Federal politicians discuss bill proposing to change liability for aviation, shipping industry

A federal omnibus bill that would let the government indemnify aviation industry participants for losses, damage or liability due to armed conflict or unlawful interference with an aircraft, and which would impose strict liability on ship owners for damage from hazardous and noxious substances, was the subject of discussion in the House of Commons this week.

Bill C-3, introduced Oct. 18 by the ruling Conservatives in the House of Commons, would, if passed into law, make a new law called the Aviation Industry Indemnity Act. It would make changes to other laws including the Aeronautics Act, the Canada Marine Act, the Marine Liability Act and the Canada Shipping Act, 2001.

In addition, it would implement the provisions of the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (also known as the HNS Convention) in Canada.

The House of Commons Tuesday resumed consideration of a motion to read C-3 a second time and refer to committee. It was last discussed Nov. 4.

The HNS Convention stipulates, among other things, that the owner of a ship, at the time of an incident, “shall be liable for damage caused by any hazardous and noxious substances in connection with their carriage by sea on board the ship” under certain conditions. It would apply to ships carrying a wide range of substances, such as iron ore, coal, sulphuric acid, nitric acid, ammonium nitrate, chlorine and ammonia.

If passed into law, the bill would let Canada’s Minister of Transport to  “indemnify one or more aviation industry participants – or one or more classes of aviation industry participant – against their loss or damage, or liability for loss or damage, that is caused by an event.”

An “event” can include “an act of unlawful interference with an aircraft, airport or air navigation facility, including an act of terrorism.” It could also include “an act or omission in the course of armed conflict, war, invasion, hostilities, civil war, revolution, rebellion, insurrection, an application of martial law, a usurpation or attempted usurpation of power, a civil commotion or a riot.”

The indemnity provided by the government would be limited to “loss, damage or liability, or any portion of it, that is not insured or otherwise indemnified,” and for “loss, damage or liability that is not solely with respect to a loss of income.”

Most of the speeches Tuesday were by members of the New Democratic Party.

“Part 4 amends the Marine Liability Act to implement the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 2010,” noted Christine Moore, the NDP MP for Abitibi-Témiscamingue.

“This deals with liability in the event of a spill, for example, and provides that a ship’s owner is liable for the costs and expenses incurred by the Department of Fisheries and Oceans if it has to intervene or by another response organization that might have been designated by the department.”

The HNS Convention aims to “ensure adequate, prompt and effective compensation for damage to persons and property, costs of clean up and reinstatement measures and economic losses resulting from the maritime transport of hazardous and noxious substances,” according to background information on the website of the International Oil Pollution Compensation Funds.

Under that convention, a ship owner would have “strict liability for any damage caused by HNS, i.e. the shipowner will be liable even without fault on the part of the ship or its crew.” Ship owners would also be required to maintain insurance to cover their liabilities.

On Parliament Hill Tuesday, Moore suggested the issue of insurance coverage should be discussed once Bill C-3 is referred to committee.

“If these people are responsible for paying, adequate insurance coverage must be available,” she said. “Consequently, a fairly accurate valuation of what a major incident might cost must unfortunately be made. This is essential so that we can be sure that these people have adequate insurance coverage and that no companies will be unable to pay. If that were to happen, spills might continue spreading as no one would take action because no one would know how the bill would be paid. This is a very important question that should be discussed in committee.”