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Standing Committee on Transport, Infrastructure and Communities
Wednesday, February 7, 2018
[Recorded by Electronic Apparatus]
C-64, an act respecting wrecks, abandoned, dilapidated, or hazardous vessels and salvage operations.
We have a variety of witnesses on our panels today. I'd like to ask you if you would take a moment to introduce yourselves.
I'll start with Mr. White.
Ms. Anghel, would you like to start with a five-minute presentation? We try to keep everybody to five minutes because the committee members always have a lot of questions that they need to get answers to.
Please, go ahead.
On behalf of the entire recreational boating industry and community, thank you for the opportunity to be here before you today on Bill C-64.
The National Marine Manufacturers Association, known as NMMA, is the leading association representing the recreational boating industry at the national level across Canada and the United States. Our member companies produce more than 80% of the boats, engines, trailers, accessories, and gear used by North American boaters.
NMMA, through regional efforts, also represents marina operators, dealers, and finance and insurance companies. In Canada, the recreational boating industry generates $10 billion in revenues, contributes $5.6 billion to the national GDP, and employs more than 75,000 people across the country. More than 4,000 businesses serve approximately 12.4 million adult Canadians who enjoy boating each year on our waters.
We place great importance on ensuring marine safety, preserving marine ecosystems, and promoting improvements to environmental stewardship. Therefore, NMMA is largely supportive of the proposed legislation and of the oceans protection plan.
As an indication of our commitments to these causes over the last 20 years, marine manufacturers across North America have invested billions of dollars to develop cleaner, quieter, more efficient engines that reduce emissions by 75% to 90% and increase fuel efficiency by more than 40%. In 2010, NMMA stepped up in a big way and worked on a voluntary basis with Environment Canada to develop new regulations requiring that engines sold in Canada meet U.S. EPA standards.
Each year, we publish statistics on the total number of boats sold, and for the committee's interest, in 2017 there were 39,000 new boats and 61,000 pre-owned boats sold across Canada. We estimate there are approximately 8.6 million recreational boats in use today, with over 50% of those being human powered with no engines.
NMMA is committed to a strong and enforceable licensing program and welcomes the opportunity to see an expanded and enhanced registration process. Having accurate data will help address the abandoned vessels issue and safety, while also providing valuable data for the boating industry.
Should Transport Canada enlist provincial assistance to deliver a new licensing program, we recommend that every effort be made to ensure a seamless delivery framework that includes consistent pricing regardless of province or territory. As a side note, I believe there are representatives from the insurance industry who may have good insight into this topic, and I would be pleased to facilitate an opportunity to enlist their expertise.
While NMMA is supportive overall of the provisions of the bill, we do have one fundamental concern. We appreciate that the legislation was written to encompass all vessels, and we appreciate that many of the boats needing cleanup are recreational. I do stress the importance of ensuring that, as regulations are developed, commercial vessels are treated differently from recreational boats. Disposing of a commercial vessel is a more complicated and expensive task than it is for a recreational boat.
Our industry wants to ensure the burden of cost is not disproportionately placed on recreational boats. Should any levies or taxes be imposed on recreational boats through licensing, these funds should be used to support disposal of recreational boats specifically.
Our association will continue helping identify solutions on this topic. We have applied for funding under Transport Canada's abandoned boats program, and our goal would be to reach across the nation to identify the size of the problem and then consider recycling options. Part of this solution may exist outside of Canada.
NMMA has taken a leadership role on the international stage on this and many other boating issues, much of this facilitated through the International Council of Marine Industry Associations, on whose executive committee I serve as Canada's representative. This global organization brings together recreational marine industry associations under one international umbrella, engaging proactively on the topic of end-of-life of boats and how best to expand recycling options by sharing best practices.
There are some sound recycling solutions in places like France, Sweden, the Netherlands, and Japan, just to name a few. I'd be pleased to share these learnings with Transport Canada and the committee, so that we don't work in a silo in Canada on this global topic.
We applaud the government for introducing Bill C-64, and we will continue to provide assistance and support as the bill moves forward.
Thank you for the time today and for the invitation to be here.
He has been the total lead of this, with the exception of two persons who were on the bench with him, as opposed to being in the bleachers. That was me, and Parliamentary Secretary Karen McCrimmon, who kindly gave us some time to look into this project.
In the spring of 2013, he initiated this project on the premise that if you go to Halifax or to London and you look at the memorials there, they say, for sailors, “tombs unknown” or “graves unknown”. His position is that this is not true. We know where they are. We know exactly where these ships are. Not only do we know where the ships are, but we know how many people went down with those ships.
Again on his own, in 2013-14, the first place he went was the ship that went down with the most people on board, the Athabaskan, off the coast of France. There were 128 sailors on board. He dealt directly with France through the embassy here and he got France to include the two Canadian warships within French territorial waters under the French heritage code. That means there are now punitive consequences for somebody who goes on those wrecks. International laws of the seas do not provide punitive consequences. They just provide jurisdiction.
His next step was to go to the U.K., where we have three corvettes that sank in British territorial waters. Again on his own, he went through the high consulate here to submit the request to have those three vessels placed under a special act that they have in the U.K., called the Protection of Military Remains Act. That is strictly to add punitive consequences to the international laws of the seas for the vessels that are sunk there.
He went there on his own. Interestingly, the U.K. looked at that and said it was coming from a single person and asked whether it was possible to get that from a higher level of authority. He went to the Naval Association of Canada. Of course, he has the support of all those people, but the U.K. insisted on having a Canadian position on that.
Therefore, we went through Global Affairs Canada, trying to get a request with the British delegation here, waiting for that request so they could staff it through England, and they were ready to do it. Unfortunately, Global Affairs Canada looked at that position and said this request could serve to undermine the current laws under which these vessels are protected. Well, they are not protected. Interestingly enough, the Germans have U-boats protected under that British law, but we can't get our Canadian warships that are sunk there protected under that same law.
The next steps for him are to get a political champion so that he can bring this project to fruition, and we believe that this committee has the power to possibly create that. We also need to have all those wrecks with sailors on board—and like I said we know where they are—legally designated as ocean war graves.
This is the title of this project, ocean war graves. The responsibility could be passed on to the Canadian agency, the Commonwealth War Graves Commission, to which Canada subscribes a significant amount of money every year.
Global Affairs Canada needs to review its position as to the jurisdiction versus jurisdiction enforcement, which does not exist right now. Once we do that, we can go back to the U.K. The U.K. is waiting to include those three Canadian warships into its protection law.
After that, we will come to Canada. Here in Canada alone, we have nine warships within Canadian territorial waters, and 10 merchant ships that were sunk due to enemy action. All those vessels are known. Their positions are known. The number of people on board are known. It's just a matter of putting a law into place, whether it's something similar to what the U.K. has to protect the wrecks, to protect the war remains, or having our own law here.
For the merchant ships, it's an issue of changing or amending the Canada Shipping Act. It could very well easily do that to provide those merchant ships and warships the same level of protection that all our cemeteries have across the world for soldiers and airmen who actually fell.
This is all he is looking for, to give those sailors down in their graves at the bottom of the sea that same level of protection that is not available to them now, but that can be put into place.
Thank you very much.
Mr. White, you have five minutes.
C-64, the wrecked, abandoned and hazardous vessels act, with a specific focus on the need to provide protection for Canada's ocean war graves.
Before I begin my remarks, I would be remiss if I did not acknowledge the incredible work of retired merchant navy Captain Paul Bender, who has led the charge to bring protection to Canada's ocean war graves. Captain Bender's efforts on this issue come after a remarkable lifetime of service to Canada, which includes his service during the Second World War, post-war service in the Royal Canadian Navy, and now at the age of 90, fighting to ensure the final resting places of Canada's sailors and merchant mariners are given the protection they unquestionably require. It is truly an honour to add our support to Captain Bender's work.
My name is Patrick White. I am the Founder and Executive Director of Project Naval Distinction.
Project Naval Distinction is an independent citizen initiative working to ensure all branches of the Canadian Armed Forces are given proper recognition across Canada. As the Royal Canadian Navy faces a natural challenge in connecting with Canadians beyond Canada's coastal communities, known as maritime blindness, our work has focused on ensuring the sailors of the Royal Canadian Navy are given recognition alongside the soldiers and aviators of the Canadian Army and the Royal Canadian Air Force.
We were made aware of Captain Bender's efforts to provide protection for Canada's ocean war graves from a Twitter exchange between Ian Holloway, dean of the University of Calgary's faculty of law and the minister responsible for Parks Canada. On January 1, in response to Dean Holloway's tweet about Joseph Brean's National Post article about ocean war graves, Minister McKenna confirmed she was looking into it. We contributed our suggestion for amending Bill C-64, an ideal vehicle through which to enact legislative protection for Canada's ocean war graves.
In the same National Post article, Captain Bender outlines numerous important reasons why Canada's ocean war graves need to be given protection immediately. On a fundamental level, we are drawn to his final comment that protection of Canada's ocean war graves is more than just symbolic recognition, it would “put the loss of sailors on the same plane as the loss of soldiers and airmen.”
There are clear and concrete reasons why this issue must be addressed with a sincere sense of urgency. As Captain Bender notes, he has, “the latitude and longitude position of every one of the Royal Canadian Navy ships that were lost during the Second World War". This information is readily available to salvagers and treasure hunters. The question is not whether these graves might be disturbed. The question, if we do not act, is when. In November, blood-stained canvas hammocks, used by Canadian soldiers on the ocean liner RMS Hesperian were found off the coast of Ireland indicating the ocean war grave had recently been disturbed. The same grave-robbing could be happening right now to other Canadian ocean war graves as we sit in this meeting.
In light of this information, I ask the committee to amend Bill C-64 to provide protection for all Canadian ocean war graves in Canadian waters under section 163(2) of the Canada Shipping Act, and ensure the punishments for those who commit an offence are in line with those of grave-robbing.
Further, and in their roles as individual Members of Parliament, I ask committee members to, first, request that the Minister of Transport, the minister responsible for Parks Canada, and the Minister of National Defence provide immediate protection to all of Canada's ocean war graves under the existing powers of the Canada Shipping Act. Second, I ask committee members to request that the Minister of Foreign Affairs ask the government of the United Kingdom to add Canadian ocean war graves to the list of protected places and controlled sites under the U.K. Protection of Military Remains Act, 1986, and third, given the urgency with which protection for ocean war graves is needed, request the Speaker of the House of Commons to hold an emergency debate on protection for Canada's ocean war graves.
The men and women who have made the ultimate sacrifice and given their lives for Canada deserve to remain undisturbed in their places of final rest. Whether on the battlefields or in the cemeteries of Europe, or in HMC ships at the bottom of the ocean, Canada's soldiers, aviators, and sailors deserve the same protection that any Canadian would expect for themselves and their families.
Thank you. I look forward to answering any questions.
We'll start with questioning for six minutes.
Mr. Lloyd, welcome to the committee today.
We have a huge issue with derelict vessels. I was pleased to listen to the testimony today. I wanted to ask the National Marine Manufacturers Association how they foresee this legislation impacting their association members in increased costs or red tape.
I'm not sure what they're going to do with the abandoned vessels. They are where they are, and we need to work together to figure out how we're going to dismantle them and where we're going to take them. Right now the only option is to take them to a landfill, and that's probably not what we want to do.
I don't know. We've applied for the funding, now that this program is upon us, to really get at the core of how big the opportunity is. It could be—although more so on the west coast—that there are hundreds across the country, but I don't have any way to measure it at this time. Again, I welcome the opportunity to work with the government on that.
That's all I have for questions.
Thank you to the witnesses for being here today.
Ms. Anghel, I'm going to start with you. If a recreational boat owner is finished with their boat now, what do they do with it? If it can no longer be used, where does it go?
There was a program in Ontario funded by the Ministry of the Environment that was looking at grinding up the fibreglass and turning it into cement. There are a lot of these opportunities in other parts of the world. That funding ceased to exist a few years ago, so that went away. There's an opportunity to go back there.
There aren't a lot of great solutions for disposing of them responsibly.
I'm happy to hear that you're onside with the legislation and that you think it's a good step forward. Thank you for being here today.
I'll go to Mr. White. Thank you so much for your presentation, and for your hard work on this issue. Of course, thanks also to Captain Bender for everything he has done. I guess, maybe, both of you can answer this question for me.
I support what you're trying to do. I totally understand the need to protect these ships that sank during war, and the graves. I question that this would be the right place to have that, and if this legislation is where that should be. Can you tell me why you think this legislation is an appropriate place to put what you're asking for?
The Canada Shipping Act is one of the primary vehicles under which that kind of protection could be granted now. It might be possible to amend the Canada Shipping Act to insert different punishments or protections under subsection 163(2) from what exist now. I'll be very honest. I don't profess to be an expert on a lot of this. What we saw, and from what Captain Bender had researched, was that there does exist a gap.
What I had thought to propose, in terms of this bill and an issue dealing with the Canada Shipping Act, was that if there were any way we could get protections through Parliament sooner, rather than drafting a whole new bill, etc., perhaps this could be the vehicle to do it. I'll fully admit, in our position, there might be a better vehicle, but echoing what I'm sure the admiral has said, there's a real sense of urgency. Perhaps we can use it collectively, as a Parliament, both sides asking, “What avenues exist?” and “How quickly can we bring in protection?”
I am concerned that we would have war graves protected under something called “abandoned, dilapidated, and wrecked vessels”. I think there's an optics problem there that we may want to avoid. To that point, though, I do believe that what you're asking for is significant and needed.
What does it mean to have it protected? Is it not illegal right now to...?
As I mentioned before, even the Germans asked for the U-boats to be protected from salvaging or diving. So did the Danish—some of their merchant ships were sunk during the war—under that same act. There are punitive consequences.
With thanks to all three of the witnesses, I'm going to focus my questions on the National Marine Manufacturers Association.
I was elected in British Columbia. It's actually perfect that you're here today, because this afternoon we have another witness, from Vard Marine, who was commissioned by Transport Canada to do a picture of both the abandoned vessel problem and also our capacity to respond to it from a ship breaking and recycling point of view.
This is how they characterized what they heard from marinas in B.C. I'm just going to read it out for the record, but I'm curious whether it resonates with what you've heard from your membership. It says:
Vessel abandonment is clearly perceived to be a significant issue in the region, with numerous respondents reporting problems ranging from illegal mooring adjacent to their facilities, to abandoned or sunken vessels inside their facilities which cannot be dealt with easily due to regulatory and risk uncertainty, and even incidents of vessels leaking fuel, sewage, or even being set ablaze in their harbour as a means to scuttle them quickly.
It goes on to say:
All the stakeholders acknowledged that proper disposal of vessels is an issue.
One marina reports an estimated 16 vessels sunk deliberately or after being abandoned on the sea floor within the bounds of their marina.
I'm seeing a nod, so you're hearing this from your membership also.
One of the pieces of it was borrowing the vessel turn-in program that Oregon and Washington pioneered as long as 10 years ago. That was one way they had to get rid of the backlog. It's equivalent to a “cash for clunkers” program like we've had in a bunch of our regions. Especially, it was recognized that you got a boat amnesty: within a certain number of years you can turn in your boat, in co-operation with your local government.
Is that something you've been hearing from your membership as a model, maybe, that some of the marinas on the U.S. side have had experience with and that has helped them deal with the backlog of old pleasure craft?
There are lots of other opportunities. In B.C., maybe something needs to be done more quickly. To get started, we maybe could focus pilot projects on where the problem is, and then work our way out. Definitely there are a lot of great examples from the U.S. and Europe that we should put together and see what works for us.
You mentioned recycling examples from other countries that your association was looking at. Is that research you've compiled already that you'd be able to share with this committee now?
You mentioned that your association had applied to the small harbours abandoned vessels removal program. Can you tell us about your experience, whether you received funding, and how you found the application process?
The application process was okay. There were no issues. Perhaps, because the issue is so technical, we want to step up and take the initiative to work proactively on the matter. It felt a bit daunting because we aren't technical experts, but we are here to represent the industry. Maybe we'll need some assistance, if it is approved, to look more closely at the technical aspects of how it will work. It was a relatively easy process, though.
transport minister at committee on Monday, who said that only seven boats had been applied for. I think four as assessments and three for removals. In retrospect, if you do have feedback for all of us on how we might streamline that process, we'd like to get a higher level of participation, so that we can get more of that backlog removed.
Thanks for your work.
Go ahead, Mr. Hardie.
Vice-Admiral Rouleau or Mr. White, this is for either one of you. To your knowledge, are any of the wartime wrecks hazards to navigation or are they all too deep?
Right now, the one where he was stopped was the three ships that are within British territorial waters.
Ms. Anghel, do you have any sense as to the average age of the pleasure boats that are abandoned?
What I know is that the engine is now built to high standards over the last several years, but what it was in the fifties and sixties and what spillage there is, I really don't know. I could look into it, but I don't know.
Let's fast-forward to the present and talk about the materials that are going into boats now. What design attributes will there be to ensure that if it's wrecked, it's not going to contaminate that area with debris, particularly styrofoam, which tends to pop up and get really ugly along the beaches. Of course, it's not very good for the marine life either.
Do the more modern ingredients going into pleasure craft give us a sense that things are going to be better protected, even if the worst happens?
I would be more than happy to provide some of the more technical engineering aspects of what we're looking at when we're certifying a boat. We could also look at the provisions of the Transport Canada Construction Standards, which must be met to be compliant for a boat to be used here.
Voices: Oh, oh!
Mr. Ken Hardie: Okay.
Madam Chair, before I get into my own questions, I understand that the parliamentary secretary would like to pose a question. I'd be happy to give her a minute of my time.
I just want to offer a bit of clarification on something MP Malcolmson said. We have received seven applications for vessels, but there are likely to be multiple vessels named on each application. It's not just a single number, one per application. There can be multiple vessels on the same application. That's just a little point of clarification.
My second question is for the admiral and the captain. We know of our own vessels in our own territorial waters. Are there not foreign vessels in Canadian waters that other countries have asked us to protect?
What makes this a fundamentally different issue is that it's not just a heritage asset. It's a tomb. What we saw, in fact, when I was doing some of the research to prepare for the committee, is that as recently as a few weeks ago they discovered vessels that had been completely salvaged in the Java Sea, and the remains of hundreds of sailors—U.K., Dutch, and potentially American—have been dumped in a mass grave. These are international reports coming out. Because there was an inability to protect those ships from being salvaged, we're now in a position where allied nations are finding their sailors in bags, hundreds of bags, or in graves where the ships used to be. That's what provides a bit of a twist to what might otherwise have been a relatively simple issue.
Thank you, Sean.
I have some background on the international law of the sea. I just want to make sure, Vice-Admiral Rouleau, that I understand your explanation about jurisdiction versus protection. Are you saying that the UN Convention on the Law of the Sea gives the right for a given nation to offer whatever protections it may on sunken vessels in its own waters, but does not in and of itself protect those vessels?
You mentioned you had some fears around recreational levies acting as a subsidy for commercial cleanups. Isn't the best fix for this to ensure that the owner of the vessel is liable and require that they have insurance so you would never need to put in place a levy on the recreational boater for a commercial cleanup in the first place?
I have a question for Madam Anghel about the scope and nature of the recreational boating industry. You mentioned in your opening remarks that about 40,000 new boats were sold in Canada last year. What mix is that between sail and power?
I would just say that it doesn't have to be more complicated than that. It's just kept within a fund that helps to clean up abandoned vessels that are for recreation. If we're collecting registration money from recreational boats, then that money shouldn't be used to clean up commercial ships. That is what I'm suggesting.
We recognize that it is important for all sections of the Canadian Armed Forces to be correctly recognized everywhere in Canada.
Nevertheless, I believe that protecting Canada's ocean military graves needs enhanced collaboration among several departments.
My question goes to Mr. Rouleau.
Bill C-64 excludes wrecks considered as having heritage value under an act of Parliament or of the legislature of a province. How many military wrecks meet those conditions today?
How many vessels would come under the act, in your view?
By protecting our warships, we are preserving our history. However, do any of the vessels pose a threat to the environment or cause a problem for navigation?
I will pass the rest of my time to Mr. Badaway.
My concern is more with what happens to the orphaned vessels. We have a bill that we're moving forward with, and it's all fine and dandy. It's going to identify the challenges and the problems with our vessels in general. However, when we have an orphaned vessel and no one has taken full responsibility for it, or any responsibility for it, what is the proper process then? Who is going to be in charge?
I look at certain situations in the past. One situation in particular comes to mind, which is the Kathryn Spirit. It basically became somewhat of a very expensive project, after sole-sourcing versus tendering a company. With that, the Coast Guard made a decision to build a dyke to pump out the water and recycle the ship in the place where it was abandoned, which didn't work. They then walked away from the project, and a second Mexican company came in to take over the project. Once they found out it was next to impossible to do it in a feasible manner, they walked away from the project. As far as I know, the ship is still there.
Again, I go back to my concern. This bill is great. It's wonderful. It has all the right intentions. Many MPs on both sides of the floor have worked on this with all the right intentions, and I commend them for that. However, there's a reality attached to it when it comes to orphaned vessels. Who is going to take responsibility for that? What process is going to be undertaken to find a remover and recycler?
Ultimately, who will bear the cost? Is it going to be the taxpayer?
With that said, I go back to my question based on your duties as part of the Coast Guard. Do you see the challenge being that these vessels are simply sitting there anyway, or do you see a more feasible process or protocol that can be put in place to deal with these vessels with respect to removing and recycling them from the areas in which they're basically being orphaned?
Do other panel members have a comment?
But that would have to be something we'd approach on a case-by-case basis, because the call for protection for ocean war graves isn't necessarily about recycling or reclaiming the vessels. It's about leaving them where they are and just providing legal protection in that way.
We'll move on to Mr. Shields for four minutes.
They're interesting topics. I think the challenge is trying to relate them to the bill.
I have a couple of questions about the sailors. Have other countries designated sunken sites of their lost sailors?
As Captain Bender has found, you could go to the same geographic area, and you'd have protection for the Royal Navy ships, you'd have protection for the German U-boats, and a Canadian ship sitting right beside it does not have any of those protections.
Sir, you can jump in.
Is there any example under Canadian waters?
The problem, of course, that we run into is that section 7 of the Canada Shipping Act excludes warships from anything in the act. For the merchant navy vessels, for example, if tomorrow the minister were to come out through an executive order to say, we're now providing heritage protections and increased penalties for people who dive on the merchant navy ships, that could apply tomorrow and that wouldn't require any legislative amendment. The problem is that the warships would require some other change. You would have to include something, perhaps that says, notwithstanding section 7 of the Canada Shipping Act, and in consultation with the Minister of National Defence, the Minister of Transport and the minister responsible for Parks Canada extend those protections.
I want to say thank you very much to our witnesses for coming to join us today and being very informative.
We will suspend for a moment for our other witnesses to come to the table.
Hello, Ms. May. It's nice to see you.
Our meeting is back to order. This is the Standing Committee on Transport, Infrastructure and Communities. We're doing a study, as you know, of Bill C-64, an act respecting wrecks, abandoned, dilapidated or hazardous vessels and salvage operations.
Thank you to our panel that's here. We have from the District of Squamish, Patricia Heintzman, who is the Mayor. From the Office of the Administrator of the Ship-source Oil Pollution Fund, we have Anne Legars, the Administrator. From Vard Marine Incorporated, we have Andrew Kendrick, Vice-President of Operations.
We also have joining us at the table today our colleague Pam Goldsmith-Jones. Elizabeth May has also joined us today.
Welcome, everyone. I'm going to open it up.
Madam Mayor, would you like to go first?
We, like every coastal community in British Columbia and I'm sure on the east coast, have the issue of wrecks, derelict vessels, and abandoned vessels as part of our day-to-day vernacular. It's part of a conversation that we're constantly having in Squamish.
We have had quite a few experiences over the last couple of years that have led to quite a number of conversations with Transport Canada, both at the local level in British Columbia and with the minister's office. I'm quite pleased to see issues from a lot of those conversations that we had with them actually in the act. It seems to deal with some of the issues, and I can go into specific events that it would help with, if that's helpful. It helps in a lot of ways.
There are still a few gaps and it's hard to know if they're covered in other acts or if there are other ways that we can tie off some of the gaps, but it's certainly an excellent first start.
I look forward to the conversation.
We like you to keep your comments down to about five minutes so that committee members can get as many questions answered and as much information as possible.
Let me start by saying a few words about the compensation fund. It was created in 1989 under the Marine Liability Act. It is a special account in the accounts of Canada and into which monthly interest is paid by the Minister of Finance. Today, its capital stands at more than $400 million.
The fund is therefore fully capitalized, but the money must be used strictly for the purposes for which it was constituted. Those purposes are to provide compensation for damages caused by ship-source oil pollution, as well as to pay Canada's annual contribution to the International Oil Pollution Compensation Funds. So the administrator of the fund is the only person able to authorize payments from the fund. The administrator is appointed by the Governor in Council and is totally independent. Only the Federal Court can review his or her decisions.
The notion of “polluter pays“ is the program's key principle. This is the context in which the compensation fund provides claimants with access to an additional form of justice by avoiding the need for them to go before the courts, and by providing them with compensation of up to $172 million per accident. After that, the fund sues the polluter.
What is our experience with vessels and wrecks of concern? First, I have to underline that the fund seldom has to pay for oil pollution damages caused by vessels of over 1,000 tonnes. These incidents will normally be indemnified directly by the ship's insurer, as insurance is compulsory for such ships.
The vast majority of the fund's claims portfolio is linked to incidents involving vessels and wrecks of concern. These incidents represent two-thirds of the claims received by the fund and 80% of the final settlement cost paid by the fund over the past decade. This was actually documented in this report, which is on our website. We can leave a sample with the committee as well.
Only 2.2% of the amount settled with claimants over the period of the incidents involving these ships was recovered from the responsible party. The pollution costs of these vessels are escalating. These vessels are essentially vessels under 300 tonnes, such as fishing vessels or ex-fishing vessels, tugs, barges, and pleasure crafts.
Many claims we receive are linked to wreck removal. When the wreck removal operation is triggered by an oil spill incident or imminent risk of spill, we may pay the reasonable costs of preventing oil pollution damages or cleaning up oil pollution damages that are incidental to wreck removal operations. We will not pay for the actual removal or dismantling of the wreck unless the ship itself has become an oily waste, typically an old wooden vessel that has become impregnated with oil, becoming a kind of oil sponge.
What are the potential impacts of Bill C-64 on the fund's claims portfolio? When in force, Bill C-64 should help limit the number of claims brought to the fund, especially with respect to oil damages caused by wreck removals. The benefits should be felt for ships between 300 and 1,000 tonnes, for which the costs of dealing with the oil pollution risk incidental to a wreck removal operation will be borne by the wreck removal insurance. As mentioned, ships over 1,000 tonnes must already be covered by insurance for bunker fuel pollution.
However, in and by itself, Bill C-64 will likely have a marginal impact on our claims portfolio for the following reasons. First, the act will apply only to future occurrences and not to the existing inventory. Second, most of the ships that cause claims to the fund are below 300 tonnes, with no mandatory insurance. Third, many claims are caused by ships that are abandoned or dilapidated vessels, not “wrecks” within the meaning of the convention. Fourth, small vessels and pleasure crafts are the least regulated segments of the Canadian fleet. They are an important and uninsured source of vessels of concern and of oil pollution, and they are an important source of claims with the fund. Fifth, the polluter pays principle is difficult to uphold in circumstances where the owner cannot be identified.
Pending the implementation of other initiatives complementary to Bill C-64—and we know that a number of such initiatives are in the process of being developed or implemented—the fund expects to keep receiving a steady flow of claims linked to ships and wrecks of concern.
Ladies and gentlemen of the committee, I will be pleased to answer your questions.
As noted, I'm Vice-President, Operations, for Vard Marine's Ottawa office. Vard is a Canadian company that designs ships. We also undertake a range of consulting activities to do with marine issues for private and public sector clients. Our clients range from oil majors to environmental NGOs. We take that as an endorsement of our ability to provide objective advice to whoever our client may be.
On a personal level, I'm myself a keen boater, particularly for sail and human-powered craft; and I am a lake steward for a small lake outside Ottawa. I have a keen, personal interest in all issues associated with water quality and water safety. I will try to maintain a difference between my corporate and my personal opinions.
In 2015, Vard undertook a project on behalf of Transport Canada, which was referenced, I noted, by the previous witnesses. We were supposed to be analyzing ship breaking and recycling capacity in Canada, but it actually became a much broader project, looking at advice on vessels of concern. What causes them? What are the potential means of dealing with them? This brought home to us the general legislative uncertainty surrounding the disposal of wrecked and abandoned vessels of various sizes, and best and worst practices in Canada and around the world for handling this.
Canada certainly needs a better framework to handle this problem. We consider that Bill C-64 is a valuable part of this. We do have some concerns with the bill because it's trying to address a very broad range of issues in a single package. While you may be able to gloss over this in the act itself, it will make it difficult, in our opinion, to formulate effective regulations for all the types of vessels that are under consideration. We're already seeing some signs of this in a recent DFO/PSPC request for information, which I'll talk a little more about in a minute.
The summary of the act refers explicitly to the Nairobi Convention and to requirements that will be imposed on vessels of 300 gross tonnes and above, but the general coverage of the act is to all Canadian vessels that are registered, listed, recorded, or licensed under the Canada Shipping Act.
There are only 1,500 Canadian vessels that are over the 300-gross-tonne limit. A thousand of those are barges and 200 are owned by the federal government, provincial governments, and crown corporations. On the other hand, there are roughly 40,000 vessels that are registered and several million that are either licensed or are supposed to be licensed. We followed in our work the NMMA study from 2012, which put the number of recreational vessels in Canada as 4.3 million.
Licensing applies to all vessels with more than 7.5 kilowatts, 10 horsepower, of engine power. That's a fairly low threshold. Bill C-64 lowers this still more by applying to all vessels other than unpowered vessels below 5.5 metres in length. Finally, I've been caught, because my 14-foot sailboat actually has an electric trolling motor. I'm not sure what the interpretation of the act will be in a condition like this.
As the coverage expands, the quality of the databases available for monitoring and enforcement drops rapidly. There are three different databases for Canadian-registered vessels, and they are by no means current or accurate. We're doing a study of that at the moment on another project for Transport Canada, and the registry is full of errors. We don't have access to the record for licensed vessels, but our experience suggests that the records are incomplete and highly inaccurate, and the process of licensing is poorly understood even by some of the more reputable boaters. Licences have to be renewed every 10 years, but most recreational boaters are not aware of that. We strongly suspect the licensing database is sadly out of date and would be of very little use in tracking down owners in many cases.
Enforcement of the requirements is very inconsistent. I'm not aware of any fines having been levied recently on people who didn't have a licence but were supposed to.
Applying the act to large vessels should be relatively simple and uncontroversial, except in the case of orphaned vessels. There, hard cases make bad law. But generally the large vessels are few in number, highly visible, and relatively well documented.
For smaller craft, there's certainly the potential to create a new, costly, and intrusive bureaucracy and considerable potential for mischievous or malicious application.
It appears to us to be possible to designate many vessels as abandoned, dilapidated, or derelict at quite a low threshold of proof, and if intrusive neighbours consider a boat to be an eyesore, they can initiate a process for removal that may be difficult or costly to stop.
This Friday, I'm going to an information session on the DFO initiative to create a risk assessment methodology and inventory management system for vessels of concern. This appears to envisage a very complex, multi-phased system that will deal with many abandoned and derelict vessels actually very slowly and with a maximum amount of paperwork. We're all in favour of the government creating lots of opportunities for consultants, but we are also taxpayers and boat owners. We trust regulation standards and internal processes developed to support the act will focus on actual problems and not create new ones.
I'd be happy to answer any questions either on our report or on any of our statements.
We'll go for six minutes to Mr. Chong.
Mr. Kendrick, maybe you could tell us a little bit about recycling and disposal of boats in the recreational sector. You mentioned there are some 4.3 million recreational boats in Canada. One of the previous witnesses mentioned that, until the 1950s and 1960s, it was largely a wood-hulled construction business, and disposal was pretty easy even if a boat was abandoned: within several decades, ashes would turn to ashes and dust to dust.
However, with the advent of fibreglass-hulled boats, how.... First of all, what is the life expectancy of a fibreglass-hulled boat? I know that there are lots of sailboats that were built in the 70s and 80s that are still being sailed and sailed aggressively.
Is there a life expectancy to the hull of a fibreglass-hulled boat?
Certainly, if you have an aluminum boat, if you have a steel boat, that's worth something. The fibreglass is worthless. You cannot recover anything on a cash-for-cars, cash-for-clunkers, basis. There's no residual value, or very small residual value. This is one of the challenges.
The problem exists on Bowen Island, along the Sunshine Coast, on Vancouver Island. Everybody has the problem.
What do you mean by squatters?
Sometimes on big barges that someone might buy, they might have homeless people on them, for example. That has happened many times in Squamish. You might just have people who can't afford an apartment, and they get given a crappy old boat, and they just park it in the middle of the channel.
One of the things we did recently was mark the channel. The Coast Guard said they could enforce their rules much more clearly and more effectively if we marked the channel, and we marked it right up to the water lots. There are private leases and water lots, sort of a remnant of the logging days when you had log booms everywhere, so then it becomes a private property issue or a crown land issue.
Ms. Legars, can you tell me how much money the Ship-source Oil Pollution Fund paid out last year?
This year I have over $11 million in assessment.
My point is that it's important to be proactive as opposed to reactive and to make sure that we deal with these vessels ahead of time instead of when they sink or when they become an environmental hazard. That is the challenge we face, and we have to deal with.
As mentioned, I have lots of money, but I have a very strict mandate. As I'm the only person who can allow money to be taken out of this pile of money, I have to respect these parameters. I cannot start throwing money for all kinds of good reasons.
Ms. Heintzman, living in a coastal community myself, I feel your pain. We don't see the same type of abandonment with small vessels as you do. In my riding we deal with mostly large vessels. I know that one of the towns that we have, Bridgewater, is dealing with, I think, five large vessels, one of which is actually a naval vessel, left abandoned and the impact doing that has on our tourism and our ability to grow economically.
Have you see that it Squamish?
Interestingly on this issue of whether you need to react to something before it sinks, absolutely. We had a case—and I believe it's a claim in with these guys—of a fairly large barge that was listing. It had wrecked cars on it. It had old excavators and stuff on it. People were squatting on it, living on this barge. The Coast Guard came up and they couldn't.... This was prior to this act. We believe this act will have a positive effect on this type of situation. It was listing, listing, listing, listing. I said, “Can't you do anything? It's going to sink. Isn't it going to be a much more expensive problem?” They said, “We can't board it.” They eventually made a deal with the boat owner that he would relinquish ownership as long as he wasn't on the hook for any of it. That was the only way to deal with the problem.
Twenty minutes after they made that deal—it took them a day and half to get there—the cargo, the cars, and all the stuff shifted and it sank. It became a half-a-million-dollar problem to the water lot owner.
We go now to Ms. Malcolmson.
I have six minutes. I'm going to try to cover so much ground.
To the Ship-source Oil Pollution Fund, with great thanks for removing the 100-foot Viki Lyne II and the 90-foot Anapaya from Ladysmith Harbour, both big boats, in this case in partnership with the Coast Guard, thank you for that.
I'm hoping that you'd be willing to table with the committee your report, “Statistical Report on incidents involving Derelict and Abandoned Vessels and Wrecks that resulted in claims with the Ship-source Oil Pollution Fund over a 10-year period (Jan-01-2006 to Dec-31-2015)”.
Is that possible?
Those numbers—because you're one of the single agencies that have really documented this—make me concerned that the main mechanism of Bill C-64, which is to levy fines and penalties, may in fact not achieve its final goal in this case since either the owners do not have the means to pay or they cannot be found at all.
Do you share my concern?
When you don't have any insurance in the portefeuille, it means it's very difficult to get paid. Yes, you can have a judgment against the person. You can seize his truck or try to seize his house, but very often the house or the truck will be under someone else's name. It might be difficult.
My understanding, from the staff's point of view, was that it was really good. The collaboration with the federal agencies was positive, and it's growing. I think they feel like there's a relationship happening with the municipality and with Transport Canada. I think it was a positive experience, from what I understand.
We know that out of the goodness of their hearts a lot of Transport Canada workers and Coast Guard workers have taken these issues on and fixed problems, because they know they are huge in the absence of a program, so we are trying to pinpoint who actually did the work.
Would you be able to help us get it on to the record for the committee?
There is so much that you touched on, but maybe you can give us a few words on that.
The Europeans have this problem in an even bigger way. Landfill is so expensive in Europe, so they have to do something else. Even with the higher cost of doing nothing in Europe, it's still too expensive to turn it into a useful product.
I'm sorry, your time is up, Ms. Malcolmson.
On to Mr. Hardie.
Mayor Heintzman, I recall in my Squamish days commuting back and forth on the Sea-to-Sky Highway and going past Britannia. In those days, I think we had the Prince George, before it caught fire and made an even bigger mess.
Are they still using Britannia as a graveyard for old ships?
The interesting thing about Howe Sound is that it's very deep. As soon as you go offshore a little, it's 600 feet to 1,000 feet deep. There is all sorts of stuff that's way, way down there. Sometimes the problem is that if it sinks, it's gone.
I recall travelling with the fisheries committee last year up to Prince Rupert. We were sitting in Smile's restaurant having fish and chips, and looking out under the docks there were piles of engine blocks. Sometimes the debris isn't the whole vessel, it's part of it.
Is that an issue as well?
Any part of the boat that breaks off, falls off the boat, the vessel, ship—
Ms. Legars, it seems that we have an ongoing challenge in identifying the owners of vessels. Even when we know who they are in some cases, we can't find out where they are. We've had whole vessels with crews abandoned on the west coast.
Do you have any comment on that, or any remedies that you could perhaps suggest?
The act leaves us some leeway in terms of the definition of “shipowner”. The person who is actually in charge of a vessel may be, under some section of the act, deemed the owner, so we can try to catch this person, but it's not that easy. Definitively having a registration system that is a bit more accurate would help.
I'll turn my time over now to Ms. Goldsmith-Jones.
I have a question for Mayor Heintzman.
To give a bit broader view of the situation on the west coast, we worked hard to get the title of this legislation to include barges and docks that are abandoned and holding drums of oil and.... Secondly, the squatter situation is serious. A man in Pender Harbour died in December because he was living in a 23-foot steel-hulled boat with no electrical service—no services—and lit a fire to stay warm. Can you comment on how this abandoned and derelict vessels issue intersects with homelessness on the west coast?
The other issue with this is that there is garbage and there's human waste. There are all those other issues with regard to people who don't have a lot of means living on boats that are barely seaworthy, and in close proximity, of course, to your oceanfront interface. It's a huge challenge. This is where all these things intersect. If we deal with this homelessness problem, we'll ideally be able to have fewer people living in places that aren't safe for them and aren't safe for the environment.
First of all, as someone who called Farley Mowat one of my very best friends in life—he was my daughter's godfather—I feel moved to make sure the committee knows that the Farley Mowat, christened by the Sea Shepherd Conservation Society, would not have come to the sad fate it did had it not been arrested by the Department of Fisheries and Oceans and resold through that process. The ultimate owners had no connection to the Farley Mowat or its environmental purposes.
I'll turn my attention to the excellent testimony we've heard. I welcome this legislation. I represent the area of Saanich—Gulf Islands and I absolutely echo everything we've heard from Sheila Malcolmson, Pam, and Mayor Heintzman. This is a constant source of grief in our area, and as you said, Mr. Kendrick, we have this problem because our boats survive the winters. The problem of derelict and abandoned vessel problem is far greater on the west coast of Canada where vessels are left in the water over the winter, and is compounded, as Pam Goldsmith-Jones just stressed, by the crisis of homelessness with people moving into these vessels. They are abandoned, derelict, and sometimes inhabited. It's a very serious problem.
I welcome this effort to deal with the problem, but I wonder if in the time that I have—since, as you've gathered, I'm not a member of this committee—I will have an opportunity to put forward amendments. To each of you, where do you think amendments would best be focused? I noted the rye humour in your point, Mr. Kendrick, that there will be lots and lots of paperwork involved and the process will be slow. Given your experience—and I'll start with you and move then to Madam Legars—what would you most like to see changed about this legislation to make it as effective as possible?
I think resources for enforcement and really understanding how we can implement some of the good intention of the act are important.
It's not necessarily something that will go in the act. It can be done through things besides the act, such as parallel initiatives. In my short five-point list I listed a number of things that we see coming, which aren't necessarily coming through that specific legislation, but are coming through that wave of initiatives.
How can we address the inventory? You need money at some point to do that.
For the issue of the ships below 300 tonnes, if you have no insurance, you may have an issue. What's the best way to have that covered by insurance? We there are now some discussions with the provinces, and so on and so forth. In the long run, it's what would probably help make a difference.
Also, with respect to pleasure crafts, they need.... The fund is a repository of a problem that happened higher up in the food chain and we are at the end of it. Basically, the ships for which you have a strong regulatory framework with strong enforcement and mandatory insurance will not end up being a liability for the fund. The ships for which you have fewer regulations, which are usually the smaller ships, and for which you have less enforcement and no insurance, are the ones that become a liability for the fund.
Basically if you want to avoid paying for something at the end of the day, you have to boost the regulatory and enforcement side. At the end of day, that's where you'll see fewer liabilities that are not covered.
I appreciate the witnesses today and the topic that you are clarifying.
Your Worship, you talked about many coastal communities. Have you worked with your provincial organization of municipalities? Have you worked jointly with other municipalities on this topic?
Bowen Island has done a lot of work and we work collaboratively with them. We're currently doing a marine strategy that's very inclusive of other communities in the area, and we're obviously very open to sharing any learning or any bylaws that we come up with through this process. There is quite a collaborative atmosphere among coastal communities, particularly if you're near each other.
Right now, we all know that we have a problem, so how can we get some legislation that helps us work on the problem? Absolutely we work with each other.
Most of what we're doing has been on our own dime in terms of the analysis and the investigation and communication. We have staff who are dedicated to this type of thing.
In the sense of trying to get a value number, how much would you suggest municipalities are spending on a yearly basis doing this?
Our real estate manager deals with marine environment types of things. We also have a planner, and a quarter or half of her job is dedicated to the marine strategy and marine environment. On average, in our fairly minimal budget, probably $70,000 to $80,000 a year is spent on this issue.
We often waive all the fees for what's going into our landfill when these things are pulled out. I think last year it was $25,000 or $30,000 of waived fees for disposing of these wrecks in our landfills, because, for example, we can't do anything with fibreglass. It's cumulative costs, for sure.
Ms. Legars, I know you had those five points and you responded briefly to a couple of them. If you had two of those things, out of the five, which two would you say are most significant?
Number two would be to find a way to have some mandatory insurance for ships that are below 300 tonnes, because if we don't have an insurer, liability is virtual.
Registration captures about 40,000 vessels; licensing should cover several million. We need to consider the different parts of the problem separately.
I am very interested in your comments, Mr. Kendrick, about how, in our community, the yacht clubs and marinas are working with municipalities, trying to connect those dots and truly trying to pull together. What's been your experience, and how can we keep this as simple and effective as possible?
It's interesting that the sums from the Ship-source Oil Pollution Fund are $1 million or $1.5 million a year. In Washington state, which is one of the most advanced jurisdictions in the U.S., their funding level is about $2.5 million a year. That deals with about 50 vessels a year, the average cost being $50,000 a vessel. That's what it takes to remediate the big problems.
The other key element is early intervention. If it doesn't sink, you can dispose of it for a few hundred dollars. If it does, it will cost you $50,000.
I'm very glad that the Transport staff, in response to the parliamentary secretary's comment, where I misread the number of vessels, are going to work to clarify and get a little update to the committee so that it's unambiguous wording.
Thank you, Madam Chair.
The meeting is adjourned..