Bill C-441

Fin Donnelly New Westminster—Coquitlam, BC

Mr. Speaker, I rise today not only as the member for New Westminster—Coquitlam and Port Moody but in my capacity as western economic diversification critic for the NDP.

Like my NDP colleagues, I will also be supporting Bill C-52, an act to amend the Canada Transportation Act, to send the bill to committee for further discussion. We do, however, have serious concerns with the bill as my hon. colleagues before me have pointed out, including the member for Trinity—Spadina, who is the NDP transportation critic. She outlined some of those concerns in her speech earlier.

Rail transport is the backbone of the Canadian economy. More than 70% of all surface goods in Canada are shipped by rail, so we can see how critically important it is to get this right. Eighty per cent of service commitments for agricultural rail customers are not met by rail companies because of issues such as delays, insufficient number of rail cars, inefficiencies and unreliable service. The rail freight service review found that 80% of shippers are not satisfied with the services they receive. Eighty per cent is a significant amount. Over three-quarters of all customers have a concern.

I just want to talk about the importance of rail to my riding of New Westminster—Coquitlam. Specifically I am talking about Port Moody where we are celebrating 100 years of history. Just this weekend I was at a book launch hosted by the Port Moody Heritage Society for Tracks in Time. Obviously the title is in reference to trains and the influence that trains have had on the development of our community and on the west coast, and in fact, of all Canada. The rail system is of critical importance to our community. We celebrate the Golden Spike festival in Port Moody every Canada Day. This just points to how important trains are to our community.

Talking about the importance of trains not only to the community but to the rest of my riding, it is important to focus on the efficiency and the service that trains provide to Coquitlam, Port Moody and of course New Westminster. It is important for the economy not only in my riding but in western Canada and indeed all of the country. It is critical that we look at ways to improve train service in this country.

I want to provide a bit of background. I know other colleagues have commented specifically about what the bill would do and would not do and some of its shortcomings.

Rail freight customers from farmers to mining companies are suffering from the virtual monopoly of power of the railway companies. In most parts of the country shippers cannot choose between rail service providers because they only have access to either CN or CP. Even in a few places where both rail companies provide access, one is virtually priced out of the market, leaving the shipper with no real choice. Shippers routinely suffer from service disruptions, delays and various forms of non-performance by CP and CN. Deliveries and pickups are not done on time or skipped completely. Frequently the number of ordered rail cars is not matched by the delivered rail cars and sometimes cars are damaged.

A broad range of industries are affected by the situation, especially agriculture, forestry and mining. In western Canada these industries play a significant part in the economy. Chemical and automotive businesses in the rest of Canada are also affected.

A large portion of these goods are destined for export. Lacklustre rail services are thus hurting Canadian exporters' abilities to compete in global markets. For example, soybeans from Argentina enjoy a competitive advantage in markets such as Japan and China because they are delivered faster and more punctual than soybeans from Canada, despite the fact that the total distance covered is significantly shorter for products from Canada. For years shippers have been unhappy but no concrete action was taken by the Conservatives. Since 2007 a “talk it out and wait” tactic was employed, starting with the promise of an expert review panel.

The rail freight service review started in 2008. The independent panel tabled its final report in early 2011. Half a year later, in the fall of 2011, the Conservatives initiated a mediation process that did not yield any results. Presumably, with the tacit backing from the Conservative government, CN and CP were unwilling to make any meaningful concessions. The mediation process, led by retired Conservative politician, University of Calgary Chancellor Jim Dinning, failed. Dinning released a report in June 2012.

The Minister of Transport promised government legislation on the topic to be tabled in the fall. Parallel to the end of the mediation process, the member for Trinity—Spadina tabled a private member's bill, Bill C-441, the rail customer protection act, in June 2012. The private member's bill, coupled with advocacy work from the shipping community, put pressure on the minister to follow up on his promise and actually table legislation.

The shipping community is organized in a coalition of rail shippers. The coalition is a loose and rather informal entity. Organizationally this group is attached to the Canadian Industrial Transport Association. The coalition consists of 17 members that represent mining, forestry, agriculture, chemical and manufacturing industries. One of the original 18 members repeatedly has been brought up in the U.S. Senate, both on the floor and in committee without decisive legislation as of yet.

The surface transportation board, a federal body, is working on regulations to address pricing and service issues, while judges have repeatedly supported shippers in court cases. I just wanted to point that out.

What is the NDP are looking for? What can be specific about?

We know farmers and the mining and forestry companies have been hurting for years due to unreliable freight services, without getting any help from Ottawa. To truly address the issue and also to give the NDP leverage in rural areas, the member for Trinity—Spadina has become an advocate for strengthening the shippers' position. She has been very active on this file.

The NDP position is quite simple. We are standing with business and exporters and we are committed to getting them the fair and reliable freight services they deserve. That will have an impact on not only western Canada but on the entire Canadian economy.

The member for Trinity—Spadina has worked on this issue, including forging ties with key industry associations and tabling an NDP bill. One of the goals is to continue to grow those ties with the NDP as the party that stands up for legitimate business interests and pushes back against market power abuses.

While Bill C-52 falls short on a number of stakeholder demands, it is prudent to support the bill as the shipping community is largely content with the legislation. They are also quite desperate to see some legislation address their issues.

The task is now to address the shortcomings and strengthen the bill to the benefit of the shippers and also to promote our involvement with the entire process. That is what we are doing here. We are trying to highlight some of those key issues that need to be worked on at the committee stage.

Bill C-52 will only cover new service agreements, not existing ones. Many shippers will be stuck with unreliable and unfair services, without any conflict resolution process in the case of violations to existing service agreements. Arbitration is only available for shippers that are negotiating new contracts.

Instead of offering quick and reliable help through conflict resolution to shippers, Bill C-52 would give arbitration a narrow scope for a small group of shippers and the outlined arbitration process could end up being too costly for companies like the Canadian Propane Association and others.

I want to finish by letting the House know there are others that support the position we are bringing forward. They are key stakeholders, like agriculture, mining and forestry industry associations, that have been calling for freight legislation for years, for example, Pulse Canada, Grain Growers of Canada, the Forest Product Association of Canada and the Mining Association of Canada.

In conclusion, I want to say that we are in support of it at second reading. The NDP will push for amendments at committee stage to protect shippers from the abuse of market powers through the right to comprehensive service agreements and conflict resolution processes.

Matthew Kellway Beaches—East York, ON

Mr. Speaker, I am very pleased to stand in the House today to speak to Bill C-52 and to kick off today's debate on an act to amend the Canada Transportation Act.

Here is a word about the rail industry in Canada to set some context for this discussion of Bill C-52. First, rail transport is critical to Canada's economy, and 70% of all surface goods in Canada are shipped by rail.

The rail industry has to work for Canada. Under the current government, our trade deficit is ballooning, reaching nearly $2 billion in November alone. There can be no tolerance, because there is no room in our economy for the kinds of inefficiencies, excess costs and performance woes that characterize our rail system presently.

The problem is that rail freight customers are struggling to get fair and reliable services from the virtual monopoly of CP and CN that control Canada's rail system. Many rail freight customers cannot even get a contract for service from one of these companies. Those who do get them have to contract for unreliable services that are costing the Canadian economy hundreds of millions of dollars every year.

Rotting crops, idled plants and mines, missed connections to other forms of transportation, all of this is hurting Canada's exporters, damaging our global competitiveness and costing us jobs.

These issues affect a broad range of economic activity, from agriculture, forestry, mining and the chemical industry to the automotive industry.

This set of circumstances is not new. It has defined the industry for a number of years, frustrating rail freight customers so that 80% of them are now unhappy with their rail service. They have been demanding change: action from the federal government, legislation that would compel CN and CP to provide service agreements to shippers.

Change has been slow in coming, however. The rail freight service review began in 2008. We had the panel, its report, a mediation exercise, another report and then the promise of legislation from the minister.

However, it seems that it was the private member's bill, Bill C-441, of my colleague, the NDP member for Trinity—Spadina, that pushed the government at last to release the government bill we have before us.

This is a tepid response to a real economic problem. It does not cover existing contracts. It offers only a narrow, costly arbitration process for failed negotiations for new contracts. Freight customers' demands to include penalties in service agreements, performance standards and accessible conflict resolution were ignored.

It is a start, but much more needs to be done and we will support the bill through to committee for amendments to redress the weaknesses and omissions in the bill.

Before it gets to committee, I think it is useful to think through more carefully and thoroughly what opportunities are lost to our economy, to us, with our rail system structured and regulated as it is presently.

The current issues confronting freight customers stem from the fact that the rail industry in this country is a virtual monopoly. It was made that way in 1995 with the sale of Canadian National Railway, along with the tracks, to private interests.

What was made with the sale was a virtual monopoly of a $10 billion industry that sits at the heart of the Canadian economy. Quoting from a Transport Canada document on rail transport:

Of total Canadian rail transport industry revenues, CN accounts for over 50% and CPR for approximately 35%. Together, CN and CPR represent more than 95% of Canada's annual rail tonne-kilometres, more than 75% of the industry's tracks, and three-quarters of overall tonnage carried by the rail sector.

It is important for both our economy and our environment that our rail system run with full efficiency. The alternative to rail freight is on-road transportation by way of trucks.

According to the latest Environment Canada national inventory report, 1990-2010, most transportation emissions in Canada are related to road transport. Emissions from road transport rose by 37 megatonnes, or 38%, between 1990 and 2010. Of those 37 megatonnes, emissions from heavy duty diesel vehicles or large freight trucks rose by 20 megatonnes. That is a 101% increase.

It is worth noting here that the GHG emission intensity of freight rail improved by 24% between 1990 and 2008. It should also be noted that there remains plenty of room for improving the emission intensity for both freight and passenger rail travel.

We know that not all truck freight is replaceable by rail freight and vice versa, but this is a worrying trend. It is worrying not just from an environmental perspective, but it also speaks to the broader issue of congestion on our roads and the environmental and economic costs of that congestion. Clearly, the more freight we can move by rail, the fewer trucks are unnecessarily using our road network for freight transport.

The same obviously holds true for passenger travel. It is notable that while passenger kilometres—that is, passenger travel by motor vehicle in Canada—have been on a long upward trend, passenger kilometres by train have remained virtually steady since plummeting in 1990. Of course, it was in 1990 that VIA Rail lost over 45% of its ridership in the aftermath of the federal government ordering VIA to abandon certain corridors and branch lines. As a result, passenger travel on VIA fell from its peak of about eight million passengers per year in the 1980s to a ridership that has bounced around the four million mark since.

Efforts to increase rail service for passengers have been stifled by the virtual monopoly of CN and CP. VIA operates its trains on 12,500 kilometres of track, but it owns a mere 2% of that. Eighty-three per cent is owned by CN and CP, with CN owning the majority of that track. The remaining track VIA uses is short line infrastructure, which is owned and maintained to reflect the freight market that these tracks serve. Therefore, with virtually no ownership of track and no priority access to track, VIA Rail must negotiate train service agreements with these major freight carriers in order to provide its passenger service, and it finds itself in the unenviable position of sitting between a virtual monopoly and the succession of Liberal and Conservative governments that failed to recognize the enduring value and incredible economic and environmental potential of rail travel to the country.

This indifference of our government to the economic and environmental potential of rail extends well beyond freight-related issues and intercity passenger travel, right into our cities. This is certainly the case in my city of Toronto. Investment in transit infrastructure, particularly in the form of rail transit, is critical to unleashing the economic potential of Toronto's city region. Infrastructure, and transit infrastructure in particular, is a key component of a competitive business environment.

This is most certainly the view of members of the Toronto Board of Trade. They identified transit infrastructure as their top priority. The Board of Trade's 2011 annual global benchmarking study shows why it requires urgent attention and investment. Toronto finished 19th out of 24 global cities on transportation issues, including last place in commute time and, significantly, 16th for kilometres travelled by rail. There is near consensus that the absence of adequate transit infrastructure in Toronto and the Toronto city region is the biggest impediment to Toronto's global competitiveness. It has been estimated that the annual cost of congestion to Toronto's regional economy is $6 billion. That cost is projected to rise to $15 billion if no significant action is taken.

It is time to take significant action. The cost of the status quo is too great and unnecessary. It is one of the great mysteries of the current government. It continues to contradict its own marketing materials and brochures every day. It is emphatically not a sound economic manager. It stands idly while opportunities for economic growth pass it by.

Bill C-52 is just the latest example of any easy fix but also of a government that responds only when pushed, and only then half-heartedly, to opportunities to improve the economy of the country and the lives of Canadians.

Olivia Chow Trinity—Spadina, ON

moved for leave to introduce Bill C-441, An Act to amend the Canada Transportation Act (shippers' protection).

Mr. Speaker, the rail customer protection act would give every rail customer the right to have service agreements with rail companies, including performance standards, consequence for non-performance including penalties, proper notification for service changes and a requirement to use the dispute resolution process in the event of a disagreement.

Rail transport is the backbone of the Canadian economy. More than 70% of all service goods in Canada are shipped by rail, but the service is unreliable, resulting in hundreds of millions of dollars in economic damages every year. With this rail customer protection act, rail customers would finally get reliable and predictable rail freight services that deliver products on time.

(Motions deemed adopted, bill read the first time and printed)