introduce the definition
of pollutant in Bill C-15. What we are suggesting is that Bill C-15 gives the
government the authority to adopt mandatory regulatory processes for the
management of ballast water, and that any other discussion on any other
subject, be it liability or other subjects related to ballast water, should be
conducted under Bill C-15 and not under separate bills.
There is already a means to address ballast water discharges, and that is
through that regulatory requirement, which is the international path that is
currently adopted by the international community.
Senator Forrestall: However, you do agree that some maritime management should
include a definition and regulatory powers to make it work.
Ms Simard: Definitely, and the federation would support regulatory power to
address ballast water requirements, as those regulatory requirements reflect
the voluntary guidelines we have helped to develop with the government. You are
Senator Forrestall: I cannot come to grips with a single act having two sections
dealing with the same problem, one of them half-way there and the other one all
the way there. I do not understand the need for it in this legislation if it is
already in Bill C-15 in an expanded way, which it is not in Bill S-4.
Ms Simard: We share the same problem of comprehension. We do not believe it
should be in both. We believe that the discussion of ballast water should be
addressed in Bill C-15 with the regulatory powers.
Senator Forrestall: Were you consulted about this?
Ms Simard: As we mentioned, the inclusion of aquatic organisms in the definition
of pollutant took place at first reading in the House of Commons. No debate had
yet taken place on the bill and the federation most likely would have
participated in the debate.
Senator Forrestall: The bill has been written with certain provisions in it and
you are suggesting to me that you have not yet been contacted to discuss it.
Ms Simard: We are suggesting that we would not have agreed to include aquatic
organisms in the definition of pollutant. It may have been discussed in many
fora, but we would have wanted to appear before the committee when Bill C-73
took that path. The federation could not support such a definition.
Bill C-73 was a compendium of miscellaneous amendments to the Canada Shipping
Act. Some of those subjects were discussed in a forum called the CMAC forum,
which many industry representatives attended and where many subjects were
discussed. However, I do not believe that there was any consensus on the
inclusion of aquatic organisms within the definition of pollutant.
Senator Roberge: You mention in your brief that you have some serious concerns
about the process by which this was developed. Can you elaborate on that?
Ms Simard: The process that we are trying to underline here is that a definition
of pollutant, including aquatic organisms, was included in Bill C-73, which
contained many other miscellaneous amendments at first reading, and this bill
died on the Order Paper. The clause was "parachuted" in -- perhaps my
choice of word is not the best, but that is what comes to my mind. It was
parachuted from Bill C-73 to Bill S-4, and Bill S-4 is supposed to codify what
is currently in international practice. The definition of pollutant including
aquatic organisms does not belong to international practice yet. It may, but it
does not now. Neither does it belong in Bill S-4. That is the problem.
Senator Roberge: I understand that. However, I wish to get more technical. Were
you consulted, or did you try to be consulted, by those who prepared this bill?
Ms Simard: On the definition of pollutant?
Senator Roberge: No, on Bill S-4.
Ms Simard: Yes. The predecessor of Bill S-4 was Bill C-58, which was extensively
Senator Roberge: I am aware of that, but I am speaking about Bill S-4. Were you
contacted on Bill S-4? When did you receive Bill S-4.
Ms Simard: I believe it was available on the Internet a month ago or three weeks
Senator Roberge: And you only found out about this today?
Ms Simard: Yes. I would venture to say that perhaps the industry overlooked this
addition to Bill S-4. While it is no excuse, the industry was working under the
assumption that Bill S-4 reflected Bill C-58, and we had given our blessing to
Bill C-58. Our oversight was corrected last Friday when we re-read the bill and
found that it was not the same as Bill C-58.
Senator Roberge: So you did not read Bill S-4 at that point.
Ms Simard: We read Bill S-4 six days ago.
Senator Roberge: The serious concern about the process should not be directed
toward the government. The serious concern about the process should be directed
at the industry.
Ms Simard: If this is what you are aiming at, we are more than ready to take the
blame for the oversight but we have to address the matter now.
Senator Roberge: We are not trying to blame you but you are saying we are at
fault because of this.
Ms Simard: Perhaps that sentence was poorly drafted, but it was aimed only at
underlining the fact that we had thought Bill S-4 reflected Bill C-58 and found
out that it did not.
Senator Roberge: I guess that is a good lesson. The next time you receive a
bill, you will read it as soon as you receive it.
Senator Spivak: You mentioned that Canada has adopted voluntary guidelines as
far as ballast water is concerned. How long have those guidelines been in
place? How have they been enforced? Is it by self-policing? We all know of the
terrific problem with zebra mussels and other things.
Mr. Lantz: Those voluntary guidelines, produced by government and industry
collectively, came into effect in May, 1989.
Senator Spivak: How long have the zebra mussels been here?
Mr. Lantz: I believe the zebra mussel was made known to me in September, 1988,
when I received a letter from the Commissioner of the Coast Guard explaining
that particular problem.
Senator Spivak: What is the enforcement mechanism? I know they are voluntary
guidelines but how does anyone know whether they are being followed or not?
Mr. Lantz: There is a monitoring mechanism. A reporting form accompanies the
guidelines, which are widely distributed.
The focus is on the Great Lakes. Ships entering the Great Lakes with ballast on
board fill out this form and hand it to a Seaway official.
Senator Spivak: Does anyone do an inspection?
Mr. Lantz: Yes. The St. Lawrence Seaway Authority in conjunction with the United
States Seaway Development Corporation, the U.S. counterpart of the Seaway, have
inspection programs in place. They are carried out by the U.S. Coast Guard and
the Canadian Seaway inspectors.They inspect ballast waters collectively. Of
course, it is a U.S. requirement that ships must exchange their ballast prior
to entering U.S. waters in the Great Lakes.
Senator Spivak: Why are ships exchanging ballast water? Could they not just take
it back with them?
Mr. Lantz: Without any cargo on board, a ship can have between 30 per cent and
40 per cent of its cargo-carrying capacity in ballast water. If a ship kept
that ballast water on board, it would be cutting off its cargo capacity by 30
per cent to 40 per cent, which is quite extensive.
Senator Spivak: What do the guidelines say? Where is this ballast water supposed
to be dumped?
Mr. Lantz: The guidelines suggest that the ballast water be exchanged in deep,
mid-ocean water. The ships empty out the original ballast water and take in
clean, fresh sea water in the deep ocean -- 2,000 metres or more deep.
Senator Spivak: This eliminates the chance that any organism or pathogen from a
foreign country could enter our waters.
Mr. Lantz: Yes.
Senator Spivak: I take it that the process is bothering you because there has
not been enough international consultation. I am led to believe that the
definition does not necessarily bother you because the definition is just as
much a problem in Bill C-15 as it is in Bill S-4. If you are worried about the
fact that we cannot define it, we will not be able to define it in Bill C-15
Mr. Lantz: The inclusion of pathogen and aquatic organism within the context of
the definition of a pollutant in this particular context, at these particular
sections of the Canada Shipping Act, is the reason it leads to such a huge
liability on the shipowner by the civil penalty.
Senator Spivak: I understand the issue of liability. However, Bill C-15 refers
to pollution, including pollution by aquatic organisms or pathogens. Will there
not be the same problem of definition under Bill C-15 as there is in Bill S-4?
It could be anything unless they define it very strictly.
Obviously your concern is the liability issue. Are you opposed, then, to the
terms aquatic organisms or pathogens being a trigger or a cause of liability?
How is it any different under Bill C-15? If pollution and aquatic organisms are
linked together, they will have to be defined. Is it a question of penalty,
enforcement or liability? What exactly is your major concern?
I understand the consultation and the process. That is obvious. Apart from that,
what is your concern?
Ms Simard: You are right to stress that there will be a problem with the
definition of pollution in Bill C-15, but the aim of Bill C-15 is to give
regulatory power to deal with the management of ballast water.
On the one side is Bill S-4, which attempts to deal with ballast water by making
pollution a crime. On the other is Bill C-15, which attempts to deal with
ballast water by taking preventive measures, which is not a penalty approach.
It deals with the management of ballast water. That is what we support.
Senator Spivak: You prefer regulation which does not have the context of
liability. However, would there still not be a cause of liability if someone
wanted to sue under Bill C-15?
Ms Simard: A tribunal would probably look at international practice. At this
stage, international practice does not state or attach strict liability to
pollutants by aquatic organisms. The United States have elected to address it
through ballast water requirements.
Senator Spivak: Are they not linking the issue of pollution and ballast water?
Or in the international field, do they link the two? I am trying to distinguish
between linking ballast water and pollution, and the cause of liability. I
understand your concern. How strict is your objection to liability and aquatic
Ms Simard: Our objection is based on our understanding of what is done at the
As Senator Robichaud raised, we have been working on this matter for only six
days. Our review of international practice did not show that we should elect to
attach strict liability. The federation is saying that since the marine
community evolved in an international field and there is a need to be
consistent, it is difficult for Canada to take the lead and introduce strict
liability when other countries have not reached that stage. We would like a
Senator Spivak: In other words, if there is to be liability, you want it to be
decided in an international forum. You are not necessarily opposed to
liability; you simply wish it to be through an international forum. Do I have
Ms Simard: We would like it to reflect international practice. An international
forum is the result of national legislation pulled together.
Senator Angus: Your organization supported Bill C-58. You examined it carefully
and made representations. You were comfortable with Bill C-58 before Parliament
Did you see the press release that accompanied Bill S-4?
Ms Simard: Yes, we did.
Senator Angus: Is it correct to say that the press release represented the bill
as being substantially the same as Bill C-58?
Ms Simard: Yes, I believe that is correct.
Senator Angus: Is it also not a fact that the underlying principle of this bill
is to help Canada get into line with its trading partners and have uniformity
of international maritime law in these three areas -- limitation of liability,
the fund convention and the liability convention as regards pollution?
Mr. Lantz: Absolutely.
Senator Angus: Did you have a chance to read the speech I gave in the Senate on
the second reading of Bill S-4?
Ms Simard: Yes, I did.
Senator Angus: I would like to read you a paragraph. I said the following:
As far as I can determine, the principles of this legislation are not in any way
controversial, nor in dispute amongst Canadians. On the contrary, the
legislation is long overdue, long awaited and much needed by Canada's maritime
Do you agree with that?
Mr. Lantz: Yes.
Senator Angus: However, you have now come here and raised a point, so obviously
there is some controversy about Bill S-4 in the industry; is that right?
Ms Simard: Yes.
Senator Angus: As I understand you, Ms Simard, you are saying there has been
introduced in Bill S-4 something that has nothing to do with uniformity of
international maritime law; is that correct? In fact, it is something quite out
of sync with the principles of the bill; is that right?
Mr. Lantz: Yes, absolutely.
Senator Angus: Therefore, it would be like the bill as you knew it and as you
understood Bill C-58 to be. The main thrust of Bill S-4 was to do the things we
have just discussed, whereas this provision you have described to us about
pollutants is a totally different subject-matter. Is that a reasonable
conclusion for me to draw?
Ms Simard: It is. We are concerned, yes.
Senator Angus: It is like apples and oranges, two different things.
Ms Simard: It appears, from our reading of international practice, that the
ballast water position does not represent what is adopted currently. It is not
a codification of those international conventions.
Senator Angus: When Transport Canada drafts bills or regulations affecting your
industry, is it normal practice for the department to consult with your
Ms Simard: Yes, that is the practice. However, I want to make the point that we
are not appearing here to dispute the consultation process.
Senator Angus: Because it has not yet taken place.
Ms Simard: We feel that there should have been hearings on Bill C-73 in order to
bring it to another level of the legislative process, and this has not taken
Senator Angus: I am not criticizing you. I am trying to get confirmation from
you that there is normally a consultation process. There was consultation on
the predecessor to Bill S-4 that did not contain this particular definition,
but there has been no consultation with your industry on this provision.
Mr. Lantz: That is correct.
Senator Angus: Did you receive with the press release, or in any other document
furnished to you by Transport Canada, a list of minor, non-substantive
differences in Bill S-4 as opposed to Bill C-58? Did you ever receive a list of
Ms Simard: I did not.
Senator Angus: You do not recall seeing anything.
Ms Simard: I did not get that list.
Senator Angus: It was on your own reading of the bill six days ago that you
suddenly found this point.
Ms Simard: Yes.
Senator Angus: What are you seeking from this committee? Is there some amendment
you should like to propose?
Ms Simard: We believe that the language in clauses 4 and 5 dealing with "pollutant"
should be deleted from Bill S-4 and that the bill should then be adopted.
Senator Angus: As is?
Ms Simard: As is.
Senator Angus: To what page of the bill are you referring?
Ms Simard: On page 8, clause 4 of the bill reads:
The definitions "pollutant" and "ship" in section 654 of the
Act are replaced by the following:
It should be modified to read:
The definition "ship" in section 654 of the Act...
We would also like to remove the phrase "'pollutant' means," as well
as subclauses (a) and (b), and leave only "ship," which belongs to
the new definition.
Senator Angus: You want to amend this legislation by changing clause 4 on page 8
to read as follows:
The definition "ship" in section 654 of the Act is replaced by the
You want then to go down to "ship" and remove everything else above
Did you discuss this with any officials from Transport Canada when you
discovered it? I believe that both of you, in your work at the federation, are
involved in government affairs.
Ms Simard: We had two conference calls, as a matter of fact.
Senator Angus: Were they amenable to this amendment?
Ms Simard: The representatives of the government stated their will to look into
the matter. They raised concern about the effect this could have on Bill C-15,
but they did not terminate the conference call on a negative note.
Senator Angus: Was it a video call? Could you see their red faces?
Ms Simard: No, we could not see their red faces.
Senator Angus: Are any of the representatives you spoke with here today in the
Ms Simard: I believe they are.
Senator Angus: Perhaps, Madam Chairman, we could hear why that drastic thing was
The Chairman: We will be sitting again on Thursday. If we need to hear from
members of Transport Canada, we can do so at that time.
Senator Roberge: Madam Chairman, the witness did not finish because there is
also a reference in clause 5 at the bottom of page 8.
Ms Simard: We would like clause 5 to read as follows:
The definitions "Civil Liability Convention", "Convention ship",
"Fund Convention", "owner", "pollutant", and "ship"
in section 673 of the Act are replaced by the following:
"Civil Liability Convention" means... "Convention Ship"
means... "Fund Convention" means... "owner" of a ship"
We believe that the phrase "`pollutant' means" should be deleted.
The Chairman: Everything that deals with "pollutant" should be
deleted. I think we heard you well this afternoon. We can hear from members of
Transport Canada on Thursday and make the proper changes.