Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 12 - Evidence, November 7, 2012


OTTAWA, Wednesday, November 7, 2012

The Standing Senate Committee on Transport and Communications met this day at 6:47 p.m. to examine the subject matter of those elements contained in Divisions 5, 12, and 20 of Part 4 of Bill C-45, A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.

Senator Dennis Dawson (Chair) in the chair.

[English]

The Chair: Welcome to the Standing Senate Committee on Transport and Communications. Tonight, the committee begins its pre-study of Divisions 5, 12 and 20 of Part 4 of Bill C-45.

[Translation]

This evening, we have the pleasure of having the Honourable Denis Lebel, Minister of Transport, Infrastructure and Communities, join us, but first we have the pleasure of hearing from Helena Borges, Assistant Deputy Minister, Programs Group, Transport Canada, and Colin Stacey, Director, National Air Services Policy, Transport Canada.

[English]

Later this evening. on the second panel, we will have officials from the Canada Border Services Agency to discuss amendments to the Customs Act, Division 12.

[Translation]

Welcome and thank you for taking the time to come and discuss this important bill with us. We are going to keep the minister's presentation until later.

I have a question for the committee.

[English]

If members agree, the communications services of the Senate would like to take a picture of Minister Lebel at committee when he arrives.

Ms. Borges, please proceed.

Helena Borges, Assistant Deputy Minister, Programs Group, Transport Canada: I will give you a few opening remarks to set the context of the bill and what it does. I will speak to Division 5, which is the proposed bridge to strengthen trade act. The purpose of this act is to authorize the construction of a new international bridge crossing across the Detroit River between Windsor, Ontario and Detroit, Michigan. This was referenced in the budget document last spring on page 159. In fact, there was reference to this bridge and the new bridge for the St. Lawrence.

As you may know, the Windsor-Detroit trade corridor is by far Canada's busiest border crossing with the United States. It handles almost 30 per cent of all Canada-U.S. surface trade and almost one third of Canada-U.S. truck traffic. That is equivalent to over 7,000 trucks per day. In 2011, Canada-U.S. trade reached $689 billion; and Michigan-Canada trade exceeded $70 billion. To give you some perspective, there is no greater trading partner for Canada than the State of Michigan, other than the United States.

Presently, 99 per cent of the Windsor-Detroit truck traffic crosses over an 83-year-old bridge that is four lanes and goes through the heart of Windsor and the heart of Detroit. This is the only major crossing between Ontario and the United States where there is no direct highway access or significant redundant capacity available should anything happen at that bridge or at that crossing. As such, you can appreciate that a new crossing is a vital urgency for the manufacturers and shippers along that corridor. You may also recall that the big auto makers are there, so there is a lot of joint manufacturing happening across that border.

[Translation]

Therefore, a new border crossing is necessary. The Government of Canada has been working with Ontario, Michigan and the United States governments in the past 10 years to develop the Detroit River international crossing project.

Canada and Michigan signed the agreement on the crossing in June 2012, which was an important step toward the construction of the new public bridge. The agreement shows that the Government of Canada and the Government of Michigan are fully committed to proceeding with the project quickly.

[English]

The project has the support of major automotive and auto parts manufacturers including Chrysler, Ford and GM, as well as Honda and Toyota. The Canadian and American chambers of commerce and various chambers of commerce across the State of Michigan all support this project. Labour unions in both countries support this project. Numerous other state businesses and community groups, including all the major trucking firms, support this project. Other companies that rely on cross-border trade, including familiar names like Campbell's Soup, Amway, Kellogg's and Meijer Incorporated all rely on this crossing and support it. More importantly, the cities that will host this crossing — the City of Detroit, the City of Windsor and the County of Essex — support it, as do the legislatures of Ohio and Indiana.

Despite this broad support for the project, its primary opponent, who is the owner of the current bridge in the area, has launched several legal challenges against the Government of Canada aimed at delaying or stopping the project.

[Translation]

In accordance with the intent of the 2012 budget, the Bridge to Strengthen Trade Act aims to create jobs, increase economic growth and encourage long-term prosperity in Canada, especially in the two regions most affected by the recent economic difficulties: Windsor and Detroit.

[English]

The project has already undergone a rigorous and coordinated five-year environmental process on both sides of the border that met the requirements of the respective legislation in three jurisdictions: Canada, Ontario and the United States. These include the Canadian Environmental Assessment Act, the Ontario Environmental Assessment Act and the U.S. National Environmental Policy Act.

[Translation]

The three governments granted their approval in 2009, by concluding that the project would in no way harm the environment.

[English]

The environmental assessment decision was upheld last year in Federal Court after it was challenged by the owner of the existing bridge. The decision was appealed and the Federal Court of Appeal confirmed that the project complied with all the obligations under the Canadian Environmental Assessment Act.

In this context, the proposed bridge to strengthen trade act will shield the new bridge from existing and future legal challenges of regulatory permitting decisions and administrative approvals required under specified Canadian laws.

[Translation]

Basically, the new legislation will eliminate any possibility of legal challenges by allowing the construction of the project without requiring other permits or authorizations in Canada.

[English]

The legislation is by no means a way to avoid environmental obligations or other regulatory obligations as it would still require the Government of Canada and the future P3 proponent who will be selected to build this bridge —

[Translation]

The Chair: I must interrupt you because the minister has arrived.

Welcome, Mr. Minister. We thought it would be a good idea to start with a presentation by one of your officials while waiting for you to arrive. It is up to you to decide whether you want Ms. Borges to continue or whether you would prefer to start your statement.

Hon. Denis Lebel, P.C., M.P., Minister of Transport, Infrastructure and Communities: Since I like cycling, I will pedal quickly to catch up.

[English]

Ms. Borges: The legislation requires that the Government of Canada and the P3 proponent that will be selected to build this project have to comply with the commitments made in the federal environmental assessment report regarding the mitigation measures, as well as complying with the intent of the obligations under relevant federal legislation pertaining to fish and fish habitat, species at risk and navigation. To this end, the bill requires that a plan be filed for each law for which a permit would not be required, explaining in detail all the measures that will be taken to mitigate any adverse environmental effects caused by the construction of the project. These commitments also include continued consultations with effected communities, the First Nations as well as responsible federal departments.

[Translation]

To ensure accountability, the legislation includes financial penalties if these obligations are not met.

The critical advantage of this legislation is that it makes it possible to assure the P3 bidders that the project will not be delayed because of legal challenges on the Canadian side and that the crossing will be built without delays or interruptions.

[English]

By introducing and passing this legislation, we will send a strong positive message to the P3 market. This will no doubt enhance the quality and the number of bids that we will receive for this project.

The legislation also clarifies a number of corporate governance issues that provide some minor amendments to the International Bridges and Tunnels Act. Consistent with the crossing agreement signed in June such as confirming the Crown's authority to establish a corporation to implement the project in the United States as well as in Canada, authority for the corporation to establish tolls and other charges for the use of the bridge and to charge tolls under a public private partnership. With this act we are taking the necessary steps to ensure timely implementation of this project in light of its importance to the long-term economic prosperity of both Canada and the United States in general and of the Windsor-Detroit region in particular. That finishes my remarks.

[Translation]

The Chair: Mr. Minister, would you like to add any comments?

Mr. Lebel: I will give my presentation now.

[English]

Ms. Borges, how long have you been working on this issue?

Ms. Borges: Eleven years now.

Mr. Lebel: Eleven years and we are fixing it now.

[Translation]

Mr. Chair, I am pleased to be here this evening to share with you the issues in Bill C-45 because it is very important — for you and for us — to fully support the economic development of our country.

[English]

I am pleased to be here this evening to speak about the important transportation initiatives included in Bill C-45, the proposed jobs and growth act. This legislation follows through on our Economic Action Plan 2012 commitment to promote long-term economic growth, jobs and prosperity. It will help to ensure that Canada's economy and public finances remain sustainable for years to come.

There is no question that safe, efficient and effective transportation is essential to the smooth functioning of our country and economy. It is also a key element in supporting our international trade.

[Translation]

The transportation initiatives are the following: the Bridge to Strengthen Trade Act; the amendments made to the Navigable Waters Protection Act, so navigation; the amendments made to the Canada Shipping Act, 2001; the diversification of service delivery methods through these changes made to the Canada Shipping Act; and the amendments made to the International Interests in Mobile Equipment Act (aircraft equipment) to support our aircraft companies and the aircraft economy in Canada.

These four initiatives are connected by the support they provide to our transportation network and their contribution to Canada's competitiveness and prosperity in the long term.

This is the context that I want to discuss today, and I will speak to you about two initiatives studied by your committee, starting with the Bridge to Strengthen Trade Act.

[English]

In Budget 2012, our government reaffirmed its commitment to ensuring that Canada remains highly competitive in international trade. We did this because our top priorities are the economy and creating jobs, growth and long-term prosperity for Canadian businesses, workers and their families. We know that fostering international trade is one of the best ways to achieve these goals. One out of every five jobs in Canada depends on trade, which accounts for more than 60 per cent of our country's annual income.

To support trade and create jobs, we are investing in key transportation infrastructure and launching the most ambitious trade expansion plan in Canadian history.

Clearly, the construction of a second bridge linking Windsor and Detroit supports those goals. The United States is Canada's biggest customer, as we are theirs. We need to ensure smooth passage for the more than $1.5 billion — close to $2 billion — in annual trade that crosses the border every day. The Windsor-Detroit corridor alone handles almost 30 per cent of Canada-U.S. surface trade. It is clear that the new bridge will have a powerful impact on trade between our two countries.

[Translation]

This bridge will also help create thousands of jobs and opportunities on both sides of the border. The construction of the bridge itself will create 10,000 new jobs during that period.

This is why the project is supported by stakeholders from a wide range of sectors on both sides of the border.

These stakeholders include the governments of Ontario and Michigan, the 15 chambers of commerce in Michigan, the chambers of commerce in Ontario and Canada, the United States Chamber of Commerce, the First Nations, the municipal administrations, transportation and logistics companies and associations like the Ontario Trucking Association.

Understandably, when you have been working on a file for 11 years, as Ms. Borges said, you build support and friendships over the years and, today, we are sure that, in moving ahead with this file, we are well-supported economically on both sides of the border.

There are also 50 major corporations doing business in the United States and in Canada, including the car manufacturers Ford, GM, Chrysler, Toyota and Honda.

As the Prime Minister said in Windsor in June, when he announced the agreement between Canada and the State of Michigan to build the bridge, this project is an investment for the future of the economy, trade and the manufacturing industry of North America. It will make it possible to create some certainty for the private sector and provide stability for the local economy.

During this announcement, Mr. LaHood, the transportation secretary, joined us, as did our two ambassadors — of Canada to the United States, and of the United States to Canada — and Governor Snyder. For me, this just demonstrates the importance of this immense strategy for both sides of the border.

[English]

The proposed act demonstrates our government's continued commitment to support the competitiveness of Canadian industry in the global marketplace. The new bridge will support the creation of export-related jobs and investment opportunities along the Quebec City-Windsor corridor.

[Translation]

You know that it is also very important for Quebec; many trucks pass through there, from all over our great country.

[English]

Just as important as the benefit to Canada-U.S. trade is the strengthening of our position as the gateway to the North American market. This is more than just a bridge linking Windsor and Detroit or even Ontario and Michigan. It is a key link in our coast-to-coast system of trade gateways and corridors. With this bridge and other infrastructure improvements across the country, Canada can offer shippers in Asia and Europe an integrated and efficient transportation network that spans Canada and reaches deep into North America's economic heartland.

If we want our economy to grow and create new jobs and prosperity, especially in these uncertain times, we must expand our trade. For that, we need an efficient and secure border. The defeat of Proposition 6 yesterday clears the way for the construction of the new bridge across the Detroit River. We will continue to work with our partners in Ontario and Michigan to obtain the necessary Presidential Permit to allow this important bridge to proceed. Together, we will get the job done and build a bridge for the future.

Infrastructure investments like this new bridge crossing are essential to keeping trade flowing and maintaining a strong national economy for generations to come.

There are many other ways in which the Government of Canada continues to ensure long-term prosperity in our country. As outlined in Economic Action Plan 2012, we must continue to compete with the world's large and dynamic emerging economies. We must continue to take the necessary steps to allow our industries and businesses to shine on the world stage. To this end, we are proposing important amendments to the International Interests in Mobile Equipment (aircraft equipment) Act. These proposed amendments are a clear demonstration of our commitment to support the competitiveness of Canada's airline industry and of the economy in general.

[Translation]

Adopting these amendments will help Canada proceed with the ratification of the convention and the Cape Town protocol, which is important for our airline industry and our aircraft equipment manufacturers.

The convention and the protocol are used as an international legal framework for financing aircraft equipment, including air frames, motors and helicopters. As you know, this type of equipment is extremely costly and highly mobile in nature.

Given that the convention and protocol contribute to providing greater stability and predictability in financing this equipment, they allow financial institutions to reduce the financing costs taken on by aircraft manufacturers. This is something that has been asked of us, and we held a meeting not long ago with all the owners and representatives of the country's aircraft companies, small and large, that have all asked us to opt for this agreement.

As a result, Canada's ratification of the convention and protocol could contribute to strengthening the competitiveness of Canadian airline companies and aircraft equipment manufacturers. Of course, this does not just concern people who use the aircraft, but also the people who manufacture them.

[English]

Canada's airline industry and aircraft equipment manufacturers strongly support this initiative. Canada's airlines play an essential role in our economy, and they operate in an intensely competitive international market. The proposed amendments demonstrate our government's continued commitment to support the international competitiveness of Canadian industry.

[Translation]

To conclude, Mr. Chair, ladies and gentlemen, please allow me to emphasize the fact that the two initiatives studied by your committee serve an essential objective, which is to make Canada an important and dynamic player in the global economy, so that the country continues to be a place where Canadians are proud to live, work and raise their family.

Thank you, once again, Mr. Chair, for giving me this opportunity to talk about these important initiatives. I am now ready to answer any questions the committee members may have.

The Chair: Thank you. I will introduce the committee members in a moment but, since you spoke about the aircraft industry, I would like to publicly reiterate the committee's invitation, if I may: we are in the process of studying the aircraft industry, national and regional airports, and an open invitation has been made to the Minister of Transport to come and testify before our committee on the date of his choice. I would just like to repeat this invitation publicly, because you will see that we are a very warm and welcoming group, and you will be treated very well.

Mr. Lebel: Mr. Chair, given your commitment and the way you extended your invitation, it would not be right of me to refuse. We will look at the agenda to find a time to come and speak with you.

The Chair: I would like to introduce our members. You may already know Senator Doyle, from Newfoundland and Labrador; Senator Boisvenu, from Quebec; Senator Eggleton, from Toronto; Senator Mercer, from Nova Scotia; Senator Greene, from Nova Scotia; Senator Verner, who you know well; our friend, Senator Housakos, from Montreal; Senator Unger, from Alberta; and Senator Zimmer, from Winnipeg, who will have the honour of asking you the first question.

[English]

Senator Zimmer: Welcome, minister, Ms. Borges and Mr. Stacey.

Ms. Borges, it is nice to see you again. I have a few questions. When will the construction of the new bridge begin? How long will it take to complete? How much will it cost?

Ms. Borges: Before we can begin the construction of the bridge, there are still a few approvals that we require from the U.S. government. The minister mentioned that we require a Presidential Permit. Now that the election is over, hopefully we will be able to get that from the State Department soon.

For the last two years, the project has not moved at all in Michigan. We are now in the process of doing the due diligence work to confirm all of the requirements in Michigan and the costs on the Michigan side. We will need to do that, and it will probably take us another two years or so to get that done. We will then launch the procurement process, which is for selection of a public-private partnership. That process has two steps — the request for qualifications and then the request for proposals. We expect that will take about another two years. Construction will follow immediately after that.

A project of this magnitude, because it is building plazas on both sides, the bridge structure itself and an interchange in Michigan, will probably take four to five years. That is the average for a project like this. Construction will probably start in about four years or so.

Senator Zimmer: Do you have any idea of total cost?

Ms. Borges: Part of the due diligence work is to refine those costs. Right now, we are estimating the project at about $2.5 million for the crossing itself. The Province of Ontario is already constructing the road that will connect the bridge to Highway 401, and we are contributing half of the cost of that road as well. That will add another $1.6 million or $1.7 million to the total cost.

Senator Zimmer: What recourse does the general public have if the proposed mitigation activities fail to correct or diminish any negative impacts resulting from the construction or the operation of the new bridge?

Ms. Borges: As part of the legislation, the proponent or the government will have to file a plan. That plan will outline all of the mitigation measures to attenuate any impacts that we will have.

As part of that process, there is normal consultation with the communities as well as the First Nations. We have extensively engaged the First Nation there, the Walpole Island First Nation. They have been working with us. In fact, they are already helping us to relocate some species at risk, some kinds of coffee trees and other plants. Therefore, through those processes and consultations, we will be obligated under the law to comply with those plans. If they do not comply, there are provisions in the act for fairly stiff financial penalties, higher financial penalties than most other legislation that we have currently on the books.

Senator Zimmer: It sounds like you covered all the bases. In Winnipeg, when we built the Forks, they did not check to see where the Aboriginal burial grounds were and they had to stop and back up. Congratulations, it looks as though you had a lot of bases covered.

Mr. Lebel: We have a certain practice. We are just beginning, but we are on our way to building a new bridge on the St. Lawrence River. We are doing both at the same time, and the experience from one will serve for the other one. We have done a good job on the St. Lawrence River and will continue to do so, but we are a bit more advanced for certain issues in Montreal and some others in Detroit.

Senator Zimmer: Thank you very much.

The Chair: Ms. Borges, since I had you as a witness many years ago when Lawrence Cannon was Minister of Transport, before he went to bigger and better things across the sea, you might remember that we passed Bill C-3, the International Bridges and Tunnels Act.

Ms. Borges: That is correct.

The Chair: We thought at that time that we were addressing this issue to solve the fact that you would not need more legislation to solve issues like this. Why are you back now and what was wrong with Bill C-3?

Ms. Borges: In fact, we are using Bill C-3. We are making some amendments through this one. The framework that is in the International Bridges and Tunnels Act is the framework we will use for this bridge in terms of the governance arrangement and the safety and security and all of those elements that were in Bill C-3.

This act is very unique. It deals with a situation that we have never encountered before. As the minister asked me, I have been on this project for 11 years. We did the environmental assessment in five years. We completed it in 2009, and we have been fighting legal battles here and in Michigan for the last three years to try to advance the projects.

Because we need permits under the various laws in Canada, every time a permit is issued, there is an opportunity for judicial review of those decisions. That means that anyone can complain and go to court, and we had a challenge on the environmental assessment by the owner of the bridge which, in effect, took almost two years to get through the court system. If we want to wait longer to build this bridge, then we would not need this act, but we think it has been long enough now. To try to avert any more of those kinds of legal challenges is what this bill is providing us with. This bill combined with the International Bridges and Tunnels Act gives us the legal framework for this bridge.

The Chair: Thank you. I wanted to get that on the record.

Senator Mercer: Thank you, chair, for bringing up Bill C-3 because that is exactly where I was going.

The Chair: Are we the only ones that were there?

Senator Mercer: I think so.

Ms. Borges: I was there.

Senator Mercer: Ms. Borges was there.

I have some of the same questions today as I had before the committee back when we had Bill C-3. I found myself in the unusual position of being a left-wing Liberal defending corporate America. If I recall, and Ms. Borges and the minister can correct me if I am wrong, the current owner of the bridge has said many times that they would like to build another bridge next to the current bridge. Indeed, if I recall correctly, and I have been to Windsor several times and toured the area, they have actually bought the properties adjacent to the bridge on both sides of the river.

You would not have a 3P deal when we can have a 1P deal. Why do we want to get into the bridge business when a private developer is willing to develop a bridge on his own, next to the bridge that is already there?

Mr. Lebel: It is because we do not want the economy of this corridor to be totally controlled by a private owner who can decide to jam both bridges.

Senator Mercer: Has he had a history of doing that, minister?

Mr. Lebel: We do not know.

Senator Mercer: We do not know. The family has owned the bridge for decades.

Mr. Lebel: You have to see how he has reacted in some years to see how it is important for him to control everything. If it was not that, he would not react in this way.

For us, it is very important. It is not a question of private versus government. We want to have the economy grow, and we want to be sure that both sides of the border will be well served by the infrastructure that we have there. If this owner decides to do something to interfere with our development, we cannot accept that.

Ms. Borges: When we did the five-year environmental assessment, we looked at two options for twinning his bridge. Both options were ruled out for major significant impact to the environment and to the communities along that corridor. That is right in the old part of Windsor, next to the university, next to a college. The option was ruled out because of that. For him to build another bridge, he has to get another environmental assessment. They have filed one, and it is being currently processed, and, depending on the outcome of that, he could. However, as the minister says, this is one very narrow corridor going right through the heart of the city. As for putting more traffic through there, we cannot; the road is at capacity. That is why the location for this one is much farther away.

Senator Mercer: Some of my colleagues have not been to Windsor, but I would argue that saying through the heart of the city of Windsor and through the heart of the city of Detroit is a bit of an exaggeration. I recognize the congestion and its proximity to the University of Windsor.

However, there was an agreement a number of years ago between the Government of Canada and the Government of Ontario to rectify what on our side of the border has always been viewed as the single biggest problem, namely, that there is no connector from the 401 to the bridge. There was an agreement signed by the prime minister of the day and by the premier of the day to do that. That agreement has never been acted upon. I cannot recall the numbers, but money was committed by the Government of Canada and by the Province of Ontario to fix this. What happened to that agreement?

Ms. Borges: Actually, there was not an agreement of that nature. There was an announcement that we would conduct the environmental assessment for a new crossing.

Senator Mercer: Politicians, again, announcing things before they were ready.

Ms. Borges: There was a piece of infrastructure built on Huron Church Road, if you are familiar with the area. As you may or may not know, this is a unique crossing in that the secondary inspection for Canada Customs is not at the bridge. It is actually three kilometres away. When a truck comes in from the United States, it goes through primary, and that truck has to get de-stuffed and checked. It goes unescorted for three kilometres to a facility owned by the Ambassador Bridge for a checking. That is a bit of a security concern for our customs colleagues.

We did build for that facility, though, a brand new intersection so that trucks could turn in and out of there a lot better. They did benefit from this, and there were lots of other investments in the city of Windsor with that money that you are referring to, senator.

Senator Mercer: Let us go across the river for a moment to the Michigan side. The last time I was there, the place was a mess because of the construction. I saw evidence at the time, and it may have changed since then, that this was the single largest highway construction project ever undertaken by the State of Michigan. The objective was to take all of the interstate highways that come in and out of Detroit and feed the border, which are the lifelines of Canadian industry, as we feed our products into the United States. They were bringing them all together and ensuring that things worked. While I did not see the finished project, it seemed to me that it all seemed to end at the Ambassador Bridge from the American side.

Therefore, when we build a new bridge, will we have to move all that work that the good citizens of the State of Michigan, and probably the United States of America, helped pay for either up or down the river, depending on where this new bridge will be?

Ms. Borges: In fact, no. The project you are referring to is finally complete. It was two parts. One brought together the interstate system, and the other part was building a new connection from the plaza to the interstate system. The project was done with the highways — by the State of Michigan. The plaza was paid for by the U.S. federal government and the money provided to Michigan so that the owner of the bridge, Mr. Maroun, could construct this project, which is called the Gateway Project.

I do not know if you have kept an eye on the happenings down there, but earlier this year and last year several law suits were filed by the State of the Michigan against Mr. Maroun, because instead of using that money how it was meant to be used — to provide good connections — he used it to build a duty-free shop, a gasoline station and blockages to the new crossing. As a result, he was put in jail for two days, and the State of Michigan had to take over the project to complete it. It has finally been completed and is now open to traffic as of last month.

Senator Mercer: I was familiar with that.

We have the Prime Minister's announcement and the analysis over the past 12 or 18 hours since the election that everyone is happy on the Canadian side that we can proceed with this. They continue to talk about an analysis from an American point of view that this would be a no-cost thing for the Americans. I am quite happy to do business with our neighbours to the south; they are our best customers and we are their best customers. However, it seems to me that if we are building something that will benefit them just as much as it will benefit us, why are we the only ones paying?

Mr. Lebel: We will be refunded through tolls. We will only advance the money. That is how we will pay for it — by tolls. At the end, we will not pay more than that.

Senator Mercer: We will put up the money through either guaranteed loans or some magical thing that the government seems to come up with to make these projects work. I still do not understand. We will be taking the risk. We, as Canadians, will be taking all the risks. There is no question that we will get a good deal of benefit — and I am not questioning that — as will the people of Michigan and the United States, who are taking no risks. I find that curious.

Ms. Borges: As the minister said, we will front the money but then we will get repaid through tolls.

You should be aware, however, that money for two of the other bridges between Canada and Michigan, at Sault Ste. Marie and at Sarnia, was fronted by Michigan and was paid pack through toll revenue. This time, we are taking the lead because they are having problems in their state. They did it before, and they have been repaid through toll revenue over the years.

Senator Mercer: Are they still receiving the money from the tolls at those other two bridges?

Ms. Borges: Both companies receive money from the tolls. There is a Canadian company on the Canadian side and the Department of Transport for Michigan on the American side. The bridges have been paid off, so both sides receive toll revenue. On this new bridge, we would receive the toll revenue until it is fully paid.

[Translation]

Senator Boisvenu: I do not have Senator Mercer's background, but I have a few quick questions, to improve my knowledge of this project. If we need a bill to build a bridge, is it because it is an international bridge or because of loans?

Ms. Borges: We need the legislation for this project because of legal challenges that we are in the process of dealing with. We would normally use the legislation that Senator Dawson mentioned, the International Bridges and Tunnels Act. On the American side, they need a presidential permit that authorizes all international structures.

Senator Boisvenu: There is no need for specific legislation when it an interprovincial bridge is involved?

Mr. Lebel: With the adopted legislation, even the international aspect would be covered by this part. The specific context of the owner who continues to interrupt everything regularly — and I do not want to spend too much time on this — as Ms. Borges explained, brings a particular context. There is the issue of the presidential permit. We were almost at that point a few weeks before the elections. It came very close. You will understand that the elections halted the process of getting this permit. Everyone supported us in this project. This brings about something different. We will continue to work on it.

I must add another important element. We said when we announced the bridge that the steel used in its construction would be North American steel, from Canada and the United States, and that the employees who would work on it would be from Canada and the U.S. We will see how the P3 competition unfolds, but it is really in the spirit of the particular context of this bridge that we have to react. We have protected certain elements that should be brought in to build the bridge. We at least have the certainty that, for this part, what we already have in hand can be considered.

Senator Boisvenu: Will the current bridge continue to operate until the other one is built?

Mr. Lebel: Even if it continues, it is a private company that will continue to do business. We know that there is currently a lot of traffic. There were some threats recently, and we had to close the bridge. The tunnel alone cannot handle all the traffic and it allows for the transport of material from both sides, but it is a small tunnel with large trucks. We expect that, in the next 30 years, the number of trucks will triple and the number of cars will double. We need to ensure that traffic can get through adequately.

Senator Boisvenu: Have you decided on a bridge or a tunnel?

Mr. Lebel: We are in the middle of that. Ms. Borges can answer that question.

Ms. Borges: It will be a bridge because of the navigation on the Detroit River.

Senator Boisvenu: You could build a bridge like the Chesapeake Bay Bridge, which goes under the water.

Ms. Borges: But there are too many trucks that cross the bridge. And it is not good because of the transportation of dangerous goods.

Senator Boisvenu: What management model will be used? This is public money. Will it be administered by the state or will you subcontract with the private sector for the tollbooth and maintenance positions?

Mr. Lebel: This is an important part of the implementation process. To build a bridge with another country, to advance money to one of the Canadian provinces, you need to ensure that the structure in place meets our needs and to know how this organization would be set up.

Ms. Borges: It is with the private sector. The model used is the same as for the Confederation Bridge, between New Brunswick and Prince Edward Island. They will build, operate and look after all the maintenance on the bridge for 20, 30 or 40 years. This remains to be determined.

Mr. Lebel: We are going to have to appoint people to boards of directors, a little like we did in all the organizations under the jurisdiction of the Department of Transport.

Senator Boisvenu: In terms of aircraft equipment, why did Canada not sign the Cape Town Convention?

Mr. Lebel: A willingness to participate was announced in 2004-05. I am going to ask Mr. Stacey to add to this.

Colin Stacey, Director, National Air Services Policy, Transport Canada: We signed the convention in 2004, but we have not ratified it. The provinces and territories need to participate in some parts of the agreement.

Basically, in 2004, only two provinces had the necessary legislation. Right now, all but three provinces have it. In addition, there have been changes at the international level, especially under the Sector Understanding on aircraft equipment, which is another OECD agreement. This other agreement sets some conditions so as to generate profits especially in the context of aircraft financing. It is important to implement the protocol and the Cape Town Convention to some degree according to some specific conditions described in the sector understanding. Because of the changes made to the sector understanding over the past five years, we had to wait to ratify the Cape Town Convention and the protocol.

Mr. Lebel: Let me add something to that. At the moment, New Brunswick, Prince Edward Island and Yukon are the provinces and the territory that have not subscribed to the principle. Since the other parts of the country have done so, we feel better about it. That is why we are moving forward and, as I said earlier, airlines and manufacturers alike are asking us to subscribe to the principle. We know that the global market is very tight and the profit margin is very narrow; so we need to help our companies and this is certainly one of the best ways to do so.

[English]

Senator Eggleton: Much to my surprise, I received information that suggests the traffic on the bridge and in the tunnel is actually down. I thought they would have been going up, but apparently it has been falling since 1999. Will that continue to be the case? What is the justification for this bridge? How does the current bridge relate to all of this? Will it continue to survive? If the traffic is going down, how will it be possible?

Ms. Borges: The traffic went down as a result of September 11, 2001. At that point, there was a huge dip in the traffic. In the last three to four years, the traffic has been continuously going up. In fact, over the last two years at the bridge there has been an increase of 14 per cent per year. The traffic is continuing to go up. It does vary if there is construction happening, and there was construction for the last two years as a result of the project that I mentioned earlier.

You must know that at this bridge there are 7,000 trucks per day. It is a four-lane bridge, unlike the other ones that are five or more. That is more traffic than the next two busiest bridges combined. The bridge at Sarnia, coupled with the Peace Bridge at the Niagara area, does not handle as much traffic as this bridge does alone. This bridge is 83 years old; we have to take that into account. If there is an accident on the bridge or if there is a security incident on the bridge, the traffic gets backed up so much that there is no other option in the area. In the Niagara area we have two bridges that handle trucks within kilometres of each other, plus two additional passenger vehicle bridges. There are four bridges that can handle truck or vehicle traffic. In Windsor, there is one and that is it. There is nothing else.

Senator Eggleton: This becomes a backup for that.

Ms. Borges: Yes, and a security risk.

Senator Eggleton: It also has to pay its way. You still will have the Ambassador Bridge, I assume?

Ms. Borges: Yes.

Senator Eggleton: The owner will still maintain that? He may even cut his prices to compete with your bridge. The volumes that you say are increasing, have they gone back to the pre-9/11 period?

Ms. Borges: No, they have not because some of the traffic has diverted to rail and some has diverted to Sarnia. In Sarnia there has been some growth. Until the economy gets back to the robust economy it was even before 2008, it will not grow as fast. The projections we have done were done before, in 2004, and we have updated them twice since then. We will do another update. Over the next 30 years truck traffic is expected to triple and vehicle traffic to double. That is what we have to look for. These bridges are 100-year-old structures. We need to make sure there is a structure there for the next 100 years to handle the growth in traffic.

Senator Eggleton: The numbers that I have here indicate that the traffic on the bridge is down 42 per cent and the truck traffic is down 60 per cent. They could be valid numbers, then.

Ms. Borges: From what they were prior to 2001, potentially, yes, but not in the last few years.

Mr. Lebel: Who knows where the American economy is going at the moment. We all expect to have a better economy in the U.S.A. soon.

Senator Eggleton: We all hope for that.

Mr. Lebel: We all hope and we have to work to help that happen.

Senator Eggleton: I thought our focus was more on China and India, not on the United States.

Mr. Lebel: We can do both.

Senator Eggleton: Can I ask about Division 12, which is the interactive advanced passenger information system, this initiative?

Ms. Borges: That is for the CBSA.

The Chair: That is a question for our next witnesses, if you do not mind.

Senator Eggleton: The minister will not take this?

The Chair: Maybe he has an opinion, so I will let him answer the question.

Senator Eggleton: My concern is the handling of the data in the United States. How secure and how safe will the privacy be for the information with respect to Canadians? South of the border, they outsource some of this data gathering information. I think that would be of some concern to Canadians. I am wondering how Canadian interests are going to be safeguarded. How can we mitigate these concerns that people might have about how this information might be used and where it might end up?

Mr. Lebel: We respect the privacy of our Canadian citizens; we respect the privacy of Americans coming to Canada. I am sure they do the same in their country.

Senator Eggleton: Okay. Well, maybe I will ask the border officials.

[Translation]

Senator Verner: Thank you, Mr. Minister. Ms. Borges, let me applaud you for your patience and perseverance over the past 11 years.

Mr. Minister, I understand that you were one of the many supporters of the project. And as you know, yesterday, in the U.S. elections, proposal six was defeated, which makes it possible to continue with the project.

The bill highlights the fact that there will be exemptions to certain laws for the project proponents. I understand the context and the fact that we do not want to end up in court and be back here in 10 or 11 years. That said, could you tell us if there is a way for the public to express its opinion? Is there any type of public consultation or an outlet for the public at large without having to go through lengthy legal proceedings?

Mr. Lebel: Ms. Borges will give you an answer.

You are right about the importance of what happened last night. I want to publicly say how blessed we are to have a partner like Governor Snyder. The governor has personally joined this fight, not for him, but for his people. This is very important for the Canadian economy. It is also important for Michigan to be able to carry out this major project. Governor Snyder and Ambassador Jacobson, as well as Canada's Ambassador Doer in the United States, have really played a major role as partners in this matter. I would like to thank them for their support. When we go ahead with those amendments or pieces of legislation, it is because they are in the best interest of the public.

Ms. Borges: During the environmental process, we held 300 public hearings over five years, during which we studied this project.

Then, every time we have to request a licence or, in this case, an exemption, the company has to file a complaint with the minister and has to describe in detail all the initiatives that the company will take to avoid environmental impacts. The First Nations, the provinces and everyone concerned can look at the plan, which is developed jointly with them, as well as the department responsible. There are a lot of consultations before the plan is submitted. If the company does not give consideration to the complaint, provisions in the legislation enable us to impose penalties to correct the situation.

Senator Verner: If, for one reason or another, a community disagrees when these plans are developed, is there a way for the community to express that or to bring it to your attention?

Ms. Borges: Yes. In the contract with a private company, we will have remedies, but we also require all crown corporations to organize one or two sessions every year so that the public can complain if there are community problems. And the minister is always available to hear those complaints and to receive letters or other submissions.

Mr. Lebel: A lot of work has been done to date. A number of files have moved forward on the environmental front, and on other fronts. A lot of work has been done on the ground. And to date, we have always managed to reconcile the interests of the whole community. And you are quite right to say that we will continue to do so in the future.

Senator Verner: I have one very Quebec question about the Champlain Bridge. This major bridge is a large-scale project. I understand that there is a procedure with specific exemptions for the Windsor bridge. Could this type of procedure be applied to the Champlain Bridge?

Mr. Minister, you said that you were hoping to shorten the time for the construction of the Champlain Bridge as much as possible, which, as we know, is a project that you and all Quebeckers feel very strongly about.

Ms. Borges: Right now, we hope that we will not need to have this type of exemption because the environmental process is under way and we have to complete it by next year because the new legislation gives us one year to do everything. But things are going well and we hope to complete it by next year.

Mr. Lebel: Environmental studies have been shortened from 24 to 18 months. This is an evolutionary process. We said that there would be public consultations. You will see that those consultations will be announced in the next few weeks. Of course, we will listen to what people have to say. At the same time, we are developing a business plan and setting our deadlines. In the coming weeks, you will see that we will be talking about other aspects of the bridge. I will be making announcements before the holiday season. Things are on track.

Obviously, this is taking longer than I would have liked. But we have to do things the way they have to be done and we have to follow the whole construction process, with plans and specifications, options, architecture, and so on. We will get it done as soon as possible, but what is certain is that we are going to deliver a bridge. And I said that the people in my region would keep an eye on me, I swear. There are 275,000 people who follow me every day to see if I am doing my job.

Senator Boisvenu: Mr. Chair, I will address my questions to the next panel of witnesses.

The Chair: In that case, Mr. Minister, let us thank you once again for accepting our invitation.

We are going to suspend the meeting for a few minutes so that our second panel of witnesses can take their places.

[English]

Honourable senators, I remind the audience that the Standing Senate Committee on Transport and Communications is considering the pre-study of Divisions 5, 12 and 20 of Part 4 of Bill C-45.

On our second panel this evening, we have officials from the Canada Border Services Agency to discuss amendments to the Customs Act, Division 12 of the bill.

Appearing before us are Anita Henderson, Counsel, Legal Services; and Sharon McKeen, Manager, Travellers Unit, Advance Information and Program.

Thank you for coming. We will proceed with your opening statement and move to questions from the committee afterwards.

Sharon McKeen, Manager, Travellers Unit, Advance Information and Program, Canada Border Services Agency: Thank you, chair, members of the committee. It was supposed to be my colleague, Daniel Champagne, presenting to you. I am here because he is at the Finance Committee.

Thank you for the opportunity to be here today to discuss the three proposed changes to the Customs Act contained in Bill C-45.

Canada and its international partners, including the United States and the European Union, have a long tradition of working together to promote security and facilitate legitimate cross-border travel and trade.

The amendments to section 6 of the act will clarify the obligations of port authorities with respect to the maintenance of customs facilities. Section 12.1 is being revised to close gaps in the Customs Act regarding the pre-load reporting requirements for cargo, and subsection 107.1(1) is being expanded to include travellers who are expected to be on board a conveyance.

In terms of clarifications of port authority obligations with respect to the maintenance of customs facilities, owners/ operators of international toll bridges and tunnels, airports, marine ports and railways provide, equip and maintain buildings, accommodations and other facilities for the proper detention and examination of imported goods free of charge to the Crown since section 6 was enacted in 1986. The amendment clarifies what has always been required by the CBSA and provided by owners and operators under section 6 of the Customs Act without imposing additional obligations or requirements.

This clarification is necessary because several international bridge and tunnel operators are challenging the scope of the original section. The goal of this amendment is to ensure access by the CBSA to adequate port of entry facilities free of charge.

On the advance data requirements for pre-screening cargo, section 12.1 is being revised to close gaps in the Customs Act regarding the pre-load reporting requirements for cargo. The CBSA assesses, as much as possible, the potential risk posed by goods before they arrive in Canada, allowing the agency to focus its examination and interdiction activities on high-risk goods while enabling low-risk cargo to enter Canada with minimal delay and intervention. This amendment will improve the risk assessment of goods before they arrive in Canada by requiring shippers to provide CBSA with cargo data before loading can commence, ensuring the integrity of supply chain.

On the pre-departure traveller information, the proposed amendments to subsection 107.1(1) allow the Minister of Public Safety to require information about any person on board, or expected to be on board, a conveyance. This amendment will improve the integrity of the risk assessments and mitigate health, safety and security threats prior to departure for Canada.

The three amendments before the committee will ensure that travellers and goods will not pose a threat to the safety and security to Canada.

Thank you for the opportunity to speak to you today. We look forward to answering questions from the honourable senators.

Senator Greene: It strikes me that there might be some privacy considerations around the advanced passenger information system. Have you had any conversations with the Commissioner of Privacy and what might the response have been?

Ms. McKeen: We certainly had a number of consultations and sessions with the Office of the Privacy Commissioner. As we are all well aware, they are very concerned about privacy safeguards on data, so advanced passenger data is no different. When we deal with the OPC, we do a privacy impact assessment. There have been three privacy impact assessments done on API/PNR, advanced passenger information/passenger name record. Two were done in 2003 and one was done in 2004.

At this point now, we are doing a revision to the privacy impact assessment to reflect changes in the program over the last 10 years since the program came into inception. We also had a joint review in 2008. We had an OPC audit in 2006, and we have met with the Office of the Privacy Commissioner in March 2011 and as recently as this past June 2012.

Senator Greene: Do you have any additional meetings planned?

Ms. McKeen: Absolutely. We have a meeting planned in about two weeks. The meeting is to provide them with technical specifications on PNR data.

[Translation]

Senator Boisvenu: Thank you for joining us. This is very interesting. My question is related to Senator Greene's comments. I presume that this bill is in response to September 11, 2001, in terms of national security, correct?

[English]

Ms. McKeen: Yes, the initiative to provide advanced passenger data for all commercial carriers flying internationally inbound into Canada is very much in response to September 11, 2001. This is not for domestic flights or for outbound flights.

Senator Boisvenu: This is for international flights?

Ms. McKeen: Yes, arriving in Canada, not flying from Canada. It is not outbound and it is not domestic.

Senator Boisvenu: It will concern Canadians that are coming back from the United States?

Ms. McKeen: Yes. It will affect all travellers.

Senator Boisvenu: All travellers entering Canada?

Ms. McKeen: Yes. The information is not attached to the nationality or the origin of the individual; it is tied to the commercial carriers flying into Canada.

[Translation]

Senator Boisvenu: The text says: "to require information about any person on board." How do you define that "information"?

[English]

Ms. McKeen: Advanced passenger data, the API, is the biographical data contained on page 2 of your passport. Passenger name record deals with your itinerary, where you are flying to, how heavy your bags are, how did you book, when did you book. This type of information is all regulated under 107 of the Customs Act, and we have regulations that enact the requirement of the information.

Senator Boisvenu: Can you match a criminal file using that information?

Ms. McKeen: We receive the information, and then based on the risk indicators we do check certain enforcement and immigration databases, and we analyze the level risk of the individual coming in. At this point, the information is given at time of departure so the individual is on the plane, the door is closed and on the way to Canada. The information is provided; we do an analysis of the risk level of the individuals on the plane while they are en route. The requested amendment is to have the information for those expected to be on board, so before they board the airplane, up to 72 hours in advance of travel.

[Translation]

Senator Boisvenu: Here is my last question. What has led you to make those amendments? Have any particular incidents taken place? Is it because of the content of agreements with the U.S. and other countries? What is prompting Canada today to increase the amount of passenger information? What situation has led us to that?

[English]

Ms. McKeen: I would not necessarily say it is one particular situation. There are many factors taken into consideration. Number one would be short duration flights. As I indicated previously, the information is only sent at time of departure. Short duration flights, many flights landing at the same time means that our officers are targeting and intelligence officers now have to evaluate the risk and manage the workload coming in, which gives us a short time frame to evaluate that risk and be able to react appropriately.

As well, if we can identify the risk early in the travel continuum and identify the risk before the individual travels, then we have the time to react. In today's world, we do not have the ability to react and to stop the threat from coming to Canadian soil.

Senator Boisvenu: To your knowledge, has a situation happened in Canada wherein if the new rules were adopted those situations would not have happened as in the past?

Ms. McKeen: It is hard to predict what could have been, but the essence is that if we have the information earlier it gives us the ability to evaluate the risk and be able to mitigate it before coming onto Canadian soil.

[Translation]

Senator Boisvenu: But there has been no situation in the past that would basically allow us to say that these regulations would have made it possible to avoid it. So we are really working on prevention, rather than correction.

[English]

Ms. McKeen: There could have been. I will not comment on any particular case in the past. That is all to say, though, that risk indicators that are present and the intelligence and enforcement information that we obtain always puts us in a better position to protect Canadians.

Senator Eggleton: Part of the objective I understand is to stop people from coming into the country that are high risk, but that does not apply to Canadian citizens, I would not think. You have to let a Canadian citizen back into the country.

Ms. McKeen: Absolutely. You are correct that Canadian citizens have the right of entry.

However, if you pose an immediate threat to the safety of the aircraft or the Canadian public, then that would be the opportunity where we would prevent you from coming back.

Senator Eggleton: These kinds of assessments —

Ms. McKeen: That would likely be the only —

Senator Eggleton: Okay. I understand what you are saying. These kinds of assessments have gone on for many years, except you are getting new instruments for being able to stop them, perhaps.

Will there be any difference in the line of questioning, the information that these passengers are expected to provide from what has been the case in the past?

Ms. McKeen: No, there is not. The information we are seeking remains the same. The only amendment we are seeking is to receive the information earlier.

Senator Eggleton: There is one other aspect of this. It is the sharing of the information with the United States, which has been talked about for some time and raises this question of privacy. It has been explored a little bit already. By the way, I think we should have the Privacy Commissioner in here to get the Privacy Commissioner's view of this thing.

One aspect of this is the fact that the U.S. has various handling organizations. Some of them are private sector and are outsourced, which could cause concern about the privacy of the information on Canadians. How can you mitigate against this possibility?

Ms. McKeen: Whenever we share information, regardless of who it is, we have arrangements and agreements in place that outline all of the use, access, retention commitments within it. Our commitment to sharing with the U.S. is no different. We have a memorandum of understanding which dictates or outlines what type of information we would share.

Senator Eggleton: It addresses privacy issues and third party handling of data?

Ms. McKeen: Absolutely, onward sharing, privacy safeguards and retention. It all has to be identified within the agreement or arrangement instrument.

The Chair: Having had an informal meeting with the steering committee, we will put forward an invitation to the Privacy Commissioner.

Senator Mercer: Senator Eggleton asked my question on the sharing aspect. I am also concerned about who we share with, agreements or not. I worry about what the people we share with do with the information. We have seen information that we have shared — not in this particular case but in other areas — that has not been used for the things we thought it would be used for.

I have a technical question. You talked about port authorities maintaining customs facilities. Does that mean it will affect the cruise ship industry? Senator Greene and I are from a city that receives tens of thousands of visitors every year via cruise ships. They arrive at our city, get off the ships and spend a lot of money. We want them to keep coming. Does this pertain to them? Do the cruise ships have to provide us with data?

Ms. McKeen: Not at this time. At this time we receive the advance passenger information in the air mode only. We have plans for expansion and cruise ships would be a likely scenario but it is a future enhancement; it is not current today.

Senator Mercer: In anticipation of that and in trying to cushion the blow to the Port of Halifax, which is the greatest port in the country, I am concerned about the cost of this. Who bears the cost of all of this? If the port authorities maintain customs facilities and provide space for CBSA officials and offices, are you paying rent to the port authority or are the port authorities, airports, et cetera, responsible for providing this as a cost of doing business?

Ms. McKeen: Are you talking about cruise ships now?

Senator Mercer: No. Forget the cruise ships for a moment. I am asking you this question because if you do get to cruise ships, it will apply. For example, does the Canada Border Services Agency pay for the facilities that they use at the Halifax Stanfield International Airport?

Anita Henderson, Counsel, Legal Services, Canada Border Services Agency: The answer is no, we do not. This is different than the advance passenger information, if I understand the question correctly, and we are moving into who is providing those port of entry facilities for the CBSA to do its job once people arrive. The short answer to your question is no, the CBSA does not pay for its facilities at ports of entry under section 6. Airports are one of the types of stakeholders that are included.

However, if your question harkens to the advance passenger information, it is not the port authority that provides that information; it is the commercial carrier.

Senator Mercer: The carrier pays for that?

Ms. Henderson: For the passenger information.

Senator Mercer: If I am Air Canada or any airline and I am flying into any airport in Canada and CBSA says you have to provide us with this information, I have to gather the information. It just does not magically appear. I have to gather the information. I have to pay someone to do that; I must have equipment to properly get this information into your hands in a timely fashion. Who pays for that? Does the Canada Border Services Agency pay for that? Do they contract with the airlines to provide that information or are the airlines expected to absorb that as a cost of doing business?

Ms. McKeen: There are costs on both sides, but there are certainly costs borne by the air carriers.

Senator Mercer: I would suggest that the costs are actually borne by the customers, the passengers, which goes back to our previous study. We keep adding little pebbles to this pile and suddenly it is becoming a mountain.

I do not have any other questions apart from the fact that I am concerned. I will be happy when the Privacy Commissioner comes here to hear what she has to say about this collection and sharing of information.

The Chair: Thank you.

[Translation]

Senator Boisvenu: If you have more information on passengers, you will be able to have a good idea of the people travelling once they land. Will Canadian customs procedures speed up?

[English]

Ms. McKeen: Yes, absolutely. When we are evaluating the risk, the lower risk travellers can move and this is to facilitate the free flow of legitimate travellers. That is one of the goals we strive for.

[Translation]

Senator Boisvenu: I think a lot of Canadians will be happy.

[English]

The Chair: We will be meeting on Tuesday, November 20 and doing a mixed meeting between the airline study and we will have witnesses on Bill C-45. We will get Ms. Stoddart to come in as a witness as soon as possible. The next day we will again be doing a mixed meeting between the airline industry with witnesses from Air France and some witnesses on Bill C-45. We will continue in November with Bill C-45 and try to get a mixture of Bill C-45 and the airline study going at the same time.

Ms. McKeen and Ms. Henderson, we were happy to have the A team here tonight. I want to thank you on behalf of the members of the Senate and wish everyone a good night.

(The committee adjourned.)