Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources

Issue 7 - Evidence - February 22, 2005


OTTAWA, Tuesday, February 22, 2005

The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill C- 15, to amend the Migratory Birds Convention Act, 1994, and the Canadian Environmental Protection Act, 1999, met this day at 6 p.m. to give consideration to the bill.

Senator Tommy Banks (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, after the conclusion of our business with our witness we have approximately 20 minutes of work to do, which for which you must stay, because we must approve our budget or we are doomed, to put it mildly.

To proceed with our business, it is my pleasure to welcome Mr. Avrim Lazar and Mr. Andrew Casey. Please proceed.

Mr. Avrim Lazar, President and Chief Executive Officer, Forest Products Association of Canada: I should like to offer the regrets of Ms. Gelfand from Nature Canada, who coauthored our submission. Unfortunately, she is ill and she asked me to go ahead.

You may find it unusual, on an environmental act, to have Nature Canada and the forest industry come with a joint submission.

The Chairman: No, we have commented in the past on the wonderful synergy you folks have.

Mr. Lazar: I am glad it has been noticed. It will be clear why we have come to a common view after I give the testimony.

The Forest Products Association of Canada represents about 75 per cent of the industry from coast to coast, from Newfoundland to B.C. We are responsible for about 900,000 jobs in Canada. We are the economic mainstay of 350 rural communities that would shut down without us.

We also pride ourselves on being sustainable development leaders in Canada. Our environmental record speaks for itself. I have handed out our annual report, in which you will find all the charts and graphs that show what we have done environmentally over the last 10 or 15 years.

I can say with confidence and with the support of the environmental community that, on air quality, water quality, climate change, protecting biodiversity, and ecosystem-friendly forestry practices, we are word leaders. We are second to none in Canada. Maybe even more important than that is the fact that we are getting better every year. We are determined to be sustainable development leaders.

The purpose of our visit today is to support the bill, but not to focus on the oiled seabirds element of it; rather, we will focus on changes to the purpose of the act and to the capacity to make regulations.

The old Migratory Birds Act was designed at a time in which the threat to migratory birds was men with rifles — I imagine there were some women with rifles too, but not quite as many and not as badly behaved — and people who were collecting birds' eggs from nests. At that time there was a danger of extinction from this individual taking of birds. Today, the world has changed and the danger to bird populations is mostly from habitat destruction — destruction of ecosystems. The way the Migratory Birds Act is currently written, it is an offence to harm a migratory bird or its nest. That means that if, in cutting your lawn, ploughing a farmer's field, chopping down a tree to make a road, or any forestry practice, you harm any single individual bird or its nest, you are in contravention of the law. The officials have managed, with reasonable grace, to ignore the letter of the law and apply the spirit of the law, which is to make certain that the migratory bird populations are not endangered or in any way threatened.

Ignoring the letter of the law brings certain complications. Industry does not know when the officials will show discretion and when they will decide to use the letter of the law to make life difficult. For the most part, however, the system worked relatively well until we moved to the stage of saying that we want all forestry practices in Canada to be certified to the highest environmental standards. Almost all certification schemes require that we be demonstrably in accordance with the letter of the law. In this case, the letter of law is just not achievable. One cannot conduct any sort of industrial activity and avoid harming the nest of a single bird.

Therefore, we got together with the Canadian Nature Federation, or what we call Nature Canada, and they agreed with us that this is not what we are looking for. We are looking to protect populations. Together we petitioned the government to change the act so that the intention of the act is not to protect individuals but to protect populations. It is an ecosystem intention as opposed to an individual intention.

The proposed Bill C-15 makes that change. It changes the purpose of the legislation, and it goes one step further and provides for the creation of regulations to give effect to that change. With this new regulatory power, in order to protect populations the government can require that industry not go this close to a water course or that industry provide proof that the general nesting grounds are being avoided.

With a change to the purpose of the act, it is possible to continue to provide jobs; and with the regulatory power, it is possible to continue to provide all the necessary stringent protection for populations. We are here primarily to say, ``bravo, well done, pass this.'' It will bring the Migratory Birds Act into the 21st century.

I have one further remark on the concept of mandatory fines. I understand that this bill would have fines imposed based upon the size of the vessel. In the forest industry, we have low grass areas, which probably will meet that size. We find the concept of removing discretion from enforcement officials and judges to be a poor idea. Almost inevitably, when you take away discretion, you end up with perverse results. We are certainly in favour of rigorous, stringent enforcement and fines for anything that harms migratory birds, but we would like that rigorous enforcement to be applied with the intelligence, common sense and judgment that come when you allow some discretion for judges and enforcement officials.

The Chairman: Do I take that to mean that you support the bill more or less overall with the exception of the minimum fines applied to ships of a certain size? Is that a correct understanding of what you just said?

Mr. Lazar: I will be precise. We applaud the changes to section 3 and to section 8(1), which are the ones that deal with the populations and regulations, and we support the bill overall with that exception of the minimum fine.

Senator Cochrane: Let me ask you about minimum fines. The fines that are put forth in this bill are $100,000 and $500,000. Am I right? I have not read any notes at the moment.

What kind of fines would you suggest? Would you suggest that they be lower than $100,000? Would you suggest that there be a different sort of — I will not use the word fine — a different sort of an idea that maybe ships can use, or the judges can use to make sure that people who are sending their oil out into the waters are penalized in some way?

Mr. Lazar: I am not going to claim to be a technical expert on this aspect. However, I do know from long experience — I was in the government, in Environment Canada and I am now with industry — that when you set a minimum fine and say that if the vessel is this big you must fine at least this amount, you end up doing things that do not pass the test of common sense. Our view is that the concept of the minimum fine, especially tied to the size of the vessel, does not further the intention of the act and could bring it into disrepute because of the perverse results. I do not have a view as to what the fine levels should be.

Senator Cochrane: Do the judges have enough leeway to do something like this?

Mr. Lazar: Normally, what is specified are the maximum fines, not the minimum.

Senator Cochrane: Is that the only thing the judges can impose?

Mr. Lazar: They can impose whatever they think is appropriate in the case. However, the proposed legislation would mean that judges could not use their judgment. Even if they thought it was inappropriate, they would be forced to do it — and usually they would accompany their decision with some commentary about being forced to do something that they do not think makes sense.

Senator Cochrane: Nothing less than $100,000 fine would be imposed; is that the case with this piece of legislation?

Mr. Lazar: The way this legislation is written, there is a minimum penalty, and it is not based upon how bad the spill is or the damage done. It is based upon how big the vessel is. It is as if your speeding fines were not based on how fast you go, but whether or not you are driving a Honda Civic or a BMW. If you go fast in a Honda Civic, there is discretion, but if you are in a BMW, we are going to slam you.

Senator Cochrane: What we are hearing here is confusion; I am still not clear.

Senator Angus: It is very clear.

Senator Cochrane: Oh, is it really?

The Chairman: I think what the president is saying —

Senator Angus: He does not like the amendment that was put in at the House of Commons; that is all he is saying.

The Chairman: I think he is saying that there should be a range of fines within which the judge would have complete discretion, up to a maximum only and no minimum. Do I understand you correctly?

Mr. Lazar: That is correct. If I was as articulate as Senator Banks, that is what I would have said.

Senator Milne: If I can follow that thought through, do you think there would be some danger that judges would find ships innocent that were obviously guilty of doing something, rather than fine them that amount?

Mr. Lazar: That has been the general experience, as I understand it from the legal community. When you have no choice but to slam someone hard, and you think it is inappropriate, you find some way of avoiding that action.

Senator Spivak: I want to ask you about this minimum fine, and then I have another question, if I may.

After all, the experience has been that the ships went north to dump their waters because our fines were less. The proposed changes would bring the legislation in conformity with the American laws. You can talk about how difficult the minimum fine would be, but we are talking here about prevention.

The only other way that it has been suggested is through proclaiming sections of the Canada Shipping Act, which apparently would do a similar thing. However, do you not feel that the fines have to be comparable to the American experience, so that the ships do not go north to dump their oil?

Mr. Lazar: The size of the fines in Canada can be as large as we wish. The enforcement regime can be as rigorous as we wish. That does preclude allowing the judges to use discretion in imposing penalties. We can have fines without having a minimum fine. We can have larger fines than the Americans if we so choose; we can have a more rigorous, demanding system — more inspectors, harder judges. My colleagues and I are not commenting on whether the regime should be rigorous or punitive; we are saying only that there should be discretion to decide when to hammer and when to say that this is a minor incident.

Senator Spivak: Your position is that it is the discretion you are opposed to, not the size of the fine.

Mr. Lazar: It is the lack of discretion.

Senator Spivak: You have no objection to the size of the fine because that is in harmony with the American experience.

Mr. Lazar: I have no views on the size of the fine.

Senator Spivak: I will not ask you about the Canada Shipping Act, I think, because that is not your expertise.

Mr. Lazar: You can ask me about forestry, if you like.

Senator Spivak: Let us go back to that. You are suggesting that you can conduct the industry in such a way that you can protect the basis of the water, and you can protect nests. Who is enforcing that?

In Manitoba, there is hardly any enforcement of huge tracts of land which have been given to Tembec and to — I forget the name of the other one — but one-fifth of the province. No one enforces it. Therefore, how do we really know what is going on there? Besides which, you have to have some objective evaluation of the actual practices on the ground. Who is doing that?

Mr. Lazar: Good question. There are two methods that are being used to ensure compliance with the highest standards of sustainable forestry practices. The first is provincial regulation. We had a study done by Professor Cashore from the Yale School of Environment and Forestry at Yale University.

Professor Cashore compared the enforcement regimes in Canada, the United States, Russia, northern Europe — everywhere. His conclusion was that the regimes are as rigorous in Canada as any place in the world, and much more rigorous than most. That is one point. According to an objective study by an American from Yale, we are as rigorously regulated as anyone in the world.

However, we are not always convinced that our customers understand provincial regulation, because we sell 80 per cent of our product outside. Therefore, we have gone to third-party-verified certification schemes. There are four big schemes available to us: the ISO scheme, which we rejected because it is too soft; the FSE scheme, which is the one the World Wildlife Federation is in favour of; the Canadian Standards Association, which is just as rigorous; and the SFI, the Sustainable Forestry Initiative, which is the one used most in the U.S. where our customers are. We require that each of our members meet these certification standards or we throw them out of our association. We do not take their word for it. They must provide evidence of a third-party audit of their compliance.

Canada is the only country in the world in which the national association makes this a condition of membership. It is partly because we care, but it is also because unless we can demonstrate this, we will not be able to sell our products in global markets.

Senator Spivak: If I may continue, are you suggesting that every member of your association now has been certified by the Forest Stewardship Council?

Mr. Lazar: No, I am saying something slightly different. They have to be certified by the Forest Stewardship Council, the Canadian Standards Association or the FSI standard, which is the standard our American customers respect. They have to meet one of these three by 2005. It takes time and money to do it.

Tembec in Manitoba, which you mentioned, has committed to using the Forestry Stewardship Council. They have a couple of years left to complete their compliance.

Senator Spivak: Tembec has committed?

Mr. Lazar: Yes.

Senator Spivak: That is news.

I have no quarrel with regulations. I know that the legal framework in Canada is good. It is enforcement that has been sadly lacking in the past. If you are telling me that forestry companies are now committed to having their practices audited and certified, that is very good news.

Mr. Lazar: We are more than committed; we are doing it.

The Chairman: That is good news. I remember having congratulated you on that wonderful synergistic combination when we learned that you were taking that route. That is very commendable.

Senator Cochrane: To your knowledge, Mr. Lazar, has the federal government committed to increasing the funds available for the enforcement of this bill when it becomes law?

Mr. Lazar: You get to learn many things as the head of a forest products association, but that is not one of them. From my experience, I can tell you that the government is far faster to pass regulations and legislation than to provide the necessary funds for implementing them. The submission that we made to Nature Canada specifically recommends that the committee ask the government that question and monitor the government's implementation. There is no point in making commitments if you do not fund the implementation of them.

I have no knowledge of this, either positive or negative, only past experience.

Senator Angus: Welcome, sir, and thank you for your comments. I understand from reviewing your materials that your association is the successor to the Canadian Pulp and Paper Association.

Mr. Lazar: That is correct.

Senator Angus: The head office used to be in Montreal. Where is it now?

Mr. Lazar: It is now at 99 Bank Street here in Ottawa.

Senator Angus: You say that your member companies represent 75 per cent of the working forests in Canada. How many members do you have and are they all corporate members?

Mr. Lazar: We accept only corporate members. We have about 30 members now. With amalgamations, we occasionally lose count. For the most part, they are large entities. The small lumber mills tend to join the provincial associations, which deal with local issues and are more affordable for them.

Senator Milne: If you have 30 members, this is not a complete list on the back of this report. There are not 30 names there.

Mr. Lazar: If someone will count, I will give you an accurate answer.

Senator Angus: I knew your association well when it was in Montreal. As you say, it is certainly ``the'' association of forest product industry participants anywhere in the world.

I notice that the documentation relating to your joint submission with Nature Canada is dated November of 2004. It even has a statement that it was prepared with a view to assisting our sister committee in the other place. Did you appear there?

Mr. Lazar: No, we did not.

Senator Angus: Are you aware that the provisions you referred to earlier about minimum fines were not in this bill as it was originally presented?

Mr. Lazar: We are aware of that.

Senator Angus: Would it be right for me to conclude, after reading your documents, that they were prepared before the amendment with minimum fines was suggested?

Mr. Lazar: The piece that the Forest Products Association of Canada and Nature Canada submitted together was prepared before, but we have looked at it since. The subsequent piece that we added under only the FPAC name was done after the amendment.

Senator Angus: It makes reference to the minimum fine, does it?

Mr. Lazar: Yes, it does.

Senator Angus: That is why the original brief or submission did not address your concerns about minimum fines?

Mr. Lazar: Yes, and also because the minimum fines was not something that Nature Canada felt was central to their concerns. To be very clear, it is not central to our concerns with this bill either.

Senator Angus: It is a criticism?

Mr. Lazar: It is a worry that this is probably a step in the wrong direction in terms of how to regulate industry.

Senator Angus: I understand that you did not testify or make a presentation to the committee in the other place. Do you have any knowledge about how those amendments came to pass? Was there a specific reason that you are aware of?

Mr. Lazar: No.

Senator Angus: You made some comments about regulations. I want to be sure I understood well that the regulations in the over-regulation, if you will, inherent in the statute have been removed by Bill C-15.

Mr. Lazar: That is right. We see that as a huge step forward, as a very progressive change in the legislation, and we applaud it.

Senator Angus: Thank you very much.

Senator Adams: I am sorry that I was late and missed some of your presentation. Is your main concern projects for paper mills and such things?

Mr. Lazar: That is correct.

Senator Adams: Last week, we heard from officials from Environment Canada with regard to oil spills at sea. They said that about 300,000 birds are killed every year as a result of oil spills.

Mr. Lazar: I am not an expert on oil spills at sea.

Senator Adams: I live in the Arctic where we get a lot of our supplies by sea. Does Bill C-15 deal with anything other than oil, such as chemicals transported by ship?

Mr. Lazar: I suggest that you ask the departmental drafters. I do not want to go beyond my level of technical expertise. I know that you have access to the drafters of the bill. I am here to comment on a specific aspect of it.

Senator Adams: Do you agree with the policy in Bill C-15?

Mr. Lazar: We strongly agree with the policy, with the exception of the minimum fines.

Senator Adams: Why are you not satisfied with the minimum fine?

Mr. Lazar: Our view is that when you impose a fine without any capacity to hear what the circumstances were and what the degree of harm is, you lessen respect for the law because very often it leads to perverse results. Our system is based upon the concept that the law sets a framework and prosecutors and judges live within that framework. Dictating a specific outcome without of any idea of the facts takes it outside of that scheme that has served us very well.

Senator Adams: Say you hire a foreigner's ship from outside of Canada for your cargo. If you cannot get it back into Canada, how does that work? Do you have to be certified before you leave Europe or do foreign ships have to be inspected before they land in Canada?

Mr. Lazar: You are asking how ship inspection works?

Senator Adams: Yes.

Mr. Lazar: You would have to ask someone in the shipping business. I can tell you how to do forestry.

The Chairman: But you ship a lot of wood.

Mr. Lazar: Yes, the wood is certified.

The Chairman: Do you use various flag carriers or do you use foreign flag carriers in the main when you are exporting?

Mr. Lazar: We use whatever gives us the best rates. Transportation is 40 per cent of our cost structure. It is a huge amount. We will go wherever we can get the best rates.

Most of our shipping is to the U.S., so most of it is not by ship, except the stuff that goes down the coast. We suffer from monopolistic rail lines where competitors cannot get running rights, but you probably do not want me to start down that road.

The Chairman: I introduced a bill to bring an end to that with respect to the transportation of grain by railway just the other day. I understand what you are talking about.

Senator Adams: It is difficult for me. He is not an oil man.

The Chairman: He is a tree man.

Senator Adams: Where I live, there are no trees.

The Chairman: Speaking very generally and almost colloquially, and putting aside the question of the regulations, if the present penalties that now exist under the various acts were robustly enforced and robustly applied, do you think the changes that are contemplated in the bill that is before us would be necessary or advisable or good or bad?

Mr. Lazar: Not advisable. To speak very colloquially, if you have the capacity to punish polluters and you have a legal system and enforcement officers to chase and fine them, that probably has a greater impact on the environment than the minimum fine. I think Senator Spivak pointed out that the greatest danger to the environment is not judges' discretion, it is lack of enforcement officers, lack of investment in enforcement.

Senator Milne: I was going to thank you, Mr. Lazar for supporting the bill except for this minimum fine business, but I have been sitting here reading through your annual report and it contains a lot of information about other things that would be of great interest to this committee.

We are saying here today that about one third of wood residues is still being landfilled, for want of a better use. Making green power is that better use. Diverting the country's total annual biomass surplus, which is both agricultural and wood waste, to co-generation could replace up to 25 per cent of the electricity Canada now derives from fossil fuels. Taking just the 5 million to 6 million bone-dry tonnes of biomass still being landfilled and using it to make green energy would displace about five megatonnes of fossil fuel greenhouse gas emissions a year.

Then you talk about new technologies like fast pyrolysis and black liquor gasification, and I do not know anything about those particular new technologies. If you have some information on those, it might be of great interest to this committee.

Mr. Lazar: We would love to comment at length on the use of biomass as a way of solving Canada's greenhouse gas and energy problems and providing employment, but if you permit me, I will comment briefly.

The Chairman: Please, give us a thumbnail sketch now and we may invite you back later.

Mr. Lazar: The use of biomass under Kyoto is greenhouse gas neutral. When you switch from fossil fuels to biomass, you produce no greenhouse gases that are counter to Kyoto because Kyoto understands the carbon cycle. You burn, CO2 comes out. You grow a tree or a plant, CO2 goes in. As long as you are keeping the cycle, nature is in balance.

Nature gets out of balance when you dig in the ground and take fossil fuels that were made thousands of years ago and you use up thousands of years of stuff in a hurry. Then we have the problem of the greenhouse effect and global climate change.

We discovered in our mills that we have abundant fuel in chips, sawdust and bark. Black liquor is the sludge that comes out of the pulping process, and with technology, we could use that as a source of power. We have now reduced our fossil fuel use to basically a minimum.

We have as an objective to be energy self-sufficient in the whole industry. Because we work in remote communities, we could become the source of all the electricity for those communities.

The mills in Canada generate enough electricity today to run Vancouver on a continuous basis, the same amount of electricity as that generated by three nuclear power plants. If we were treated the same as wind energy, with the same economic advantage as wind energy, we could double that tomorrow. We could go to the equivalent of six nuclear reactors.

We have not had a lot of attention because we never asked for anything, we just did it. We have reached the point where we will not be doing much more of it because although we have the capacity for it, there are so many demands on capital to keep the mills open.

One of the great difficulties in sustainable development is that you have to provide jobs in addition to protecting the environment. Canada's mills are under tremendous pressure. When we shut down a mill, we shut down the town.

We have only a finite amount of capital, and we have to decide whether we should buy a new boiler to burn biomass or we should produce a new grade of paper which we can sell in Japan or we should improve another part of our operation. We have to decide what is economically necessary to keep the mill profitable or at least to keep it from losing too much money.

If there were a small incentive from the government, if the government just treated us the same as wind, we would be investing in those burners of biomass and could be producing the equivalent electricity of six nuclear reactors instead of three.

The Chairman: The kind of investment you are talking about is not cash infusions, it is tax treatment and the like; am I correct?

Mr. Lazar: Tax treatment, but as well, there are green energy buying plans in various provinces. We could be included in that. It is not a lot of money.

In terms of leverage, this would have the greatest impact on Kyoto. As well, it is job rich. It turns out that to produce biomass fuel provides more employment than almost any other type of electricity generation. It is labour intensive, which for the rural areas is great.

The Chairman: Does that make it inefficient?

Mr. Lazar: No, because the major cost is not the labour cost, it is the fuel input. It is not at all inefficient. It is efficient enough that we have done the equivalent of three nuclear reactors without any government help. In fact, the government has fought us in some ways, because the power companies would not let us sell into the grids when we wanted. Some of the projects we would have done had the big power companies allowed us to sell into the grids would have been a great deal more economical.

Senator Milne: Are those the provincial power companies?

Mr. Lazar: That is right. Not all of them, but it has been an uphill battle. We are doing business too. They see the small-scale biomass co-generation projects as competition.

There have been changes and they are slowly coming to recognize that. We have been getting support from Natural Resources Canada on this. This is an untold Canadian success story in climate change control, keeping small towns alive and using what is abundant. There is a lot of biomass across this country and we can keep growing it.

The Chairman: Would you be good enough to send to our clerk a compendium of the basic information we need to get to? We have been very much engaged by what you have said with respect to biomass.

Mr. Lazar: We would be delighted to do so. If it ever suits the committee, we would be delighted to come with technical experts as well on gas liquefaction. We laughingly call our presentation the miracle of biomass — not because it is a miracle, but because it is common sense; and, when you look at it, you realize that here are some very serious, wonderful, answers to vexing problems to which no one has paid attention.

The Chairman: I think we can safely say we would like very much to pursue those questions.

Senator Spivak: With all the consultations on the budget, and especially the Green Budget Coalition, this is not a new idea. I knew about this before, but I did not know the scale of it, nor did I know the obstacles. Has this not been pitched to government each time by the Green Budget Coalition?

Mr. Lazar: It has been pitched. Government has tended to see wind power as a more politically attractive option. If you do polling — such is democracy — and ask people what they would really want to see government spend on, they say wind power. They do not know about biomass. We are 100 per cent in favour of wind power, but the wind guys are getting more encouragement than we have.

Senator Spivak: The environmentalists know about it. There is an expression: ``If you hear hoof beats outside your window, don't think of a zebra before you think of a horse.'' This is right there and it is common sense.

I have one other comment on the issue of minimum fine, which has so taken our committee up. I want to briefly summarize what the department officials said when they were here. Senator Angus, I am sure, will criticize me, but they said that it is a strict liability offence so the Crown has the burden to prove that the action occurred. The proof has to be beyond a reasonable doubt. In a strict reliability offence, the accused has the defence of due diligence and the burden is on the accused to show that the accused exercised all reasonable care to prevent the offence from occurring. The court has the discretion to look at the defence of due diligence. If the accused company can show that they exercised all reasonable care, and if they have been ``good actors'' in the past so that there has been no damage to the environment, then they can escape the liability. The court is not obligated to impose the minimum fine of the amount for a 5,000 tonne ship. That is the department's position on it.

Mr. Lazar: If that were the case, then we would not be objecting. The briefing I received on this indicated that that was the original intention. However, the amendment made in the House of Commons committee went in the other direction.

Senator Spivak: That is after the amendment was made. Perhaps Senator Angus has a comment on that.

Mr. Lazar: Get the department back, then.

The Chairman: One of the distinctions is that the onus of having to prove the exercise of due diligence requires proof only on the balance of probability as opposed to beyond a reasonable doubt, which is the level of burden of proof on the Crown to prove that the event occurred.

I do not know if that distinction has anything to do with your question, but I would like you to address this further, Mr. Lazar. Senator Spivak was asking a very important question. When the department was asked, ``Is it not unreasonable that a ship that displaces 5,001 tonnes will be fined a lot of money, or given a minimum fine, for dropping a quarter of its oil, whereas a ship that displaces 4,999 tonnes will not be fined as much for letting go of a hold full of oil?'' The discretion that you suggest is removed from the option of the judge in the case exists in the fact that the judge can determine that due care and diligence was taken by these good guys who operate this lovely white ship and who maintain that it was just a mistake that they let a quarter of their oil go. I think that was the response when we said, ``Does that imbalance, given the tonnage, not seem unreasonable? Does that not remove discretion?'' My impression was that the department was saying that the judge has discretion because he can find that due diligence was practiced, and therefore there will be no fine.

Mr. Lazar: The briefing I got did not say that. Again, I do not want to be put in the position of being the technical expert on the act because I am not. You have to call the department lawyers back. The briefing I got was in the other direction,

The Chairman: I will be corrected right now by our legal advisor.

Ms. Kristen Douglas, Researcher to the Committee, Library of Parliament: It is hard to comment on your understanding of a conversation that happened another day, but where there is still discretion in your example is with respect to that less large ship — that is, the ship that displaces too little to meet the minimum fine provision. If it committed a very egregious environmental harm, then the judge has discretion to impose a fine up to the maximum amount. There is still discretion there. The minimum does not apply to that smaller ship, but the judge can use his or her discretion to award a fine right up to the maximum that is provided. It could be much higher than the minimum fine.

Mr. Lazar: That is consistent with what I have been told.

Senator Buchanan: The minimum does not apply to the smaller ship?

Senator Angus: No. It is not a forced minimum. In other words, if the smaller ship does some bad thing, the judge is not forced to give them the least amount of fine, whatever the number is. He has discretion. His discretion can go all the way up to the maximum. There is no problem with that. That is what the witness is saying. I think the witness has accurately summarized the situation.

The Chairman: The minimum kicks in at 5,000 tonnes.

Senator Milne: I am curious to know why, in this letter that you wrote after the amendment was made in the House of Commons, you say that the amendment may not be constitutional. On what ground do you base that?

Mr. Lazar: The advice we got from our lawyers was that that degree of lack of discretion might not withstand a court challenge. I will leave that to the lawyers to debate, but that is the legal advice we received.

Senator Milne: They did not give you any background?

Mr. Lazar: They did not give us a huge background briefing.

Let me summarize the point simply, because I do not think it is all that technical. If, when trying to govern, you think that you can determine what will be right in every situation, then you govern in great detail. Human experience is that when you try to govern in great detail from afar, you make very silly mistakes because you do not know what the world will be like in great detail. This is why you have a range of fines, and enforcement officers with appropriate discretion and judges with appropriate discretion; it is so that, within the framework of the law, common sense and good judgment will prevail. If you try to substitute detailed instructions for common sense, good judgment and responsibility, you almost inevitably end up doing stupid things. That is the human experience. No matter how brilliant, well intentioned or far sighted the drafters of that detailed instruction are, they do not know what they are applying it to because the world is so varied.

Senator Milne: You do not have to persuade me whatsoever. This amendment was put in in the House of Commons, not here. I am curious to know if you had any legal argument why it was not constitutional. Our great concern in the Senate is that laws that are passed by the Government of Canada be constitutional and stand up to a challenge.

Mr. Lazar: You can probably find shipping industry lawyers more than willing to support you on that.

Senator Buchanan: There have been cases recently on minimum sentencing that the courts have said are unconstitutional. Is that not right?

Ms. Douglas: My understanding is that there are cases of that nature involving minimum incarceration periods. So far none have involved a minimum monetary fine, but that is the argument.

Senator Buchanan: It appears that they could be extended; that is what your lawyers are telling you, I think.

Mr. Lazar: That is what my lawyers are telling me. However, my major point is not based upon that; it is just bad governance.

Senator Buchanan: A case came through the Nova Scotia Supreme Court not long ago. Your lawyers probably are right: some company will go to the courts with this one and it will be proven to be unconstitutional. That is something we will have to see. The bill has passed the House of Commons but as a Senate committee we could recommend that the amendment be dropped.

The Chairman: Absolutely, we can do what we like.

Senator Buchanan: Is Scott Paper in Nova Scotia a member of your organization?

Mr. Lazar: No, they are not.

Senator Buchanan: What about Avon Pulp and Paper?

Mr. Lazar: No. The members are listed there.

Senator Buchanan: I notice that you have Bowater in Liverpool, and Stora.

Mr. Lazar: Yes. Irving, for reasons related to softwood, has decided not to join the national view.

Senator Angus: They have resigned right out of the association, have they?

Mr. Lazar: They have.

Senator Spivak: My question is this: in the House of Commons there were critics who said that this was going to be challenged in court, certainly. Why did the justice lawyers pick this route rather than go after sections of the Canada Shipping Act? Would that have withstood the challenge better than this?

The Chairman: Senator Spivak, you know better than to ask me that. We might want to have a return appearance by some people from the Department of Justice.

Senator Buchanan: Did the justice lawyers agree with this amendment? They did not, I guess.

Ms. Douglas: No.

The Chairman: Did they disagree with it?

Ms. Douglas: Yes.

The Chairman: Mr. Lazar, would you comment on one thing? In your submission you talk about the need for increased surveillance and enforcement in respect of this bill. Would you talk about that and include references to your operations, if you think there should be any, as opposed to ships, because we are considering this bill in its entirety and there are aspects of this bill that affect your members' operations as well.

Mr. Lazar: It is relatively simple; the public interest is expressed in legislation, but is only achieved in implementation. If the budget does not follow the intention of the legislation or regulations, then the on-the-ground effect is not seen. I have not done an audit of Environment Canada's resource allocation, so that would have to be done. In government, obviously fiscal resources are constrained, while legislators' good intentions are expansive, and sometimes we find that there are more public intentions expressed in legislation or regulation than are actually achieved on the ground because of the lack of capacity to enforce and to deliver.

Senator Angus: A number of us have referred to your post-House of Commons submission, if I may call it that. That document has not got a date on it — at least not the copy I have. For identification purposes, I am referring to a letter that has an attachment called FPAC submission on Bill C-15, et cetera, and it goes on for several pages. It talks about your opinion as to the effects of the minimum fines and the possibility that they might even be ultra vires of Parliament. I should like this document to be part of the order officially and to be identifiable. Could we put a date on it?

Mr. Lazar: It was certainly dated at one point in time. If it would please the committee, I could officially date it right now.

Senator Angus: Can that be done in writing, and write it on the committee's official document?

Mr. Lazar: Why not date it officially February 20.

Senator Angus: That is a Sunday.

Mr. Lazar: Since my Sabbath is on Saturday, we will date it February 18.

The Chairman: Thank you very much, Mr. Lazar. I suspect that we may ask you to come back again on the other issue. At least it is a possibility.

Mr. Lazar: We would be grateful for the opportunity.

The Chairman: We look forward very much to your sending to our clerk the materials as you discussed and as we asked.

Senators, we are going to go to other business now and we will continue in open meeting. You have before you a copy of the budget, which has been massaged somewhat and which we must forthwith send in order that we can continue to operate properly.

Senator Angus: The sign says this is a public broadcast.

The Chairman: That is correct.

Senator Angus: Is that what it should be?

The Chairman: In fact, that is what it must be.

Senator Angus: I see, so one will act accordingly.

The Chairman: If we were speaking about plans, that would be another question, but we are speaking of budgets, and that is an entirely public matter.

Senator Angus: The numbers are irrelevant, but the narrative is not, if you will.

The Chairman: What I am asking you to do today is to approve this proposed budget, which is in the aggregate $424,072. Correct me if I am wrong, Ms. Hogan, but that does not include any of the costs that we anticipate in our study of the Environmental Protection Act. The study of the Canadian Environmental Protection Act, which we anticipate being given on March 31 or thereabouts, is deemed legislation and will therefore be under a legislative budget, which is statutory and not discretionary. This budget is for the conduct of our various ongoing studies. It contemplates, as you can see, a trip to pursue the OPEC and nuclear questions on which we are obliged and have undertaken to report. It includes a trip to the east. I am referring now to number 6.

The first item in number 6 may not be that week, because there are several conflicts coming up with other things going on. We can move these things around.

The travel and fact finding is in May. That is item number 1 under transportation and communications, and the other things are self-evident. We have budgeted a trip to Atlantic Canada in order to address questions there having to do with all of our respective ongoing studies, including water and the like. I have not assigned a particular date, but we wanted to have it in the budget to accommodate it when it comes along.

The aggregate we are asking for is $424,072. We should have questions about this budget. Remember, this does not include CEPA.

Senator Angus: I am concerned about the item that totals $179,710 involving a possible fact-finding mission in May, given what you told us at the last meeting about the exigencies of the CEPA study and other studies we are obliged to do in regards to legislation and water and the things relating to Canada. If you are faced with issues in getting the full amount of $424,072 approved, you might consider backing off on that item. We do have other things to do. I do not know when we will be able to do that item, given all the other stuff you have described to us. However, I understand that that item relates to past business from a time when I was not a member of the committee, so I could be off-base there. Those are just observations.

The Chairman: Senator Taylor was the chair of the committee when we studied OPEC and so forth and found out how insignificant we are in the scheme of things there. In each of the reports we issued on studies that have to do with nuclear safety and the storage of spent nuclear fuel, we said that we would look at this again. To give an example, there is an extreme shortfall between the limit to which Canada, on the one hand, obliges its nuclear folks to be insured to cover potential contingent liabilities that would derive from a disaster of some kind, and everyone else in the world on the other hand. The gap is astronomical. We literally considered whether it made sense to self-insure, because in these days, with an event such as Chernobyl or something leaking into Lake Michigan, the liabilities would be so huge that the limit the government obliges generators to cover themselves for is insignificant. We have established that the government is on the hook for the balance anyway. What is the point of this? We should find some self-financing insurance scheme as the Law Society does.

Senator Angus: Listen, I only raise it, perhaps naively, because I know there is a limit on our time. If we are not obliged to do that right away, as we are obliged to do CEPA and these legislative items, I do not know when we will do it in 2005.

The Chairman: I think you are right. If time constraints come upon us, we will have to look at things and decide what not to do. Ignore my previous telegram. It is not the case that CEPA needs to be done in the calendar year. It is a year. We do not have until December to do CEPA; rather, we have until April or so to do it, with a little wiggle room even then. We are not quite as tightly constrained as we thought.

You are right. Whether we approve this budget now and whether we get it or not, events will determine, and we will determine in light of those events, what we do and do not do, including moving conferences around and the like.

Senator Angus: Thank you for those clarifications.

Senator Spivak: I want to point out that I think I agree with Senator Angus about the timing. I do not see this in May. I was on the last trip. This is the energy part of our portfolio. The information that you get from the organizations in Paris and Vienna you cannot get over the phone. You actually get an expert reading of the state of the oil reserves and the whole world situation. It is very valuable, even though it sounds like a junket.

I agree with Senator Angus that we should do everything else that we have to do first and maybe go in the fall.

Senator Angus: The clerk and I think January.

The Chairman: January in Vienna — we do not have to flagellate ourselves. Doing your duty is one thing but being a masochist is another.

Senator Milne: What sort of a motion do you need to pass this budget?

The Chairman: If we have asked all the questions that we wish to ask, we simply need a motion that says that we approve the budget that is before us.

Senator Milne: So moved.

Senator Angus: I am happy to second that, Mr. Chairman.

The Chairman: All in favour? Opposed? That motion is carried.

Senator Milne: Before we get on to the next one, I would point out that nothing that has spilled into the Great Lakes on the Canadian side is ever likely to get into Lake Michigan because it flows north into the other Great Lakes on the Canadian side.

The Chairman: I should have learned that.

I have another budget. Please look at the second budget headed ``Legislation,'' in the amount of $20,000. This legislative budget requires the same motion of approval. I call to your attention the fact that we have added $10,000 to the amount that we used to have in order to obtain professional and other services that we think we will need.

Currently the budget is $20,000. In our submission, we told internal economy that when CEPA comes we will be coming back for a bunch more money, which will be under legislative budgets.

Senator Angus: Are you moving, Senator Milne?

Senator Milne: I will move adoption of this budget.

Senator Angus: I will second it.

The Chairman: It has been moved that the legislative budget in the amount of $20,000 be now approved; all in favour?

Hon. Senators: Agreed.

The Chairman: Opposed? Thank you. That motion is carried.

Senators, I have a whack of letters here from people who want to appear before us on Bill C-15. I will give them to the clerk, and the fact that someone replies to these letters will ensure that I do not seem rude.

The budget subcommittee of Internal Economy has proposed a rule that would give full funding to committees for all members to attend hearings, but for fact-finding missions, whether domestic or foreign, the amount given will fund the travel of the number of senators on the committee that is equal to the average attendance by senators at the committee. If 58.9 per cent of senators attend a committee, then 58.9 per cent of the senators will be permitted to go on fact-finding missions.

Senator Milne: Are we going to say the same ones?

The Chairman: I will argue against that. It is wrong, in my view, because it is not the same ones who attend all the time. If they remove people from our membership who are ill for lengthy periods of time, and who have other committees at exactly the same time, then that would be a perfectly reasonable thing to do.

However, it is not the same 58.9 per cent of the people all the time; and they do have those duplications of obligations on the part of senators, so I will be arguing against that strongly.

Senator Cochrane: Has this already passed?

The Chairman: No, it is a proposal by the budget subcommittee of Internal Economy, but it has been attached to the Main Estimates, so it has a certain cache. I am glad to hear you have been discussing this, because it is wrong in my view, and I will be taking that position forward.

Are there other questions of our researchers or our clerk?

Senator Adams: Who is the next witness?

The Chairman: The next witness is Herb Gray. It is Thursday morning here; and it is very important as it has to do with the International Joint Commission. That is the body set up between Canada and the United States to deal with matters having to do with boundary waters of all kinds. Those include the obvious ones, like the Great Lakes, rivers that are boundaries and rivers that go back and forth, like the Red and the Milk, and cross the border.

Senator Adams: Nothing to do with the sea?

The Chairman: Nothing to do with the sea, except when there are borders created by it. This is an important matter. I urge you all to be here; if there were no other reason, it would be because I want to have good attendance so that if I lose my argument, we will all be able to go on fact-finding tours.

Senator Cochrane: Will we be meeting in this room all the time now?

Ms. Hogan: Only when televised.

The Chairman: When we wish to be televised, we have to be here. We are here on Thursday; are we televised on Thursday?

Ms. Hogan: Yes.

The Chairman: Wear your best bib and tucker. Are there any other questions of anyone?

The committee adjourned.