by Mark Cardwell

To hear eminent Canadian maritime law expert Richard Gaudreau tell it, there would be no need for ongoing indemnity angst related to last summer’s early-morning oil train explosion in Quebec’s Lac Mégantic, if the disaster had occurred at sea. “People wouldn’t have to worry,” Gaudreau, one of the three members of Transport Canada’s Tanker Safety Expert Panel, told a lunchtime audience of more than 80 Quebec maritime community stakeholders on February 13. “Canada has an extraordinary compensation regime (and) we can handle and manage spills and related compensation.”

As the keynote speaker at the event, which was one of four membership luncheons held annually across Quebec by the St. Lawrence Economic Development Council (SODES), Gaudreau presented a 20-minute overview of the report his panel submitted to the federal government in November on tanker safety and spill prevention. It was the first of two reports the panel was mandated to prepare in May, when Transport Canada commissioned Quebec engineering firm Genivar to conduct a Canada-wide risk assessment to determine the national risks associated with ship-source spills, and to create a way of comparing the risks between regions of Canada.

Genivar divided the project into two phases and hired Gaudreau, former Vancouver Fraser Port Authority President and CEO Captain Gordon Houston, and oceanographer Michael Sinclair as panel members. In the first phase they examined the likelihood and potential impacts of oil spills in Canadian waters south of 60° north latitude. (The report is available on Transport Canada’s website ( The second phase, which is currently underway and is expected to be completed by the fall, is focussed on the risks associated with oil spills in the Arctic and spills of hazardous and noxious substances in Canadian waters. According to Gaudreau, panel members were pleasantly surprised by the level of preparedness to respond to spills from ships and oil-handling facilities that they saw in visits across Canada and the U.S., heard about from more than 100 stakeholders, and read about in than 60 public submissions. In addition to industry-wide improvements in ship design (notably double-hulled oil tankers) and training for crews and emergency-response personnel, they lauded Canada’s compensation regime, which requires every oil-carrying ship to have insurance to cover spill costs of up to $137 million. Canada also has a $400 million indemnity fund, and can rely on – if need be – another $833 million in international funds. “That means there is $1.3 billion available in total,” said Gaudreau. “Compared to other countries (including) England, France and the United States, our (private-public) indemnity system is one of the best (and) is almost impossible to improve upon.”

(Editor’s note: The $400 million and $833 million indemnity funds mentioned by Mr. Gaudreau are sustained entirely through contributions made by industry participants).

Though it lauded some of the systems and equipment in place to manage spills across Canada, the panel made 45 recommendations on how to improve the country’s preparedness. Gaudreau listed some of the principal ones, notably a call for each geographic region having resources to meet specific risks. The Great Lakes, he noted, tend to have smaller ships with refined petroleum products, while ocean ports and refineries receive large tankers that, in some cases, must navigate difficult waterways.

“Big spills are rare,” said Gaudreau. He added that Exxon Valdez-sized spills in excess of 10,000 tonnes should only happen once every 200 years. More likely, he added, are spills of 1,000 to 10,000 tonnes, which “should only happen every 50 years.” Still, Gaudreau said spill prevention and management strategies and resources should always be designed with a worst-case scenario in mind for each specific region.

He also noted that the panel recommended the creation of Transport Canada-controlled coordination system that would take charge of resources from industry and public agencies like the Coast Guard, the Navy and other federal ministries in the event of a spill. “They work too much in silos,” said Gaudreau. “There is a lack of coordination.” That shortcoming was evident, he added, in the uneven and tardy response by the U.S. government to the Deepwater Horizon spill in the Gulf of Mexico in 2010.

Gaudreau encouraged both government and the marine industry to continue working to improve their spill management capabilities, and to actively communicate to Canadians the country’s current world-class state of readiness to manage and indemnify in the event of a major spill. “This needs to be known Canadians to alleviate fears that Canada is not ready and has no compensation ready,” said Gaudreau.

Mr. Gaudreau practiced law from 1969 until the end of 2012, and was also Chair of several Québec and Canadian marine-related organizations, including the St. Lawrence Economic Development Council (SODES). He has chaired a number of public inquiries and has studied and contributed to the drafting of maritime and port legislation/ regulations in Canada and abroad. From 2000 until 2010, Mr. Gaudreau taught post graduate courses in marine transportation management at l’Université du Québec à Rimouski. Mr. Gaudreau was an active member of the National Coalition on the Coast Guard Recovery Program and the Canadian Bar Association.