Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 11 - Evidence

The Standing Senate Committee on Transport andCommunications, to which was referred Bill C-14, respecting shipping and navigation and to amend the Shipping Conferences Exemption Act, 1987 and other acts, met this day at 9:35 a.m. to give consideration to the bill.

Senator Lise Bacon (Chairman) in the Chair.

[English]

The Chairman: Good morning. This morning, we haveBill C-14, an act respecting shipping and navigation and to amend the Shipping Conferences Exemption Act, 1987 and other acts.

[Translation]

With us this morning is Mr. Gilles Bélanger, President and CEO of the Canadian Shipping Federation and Ms Anne Legars, also from the Canadian Shipping Federation.

Welcome to the committee. We have received your documents in both official languages and we thank you for sending them to us. You have 15 minutes to make your presentation, as we would like to devote 45 minutes to questions.

Mr. Gilles Bélanger, President and Chief Executive Officer, Shipping Federation of Canada: My presentation will not take up 15 minutes, so we will have ample time for questions.

I am the President of the Canadian Shipping Federation. With me is Anne Legars, Director, Policy and Government Affairs.

[English]

The federation represents over 95 per cent of ocean vessels, including international cruise vessels trading internationally to and from ports in Atlantic Canada, the St. Lawrence River and the Great Lakes. Our members and the companies they represent are listed in Appendix I to our brief.

The federation welcomes Transport Canada's efforts tomodernize and streamline the Canada Shipping Act, which is a vitally important piece of legislation for our industry. On the whole, the federation supports Bill C-14, but wishes to suggest a few changes. We also take this opportunity to note that the consultation process held by Transport Canada has proven to be extremely fruitful in terms of streamlining the issues and rectifying a variety of drafting problems at an early stage. As a result, we are free today to focus mainly on policy issues.

Bill C-14 grants the government powers in rule setting, enforcement, investigation and adjudication that are much wider than under the current Canada Shipping Act. Although we fully recognize that Transport Canada needs flexibility, as well as broad powers to efficiently fulfil its mandate, we are nevertheless concerned with three aspects of the proposed new regime: One, the proposed administrative penalty regimes; two, the framing of the minister's discretionary powers; and three, the fairness of treatment between modes.

I will begin with the first policy issue that we believe should be addressed by the standing committee. The search for flexibility and efficiency has led the government to propose anew administrative penalty regime for enforcing regulatory contraventions. Under this regime, the minister has the power to appoint the adjudicators who will revise his decisions.

Moreover, the minister will have to meet a civil burden of proof only, which means a proof based on the balance of probabilities rather than the traditional penal burden of proof that is based on proof beyond a reasonable doubt. In addition, the minister would be allowed to choose at his sole discretion and advantage whether to proceed using the new administrative penalty regime or the traditional judicial process.

I wish to underline that the industry does not oppose the general concept of administrative penalties when it is applicable to contraventions of lesser importance.

The consequences of a finding of violation under the proposed administrative penalty regime can be very serious. For example, a fine could amount to $50,000 in a number of cases. The violation would be recorded in public records for at least five years and it may prevent the issuance of Canadian maritime documents.

We are therefore concerned that the proposed regime would decriminalize most contraventions to the act by withdrawing the procedural safeguards existing in criminal law, such as the burden of proof and rules of evidence, while maintaining penal consequences for the contravener.

The federation opposes the proposed administrative penalty regime because we do not believe that an adequate balance has been achieved between the procedural guarantees provided for in the bill and the consequences of a finding of violation. We also submit that several common law procedural safeguards should be stated explicitly in the act since violations will be adjudicated by persons who are not trained in law. Many of the recommendations contained in our brief propose what the industry perceives as a better balance between the procedural regime and the penalties it confers.

The second policy issue relates to the need to apply guidelines and safeguards to the increased powers granted to the government in the enforcement of the act. Again, the search for flexibility and efficiency has led the government to propose that the actgrant unprecedented powers to the persons in charge of law enforcement. We submit that the greater the government powers, the greater the need for guidelines to frame those powers. We therefore recommend that some standards of performance be introduced or reintroduced in the legislation. This is especially important if some of the administration's decisions are to be reviewed by adjudicators who do not have the same level of judicial expertise as the courts.

[Translation]

The third policy issue of concern to us is the fairness of treatment between the different modes of transportation. There is nothing to indicate that shipping conforms less than other modes of transportation to applicable laws and regulations.

In spite of this fact, the regime proposed in Bill C-14 is much stricter than the regime applicable to other modes under federal jurisdiction, whether it be with respect to the maximum fines imposed under criminal law or the penalties set out under the new administrative penalty regime.

Many of the recommendations in our submission are aimed at ensuring that shipping is treated in the same manner as other modes. Many recommendations propose that the corresponding provisions in the Aeronautics Act be reproduced in the Canada Shipping Act.

The Department of Transport has let it be known to us thatthe aviation industry is extremely satisfied with the new administrative penalty regime and that therefore, the shipping industry should be equally pleased with the proposed regime. In that case, the proposed regime for the shipping industry should be brought in line with that of the aviation industry.

In addition to these three concerns over policy issues, our brief also contains a number of specific recommendations calling for certain terminology and definitions to be clarified.

Finally, the federation strongly supports Part 15 of the bill which proposes amendments to the Shipping Conferences Exemption Act. The proposed changes would update the legislation, harmonize Canadian and U.S. legislation and ensure continued international shipping to and from Canada.

Thank you for your attention. I will be happy to elaborate further on the federation's position during the round of questions.

The Chairman: I understand that this bill is the end result of many hours of consultation. Are you reasonably satisfied with the consultation process? Were any concerns you expressed taken into consideration or, at the very least, were you provided with satisfactory explanations?

Mr. Bélanger: Yes, we were consulted and we are satisfied with the process overall.

As far as the proposed administrative penalty regime is concerned, we were told repeatedly that this was a global government policy and that it was important to lighten the load of the courts. We do not have an issue with the regime as such, but rather with the extent of the penalties provided for under the regime. One must understand that the higher the penalties and the greater the consequences, the more contraveners are likely to challenge the penalties.

As I have often stated to Transport Canada, based on my experience, it is difficult to plead points of law such as the Charter of Rights and others to individuals who have no background in law. It is always a somewhat trying exercise. My concern with this bill is that the government is merely perpetuating this situation.

We have no objections to the regime applying to penalties of a lesser nature. However, in more serious cases, we should continue to turn to the judiciary process. When failure to renew documents or to properly maintain registers carries with it seriousconsequences, it makes life that more difficult for the company. In such instances where criminal violations have occurred, we have concerns about having to plead our case based on the balance of probabilities.

The judiciary process based on showing proof beyond a reasonable doubt clearly has a place in our Canadian judicial system and that is true in this case. This is our biggest problem with this bill.

The Chairman: On page 10 of your document, you state that you would like to see standards of performance introduced to frame clearly the discretionary powers of persons in charge of law enforcement, this with a view to preventing any abuse of power. You focus in particular on clause 211. Which provisions lead you to believe that inspectors will be likely to act in an arbitrary manner? What provisions give you cause for concern?

Ms Anne Legars, Director, Policy and Government Affairs, Shipping Federation of Canada: Generally speaking, the industry is very much aware of the arbitrary nature of some decisions made by inspectors. These decisions can directly impact deadlines because they can result in a ship being denied permission to proceed. Sometimes, their discretionary authority is called into question. This is an ongoing concern of the industry, hence the reason why it would like specific guidelines in place to frame these powers.

The Chairman: And you say that you are speaking from experience?

Ms Legars: Yes, the experience of certain members.

Mr. Bélanger: During the consultation process, we were often told not to be concerned because people would receive some training. However, past experience has shown us that even when people do get training, problems do arise from time to time. That is why we would like standards of performance to be included in the legislation.

The Chairman: You refer on page 13 to fairness of treatment with other types of regimes. Why do you refer to the Aeronautics Act in particular?

Mr. Bélanger: The Aeronautics Act already provides for the type of regime that we would like to see this bill institute for shipping. Transport Canada has told us countless times that this particular regime works well and that aeronautics industry stakeholders are satisfied with it. Currently, the aeronautics industry regime is applied to the shipping industry. Penalties and their repercussions are not the same. If our industry had a similar regime in place, it would encounter fewer problems.

The Chairman: Are you saying that that industry has fewer problems?

Mr. Bélanger: The penalties are lower.

Ms Legars: I refer you to appendix IV where you will find a table comparing recording times, burden of proof, etc.

The Chairman: In paragraph one on page 5 of your brief, the following is noted, and I quote:

[English]

The legislation is more severe for our mode than the others.

[Translation]

Could you clarify that statement? You find this legislation more severe?

Ms Legars: I refer you to appendix II which compares provisions respecting periods of incarceration and the penalties in place for rail, aviation and shipping modes. Note the difference between the existing Canada Shipping Act, the bill and the draft bill circulated to stakeholders.

The Chairman: On the basis of this comparison, you feel the Federation has good reason to be concerned. Is that correct?

Ms Legars: We found that our mode faces the highest maximum penalties. Transport Canada tells us that we have no reason to be alarmed, that these are maximum amounts in any case, that the courts are not compelled to imposed maximum fines and that in point of fact, we should not read too much into this.

As we see it, a maximum fine is a signal to the courts that they must eventually take harsher action in the case of the shipping mode than for other modes.

The Chairman: You say that this is a signal. In reality, however, have maximum fines ever been imposed?

Ms Legars: No, but let us just say that this opens the door. Until now, penalties imposed under the Canada Shipping Act have been very low. We agree, and we have stated this clearly in our brief, that the penalties are too low and that some corrective action is in order. It is ridiculous to have $25, $50 or $100 fines. However, there is a difference between $25 and $1 million.

The Chairman: You believe the maximum penalty will become the norm?

Ms Legars: Normally, that is reserved for the worst violators. We hope that does not apply to the majority of cases. We would not want this to become the norm because we do not want the worst kind of behaviour to be considered the norm.

Mr. Bélanger: Overall, our concern is that one mode is being treated differently. Why should one kind of contravention be penalized more severely when the shipping industry is involved as opposed to the aviation industry?

The Chairman: The legislation is more lenient toward the aviation industry?

Mr. Bélanger: That would appear to be the case.

The Chairman: That is debatable.

[English]

Senator Forrestall: I want to ask you seriously, how long did it take to put this brief together? How long did you work on this magnificent piece of work? Was it a week, a month, a year?

Ms Legars: Actually, it was an ongoing process because we have been doing briefs for perhaps the last one and a half years for the consultations. It was an ongoing process because there were some issues addressed and they were withdrawn from the brief. Others were rephrased, so we made an amendment. If you compare this with the one that was before the Commons it is likely the same, but it was reformatted and streamlined. The preceding version was one that we gave to Transport Canada and it was not exactly the same, but it is an ongoing process.

The Chairman: There is more for us.

Senator Forrestall: How long do you think it would take you to train someone to understand what has been years in the works? I am not being facetious. As I get older I am becoming just a little bit more cynical. My feeling three or four weeks ago, as I went through the act, was that there might be a little difference of opinion here or there and some of that I might share. When people put material before us in the last 24 hours, they cannot expect much. Our advisers at the table are excellent and experienced, but even they cannot cope with this massive amount of material.

Having said that, you make a number of recommendations. In one you suggest that clause 233 should frame and restrict the seemingly unlimited discretion vested in the minister and the choice of proceedings - that is to say, how he would proceed in an action.

If you were to restrict the minister, where would you vest that power or authority? I suppose it goes part and parcel with the issue of who advises the minister with respect to the procedure and the selection of the process. The adjudication process is in the same vein. Where would you get the adjudicators? You suggested that they should be appointed, not by the Minister of Transport, but by another authority. What authority would you suggest?

Those are three quick questions that strike me as we go through the bill.

Incidentally, I am glad you think clause 15 is all right, because we might well have that in place for two years.

Mr. Bélanger: In terms of the selection of adjudicators, for example, the problem that we raise is that the adjudicator will adjudicate on a decision by the minister. Being appointed by the minister, at the will of the minister, and having responsibility to review a minister's decisions seems to be a problem to us. Cabinet, justice or another authority than the minister - whose decision would be reviewed by that same adjudicator - could make the appointments. That is one point.

On the choice of proceedings, what concerns us is that when the administrative penalty regime process is utilized the act says that the burden of proof is lighter and the rules of evidence do not apply and so forth. Under the judicial process, the burden of proof is beyond a reasonable doubt and the rules of evidence are those known in the judicial process. Depending on the quality of the evidence that the minister has on hand, the minister might decide to go one way or another. If he does not have enough evidence to go to the judiciary then he will proceed to the administrative penalty. The evidence that must be proven is only a balance of probability.

It would make the case easier to be made under the administrative penalty regime than the judicial process. We are saying that because of that, there should be guidelines somewhere that determine when to go one way or the other and not leave it to the will of the person who knows what the evidence is in order to go one way or the other.

Senator Forrestall: Could you give us an example? It would be a problem in the odd circumstance that this comes up. I think it could be a massive problem.

When I went through the documents, I did not think it would be a daily occurrence. This is pretty remote. There are many checks and balances in our processes and procedures.

I do not think I glossed over it. Could you give me your sense of the proportion of this as a problem in shipping? Is it a major or minor problem? Is it only a serious problem when the occasion arises?

Mr. Bélanger: The problem is somewhat theoretical at this point because it is not in place yet. At this point we do not know what might occur.

Senator Forrestall: I understand that at this point it is theoretical. On the other hand, that does not make any difference to the processes or procedure that the proposed legislation would put in place. I am wondering how much of a problem this process is to begin with.

Mr. Bélanger: We do not know at this point what the regulation will bring about. The regulation is not yet developed. The regulation may help to solve part of that problem. We do not know that yet. We are at a point where this is an absolute unknown.

Senator Forrestall: Are there other parts of the bill that fall into somewhat the same category? That is, until you see the regulations that will be proposed under the bill, is it difficult to proceed?

Some of your objections seem to be at once very serious but also a little nitpicky, pardon the expression. It seems that you are trying to guard against all the bogeymen that might haunt you unless you build safeguards. How important to you and to the Shipping Federation is it that you examine the regulations or will you have the right to participate in the development of the regulations in the consultative process? I gather this has been quite a consultative process. As you know, for some of us have been tending this baby for 20 years or more. I know not that much more about it now than I thought I did then.

Is this a pregnant problem or is it a fact? You would be able to better understand and deal with the bill if you knew the regulations. Not knowing the regulations, are you attempting to control the development of the regulations?

Ms Legars: Actually, we will be involved in consultations during the drafting of the new regulations. We will have input and will be consulted. Transport has been telling us not to worry because all the concerns we have raised will be dealt with in the regulations.

We believe that the best place to fix issues is in the legislation because it frames the actions of the administration. We believe that most of the issues that we raise should be fixed in the act itself rather than in the regulation.

Senator Forrestall: In the definition section, at number 18 of your recommendations, you say that a general definition of "owner" should be introduced in the act and should refer to registered owners.

What is wrong with the definition of an owner in the current act?

Ms Legars: Actually, it is developed in our brief. The word "owner" is used many times in the act. It is one of the core concepts, but it is not defined. Ownership, in ships, is something that can be very controversial in certain cases because you have ships that are chartered by charter parties, or ships that are leased or whatever. You have varieties of ways to use or to own a ship. The industry believes it is important to define "owner," in the meaning of the act, because this concept is used in many sections of the act.

For example, the minister may seize the ships of the owner in a number of cases. That is actually developed in our brief. We must know the definition of "owner" so that we can determine what other ships are owned by this owner and what ships the government could eventually seize. We would like that to be defined in the bill so we understand the exact implications.

Mr. Bélanger: Vessel ownership is somewhat different from ownership of the goods. As my colleague just stated, when the act says that the minister may seize the ship or a ship of the owner, it could be very extensive or very restrictive depending on the definition of "owner." If we mean the registered owner, that is one thing. If "owner" includes a boat charterer, or a long-term charterer or time charterer, it could affect ships that have no relationship with that person at the time the seizure occurs. That is why we seek a definition under the legislation and that definition is not in the bill.

Senator Forrestall: It seems to me that it is not unheard of that ownership, in fact, has its final repository in the ownership of the cargo.

This is a massive piece of work that you have done.I would like to go on for a few hours to see what we could ferret out. To close, though, I see nothing in here to suggest that you are violently opposed to the amendment as a general action. Is it a step forward and does it generally serve your industry as well as it can under certain circumstances?

Mr. Bélanger: Absolutely. It is a major step forward. The consultation process that has been done with the bill has been exceptional. The industry is quite pleased with the way it is progressing. There are certain aspects on which we would like to see further improvement before it is adopted, but, generally speaking, the industry is quite pleased with where the bill has gone from the time it started until today.

Senator Forrestall: We are all very hopeful that Minister Tobin will come forward with a policy for the arts, building repair and the industry generally. The consultation process has been good. I am quite surprised at how exhaustive it has been.

Is there anything here that could stand in the way of proposals that Minister Tobin might want to propose to the country in a matter of days - as soon as the election is called, perhaps? In any event, he is now ready to come forth. I wonder if in the doing of this we perhaps should not know what he will propose because there might be certain aspects of the Canada Shipping Act that would impose themselves upon his proposals. I would not want to impair that, nor would I want what he has to say to impair this. I would like a personal observation from you, if you would care to give one.

[Translation]

The Chairman: A report on shipbuilding was presented to the minister. He will review it with a view to formulating a policy. Would you care to comment on that issue, Mr. Bélanger?

Mr. Bélanger: I do not believe that this report will have an impact on shipbuilding.

Senator Gill: You raised two points, namely the process of drafting guidelines and the fairness of standards. It seems to me that the shipping industry is quite different from the aeronautics industry. Neither revenues nor expenditures are the same. A vessel always remains in the water, whereas an aircraft can be on the ground as often as it is in the sky. Regulations are surely quite different. What do the two industries have in common?

Ms Legars: These two modes of transportation require significant capital investment, highly specialized personnel, technological navigational aids and so forth. Great distances are covered - which implies major safety requirements - and major land infrastructures must be in place to satisfy environmental concerns. That is the parallel we have drawn between these two modes.

Senator Gill: Have you weighed the financial impact of implementation? I realize the legislation is being drafted. However, if you have drawn comparisons with the aviation industry, surely you must have some statistics which would give you an idea of the financial implications, particularly since regulations are already in place for the aviation industry. This will mean more government and corporate staff and therefore higher administration costs. Have you been able to assess therepercussions for companies operating within the industry?

Mr. Bélanger: Since we do not know what the regulations will be, it is extremely difficult to evaluate their impact. We can only speculate on the consequences of imposing maximum penalties.

Getting back to your previous question, I note that under the legislation, a person may be fined for failing to comply with an order issued by a safety inspector or something of that nature. For the shipping industry, the maximum fine is $10,000, comparedto $5,000 for the aviation industry.

Why are different penalties imposed when someone fails to make a repair, whether it be to an aircraft or to a vessel? I might even be tempted to say that the consequences of failure to comply with an order can be more serious when an aircraft is involved.

I am using one particular contravention as an example, but there are numerous others. In all parts of the legislation, shipping contraventions are dealt with more harshly.

The penalty for failure to comply with an order issued by a safety inspector, for example, should be the same for both industries.

Shipping is a very safe mode of transportation. Suddenly, however, the legislation seems to be saying that something is not quite right with the industry because it provides for much larger penalties for this mode than for other modes of transportation. The legislation helps to project a negative image of shipping. The question we have to ask ourselves is: why? What impact will higher penalties have on our members who are forced to pay? At the same time, we wonder why this mode of transportation has been singled out, given that its record is no worse than other modes. In fact, its safety record is probably better. Why single it out then for special treatment? That is our main concern.

Senator Gill: It is all relative. I believe that given its overall size and impact, shipping is a more formidable mode of transportation than aviation. In fact, it is not easy to draw comparisons between the two modes, particularly because of what I said earlier. The overall impact is different. You might be right to compare the two, but they are radically different modes.

[English]

Senator Finestone: If I had an eighth of the experience of the Honourable Senator Forrestall, I would perhaps be able to ask an intelligent question.

Senator Spivak: He is an old salt.

Senator Finestone: I may be old, but I am not a salt, so I do not know very much about this.

I do know that when I read a presentation such as yours, which is complex and complete - and I had exactly one hour to look at it - it is not easy to ask intelligent questions. I can ask about issues that seem to me to be of concern.

You represent 320 companies of all types, cruise line, shipping, steamship, parcel and container, which come from Africa, the Mediterranean, Europe and Asia. You cover the world map and you say that the definition of ownership is a problem. If I were one of the owners for whom this could be a problem, of if I were outside of Canada as an owner, I would want to know what ownership is all about. As a Canadian, I would want to be clear on this if I were shipping goods on someone else's ships. This is a murky area.

First, I would like to know what definition change could bring clarity, and, second, what type of training or personnel should a minister appoint so that he has direction on guidelines, rules of procedure, statutes and regulations?

How will we respond for the sake of Canada's public image, Canadian shippers, personnel and passengers, with a safety guideline?

Mr. Bélanger: On the definition of owners, we are saying that we should qualify or define in the proposed legislation what Transport Canada means or would like to have as an owner in accordance with financial transactions and leasing agreements. The responsibilities of either party are defined by contracts,et cetera. The problem is not at that level.

To use one example, what does Transport Canada mean when it says that the minister may seize a ship of the same owner as the ship that committed the infraction? What is "the ship of the same owner?" Is it a ship that the owner has registered in his name in a ship registry somewhere in the world?

Senator Finestone: Are we speaking about a ship such as might carry Libyan registration?

Mr. Bélanger: Is it Libyan, Panamanian, Canadian or Bahamian ship, or is it a ship that the owner has on a long-term lease? Is it a ship that the owner has on a short-term lease?

Suppose I am the owner and one of my ships, on a previous trip to Canada committed an infraction. The next ship to come here is a ship that I have leased for one trip. I do not own the ship, but it is under my control for that trip. I come to Canada and the minister seizes that ship on the belief that it is mine because I have chartered it for that trip. Under the proposed legislation, because the owner is not defined, we would be required to argue through the courts whether that ship meets the ownership definition - and there is no ownership definition. In certain areas I may be considered as an owner because I have chartered the ship for that trip, but in other quarters I would not be considered to be the owner.

Instead of debating the infraction or the problem, we will be debating the definition of ownership. Why not define this in the proposed legislation? Do we want the registered ownership, or the registered owner, to be an owner under the proposed legislation? If that is the case, let us say that and make this clear.

Senator Finestone: What is the role of the captain under whose watch such an infraction takes place?

Mr. Bélanger: That depends upon the situation. Some of the infractions may have to do with the captain and others may have to do with the owner in situations where the captain may not necessarily have control.

The captain manages the ship. Under his management there are a certain number of responsibilities, but there are responsibilities that lie with the true owner. There are responsibilities that lie with the long-term charterer, with the short-term charterer and with the captain. There are many parties. I have been around for only two years and I do not know them all yet. Ownership is a complicated issue.

Senator Finestone: Is that not something that should be defined in regulations, rather than in the context of the law itself?

Ms Legars: We think it is important that it be in the act itself because this act is referred to by the courts when they need to refer to maritime matters. For example, the Federal Court of Canada in its jurisprudence already referred to the current Canada Shipping Act to decide what was "the owner." Under the current Canada Shipping Act the owner is the registered owner. The Federal Court of Canada took this definition and applied it to its case.

Senator Finestone: This is not a need to understand the complexity of what you are saying because you are not talking to a well-informed person, but I will ask: If all this is as complicated as you said, Mr. Bélanger, and if it is not in the act, madam, did you bring it to the attention of the officials in the consultation which you, yourself, have said was very good and effective and with which you all seemed to be very happy? Why are you coming here with it now if it will cause serious problems and penalties that are extraordinarily different between the different modes of transportation in Canada? What did they say to you when you brought this issue to their attention? Was it not serious enough for them to address it, or did they suggest it could be handled in regulations? Did they ignore you?

Ms Legars: As for the different level of penalties, they said that we were talking only of maximum levels of penalty and they did not mean that in all cases and that the court would pronounce the highest level provided for under the act.

Ownership is something that we brought forward a few times. I do not know if we did not explain it well, but they did not believe it was necessary to reintroduce the current definition, which is what we are asking for.

Senator Finestone: Is there a definition in the existing act?

Mr. Bélanger: Under the current act, it is the "registered owner." That is clear. Everyone knows what an owner is under the act.

Senator Finestone: Did you not ask why they changed the definition?

Mr. Bélanger: We raised it many times, but it has not caught their attention.

The Chairman: You did not get an answer.

Mr. Bélanger: No.

Senator Finestone: When it was before the Commons standing committee did members not ask you any questions on ownership?

Mr. Bélanger: We did not have questions on ownership. It was in part of our brief, but it was not raised when we were asked questions.

Senator Finestone: If it was not part of your brief, is it now becoming very important at a late stage in the process?

Mr. Bélanger: No, senator, it was part of our brief.

Senator Finestone: Frankly, I find this very puzzling. I do not have the experience to go into it in depth, but your presentation and your brief, as well as your annexes, give me pause for concern. When you go to $1 million versus $200,000 in the Railway Act, and if you have an oil spill and a spill outside Mississauga, Ontario, one from rail and one by sea, both seem to me to have created a potential for serious damage,environmentally, health-wise and property-wise. Why is the amount of the fine so different? I do not know that. Did you raise the issue of the amount of funds?

Mr. Bélanger: Yes.

Senator Finestone: This was the enlightened decision of the ministry and the minister in presenting this bill. Are you still happy with the bill?

Mr. Bélanger: Well -

The Chairman: Mr. Bélanger said it was a step forward, not that he was happy with it.

Senator Finestone: If he gets the punishment of $1 million versus $200,000 for the railway, I do not think he would be very happy.

In international marine law, it states that once a vessel is outside territorial waters - that is, 40 miles from the coastline - it is no longer subject to the law of our country. However, there has been a decision from the international tribunal on hot pursuit. Perhaps that was Brian Tobin on the issue of fish, I am not sure. It allows for applicability of that law even outside territorial waters.

Do these amendments and rules apply to vessels in harmonization with decisions of the international tribunal?

Ms Legars: I have to think about that.

Senator Finestone: Perhaps you could send us an observation. That would give you time to think it over.

Senator Spivak: It seems to me that much of this is in the realm of administrative law. I am wondering how this compares with the general body of administrative law in the sense that not all, but some of your objections, it seems to me, could be handled by regulation. I am wondering whether you agree that the purpose of consultation in regulation is, perhaps, a very important element for you.

Mr. Bélanger: I am sure you are right in that. The problem we have is that at this point we do not know what the regulations will be. The problem we always face when we respond to a bill is that we never know what the regulations will say. We do not know if we will be able to correct some of the perceived problems when the regulation is developed and adopted. There is that element of uncertainty that is certainly part of some of our representations.

Senator Spivak: We are very often confronted with legislation by regulation. That is becoming, more and more, a practice. In my view, parliamentarians ought to be able to amend regulations, but that is not in the cards yet. So much of it is done after the fact.

It would be helpful, at least to me, if, in writing, you could tell us which of these recommendations that you consider to be regulatory and which you consider to be legislative. That would be very helpful.

I am always surprised by how often search and seizure comes up. It has come up in many different pieces of legislation. I thought, and I guess I am wrong, that this search and seizure issue had been laid to rest in terms of how it was done - with or without a warrant. Can you tell me whether in this legislation the search and seizure provisions differ markedly from other legislative regimes? This comes up very often. It is a whole Charter of Rights and Freedoms issue.

Ms Legars: Our members expressed concern in terms of search without a warrant. We were a little bit afraid of "fishing expeditions," if I can put it that way. That is why they wanted to have the kind of amendment that we have put forward. It is only in cases of imminent danger or emergency, to be sure, that it would be restricted to these cases. Off the top of my head I cannot say what is the case in other regimes. If you want, I can come back with a response to that.

Senator Spivak: It would be interesting to know about this because it comes up very often.

This applies, of course, to fishing vessels. Up until now has a warrant been necessary to board vessels in search of illegal catches or whatever?

Ms Legars: We do not represent fishing vessels. We represent international cargo and international cruise vessels.

Senator Spivak: Are fishing vessels not covered under the Canada Shipping Act?

Ms Legars: They are, but we do not represent them.

Senator Spivak: Those are my questions on administrative matters.

Looking at the appendix, I notice that you have a comparative pollution prevention record. Are basis for these comparisons in Appendix III solely as noted in the footnotes? Are they also generally recognized through government agencies? What is the documentation for this table, apart from what you have footnoted?

Ms Legars: These are facts that are well recognized in transportation world among stakeholders. The general fact that the marine mode has less emissions and pollutants and the best record of safety is well recognized. I tried to produce a table, and it was difficult because it is something that is well known. That is cited in all kinds of public reports and things like that.

Senator Spivak: Is there not a great deal of literature?

Ms Legars: The latest report information I had that could be used was from North American transportation statistics. There are comparative safety records. There are also intergovernmental statistics that are collected between the U.S.A., Canada and Mexico. They did not have the same figures for pollution. I had to take that out. The latest report on the subject was one that was done in November 2000, by SODES.

Senator Spivak: There is no mention of ballast water here. I would like to know what you think about ballast water and enforcement in this legislation.

Ms Legars: In the brief that we presented to the House of Commons committee, we had a part on ballast water which was treated in the bill. We said we supported the kind of legislative approach that had been taken. I made an effort to streamline the quite thick brief that was presented to the Commons committee, to have it a little thinner and easier for you. I took out the parts that just supported the legislative approach.

Senator Spivak: We would like to see that.

Mr. Bélanger: The industry, both our group and the domestic carriers, the Canadian Shipowners Association, together requested to Transport Canada that a regulation be brought about for the management of ballast water. We went further at that point. We asked that a specific clause be introduced in Bill C-14 to cover that. The response was that it is sufficiently covered in the powers of the minister under the proposed legislation. Then we said that they should then take it seriously and bring in regulation on that subject. We feel that Canada should probably take a leadership role in that area and perhaps bring about regulation on ballast water to prevent introduction and spread of non-indigenous species, in particular.

We believe that there will be regulations forthcoming on the issue.

Senator Spivak: That was commendable. As you know, the introduction of exotic species is one of the biggest threats to the environment. That is not always recognized, but it is a major threat. That would be the one of the regulations that you would suggest.

Are oil tankers covered in this bill? Are you representing them? Can you tell me about the situation with the double hulls? What is the situation? We now have double-hulled oil tankers, do we not? Do you not think that the million dollars of liability is absolutely essential for oil spills and is, in fact, minimal?

Mr. Bélanger: There is a difference between the liability and the cleanup costs. This is the fine for having done that. The cleanup cost is another issue.

Senator Spivak: Liability is a preventative measure. We would rather have prevention than cleanup costs.

What about double hulls?

Ms Legars: International vessels and tankers coming to Canada are already double hulled. That is covered in international conventions. All the single hulls that still exist would be small Canadian tankers doing coastal trade with oil from refineries. In terms of international tankers, they are all double hulled.

Senator Spivak: Hopefully we will not see a repeat of the Exxon Valdez.

Ms Legars: Hopefully not.

Senator Adams: You mentioned that the fines will go up. I come from the North. Anything I ship that I own, I insure. How will the insurance companies be affected? Will insurance rates go up for the shipowners? If the fines go higher, will rates and insurance costs go up? Does this have anything to do with insurance policies?

Ms Legars: I would not find it would have an impact. All international vessels are already insured with P and I coverage, under the protection and indemnity clause. They already have huge coverage, mostly also umbrella coverage. I would not say that it would have an impact.

[Translation]

The Chairman: Thank you for your informative comments. We would appreciate your sending us, as agreed, the answers to Senator Finestone's questions.

Ms Legars: I have taken note of several of them, including recommendations on issues that should be covered in the legislation as opposed to the regulations, and comparisons with other regimes.

The Chairman: Kindly forward your responses to the clerk. I will see to it that they are circulated to all committee members for their information. Thank you for discussing your brief with us.

[English]

Our next witness is from the Canadian Marine Manufacturers Association. We welcome you, Mr. Currie. We will hear you first and then I am sure my colleagues will have questions.

Mr. J.A. (Sandy) Currie, Executive Director, Canadian Marine Manufacturers Association: Good morning. Thank you on behalf of our association and the members of the recreational boating community for the opportunity to speak with you this morning. We have already sent you an information package. Rather than go through page by page, I should like to pick out highlights and focus on those. Following that, you can fire away with questions.

First, I will give a brief history. Our association was founded in 1993. We have 75 members. Although that is not nearly as many as the previous group, our membership represents the companies that manufacture and distribute virtually 100 per cent of all the products that are used by recreational boaters in this country. That includes boats and motors, trailers and a variety of accessory and electronic products, including safety items and navigational equipment. While not necessarily large in number, we do represent a number of companies that manufacture a great selection of products.

I would like to recap what boating means to Canada. Decima Research recently conducted a survey for us, and in that we discovered, not to our surprise but really more of a confirmation, that nearly 20 per cent of the households in this country own a boat and that over half of those households own more than one. We did not necessarily qualify what those are, but we now know there are a large number of boats.

We also discovered that an additional 19 per cent of Canadian households would show an interest in becoming recreational boaters if circumstances or the products were presented to them in an appropriate manner. This tells us that there is a dramatic potential for the industry to increase the number of boats used by pleasure boaters in this country over the coming years. At the present time, there are approximately 2.7 million recreational boats of all types in this country. We have recently taken steps to introduce a marketing program that hopefully, over thenext 10 years, will actually double that number. Today's presentation is designed to focus on the future, on safety and so forth.

Two key points I should like to speak to this morning relate to safety and also to the logical application of regulations insofar as the manufacturing, distributing and service sectors are concerned.

The issue we have at this point with regard to enforcement has to do with the possibility that we will wind up with two different sets of regulations for vessels on the water. In fact, this might be compared best to a situation where driving regulations are different for cars, trucks and buses on the highway. In essence, picture a situation where cars are subject to one set of rules, and commercial traffic, trucks and buses are subject to different rules. We are all driving down the same highway but there are different rules. That is a major problem for the recreational boating community. The issue of creating a separate enforcement regime is giving us a tremendous amount of difficulty. We strongly suggest that there be remedial action taken to prohibit this from taking place.

We fear also that the consequence of this will be a reduction in enforcement activity. The result may seriously compromise safety on the water. Some of the regulations, especially the collision regulations, at the moment, apply equally to the pleasure vessel fleet, but those who enforce the new rules will be forced into a different situation and the penalties will create confusion.

Speaking of enforcement, at the present time Transport Canada is telling us there are about 1,700 large carriers in this country, of which 536 are government vessels. That means there are approximately 1,200 other commercial vessels, incomparison to 2.7 million pleasure boats. In addition, there are another 44,000 vessels in the ship registry, which includes a number of recreational craft. To complete this inventory, there are approximately 24,000 commercial fishing vessels. All this added up puts into numbers the fact that the commercial and fishing fleets are approximately equivalent to about 5 per cent of the recreational boating fleet.

Transport Canada may be successful in managing to use Part I of the proposed approach on the 1,200 or so carriers and on the fishing and smaller commercial vessels, but in our opinion, from a practical point of view, it would be impossible for Transport Canada to get involved in recreational boating. That may sound strange, but why do we say that? The fact is that Transport Canada has approximately 400 full-time employees dedicated to the marine environment. They are having difficulty at this stage of the game dealing with the commercial fleet. That is not to say they are not doing a good job, but certainly they have their difficulties and so forth. Imagine adding 2.7 million boats of a recreational nature to that scenario. That can force a significant problem in the future, which will lead to a compromise in safety.

We are fearful that adopting the proposal to allow Transport Canada to regulate will lead to different standards of enforcement and the penalty will be a detriment to safety. We would prefer to have the police officers who currently enforce the Contraventions Act and the other regulations that impact on our fleet continue and, in addition, be given the powers to deal with commercial vessels and to police that group. The police agency's ability to enforce these regulations on all vessels should be recognized more clearly in the proposed act. That is our recommendation.

They are present on the waterways and they are required to deal with offences immediately. Furthermore, they are there and capable of enforcing regulations no matter what the vessel type. From a practical point of view, Transport Canada does not go on the water. It, to our knowledge, does not own any ships. It makes inspections on an appointment basis, whereas the existing police officers are capable, able and willing to do the work on an on-call basis or as they see an infraction happening.

In addition, we are very concerned that there has been very little public consultation on the approach of utilizing an appeal tribunal. Transport Canada has only recently recognized that the recreational boating community will be impacted by this proposal, if adopted, and it is our opinion that this approach, while it is well intended, is inappropriate for the marine community if left in its present form. We much prefer the ticketing regime we now have under the Contraventions Act.

We also have grave concerns about the move of a significant number of what are now considered pleasure vessels into the category of commercial. Not only does this appear to be unnecessary, but it will lead to confusion as these vessels are virtually indistinguishable from the millions of other pleasure vessels on the water.

This will create an enforcement mayhem. How will a police officer know whether a boat is commercial or pleasure? They will look the same, be operated in the same fashion, they will probably be doing the same thing, but there will be no way for a police officer to detect the difference. To compound this issue, many of the vessels in the category are a type that will move back and forth. It could be a pleasure vessel this afternoon, it may be a boat that is used for a "commercial application" tomorrow morning, or this evening. It will be a difficult issue.

Transport Canada has stated many times that for commercial use, even for a short time, the vessels and its crew must be in compliance with the commercial regulations.

We believe that recreational craft operators are currently under greater regulation than commercial vessel operators. That is because of our new requirements to carry a PCOC, Pleasure Craft Operator Card. On the part of the small commercial vessel, there is no requirement to have any training.

I have been asked to speak about an issue that is somewhat outside my domain, which is the provision for the creation or the requirement for marinas and facilities which sell gasoline to be considered as oil handling facilities. The recreational boater, for the most part, goes to a marina along the path of his travel or may visit a marina where he keeps his boat if he is not on a body of water that adjoins or connects to another larger body. They do so in order to get gasoline and to buy other products for either their boats or cottages.

Petrochemical companies are cutting back dramatically on the amount of fuel that they make available to marina operators. A large number of wholesalers are now refusing to sell gasoline and diesel to water's edge marine operators. This is not because marine operators are doing a bad job, but simply because the petrochemical companies do not like delivering to marinas down dusty roads in the country. The availability of gasoline is decreasing.

If the marinas or yacht clubs that sell gasoline to boaters at the present time are considered to be oil handling facilities, you will be creating a situation where a yacht club or a marina that sells literally a few thousand gallons of gasoline a year may be subjected to the same expenses and regulations as a refinery or major commercial oil loading facility.

In many cases, this may drive marinas that continue to sell gasoline out of the fuel provision business. If that takes place, boaters will then start to transport gasoline in the backs of their cars or on the back of a pickup truck down the highway and they will have to carry it to their docks or to the beach, pour it from a jerry can or somehow get it into the boat. All of this will increase the likelihood of accidents. Hopefully, those accidents will be limited to fuel spillage in the water. We do not like that to happen and we do not encourage boaters to refuel their boats with a jerry can at their own dock, but if the gasoline is not available at marinas because of these new regulations, that will happen.

In the worst case scenario, there will be a fire and someone may be injured or killed. None of us wishes to see that. I would ask that, considering the marinas are now covered by provincial fuel handling regulations, that there be steps taken to prevent the inclusion of marinas and private yacht club facilities as oil handling facilities. This will make the problem considerable worse.

The recreational boating community also relies on the small vessel registry for registering vessels that are used for pleasure use and for securing and identifying boats that are mortgaged.Bill C-14 appears to make it impractical to begin to exclude pleasure craft from utilizing the services of the small vessel registry. Once again, that will create problems. Consumers will be forced to employ alternative means to check the ownership if they wish to purchase a used boat. In addition to that, it will create undue stress on people who are trying to register their vessels and take them offshore.

As the gentleman from the commercial side mentioned earlier, by registering a vessel with a national authority, you are able to clearly define who owns the boat. With the loss of this convenience, a cruising yachtsman who owns a boat and keeps it in Ottawa, but wishes to take it to the Bahamas, may find himself in some difficulty should he go outside Canadian waters. The loss of this facility will create some difficulty for us. This is a consumer issue and will not necessarily impact the sales of boats by my members, but it may cause consumer problems down the road.

Part 10 of Bill C-14 deals with pleasure craft and talks about vendors and various regulations. The issue that we would like to bring to your attention deals with capacity plates and what we refer to as builders' plates. You will find the comments onpage 9 of my brief.

In summary, the difficulty we have at this point is twofold. First, there are tens of thousands of boats that are in use in this country that are perfectly safe that are not fitted with these plates. Legitimate Canadian builders have constructed the boats in Canada. The boats have been constructed offshore by legitimate builders, but they do not have plates on them.

Our recommendation this morning is that this existing fleet be grandfathered and not required to get plates, essentially,retroactively. At the moment, there is a process by which builders can apply for plates. There is a process by which consumers can also apply for plates. These processes are being streamlined, but they need more streamlining. However, to go back and make the owners of all these older boats obtain plates will either stretch the Coast Guard to the limit or will create havoc for the boat manufacturers. I will explain.

The consumer can apply to the Coast Guard for a small vessel plate. There is a somewhat streamlined approach, butnevertheless, can you imagine what would happen if the Coast Guard received requests from up to 400,000 boaters requesting plates for old boats, considering the underfunding with which the Office of Boating Safety must cope? It is holding its own at the present time, supplying about 65,000 to 75,000 plates per annum. If it were forced to deal with an additional 400,000 plates,I shudder to think what would happen.

The application process for builders is different and is quite confusing in that it requires a document to be signed by a person who is a Canadian resident and who is a director of the company. Canadian manufacturers have such a person. Non-Canadian manufacturers, however, do not have that person, especially since there is a residency requirement built into it. That is one of the reasons why there are so many boats in this country that do not have plates. Safe boats may be built to various international standards. They may be U.S. Coast Guard approved or approved by a national body in another country, other than the United States, but the simple fact is they cannot get Canadian Coast Guard plates because they do not have an employee who is a Canadian resident, an officer of the company who lives here.

We would ask that there be a provision in the proposed legislation that would allow for this situation to be clarified and cleaned up. There are many companies, both American and non-American, that would love to comply but cannot. They fill out the forms and send in the data that is processed and the Coast Guard gives the boats a green light, but they are not able to put the plates on them because of this administrative barricade. We must eliminate the barricade. That would make it easier for builders to get plates and for the consumer to ensure that he is buying a safe boat. At the end of the day, the Coast Guard plate on the boat indicates to me, as a consumer, that the boat has been checked and it is safe when it is delivered. We need to find a way to eliminate that.

That is my presentation. I have basically recapped the presentation that we gave to the House of Commons committee on transport. We are rather disappointed with its response. We would like to think that this committee is an opportunity for a sober reflection on the situation. Hopefully, you can find it possible to offer some parental suggestions to the House of Commons and, perhaps, we will see modifications made to this bill.

On behalf of my members and myself, thank you for allowing me to make this presentation.

The Chairman: On page 6 of your brief, you state:

Furthermore Transport has no visible on-water presence in Canada to effect an enforcement regime. Adoption of this proposal will lead to differing standards of enforcement and penalty to the detriment of safety on our shared waterways.

Would you explain that, please?

Mr. Currie: Yes. I do not want to market negatively, but, if you will indulge me, I will use a disaster as a means of comparison in response to your question. There is a coroner's inquest going on at the moment in Tobermory, Ontario, which is dealing with the deaths that occurred last year of two schoolchildren on a tour boat. A number of newspaper articles have indicated that there were shortcomings with regard to the vessel itself that have pointed out some difficulties with the inspection system.

Here is the problem with which we are dealing. If the Ontario Provincial Police, for example, had the ability to inspect that vessel on the water at the launch ramp, they are visible and, in this case, had they had the powers, they could have gone onboard to inspect that vessel. Transport Canada has a land-based inspection system which, I guess I would say, is an appointment-based inspection system. They would telephone the boat's owner and say, "We would like to make an appointment to have the ship examined." I am not suggesting to you that an owner would, shall we say, "fudge it" to ensure that he passes the inspection. However, the situation is that the on-water inspection services that are available via the marine policing agencies are vastly superior and much broader in scope than those available from Transport Canada.

In addition, Transport Canada, unfortunately, does not own any boats. Its focus is on the Atlantic coast, the Pacific coast and the Great Lakes. To my knowledge, Transport would probably have a great deal of difficulty carrying out an inspection on Lake of the Woods. It probably would not be capable of carrying out an inspection on Sylvan Lake near Red Deer, Alberta. It does not have the resources available to do that.

Organizations like the RCMP, the SQ in Quebec, the Halifax marine police and the Vancouver marine patrol are all, in the great number of cases, on the water every day. That is why we would like to see enforcement handled by those people, perhaps in addition to Transport Canada, but not to have enforcement in the hands exclusively of Transport Canada.

The Chairman: Were you consulted on this bill by the senior officers of the department?

Mr. Currie: Our organization, as well as other organizations from the recreational boating community, met with them on a number of occasions. Was the consultation as fruitful as we might have expected? I would have to be candid and say, no. On occasion, we may organize a meeting, make a good presentation and wander away with the feeling in a number of cases that our concerns have been heard; or, we may have reached agreement on, shall we say, a definition of some particular subject. Unfortunately, what seems to happen is by the time the rendezvous is over, or the documentation and draft of the bill comes out, there is a difference in what was agreed. That is one of the reasons we have difficulty with the issue of transferral of some pleasure craft into the commercial regime. We had all agreed that that was not to occur. Yet, when the draft of the bill came out, that is what took place. These are the sorts of problems we run into.

The Chairman: Were any of the concerns you expressed about this bill acted upon?

Mr. Currie: In all honesty, not really.

The Chairman: Did you receive a satisfactory explanation?

Mr. Currie: No. When our presentation to the House of Commons standing committee was over, one of the members of the committee said, "Thanks very much for coming, but I do not know why you bothered," which was quite a surprise. I am a Canadian. I believe in our system. I was really disappointed that, at that level, we were basically being given the opportunity to speak but no one was listening.

The Chairman: Were you consulted by some members of the department?

Mr. Currie: We have good relations with the director general responsible for marine safety and others on his staff, yes. I do not know where the decisions are made. Thus, I will not try to suggest to you that the minister or his staff are necessarily at fault here. We had meetings and discussions on the definition of pleasure craft. Yet, in the bill, the definition that we agreed to and the definition they proposed are as widely apart as Monday and Friday.

Senator Spivak: Mr. Currie, in talking about the issue of enforcement, I am sure you are aware that in many areas there is no enforcement, even by the local police. That is the impression I have received from across the country. What are you proposing in this bill with regard to enforcement? You are saying Transport Canada should not be in it, but what about the rest of it? There is a great problem with enforcement in this country.

Mr. Currie: There is no reason why a peace officer cannot be trained to handle an enforcement issue. I will use a Toronto scenario as an example. Even though I know you will think this will sound a bit funny, it is true. The same thing is true in Vancouver right next to the Coast Guard station. If the Contraventions Act is used and appropriately applied, itwould be possible for a peace officer or a police officer on a bicycle to go to a launch ramp on a Saturday morning where there are 10 to 20 people putting their boats in the water or taking them out and actually do inspections and enforcement. There is a potential for land-based enforcement. Water-based enforcement is a different issue. Not only will it take training, it will also require a commitment by the various levels of government to actually provide funding so that the police agencies, wildlife officers or others can be trained to get on the water to carry out inspections. We are not suggesting that it has to be a policeman. If a wildlife enforcement officer, a conservation officer or even a bylaw officer is properly trained and empowered, then there will be a means to enforce the provisions of the act.

Does it mean that more boats or what have you would not have to be bought? No, it does not. There are certainly requirements and needs for more boats and more people to be put on the water. However, there are boats there. If appropriate actions were taken, we believe there could be a significant gain in enforcement almost immediately.

Senator Spivak: My understanding is the minister now has the power to designate anyone as an enforcement officer.

Mr. Currie: But it is not happening.

Senator Spivak: You are not suggesting any change. You are simply saying that the minister should use the power he has to designate someone as an enforcement officer.

Mr. Currie: Yes. It is also fair to note that recreational boaters contribute about $200 million per year in taxes just on the fuel they buy. I do not want to discuss government budgeting, but very little of that money actually goes back into services that recreational boaters use.

Senator Spivak: Thank you for that. You mentioned something about oil handling. There is a memorandum of understanding which I have looked at between yourselves and the Department of the Environment. Perhaps the issue of oil spills at marinas pales in comparison to 40 per cent of the oil that is emitted unburned by two-stroke engines. That is a finding of Environment Canada Environmental Technology Centre. Under that memorandum of understanding, MOU, first, the Minister of the Environment says this is just a first step and there will be regulations under CEPA, so you will need to deal with Environment Canada. You will not be dealing with only one minister anyway. How do you regard that?

Second, can you tell us how that memorandum ofunderstanding will deal with the question of oil spilled by two-stroke engines and how soon that will come into effect?Some of the estimates are that will not come into effectuntil 2021 because of the large number of two-stoke engines, and that it will take a long time because of the low turnover.

How do you regard the prospect, which I am sure there will be, by the Minister of the Environment under CEPA? What does the memorandum of understanding say about the oil spilled by two-stroke engines? How soon will you rectify that and how?

Mr. Currie: First, I believe you are confusing terminology. An oil spill is someone with a gas can, or an oil can, accidentally spilling it into the water, or over the side of the boat, and it drips into the water.

Senator Spivak: I am not confusing it, because the oil that spills out of two-stroke engines is not done accidentally. It is done through the operation of the engine. Is that not a fact?

Mr. Currie: That is not spillage. It is an exhaust emission and there is a difference.

Senator Spivak: How is that different? The oil is on the water. Is the oil not coming onto the water?

Mr. Currie: The agreement that individual companies have with Environment Canada, the MOU, on exhaust emissions from spark ignition engines is in force. It applies to two-stroke and four-stroke outboard motors. It has been in force since August of last year. From a practical point of view, what does that mean? To the layperson that means that all personal watercraft and all outboard motors sold in Canada are meeting or exceeding U.S. EPA exhaust emission requirements.

Senator Forrestall: They meet the standards of the U.S.?

Mr. Currie: Yes.

Senator Spivak: That is just the ones being sold. The current ones are not meeting those requirements.

Mr. Currie: You are partially correct and partially incorrect, in the sense that you are right when you say there is an existing fleet, and unfortunately there is nothing we can do about existing fleets, just as there is nothing we can do about cars that are 25 years old. They are there and will gradually fail to remain in service as the owners choose to replace them or as they break down and are scrapped. There is nothing we can do about what has already gone before us.

Going forward into the future, all of the personal watercraft, PWC, and all the outboard motors sold, regardless of whether two-stroke or four-stroke, are covered by the MOU and all those products have been, for actually longer than the MOU has required it, U.S. EPA-certified.

We are dealing with the North American market. There are no products manufactured specifically for Canada. If Canada had unique regulations that were dramatically different from those regulations that are in place in the United States, there would be no outboard motors and there would be no personal watercraft or, for that matter, dare I say, few, if any, new gasoline-powered boats brought into this country and sold. Essentially, recreational boating would stop.

Senator Spivak: I understand about the memorandum. It is a voluntary memorandum. Nevertheless it is in force. I am asking you, in practical terms, what does that mean? I know that emissions must be reduced by 75 per cent. I am not sure whether that is air emissions or emissions into the water. What does that mean in terms of the reduction of oil and gas that, as you know, is left on the water in terms of how soon will that considerable amount be reduced? Based on the two-stroke engine, will you change the two-stroke engine, or will there be direct injection? What are you doing? I understand this is a difficult problem.

Mr. Currie: I am not an engineer so I will give you a layman's approach. With two-stroke engines the means of injecting fuel into the combustion chamber of the engine is being changed. It is either DI or EI, which is direct or electronic injection. There are various other engineering applications that have been gone through to do this. The ultimate cumulative effect will be that, over time, there will be a 75 per cent reduction in NOx and hydrocarbon emissions from all of these recreational engines. That includes personal watercraft.

In addition, there is a move to four-stroke technology. Our automobiles are four-stroke engines. You put gasoline in your car and you do not mix any gasoline in with the oil. The engine is lubricated by means of oil, which is in the bottom of the engine. Four-stroke engines are inherently cleaner, because of that engineering approach, than two-stroke engines. In the recreational boating fraternity there is now a significant move, although not a total move, to four-stroke technology.

Some companies are moving faster, some slower, but the cumulative effect of all these changes is to reduce NOx and hydrocarbon emissions by 75 per cent. The U.S. requirement is by 2006. Because of the fact that these rules have been in place and mandated in the United States for some time, we have been selling cleaner technology products in Canada for a longer time than the MOU has been in place.

It is a little complicated. I cannot actually tell you when we first started selling clean technology in Canada, but suffice it to say it goes back to the first time that any of the manufacturers first sold the engine in the American market because they discontinued, over time, the older technology products they were selling here.

Senator Spivak: The question I want answered, and perhaps you can give it to us in writing, is: What actually is the time frame? Some of the research I have examined says the time frame for 75 per cent of emissions will be 2021. These two-stroke engines have been around since the 1940s without any change. I have seen the comparison between four-stroke and two-stroke engine, which is about eight times the amount of pollution by two-stroke as four-stroke. When will all recreational vessels, pleasure craft, whatever you call them, be sold as four-stroke engines or two-stroke with this modified direct injection?

Mr. Currie: It is now.

Senator Spivak: Are PWCs being sold with four-stroke engines?

Mr. Currie: No, they are sold with U.S. EPA-approved two-stroke engines. The new technology you see in two-stroke motors has been applied to two-stroke PWCs.They have to match up with exactly the same emission requirements as that required in four-stroke engines.

Senator Spivak: I understand. Could you get us a technical report on what that actually means in terms of the emissions of benzene and toluene, all the BTX emissions and the hydrocarbons, meaning carbon monoxide and carbon dioxide? That would be very useful. In the United States, California is far ahead of the EPA. Those standards may change as well.

Mr. Currie: That is not a problem for our sector because what is sold in one part of the United States obviously must be compliant with what is sold in another. Essentially what happens is the carbon rules, to which we refer, will ultimately end upbeing applied to all products. As the widget goes down the manufacturing line, they have no idea where it goes.

Senator Spivak: I look forward to getting that information.

Mr. Currie: It may take some time. If possible, could I get a written request? I am not trying to be bureaucratic, but a great deal of information was asked for at one time.

Senator Forrestall: As good as the consultation process has been - and there are some gaps with respect to the handling and sale of fuels and pollution - has there been enough consultation, in your judgment, between the various departments in thefederal government responsible in one way or another for the environment, the fisheries, transport and the Canadian military? They are all involved with pollution identification. It seems to me the problem of refuelling a boat is not terribly complicated.I would have thought it would be more complicated when airplanes were allowed to refuel from the same fuelling dock. Has there been enough consultation? It does not seem to be an insurmountable problem. Is it one that we might better deal with by regulation than by statutory law?

Mr. Currie: Let me see if I can answer that. You have rolled two questions together.

My membership is not actually the marinas. I am here , if you will, just as their spokesperson in this regard. I am inclined to believe there has not been enough consultation with the grassroots business people who will be impacted by this. Many remote facilities are probably not even aware, at this stage, of what is coming down the tracks. Many people will be shocked by the impact this might have.

Our suggestion, as laypersons, would be to exclude those who are operating commercial marinas and selling product to small vessels. If that were left alone everything would be fine, but the problem lies in writing it the way it has been written, which throws the net over everyone. The fuel barge in False Creek in Vancouver should probably be considered an oil handling facility. However, the little marina on a small lake in the middle of Alberta should not be considered an oil handling facility, and that is the difference.

Senator Finestone: I understand it is provincial jurisdiction. I do not know why we are dealing with it in federal law.

Senator Forrestall: The left hand should know what the right hand is doing.

Senator Finestone: If it is federal, perhaps it needs a separate regulatory regime. Otherwise, I do not see how we can deal with it in the bill.

Senator Forrestall: My objective was to get a better sense of what we might recommend with respect to this, and that is that someone can have re-examine it. It is difficult for us to make anything other than a broad general recommendation.

The witness has indicated his concern about the extent of consultation and whether that consultation involves the private sector or recreational boating associations and so on. Perhaps we might occupy ourselves in the fall with drafting a recommendation to that effect. We can think about it over the summer. It is a very important matter.

Senator Finestone: I found the presentation interesting, having once been a small boat owner. On the issue that you discussed under Part 10 of Pleasure Craft, the compliance plate, did I understand that all new boats being manufactured now would have these compliance plates issued?

Mr. Currie: The broad answer is yes, but the onus is on the manufacturer, and whether it is domestic or foreign is of no significance. The onus is on the manufacturer to apply to the Office of Boating Safety, Canadian Coast Guard, to obtain the plates. The manufacturer has to file a technical brief on each of the boats within the product line that he wishes to get plates for. The office will analyze the information. If it is a small inboard-powered boat, a calculation is done which will indicate, for example, that a particular boat is supposed to have no more than six people, X number of kilos, and what is the horsepower. If the process could be streamlined -

Senator Finestone: The law would make it streamlined.

Mr. Currie: The way the law is will not improve our bureaucratic speed bump.

Senator Finestone: I was prepared to ask you if it would be a good idea to grandfather the whole thing and make it mandatory for boat manufacturers that wish to sell in Canada. Now you have given me another pause for reflection which we will give to our research officer.

Mr. Currie: Maybe I have confused you. It is mandatory at the present time. In that sense, they are not changing anything. The difficulty is that hundreds of thousands of boats do not have plates, and the regulation actually says all boats must or shall, which means that, in addition to any boat that is built today or in the future, everything that is old that does not have a plate -

Senator Finestone: They are illegal in the first place.

Mr. Currie: That perhaps is correct. They were illegal in the pure sense because they do not have a plate. It does not mean the boat is not safe or was not safe when it was built. It may have been built to a standard that exceeds the Canadian requirement, but it does not have a plate on it. There is no way, practically speaking, to force all these people to get plates without completely overwhelming the resources of the Coast Guard.

Senator Finestone: What is the implication if they have an accident and do not have a plate?

Mr. Currie: I am unaware that anyone has ever been prosecuted or subjected to any penalty as a consequence of not having a plate, although there is a cash penalty of either $100 or $150 in a provision of the Contraventions Act should the vessel be inspected and such a plate not be present. I am unaware of anyone actually being charged with that.

The interesting thing is that to get a small vessel license, you have to have a plate. The tens of thousands or hundreds of thousands of boats that do not have plates do not have licences.

Senator Finestone: I understood you to say it was important to maintain the small vessel registry. You were concerned that was not clear under Bill C-14. I wondered if this was mutually exclusive, or if we needed the language of the small vessel registry to be included and what was the difficulty of doing that. They do not seem to be mutually exclusive to me.

Mr. Currie: They appear to be so to us. It may be an issue of clarification.

Senator Finestone: Do you think we might suggest a special section and that the regulations should be brought before this committee?

Mr. Currie: That may be a good solution.

The Chairman: The clerk will be in touch with you for further information. We will issue it to all members of the committee.

Senators, time is running short. The report of the subcommittee on communications should be made by Senator Finestone and Senator Spivak. I think we will have to deal with it in the fall so we have enough time to work on it.

Senator Finestone: May I make an observation? Speaking for myself, and I think for Senator Spivak, the report really is incomplete. The second and third phases of it were not done. It was very ambitious and it was going in the right direction, but it has not achieved its goal. Either we do a proper study, using this as a base, or we forget it for the moment. I would not like to have it tabled as a fait accompli.

The Chairman: Should we take the summer to think about it?

Senator Forrestall: I agree. I know some of the problems that have been encountered.

The Chairman: We will take the full summer and deal with it at our first meeting in the fall. We can ask the house to give us permission.

The other problem we have is that lots of letters are coming in from pilots from Canadian and Air Canada. We have sent copies to you. We have just acknowledged receipt of the letters. We cannot interfere with labour relations. We will keep you informed if we receive any more information. As we get letters, we will send copies to you. We can deal with it in the fall, if there is anything we can do.

Senator Forrestall: In connection with these letters, may I suggest that this is a very serious problem. The temperament, not just on the flight deck but among the other support staff, does not bode very well for smooth summer flying for Canadians. It is important for each of us to review the mail and be aware of the seniority system that affects, as far as I am aware, only pilots. When there is dissension in an aircraft at 37,000 feet, there is potential danger. As you know, there is no second chance.

The Chairman: I would be concerned if things are not settled by the fall.

Senator Finestone: Is there reading we could be doing? Do we have the decision of the arbitrator or the court indicating why that position was arrived at?

The Chairman: We can send it to you.

Senator Finestone: The judges could not have been so out of line. Perhaps they were. I would like to know what happened that would allow this decision.

Senator Forrestall: The judges are in line. That is the problem. I will not comment further.

The Chairman: We will send you more information on that. We will let them work it out during the summer. In the fall, we can look at it again.

The committee adjourned.