WORLD-CLASS TANKER SAFETY SYSTEM & ARCTIC INITIATIVES Houston, TX – February 19, 2014

World-Class Tanker Safety Government of Canada announced the creation of a World-Class Tanker Safety System in March 2013. While the current tanker safety system has served us well for many years, it is essential that it be strengthened to meet future needs, as the transportation of Canadian exports is expected to grow. Regional breakdown for oil transported as cargo in Canadian waters over the last 10 years Region Approx. annual average over last 10 years in million tonnes (MT) Pacific Coast 6 MT (Canadian Traffic) 37 MT (US traffic transitting through Canadian waters) Great Lakes and St. Lawrence Seaway 24 MT Estuary and Gulf of St. Lawrence 67 MT Atlantic Coast 192 MT

ELEMENTS OF A WORLD-CLASS REGIME: LIABILITY AND COMPENSATION Polluter pay principle International consistency Adequate protection PREPAREDNESS AND RESPONSE Public, private, and community partnerships Well-established Incident Command Structure Risk-based planning, capacity , and response time Well-stocked response “toolkit” Science and technology for clean-up PREVENTION Safe tankers Modern and charted navigation system Navigation plans for high-traffic waters Systematic surveillance and monitoring Preventing Spills from Happening Responding and Cleaning in Case of a Spill Polluters Pay; Adequate Compensation for Damages

FEDERAL ACTIONS TO CREATE A WORLD-CLASS REGIME Measures already taken include: Inspect 100% of foreign tankers annually and every year thereafter Expand National Aerial Surveillance Program Implement an Incident Command System within the Canadian Coast Guard Review existing pilotage and tug escort requirements Designate port at Kitimat as public to enhance traffic control Conduct scientific research on diluted bitumen Make targeted improvements to Canada’s system of aids to navigation and develop options to enhance Canada’s current navigation system Review current liability and compensation regime Bill C-3 - Safeguarding Canada’s Seas and Skies Act Amend Canada Shipping Act, 2001 to strengthen current requirements for oil handling facilities, increase oversight/enforcement, and enhance response to spill incidents Creation of the Tanker Safety Expert Panel to review and recommend ways to strengthen Canada’s Marine Oil Spill Preparedness and Response Regime

TANKER SAFETY EXPERT PANEL: CONTEXT Panel mandate: to review and assess Canada’s current Ship-Source Oil Spill Preparedness and Response regime, and propose new ways to enhance it Phase I: Regime South of 60° (completed November 2013) Phase II: Regime for the Arctic (North of 60°) and Hazardous and Noxious Substances (September 2014) Over the Spring and Summer 2013, the Panel conducted public engagement, research and analysis on the regime South of 60°

TANKER SAFETY EXPERT PANEL: Key recommendations (South of 60°) The Panel recognized that, due in large part to the strong prevention measures in place, Canada has not had any significant oil spills since the current regime was implemented To help ensure Canada is prepared for future opportunities, the Panel made 45 recommendations that fall into five themes: Preparedness and Response Strengthening the Polluter Pays Principle Leadership and Stewardship Communication and Engagement Continuous Improvement

PANEL RECOMMENDATIONS: Preparedness and response “One size does not fit all”: proposes adopting a risk-based Area Response Planning model Conduct national and local risk assessments Tailor responses to local risks/conditions Increase collaboration with Response Organizations and other stakeholders Expand “toolkit” of response techniques (e.g., Spill-Treating Agents) Increase access to scientific expertise/information Ensure Response Organizations have capacity to respond to most probable spill scenarios, and have access to additional support in the event of a worst-case scenario

OTHER PANEL RECOMMENDATIONS Leadership and Stewardship: recommends a number of steps to: Strengthen integration and collaboration across government, industry, and communities Enhance scientific leadership Communication and Engagement: proposes measures to enhance public communications/outreach Continuous Improvement: proposes measures to ensure that the regime remains World-Class through regular feedback and assessment

PANEL RECOMMENDATION: Strengthening ship-source liability and compensation Canada remains party to international conventions and funds (International Oil Pollution Compensation Funds) Abolish limit of liability for Ship-Source Oil Pollution Fund (SOPF) Federal backstopping to be available in the extreme event that damages exceed amounts available in the SOPF, with amounts to be reimbursed with interest through a levy on users

Other issues UNDER review Options for enhancing Canada's current navigation system (e.g., aids to navigation, hydrographic charts) The behaviour of non-conventional petroleum products, such as diluted bitumen, in a marine environment

NEXT STEPS Engage key stakeholders across Canada on Panel recommendations for a World-Class Tanker Safety System (South of 60°) Broad range of stakeholders, including Response Organizations, industry, ports, provincial governments First Nations Western Canada (completed in January) Central and Eastern Canada (completed in January) Tanker Safety Expert Panel beginning its review of preparedness and response regime for: Oil spills in the Arctic (North of 60°) Hazardous and Noxious Substances

NEXT STEPS (cont’d) Consider Area Response Planning to address future needs to ensure that Canada’s regime is as effective as possible Should the response system be more flexible and responsive to risk type/level and local conditions? How would we implement such a system? How should we work with interested parties and the broader public be kept informed of steps taken in preventing spills, responding to them when they do happen, and ensuring that reasonable compensation is available?

Arctic initiatives Domestic International Preparation for updates to the Canadian Arctic regime Northern Marine Corridors International Mandatory Polar Code

Julie Gascon Executive Director Domestic Vessel Regulatory Oversight & Boating Safety Marine Safety and Security Transport Canada julie.gascon@tc.gc.ca (613) 949-3819