Bill C-49 (Historical)

Transportation Modernization Act

An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts

This enactment amends the Canada Transportation Act in respect of air transportation and railway transportation.
With respect to air transportation, it amends the Canada Transportation Act to require the Canadian Transportation Agency to make regulations establishing a new air passenger rights regime and to authorize the Governor in Council to make regulations requiring air carriers and other persons providing services in relation to air transportation to report on different aspects of their performance with respect to passenger experience or quality of service. It amends the definition of Canadian in that Act in order to raise the threshold of voting interests in an air carrier that may be owned and controlled by non-Canadians while retaining its Canadian status, while also establishing specific limits related to such interests. It also amends that Act to create a new process for the review and authorization of arrangements involving two or more transportation undertakings providing air services to take into account considerations respecting competition and broader considerations respecting public interest.
With respect to railway transportation, it amends the Act to, among other things,
(a) provide that the Canadian Transportation Agency will offer information and informal dispute resolution services;
(b) expand the Governor in Council’s powers to make regulations requiring major railway companies to provide to the Minister of Transport and the Agency information relating to rates, service and performance;
(c) repeal provisions of the Act dealing with insolvent railway companies in order to allow the laws of general application respecting bankruptcy and insolvency to apply to those companies;
(d) clarify the factors that must be applied in determining whether railway companies are fulfilling their service obligations;
(e) shorten the period within which a level of service complaint is to be adjudicated by the Agency;
(f) enable shippers to obtain terms in their contracts dealing with amounts to be paid in relation to a failure to comply with conditions related to railway companies’ service obligations;
(g) require the Agency to set the interswitching rate annually;
(h) create a new remedy for shippers who have access to the lines of only one railway company at the point of origin or destination of the movement of traffic in circumstances where interswitching is not available;
(i) change the process for the transfer and discontinuance of railway lines to, among other things, require railway companies to make certain information available to the Minister and the public and establish a remedy for non-compliance with the process;
(j) change provisions respecting the maximum revenue entitlement for the movement of Western grain and require certain railway companies to provide to the Minister and the public information respecting the movement of grain; and
(k) change provisions respecting the final offer arbitration process by, among other things, increasing the maximum amount for the summary process to $2 million and by making a decision of an arbitrator applicable for a period requested by the shipper of up to two years.
It amends the CN Commercialization Act to increase the maximum proportion of voting shares of the Canadian National Railway Company that can be held by any one person to 25%.
It amends the Railway Safety Act to prohibit a railway company from operating railway equipment and a local railway company from operating railway equipment on a railway unless the equipment is fitted with the prescribed recording instruments and the company, in the prescribed manner and circumstances, records the prescribed information using those instruments, collects the information that it records and preserves the information that it collects. This enactment also specifies the circumstances in which the prescribed information that is recorded can be used and communicated by companies, the Minister of Transport and railway safety inspectors.
It amends the Canadian Transportation Accident Investigation and Safety Board Act to allow the use or communication of an on-board recording, as defined in subsection 28(1) of that Act, if that use or communication is expressly authorized under the Aeronautics Act, the National Energy Board Act, the Railway Safety Act or the Canada Shipping Act, 2001.
It amends the Canadian Air Transport Security Authority Act to authorize the Canadian Air Transport Security Authority to enter into agreements for the delivery of screening services on a cost-recovery basis.
It amends the Coasting Trade Act to enable repositioning of empty containers by ships registered in any register. These amendments are conditional on Bill C-30, introduced in the 1st session of the 42nd Parliament and entitled the Canada–European Union Comprehensive Economic and Trade Agreement Implementation Act, receiving royal assent and sections 91 to 94 of that Act coming into force.
It amends the Canada Marine Act to permit port authorities and their wholly-owned subsidiaries to receive loans and loan guarantees from the Canada Infrastructure Bank. These amendments are conditional on Bill C-44, introduced in the 1st session of the 42nd Parliament and entitled the Budget Implementation Act, 2017, No. 1, receiving royal assent.
Finally, it makes related and consequential amendments to the Bankruptcy and Insolvency Act, the Competition Act, the Companies’ Creditors Arrangement Act, the Air Canada Public Participation Act, the Budget Implementation Act, 2009 and the Fair Rail for Grain Farmers Act.

[Karen Kancens]

This is about empty-container repositioning on a Canada-wide basis. It's not part of the CETA trade agreement.

In the context we're looking at this, with Bill C-49, I would caution perhaps that when we talk about the costs of repositioning empty containers, the costs are not only financial. Yes, you will always have an extra financial cost, especially when you're using truck or rail, but there are other costs.

Let's say you're a shipowner and you're doing a regular service from Montreal to Halifax. You have a pile of empty containers at Montreal and you have a customer in Halifax who needs 300 containers for export. Your ship is going from Montreal to Halifax in any case. It's part of your regular run. Right now you can't load those empty containers on your own ship. You have to put them on rail or you have to import them. If you're putting them on rail, you're subjecting those containers to additional moves. They're not just going from the port to the ship. They're going to the rail yard and they're being put on the railcars. There are more moves. There is more handling of the container. Yes, of course you have your additional external cost associated with the rail movement, but you also have logistical delays. Your containers are being moved at the convenience of the railway, not at the convenience of the carrier and of the exporter. You're adding elements to the chain, which are costs, yes, but there are also other elements in the form of time, in the form of additional moves.

By the way, the railways would much rather not haul empties, because they generate more revenue hauling laden containers. You're making what could and should be a very simple logistical process a lot more complicated than it needs to be, and you're adding a lot of trade-chain impediments along the way, so I would caution you to maybe not think of it only in terms of costs.

[David Graham, Liberal, Laurentides—Labelle, QC]

Thank you. Now I'm going to jump out of the water and onto the train tracks.

The mining industry is unique in that some mines don't have any rail, and there are some places that have nothing other than rail, and those rails don't connect to anything. I'm thinking of Quebec Cartier Mining or Quebec North Shore and Labrador Railway where, if you don't get there by train, you're not getting there. Then you only have one company, so there are absolutely no alternatives. How well did that work?

Most of the competition increasing things in Bill C-49 don't really apply to those areas.

[Karen Kancens, Director, Policy and Trade Affairs, Shipping Federation of Canada]

Thank you. Good morning, Madam Chair, and thanks for the opportunity to appear before the standing committee on Bill C-49, the transportation modernization act.

My name is Karen Kancens. I'm here with my colleague Sonia Simard on behalf of the Shipping Federation of Canada, which is the voice of the owners, operators, and agents of foreign-flag ships that carry Canada's imports and exports to and from world markets.

Our members represent more than 200 shipping companies whose vessels make thousands of voyages between Canadian ports and ports overseas every year, carrying hundreds of millions of tonnes of commodities, ranging from dry bulk commodities such as grain and coal, to liquid bulk such as crude oil and oil products, to containerized consumer and manufactured goods.

These ships play an essential role in the Canadian economy by facilitating the movement of Canada's international trade, and they do so safely, securely, and efficiently day in and day out. Indeed, ocean shipping is one of the world's most highly regulated industries, and foreign-flag ships are subject to a stringent regime of safety, environmental, and crewing regulations when sailing in Canadian waters, which are enforced by Canadian authorities as part of Canada's port state obligations.

Like many of our colleagues who have spoken before us, we also have a strong interest in Bill C-49's rail provisions, as we believe that the development of a more efficient rail freight system will have a positive impact on all of the elements of the logistics chain, from carriers in the rail, marine, and trucking sectors, to ports and marine terminals, to inland distribution centres and warehouses, and beyond.

That being said, we'd like to focus our comments today not on Bill C-49's rail provisions but on its maritime provisions, which we believe will also have a beneficial impact on the fluidity of the trade chain overall.

We're especially interested in clause 70 of Bill C-49, which proposes to allow all foreign-flag ships to reposition their empty containers between Canadian ports on a non-revenue basis, which is an activity that has been closed to them up until now due to the prohibitions of the Coasting Trade Act.

It's worth just backtracking a bit and noting that this isn't a new or a revolutionary concept. It's actually something that our container carrier members have been asking for and that our association has been advocating for over the last decade.

Indeed, discussions on this subject between the government and our industry had advanced to such a degree that, in 2011, Transport Canada was on the verge of introducing an amendment to the Coasting Trade Act to allow for the repositioning of empty containers by foreign-flag ships. However, those discussions were subsequently placed on hold when empty container repositioning became a negotiating item in the CETA between Canada and the European Union.

Now that those negotiations are over, Bill C-49 essentially seeks to complete the discussions that were placed on hold in 2011, when we had reached general agreement, including from some domestic ship owners, that empty container repositioning should be open to all ships regardless of flag or ownership.

Why is this issue important? It's important because a significant aspect of the container shipping industry involves moving empty containers from locations where they are not needed, or where there is a surplus, to locations where they are needed or where there is an exporter who needs empties so that he can load them with cargo for an overseas customer.

Because up until now the Coasting Trade Act has prohibited foreign-flag carriers from using their own ships to carry out this activity, they have had no choice but to employ alternative solutions such as moving the empty containers by truck or rail, or more commonly, importing them from overseas. However, none of those solutions represents the most productive use of the carrier's transportation assets, and all of them come at a price not only for the carrier but also for the exporter in the form of a less cost-efficient transportation option, as well as for the logistics chain in the form of reduced fluidity and overall efficiency.

The maritime provisions of Bill C-49 would address these issues by giving carriers the flexibility to use their transportation assets, their ships, and their empty containers in the most productive and cost-effective manner possible for the ultimate benefit of everyone in the supply chain.

Although we very strongly support Bill C-49's provisions on the repositioning of empty containers, we have a concern that the actual wording the bill uses to define the party that is eligible to reposition empty containers may be too narrowly focused and that this may make it difficult to achieve the full benefits of liberalizing this activity.

More specifically, subclause 70(1) of Bill C-49 provides that the party that may reposition its empty containers is the owner of the ship, which is defined in subsection 2(1) of the Coasting Trade Act as the party that has the “rights of the owner” with respect to both the ship's possession and its use. We see a potential problem in how this definition will be applied in cases involving vessel-sharing agreements, in which a number of container carriers enter into an agreement to share space on one another's ships and which are used extensively in the container shipping industry.

It's not clear to us at this point how the partners in such an agreement would have the rights of the owner with respect to the ship's possession other than in cases where it's their ship that's being used to reposition the empty containers. Indeed, depending on how the ships in a given vessel-sharing arrangement are allocated, a ship owner may only have the ability to reposition its empty containers on every fourth or fifth voyage, which would reduce the significant potential benefits of liberalizing this activity.

We believe that if Bill C-49's provisions on the repositioning of empty containers are to be fully and effectively implemented for the benefit of all parties, then it must be made clear that any partner in a vessel-sharing agreement may reposition its own empty containers, as well as those of the other partners in the agreement, using any of the vessels named in that agreement. Although there may be various ways of achieving this, including through additional guidance and clarification from Transport Canada, it's our view that the optimal solution is to amend subclause 70(1) of Bill C-49 to clearly indicate that the party that is eligible to reposition empty containers encompasses not only the ship owner, as defined in subsection 2(1) of the Coasting Trade Act, but all the partners who share operational control and use of that vessel as part of a larger vessel-sharing agreement.

We believe that the introduction of such an amendment represents the best means of ensuring that Bill C-49's maritime provisions are implemented in a way that reflects the realities of how the container shipping industry operates, and this for the benefit of all stakeholders, from shipping lines to Canadian importers and exporters to the supply chain overall.

We thank you for your attention and look forward to any questions you might have.

[Joel Neuheimer, Vice-President, International Trade and Transportation and Corporate Secretary, Forest Products Association of Canada]

Thank you, members of the committee, and thank you very much for having me here today on behalf of the members of the Forest Products Association of Canada.

FPAC is the voice of Canada's wood, pulp, and paper producers, a $67-billion a year industry. Our sector is one of the largest employers of indigenous peoples in Canada, including 1,400 indigenous-owned forest businesses. As the third-largest manufacturing industry, it is a cornerstone of the Canadian economy, representing 12% of Canada's manufacturing GDP. We export 33-billion dollars' worth of goods to 180 countries. We are also the second-largest user of the rail system, transporting over 31 million tonnes by rail in 2016.

As Minister Garneau said in his May 18, 2017, speech in Edmonton, “The challenge of our time is to further enhance the utility, the efficiency and the fluidity of our rail system.”

FPAC believes that the primary goal for transportation policy is a freight system that is even more competitive, efficient, and transparent, to reliably move Canada's goods to global markets. This is most likely to emerge if guided by commercial decisions and competitive markets. At the same time, there are some markets where competitive forces are limited or non-existent, and where there is a legitimate and necessary role for regulation and other government action, including a number of the types of concepts being considered in Bill C-49.

Forest industry mills are normally located in rural, remote communities, and served by one single rail carrier hundreds of kilometres away from the next competing railway. That causes an imbalance of power between these mills and the railways. Poor service costs our members in the hundreds of millions of dollars every year, including the cost of things like lost production, alternative transportation costs, additional storage, additional management and overhead costs, and long-term business impacts.

While the railways are one of our most important partners on Canada's supply chain infrastructure needs, as well as reducing GHGs, FPAC members need Bill C-49 to help balance the playing field when it comes to their business dealings with railways.

Bill C-49 needs more robust and workable measures than what are currently included. Without these changes, Canada's economy and the jobs that our member companies and other industries provide across the country will continue to be threatened. Urgent action is needed. The economies of over 600 communities across Canada depend on their local forest products mills. Making Bill C-49 work the way it is intended to will enable our members and other industries to create more middle-class jobs and help prevent economic failures in communities, such as but not limited to things like mill shutdowns resulting from poor rail service. In the case of a large pulp mill, for example, this would mean losses in the range of $1.5 million a day.

FPAC supports Bill C-49's wording on reciprocal penalties. However, to be truly effective, there are some critically important amendments that should be made, which are consistent with the minister's intent for this bill.

FPAC urges the government to make changes in five key areas. The specific wording changes and rationale behind each of these is outlined in the detailed annex that is included with my remarks this morning. I would like to focus today on a few of these important changes.

First is the improved access and timelines to agency decisions. As is, the bill will weaken the agency's ability to respond quickly to urgent rail service issues, unless it is amended so that the agency controls its own procedure. The U.S. equivalent to the Canadian Transportation Agency, the Surface Transportation Board, or STB, recently began a service-related investigation on one of the class 1 railways in the United States. The STB did not have to wait for the U.S. Secretary of Transportation to instruct them to do this. They recognized that there might be a problem and they began to investigate.

Why can't we have the same set-up here in Canada? Who wants to wait for the Minister of Justice to ask the police to investigate every time someone may not be following the law? Bill C-49 needs to be amended to make this so, to help ensure that Canada's supply chain is working well in delivering for the 600 forest communities, hundreds of other communities, and millions of workers it supports across Canada.

The second one relates to the definition of “adequate and suitable”. As currently written, the bill tells the railways that if they provide the highest level of service they can reasonably provide in the circumstances, they cannot lose a service complaint. The objective of our proposed wording change is to make the intent absolutely clear, without the need for protracted litigation about what this clause really means. The final outcome on this component of the bill must prevent current failures, such as the following that our members must live with. At a minimum, give the Canadian Transportation Agency the mandate to investigate, on its own, these types of matters.

When members ask why their traffic has been left behind or why they have not received empty cars that have been sitting at the railway's serving yard, they hear it is because priority is being given to another commodity sector.

We have members who have product to ship to current and potential customers, whose facilities are accessible by rail, but they cannot get enough railcars or are not served frequently enough and are being discouraged by the rates that are quoted. These types of service issues are not isolated, and they cost our members in the hundreds of millions of dollars annually.

Third is long-haul interswitching. The bill needs to be amended to eliminate the unnecessary prerequisites for using this remedy as well as the many exclusions. Without important amendments, long-haul interswitching will not be a usable remedy for the majority of captive forest products traffic.

Next is data disclosure. As currently worded, the interim provisions in the bill dealing with rail performance data will provide supply chain participants with data that is too aggregated and too out of date to be of any real use in their planning. The time frames for reporting and publication need to be shortened. For example, the bill says requirements will be set out in a regulation in a year. Can we not do better than that with so much at stake? Also, more granular detail needs to be published, such as, but not limited to, commodity-specific information regarding such things as grain, coal, lumber, pulp and paper; results by railcar type, on a weekly basis; and by region, for example, east and west.

Oversight of railway discontinuance processes needs to be strengthened. As currently worded, the bill will prevent the creation of viable short-lines by allowing railways to suspend service before the process is completed, thereby making it more difficult for an alternative railway to take over. Making these changes will mean Canadians in communities across the country will be served by a more reliable and competitive freight transportation system.

FPAC members take great interest in transportation issues because they account for up to one-third of their input costs. The availability of an efficient, reliable, and cost-competitive transportation system is essential for the future investment in our sector and to support the families across Canada that rely on our industry for their livelihoods.

Members of the committee, for the 230,000 Canadians across Canada directly employed by the forest sector, a more competitive freight transportation system, as outlined here, will ensure increased access to the rail system, more reliable service throughout the supply chain, more competitive rates, and a more competitive supply chain.

I will now be happy to answer any questions you have.

Thank you very much.

[Pierre Gratton, President and Chief Executive Officer, Mining Association of Canada]

Thank you very much, Chair and members of the committee, and clerk and fellow witnesses. It's a pleasure to be here.

My name is Pierre Gratton. I'm president and CEO of the Mining Association of Canada. I'm joined by my colleague, Brad Johnston, whom I think you met yesterday. He is the general manager of logistics and planning for Teck Resources Limited and is someone who works with the railways on a daily basis.

I'll begin by saying just a few words about the mining sector, which, as you know, is an economic stalwart, contributing some $56 billion to national GDP in 2015 in what was a down market. We're major employers, with some 373,000 people working directly and another 190,000 working indirectly for our sector. We pay the highest industrial wage in the country. We're active in both urban and rural settings. Proportionally, we're the largest private sector employer of indigenous peoples and a major supporter of indigenous businesses and are thus a powerful partner in indigenous economic reconciliation.

While increased mineral prices have returned some confidence to the global mining industry, increasing domestic uncertainty and business costs are raising questions over whether Canada is well positioned to take advantage of the next upswing. We are seeing Australia, our major competitor, rebound at a far greater rate than we are currently in Canada, which is concerning.

The effectiveness and reliability of rail freight service are critical to Canada's mineral investment competitiveness throughout the ups and downs of the commodity cycle. There are significant costs associated with transporting goods to and from the mine site, and companies need to get their goods to their international customers on time. I can report that our members' customers are closely monitoring this bill and its potential impacts as a measure of Canada's reliability as a source for raw materials.

If railways are the arteries of our trading nation, then the mining industry is the lifeblood upon which they depend. We account for 20% of Canada's exports and over half of total rail freight revenue generated each year, making us the largest single customer group of Canada's railways. I would just ask you to imagine the state of Canadian rail without mining and the impacts it would have on grain, forest products, and all other rail-reliant industries in Canada.

Despite this, we are continually facing an unlevel playing field in the rail freight market, which manifests itself as significant and perennial service failures. The reason is that the Canada Transportation Act is an imperfect surrogate for competition in a monopoly marketplace. Many shippers are captive to one railway and are beholden to railway market power as a result.

It's crucial to get this bill right on this third legislative attempt in four years. We hope the committee is also encouraged by Minister Garneau's boldness in introducing an ambitious package of reforms. On this note, we are highly supportive of a number of provisions in the bill, including new reporting requirements for railways on rates, service, and performance; the addition of a definition of “adequate and suitable” rail service that confirms railways should provide shippers with the highest level of service that can reasonably be provided in the circumstances; and strengthening the prohibitions against railways shifting liability onto shippers through tariffs.

We want profitable railways, but not at the expense of national economic growth. That is why we support the objectives of Bill C-49, with minor adjustments that will ensure its intended outcomes are achieved. I will now address three areas where we think that's necessary.

The first is data transparency. Enhancing railway data transparency is not only consistent with the government's commitment to data transparency and evidence-based policy, but critical to improving the functionality of rail freight markets. Robust disclosure would inform public policy-making, improve railway-shipper relations, and avoid unnecessary and costly disputes. All parties having a clearer picture of respective capacity and limitations would better compel them to achieve the optimal workable outcome.

While Bill C-49 proposes positive measures to address service-level data deficiencies, we're concerned that, as written, certain transparency provisions will not lead to meaningful data on supply chain performance. Of specific concern is the requirement in subclause 77(2), a measure that would align the Canadian and U.S. systems.

Our concern is that the U.S. model is based on internal railway data that is only partially reported. It doesn't represent shipments accurately or completely. It was created decades ago when large-scale data storage and transmissions were not technologically possible. With the data-storage capabilities that exist today, there is no rationale for such a restriction in either the waybill system for long-haul interswitching outlined in clause 76, or for system performance outlined in clause 77.

To ensure the appropriate level of data granularity and to ensure the proposed legislation reflects Canada's unique rail freight context, MAC recommends an amendment that would require all waybills to be provided by the railways, rather than the limited reporting that is outlined in subclause 77(2). This modest enhancement is consistent with the direction of this bill, but with the added benefit of modernizing a system that was designed decades ago.

While MAC is supportive of Bill C-49 improvements to costing data collection and processing by the agency, we also raise one minor but important consideration related to final arbitration.

Currently, arbitrators request an agency costing determination only when the two parties agree to make the request. However, railways habitually decline to co-operate with shippers for this request, thus limiting the ability of the parties involved to be equally informed. We know of no legitimate rationale for a railway to decline an agency costing determination, other than to deliberately frustrate the process. To ensure that the right level of transparency and accessibility is struck so that remedies under the act are meaningful and usable, we recommend that shippers be granted the right to an agency costing determination. Often confidentiality considerations are raised, but the committee should note that in agency proceedings redacted decisions protect confidentiality. Further, FOA processes are already confidential. We are not proposing any changes to these practices.

The second issue addresses level-of-service obligations. In proposed subsection 116(1.2), this bill would require the agency to determine whether a railway company is fulfilling its obligations by taking into account the railway company's and the shipper's operational requirements and restrictions. Identical language is also proposed to govern how an arbitrator oversees level-of-service arbitrations.

Our members are concerned that the proposed language for determining whether a railway has fulfilled its service obligations does not reflect the reality of Canada's monopolistic rail freight market. The quality of service that a railway company offers is influenced by how it allocates its resources. These decisions include purchasing assets, staffing, and construction. All those restrictions are determined solely by the rail carrier. Their consideration and fulfillment of service obligations leaves the shipper structurally disadvantaged. The goal of the agency should be facilitating the correct decision based on the facts, not a balanced decision between the parties. To address this, we recommend either striking out this requirement or making the restrictions themselves subject to a separate review.

Third and last, Bill C-49 proposes a long-haul interswitching remedy that demonstrates in principle a creative approach to addressing a long-standing competitive imbalance in our rail freight market. By design, however, when the number of non-entitlement provisions are taken into account, a remedy that could hold significant promise if implemented more liberally, becomes unduly restricted to the exclusion of many. As proposed, it mirrors the current competitive line rate remedy that it proposes to replace.

However, CLR has been largely inoperative for the past three decades because class 1 railways have declined to compete for traffic and are not naturally compelled to do so by market forces. Hypothetically, even if the railways chose to compete using long-haul interswitching, Bill C-49 includes a number of provisions that would make LHI unusable or would create unnecessary barriers for many captive shippers, including a long list of excluded traffic, including by cargo type or geographical restriction. Unless these are revisited, the remedy as proposed will de facto confirm in policy and law the captivity of a host of shippers, the very same shippers it purports to assist.

To conclude, we acknowledge that this bill represents a bold and holistic attempt to addressing the anti-competitive challenges inherent in Canada's monopolistic rail freight market, and the disproportionate burden that shippers endure as a result. For this reason, its direction should be lauded.

The amendments we are seeking are modest and highly consistent with the legislative package. They continue to allow the railways to be profitable and have operational flexibility, but are material enough, and definitely important enough, to make a critical difference if not taken into account. In fact, we fear that without these amendments, this bill may leave us in the same situation that the previous bills have done in the past, not ultimately solving the issues we have been challenged with.

Thank you for your time, and I would be pleased to answer questions.

[The Chair, Liberal, Judy Sgro]

We are reconvening our meeting on the study of Bill C-49.

We have with us in our next panel the Mining Association of Canada, Teck Resources Limited, the Forest Products Association of Canada, and the Shipping Federation of Canada.

I welcome all of you and look forward to hearing your remarks.

Would the Mining Association of Canada like to open up this panel and start their 10-minute presentation? Mr. Gratton, would you please start?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

Bill C-49 introduces what I call reciprocal penalties. That may be a step in the right direction.

Do those penalties seem symbolic or are they sufficiently robust to change the balance of power in contract negotiations?

[Cam Dahl]

I'm a former commissioner of the Canadian Grain Commission so I'm somewhat familiar with producer cars. Producer cars are actually a right that is enshrined in the Canada Grain Act and have existed since 1918, I think. Don't quote me on that date. The right for producers to load their own hopper cars and ship their own hopper cars has existed in Canada for a long time and still continues to exist.

The use of producer cars goes up and down over time. It depends on market conditions, and it depends on the year, but they are still utilized, and they are still an emergency valve, as it were, for producers and are not impacted by Bill C-49 at all.

[Bob Masterson]

Here are two quick responses from us. Then we'll turn it over to our colleagues.

First, what we feel is very important, and the provisions in Bill C-49 will help with this, is the data access and timeliness to support decision-making. Anecdotally, our view is that the Port of Vancouver, in particular, is getting quite congested. We think about growth plans. We think about a new $6-billion to $10-billion facility in Alberta. Then you have to start to think that the market for that is not North America; it's Asia. How's it going to get there? Anecdotally that's there, but that's why we need the data and the provisions that are here in Bill C-49 to help us understand where the pinch points are.

Second, again, we broadly applaud the work of both the former minister and the current minister. When we look at the transportation infrastructure plans that were announced earlier in the year, we see they will make important contributions to addressing many of the concerns. Anecdotally, again at least, we've been assured that there's opportunity to address short-line issues in there.

[Vance Badawey, Liberal, Niagara Centre, ON]

This is a dialogue. It's what I'm trying to get out of this in considering the recommendations we bring forward for Bill C-49. It could also affect the deliberations of the finance committee and other committees, as well as future transportation or economic strategies.

Taking it a step further, we can see that a lot of the problems exist because of the capital side of it. There's no question that they're abandoning these lines because the ballast, the rails, or the ties are deteriorating. Instead of putting the capital in, they abandon these lines altogether because they're not getting acceptable returns. Do you find there's a need, not just from the operating side but also from the capital side, to take action before these situations happen?

I say this because we have a lot of capital assets in the form of infrastructure. There is rail, water. There is the St. Lawrence Seaway, where the docks and the canals are falling apart and no capital is being put into those assets. Before it gets to the point of having to abandon these assets, what role do you see government playing to ensure that they're preserved?

[Bob Masterson]

From our perspective, short-line railways are very important, and we've stressed that their importance has been underplayed in the transportation 2030 agenda. Many of our producers carry product on that crucial first mile, and more important, when you're trying to reach a forest products mill in northern Saskatchewan, you're on the short-line for the last mile as well.

The short-lines are essential, and this is true beyond the provisions of Bill C-49. We've argued in past submissions to the finance committee that, because short-lines play such an important role in the manufacturing sector, we ought to consider putting some of the investment incentives we use for manufacturing into the short-line railways. Perhaps the tools we use to stimulate investment and growth could be applied to make sure those short-lines are on a sustainable financial footing. We should bear in mind that when these short-lines fail it's devastating for our members, our customers, and for many communities.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I'll preface my questions by stating that on Monday we had a strong theme of safety and passenger rights. Yesterday we had a strong theme of safety and business practice, which ultimately lends itself to safety. Today we're hearing about service levels to the customer.

As I said yesterday, a lot of what we're discussing regarding safety has to do with business practice. How do we lend ourselves to the broader transportation strategy of Bill C-49, building in a better business practice, a better level of service, and being able to bring our product to market, nationally and internationally?

I want to drill down a bit. In my former life at the municipal level we were all about these issues. We considered how to apply ourselves, our daily business at city hall, so as to allow business to be in a more effective and friendly environment. That's what I see here. One of the things we did back then, which I can see happening now on a national level, was to sometimes enter into the business world, not as a government but as a partner. Back then we entered into a partnership with a short-line railway because the class 1s abandoned us. To keep what happened in nearby jurisdictions from happening in ours, we bought a railway, which we ran and operated. We brought a short-line operator on board to make sure the companies that depended on those railways continued to be healthy and got the service they needed.

I want this to be a dialogue like we had back then, the same kind of dialogue here in Ottawa. Business often finds itself abandoned by the traditional transportation services. That could be on the water, the railways, the roads, or in the air. It could have to do with the government or the private sector. One example is short-lines. We all know this service attaches itself directly to business and provides a link to a broader transportation network. Often the future of business depends on that link and that network.

My question to you is twofold. First, can the product be moved by truck or other method of transport? I think I got that answer earlier when you said no. We know that some companies ended up closing because those lines were abandoned and nobody picked up the ball with a short-line operator.

Second, Bill C-49 addresses the broader transportation network and the broader transportation strategy. Do you, being in the business every day, have any recommendations on how this bill could give short-line operators a mechanism that would allow them to pick up on these abandoned lines so that local economies are not hurt and local communities remain healthy?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

I still have one minute left.

I will quickly put a question to Mr. Nielsen.

I think you mentioned that soybeans were left off the schedule and should be included on the list. That is an anomaly, and I agree with you that soybeans should be in the schedule.

Should Bill C-49 provide a review mechanism for products on the lists, since we know that agriculture changes quickly? Eating habits change and industry habits change, as well. The market changes, and we can understand that a farmer may decide to change what they grow even though that involves high costs. Should there be a mechanism to review the list regularly?

[Cam Dahl]

Just quickly, I'm not a transportation lawyer, so I'm not going to say that the amendments in Bill C-49 are perfect, but the bill does propose to tighten up or better quantify the definition of “adequate and suitable”. “Adequate and suitable” really is how the railways are held to account. Bringing in that broader definition does help improve accountability.

Is that the perfect definition? Probably not, when lawyers give us different legal texts, perhaps, but it is a significant improvement over what is in the current Canada Transportation Act.

[Bob Masterson]

This is a great question to turn over to Ms. Edwards. She is an expert not only on Bill C-49 but also on all matters on dangerous goods.

Kara, are you comfortable with that?

[Bob Masterson]

I think the first answer is, yes, we do believe that the provisions of Bill C-49 will make a more balanced and competitive rail freight environment, but we have to remember the word “balanced” is important. We're not just saying that as a means to keep the peace. Our competitive position depends on the railways also being competitive and profitable. No one's here to punish them, but it hasn't been a balanced relationship up until now. We believe the provisions in this bill will create a more balanced relationship that will allow all of us to have commercial success and to grow our businesses in the future.

To your second question, of course, it depends, and unlike perhaps the agricultural community, with large volumes in a fairly tight geographic boundary, our industry is spread coast to coast and it really depends on the individual circumstances of individual producers in a very heterogenous sector. That said, there have been people who took good advantage of the earlier provisions and did quite well. They were pleased with it. That's one of the reasons why in the consultations as a sector we asked for something that was permanent, something that was available to all sectors, and something that truly provided relief for the opportunity for competitive commercial discussions between service providers on an ongoing permanent basis.

I hope that helps. Thank you.

[Cam Dahl]

I'll give just a quick response to both of those questions. Yes, Bill C-49 will improve the competitive balance when it is passed, which is why, on balance, we are asking that the legislation be brought to royal assent as quickly as possible. This bill will improve railway accountability, will improve transparency, and will move us closer to what we would have if market competitive conditions existed.

That being said, the extended interswitching was used. It was extensively used by the grain industry and it was an effective tool. Given our desire to have Bill C-49 in law as quickly as possible, our approach to you today has been to offer some amendments to the long-haul interswitching. That would make those provisions more effective.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I want to thank each one of you for joining us today. I do appreciate your attendance.

As you pointed out, Mr. Nielsen, we know that the timing of these hearings doesn't dovetail very well with our agricultural community, but as it has been pointed out, this is important work that needs to be done. Your testimony here today is crucial in providing the committee with the information needed to ensure that the right balance is struck in addressing the underlying issues that exist in our transportation system. But we know that this is not the first time that your input has been solicited to aid parliamentarians in our deliberations on how to structure legislation that ensures market access and an efficient means of transportation for our shippers and producers.

Every witness so far has testified that there needs to be some changes to this legislation, and all have identified issues with the provisions around long-haul interswitching. Because I have such a limited amount of time to ask each of you questions, I have two questions that I would like each of you to answer.

Does Bill C-49 enhance competition in rail service, and, on balance, do you prefer the extended interswitching at 160 kilometres, as previously outlined in the Fair Rail for Grain Farmers Act, or do you prefer the LHI provisions in this bill? I'll have each one of you answer those questions.

[Jeff Nielsen]

Thank you, Madam Chair, and committee members.

Thank you for the opportunity to provide comments on this important bill. Grain Growers of Canada represents 50,000 grain, pulse, corn, oilseed, and soybean farmers from across Canada. We have members from the Atlantic provinces to the Peace Country of British Columbia. We are the only national farmer-run group representing all the grains that are exported around the world. Given our dependence on export markets, farmers like myself are highly dependent on a reliable, competitive rail system.

I run a family-owned, incorporated grain farm in south central Alberta near Olds. I grow wheat, malt barley, and canola. Right now, we're in the middle of the harvest. Luckily, we had rain today and I got the day off and I came here. It is important for me to come here personally to speak as a farmer on my thoughts about Bill C-49.

We greatly appreciate the work this committee has done in the past, including the excellent study on the former Fair Rail for Grain Farmers Act, and the recommendations made to the government. As Cam mentioned, the Barton report brought to light how important agriculture is, how the government views the goals, and how agriculture can grow to $75 billion in exports by 2025. We're thankful the government has that recognition and had the Barton report presented to Parliament.

The Grain Growers of Canada welcomed the announcement of this new legislation back in December, and we are hopeful for third reading of this bill and royal assent as soon as possible to avoid any of the handling issues with this year's crop, as we are heading well into fall now and winter is on its way. My entire crop is shipped by rail. I need a rail system that will not only perform for me but for our customers. These customers, we know, can go elsewhere. It is imperative that Canada has a rail system that is effective and responsive to get our crops to export position.

With that, I see opportunities within Bill C-49 to look at the ability to hold railways financially accountable for service provided. I want to give an example of how this would work for my farm.

Currently, there's no avenue to penalize the railroads for poor service. This lack of accountability impacts all players in the supply chain and, ultimately, farmers. I market my crops throughout the year when I see best-price opportunities for my farm and for my financial needs. Let's say I decided to sell 200 metric tons of canola in February because I saw a price signal there, and also in February I have an input bill that my farm needs to pay. It is not that I like choosing February, because it's minus-20 and I might need to shovel snow, but I'm quite willing to haul grain any time of year when I have signed contracts.

Here comes February. It's cold, it's snowy, and I'm out there ready to haul grain. The auger's in the bin, and I get loaded up and the elevator calls me that the train's not here. It has been put off for a few weeks. Then I call again and find the train has been put off for another few weeks. Now it's late April, and I'm getting my machinery ready to seed next year's crop. I have delayed paying my farm account, because I hadn't had the grain sales that I thought I had contracted for in February.

It has had a great effect on me personally and on my farm. My grain company has been affected, too. They had sales booked for that canola for an offshore customer. That canola did not reach port in time and those ships may have had to wait in Vancouver harbour for a lengthy period of time. That costs money too. It's called demurrage, which sooner or later will be passed back to me as a producer.

On the flip side, my grain company is fined by railroads if a train is not loaded within a set period of time, yet my grain company cannot fine the railroads for not supplying the train on time as scheduled. I've seen cars sit there for well over a week after they've been filled, yet there's no penalty issued to the rail companies then. That delay in moving that train for that week also delays the next train from coming in, which starts a snowball effect of delays.

We are all very familiar with the mess that happened in the winter of 2013-14. As a grain producer, I experienced it in many ways. I believe I lost marketing opportunities since I could not sell into certain markets because there were no opportunities for grain to be delivered. We saw contracts that were set for December and not delivered until well into the spring. That, of course, affected farmers' financial cycles as far as paying their bills and such. We saw customers, and I'll point to oats here specifically, who lost business. Those customers in the U.S. who wanted Canadian oats went to Scandinavia to fill their needs.

As I mentioned before, our customers have other choices. If we continue to allow the railroads to provide irregular, spotty service, we will lose those customers forever. Winter on the Prairies happens. Sometimes it's more severe than others, but it happens every year.

One of the other provisions we welcome in Bill C-49 is the increased requirement for reporting and railway contingency planning. It is hoped that our rail companies will quickly adopt and publish sound contingency plans to demonstrate that they have the capacity to get our products to wherever on time.

In the fall of 2013, farmers, grain companies, and Stats Canada knew that we were going into a large crop, which as Cam has pointed out, is now the norm. We are producing more grain continually, yet our rail companies, in the fall of 2013, were not ready. Winter hit and things literally went off the rails.

Data collection is another key point. It is important that we have a complete dataset. I commend the work of the Agriculture Transportation Coalition and Quorum Group for the information they provide, which has filled in significant gaps and helped us work with railroads to hold them more accountable in the last couple of years.

In Bill C-49, we also appreciate the ability of the Canadian Transportation Agency to play a larger role in areas such as improved dispute resolution. We see increased clarity of railway responsibility in the act when it comes to the definition of adequate and suitable service. One of the clear benefits I see of these two items is a much-needed assurance to me, as a producer, that if there are issues, they will be identified and hopefully dealt with prior to any severe impacts and the potential loss of sales or customers.

Grain Growers of Canada has a few recommendations we feel will strengthen the bill. I reiterate that it is critical that we have this legislation passed as soon as possible to ensure the smooth movement of this year's crop.

Grain farmers support maintaining the current maximum revenue entitlement, MRE, with the adjustments for capital spending, as proposed in Bill C-49. The MRE is working well at this time, and changing it slightly to recognize and incorporate the investments made by each railroad should encourage more investment and will gain infrastructure for the future as a result. The point there is our hopper car fleet, I believe. As we know, it's aging badly.

One glaring omission of grains under the MRE is soybeans. On behalf of our members, we ask that soybeans be included as one of the crops under the MRE's schedule II. Soybean acreage is increasing year over year in the prairie provinces, and naturally, those products are shipped by rail. This update reflects the current needs of an industry that were not anticipated at the time the MRE was set. This truly will be a modernization of the act. Once Bill C-49 is fully in effect, and we've seen the proposed improvements, a comprehensive review of the MRE can be undertaken, but not before.

I would like to quickly speak to long-haul interswitching. In the previous Fair Rail for Grain Farmers Act, we saw interswitching increased to 160 kilometres. This provided a very useful tool for our grain companies to obtain more competitive terms of service.

To illustrate how important interswitching is, I draw your attention once again to oats. Oats are a corridor-specific commodity being used by major processors in the U.S., and they need to get to the buyer in a regular, timely fashion. Many customers were lost as a result of the 2013 winter crisis, and the industry is still trying to get those markets back. The extended interswitching provision has helped many oat growers. Given the usefulness of that tool, we, as the Grain Growers of Canada, are concerned that the long-haul provisions set out in Bill C-49 may not be as effective or address some of the needs of all our producers.

We ask that you review the attachment to our submission for the recommendations from the newly reinvigorated crop logistics working group, of which I am a member. The group has proposed amendments to the long-haul provisions that we believe will ensure the security and market reliability the previous extended interswitching provided. Already this year we are seeing increased demand in the U.S. for some of our crops due to the poor quality in the U.S., and it must go by rail.

Grain producers are working hard to provide the world with top-quality grain, oilseeds, pulses, and corn. We believe strongly that the goals set out for increased exports are achievable and we are ready to work with the government to meet those goals. However, we need this legislation to pass as soon as possible to ensure that we can rely on the grain-handling system to get our products to export position.

I thank you for the time.

[Bob Masterson]

Thank you again, Madam Chair.

It is an honour to be among the witnesses to appear before this committee as it conducts this very important business on the review of Bill C-49, the transportation modernization act. In our brief time with you today, we want to share three key messages on behalf of Canada's chemistry sector. These are included in the brief before the committee, which provides additional details on our thoughts on Bill C-49.

Briefly, here are our three comments. First, it's important that you recognize that the chemistry industry plays an important role in the Canadian economy, and efficient and competitive rail transportation is critical to our business success. The second key point I wish to emphasize is that we enthusiastically applaud the work of Minister Garneau and his department. They've listened, and both the transportation 2030 agenda and Bill C-49 are highly responsive to the long-standing concerns expressed by our industry regarding Canada's freight rail system. Finally, while we do want to see Bill C-49 advance promptly, and we do not wish to introduce any new measures, we do believe that some amendments are necessary to ensure that the provisions of the act will indeed meet their intended objectives.

Let me begin by providing you with information about our sector, to underscore how important Bill C-49 is to the growth prospects of our industry. Canada's chemistry industry is vital to the Canadian economy. We are the third-largest manufacturing sector, with over $53 billion in annual shipments. Nearly 73% of that is exported, making us the second-largest manufacturing exporter in the country.

Like many people in the country, you probably don't give much thought to the role of chemicals in the economy, but it's important to note that 95% of all manufactured goods are directly touched by the business of chemistry. That includes all the key sectors of the Canadian economy: energy, transportation, agri-food, forestry, mining, and metals. Likewise, the goods the industry produces are also critical to communities and to quality of life for Canadians. This does include some dangerous goods: products such as chlorine, used to purify drinking water; and sulphuric acid, used in the manufacture of agricultural fertilizers.

Equally important, chemistry is a growing sector, both globally and within North America. During the past five years, more than 300 global-scale chemistry investments, with a book value of more than $230 billion Canadian, have been announced in the United States alone. Unfortunately, Canada has missed out on much of that initial wave of investment, but there are some promising prospects for capturing a share of the next wave of investments.

More than three-quarters of the chemistry industry's annual shipments in Canada move by rail. That accounts for 14%, or nearly one-seventh, of all freight volumes in the country. This makes rail costs and service two of the most important factors when investors are deciding whether to locate a next new facility or expand operations in Canada—or not. This makes a well-functioning and competitive rail freight market vital to the competitiveness of our industry and its investment prospects.

As mentioned earlier, we wish to stress that we applaud the government's efforts and are supportive of the rail freight measures to advance “a long-term agenda for a more transparent, balanced, and efficient rail system that reliably moves our goods to global markets”, as outlined in transportation 2030. Regarding Bill C-49, we believe the government has struck a balance between the needs and concerns of both shippers and rail carriers. We also believe the provisions of the bill are highly responsive to the concerns we have shared during consultations both with the Emerson panel, and more recently, with Minister Garneau leading up to the publication of transportation 2030.

Specifically, Bill C-49 addresses the important issues of data transparency and timeliness, market power, shippers' rights, reciprocity, fairer rates, and extended interswitching. The bill also proposes important measures to incorporate best available safety technologies by incorporating in-cab video and data gathering systems that have been used for many years in other transportation industries.

Taken together, the package of measures in Bill C-49 has the potential to make a meaningful contribution to a more balanced relationship between shippers and carriers, where the realities of today's transportation system mean a normal market environment cannot exist. Therefore, we believe that Bill C-49 presents a rare instance where our sector welcomes government involvement in creating market conditions.

The key word I want to stress in what I've just said, however, is the “potential”. Again, we do believe Bill C-49 is responsive to shippers' needs, we do believe it makes an important effort to establish a more balanced relationship between shippers and carriers in an otherwise non-competitive marketplace, and we are not here today to propose a suite of additional measures for your consideration.

Nevertheless, we are concerned that specific measures outlined and described in the bill may not achieve the desired outcomes. Specifically, with respect to the data transparency provisions in the bill, we would strongly recommend that these provisions include commodity-specific information on rates, volumes, and level of service that would support investment decisions and assessment of fair and adequate service. In this regard, we also recommend that the availability of information to shippers be expedited by establishing a firm early timeline for the implementation of the regulations.

On a closely related note, we recommend that the act include specific requirements for railways to provide the highest level of service that can be reasonably provided. We see ambiguity in the current language that stops short of equating “adequate and suitable” with the highest reasonable level of rail service. This should be clarified for all parties.

With respect to the Canadian Transportation Agency's powers and informal resolution process, we recommend that the agency's powers be increased, providing it with the ability to independently investigate issues on its own initiative and ensure informal resolutions are implemented and effective, and that policy-makers and stakeholders are then able to measure and analyze the broader trends in freight rail performance.

Finally, and perhaps most importantly to us, the intent of the long-haul interswitching provisions in the bill are most welcome. As noted in the government's own discussion paper, the previous competitive line rate measures were little used and provided no appreciable contribution to establishing a more balanced environment between shippers and carriers. We are, however, concerned that the range of limitations and specific exclusions on long-haul interswitching in the bill will likewise lead to its underuse and ineffectiveness. Many of our members are captive shippers. For many, trucking is not an option. For over 50% of our members, trucking becomes economically unviable at a distance of 500 kilometres. As such, we recommend the elimination of those limitations specifically related to toxic-by-inhalation products, to traffic originating within 30 kilometres of the interchange, and to exclusions pertaining to high-volume corridors.

Madam Chair, in my brief time with you, I'll stop here and welcome any questions you may have. Thank you again for the opportunity to speak to you today.

[Cam Dahl]

Certainly.

On behalf of Cereals Canada, I want to thank the committee for the invitation to appear before you today. It's not usual for a committee to be holding hearings like these when Parliament is not sitting, and it's definitely not usual for a committee to be holding marathon sessions such as you have been holding. We recognize this and thank you for the high priority you are placing on this legislation. It is absolutely critical for Canada's agriculture sector.

As I mentioned, Cereals Canada is a national value chain organization. Our membership comprises three pillars: farmers, shippers, and processors in crop development and seed companies. Our board has representation from all three of these groups. All parts of the value chain look for transportation reform as a key requirement for the success of our sector.

Canada exports more than 20 million tonnes of cereal grains every year, worth about $10 billion. Virtually all of this grain moves to export position by rail. The profitability of every part of the Canadian agriculture value chain depends on the critical rail link to our markets.

Agriculture has a strong growth potential. The Barton report indicated that Canada has the potential to become the world's second-largest agriculture and agri-food exporter in just a few short years. The report set a target of $75 billion in exports in 2025. This is up from $55 billion in 2015. Modernized transportation legislation is critical if Canada is to meet this growing demand and maintain our reputation as a reliable supplier.

Agriculture is not just about exports. The industry employs Canadians. One in eight jobs in Canada depends on agriculture. Our ability to meet these growth targets and our ability to increase the number of Canadians employed by the sector depend upon moving production to market in a timely manner. I want to stress this next point: “timely manner” must be defined by the international marketplace. We will not achieve these goals if transportation providers limit our ability to satisfy world demand.

These are the implications of Bill C-49, which is before you today. The first message I want to deliver on Bill C-49 is to quickly return this bill to the House for third reading. The bill will help introduce better commercial accountability into the grain transportation system, it will help improve grain-movement planning, and it will improve transparency and reporting.

I do not want to leave the impression that the grain sector has received all that it requested in this bill. There are provisions that the industry had requested: continuation of the extended interswitching provisions from the Fair Rail for Grain Farmers Act is an example of provisions that have not been brought into the legislation. However, no piece of legislation is perfect, and we believe that the bill should proceed. Cereals Canada has some suggestions for technical amendments to Bill C-49, which are outlined in detail at the end of the written brief you have received.

I want to touch briefly on why we're here and why we have the need for legislation.

Flaws in the grain handling and transportation system were highlighted in 2013 and 2014 when the system suffered a significant breakdown. The systemic failure impacted the entire value chain and damaged Canada's brand and reputation as a reliable supplier of agriculture products. This resulted in lost sales and it resulted in decreases in price. The crisis cost farmers, grain-handling firms, exporters, Canadian value-added processing, and ultimately the Canadian economy.

This was not the first time the transportation system failed one of Canada's largest sectors. This is clearly demonstrated by the multiple past reviews and commissions, such as the studies conducted by the late Justice Estey and by Arthur Kroeger and the report from the senior executive officers, and the list goes on. It is a long list of reports on grain transportation. History shows that if the underlying structural issues are not addressed, transportation failures will recur. Canadian agriculture and the Canadian economy cannot afford to let this happen again.

Railway monopolistic power is a key reason the grain transportation environment does not function to maximize the profitability of the entire value chain. Virtually all shippers are served by one carrier and are subject to monopolistic pricing and service strategies. Therefore, the government has a critical role to play in establishing a regulatory structure that strikes a measured and appropriate competitive balance.

I stress the word competitive. System reform will be successful only if the legislated and regulatory structure for grain transportation is adjusted so that it mimics the conditions of a competitive environment.

It is worth noting that the record size of the 2013 crop, over 70 million tonnes in western Canada, is often cited by the critics of reform as the cause of the breakdown in 2013 and 2014. However, this level of production is not an anomaly. Rather, it is the new normal. Grain production in Canada continues to grow, as does world demand.

This year, 2017, I'm sure many of you have heard—and Ms. Block is in the affected part of the province—there was a drought in many parts of Saskatchewan, yet western Canada is still going to produce one of the largest crops we have ever seen. We expect it to be between 63 million and 65 million tonnes. We have to be able to meet growing demand with growing supply.

I'm not going to go into the details of our amendments; you have them. But in summary, Bill C-49 will move us towards a more accountable and reliable grain-handling and transportation system. This is good news for everybody involved, including our customers.

The grain, oilseed, and special crops industries have been united in their call for measures that will help ensure accountability in the performance of the railways. Bill C-49 will help correct the imbalance in market power between the railways and captive shippers.

The legislation includes the following key positive elements: tools that will allow shippers to hold railways financially accountable for their service performance; improved processes for the Canadian Transportation Agency if issues do arise; clarification of the railway responsibility in the Canada Transportation Act by better defining “adequate and suitable” service; and increased requirements for reporting and railway contingency planning.

If passed, Bill C-49 will help balance railway market power and will help mimic what would happen if we had open competition. This is good economic and public policy.

While the most important part of the railway legislation is the increase in railway accountability, all of these provisions are important. Improving CTA processes is important to ensure that problems are caught and addressed before they snowball into major failures. Together with clarification of the meaning of “adequate and suitable”, this will help ensure that the Canadian transportation system meets the expectations of our customers both within Canada and internationally.

No piece of legislation is perfect, and Bill C-49 is no exception. Cereals Canada has presented a number of technical amendments. The adoption of these amendments should not significantly delay the passage of the bill, and the adoption of these amendments will significantly improve the transparency of the legislation. These are the first four amendments in our brief. They will also help align North American regulations between Canada and the U.S.

The amendments will also help to improve operational planning, as stated in the fifth amendment in our brief. It will also help give improved access to competitive tools to help improve the imbalance in market power. These are the last three amendments.

I welcome any of your questions on my verbal remarks or on the more detailed brief that has been circulated.

[Bob Masterson, President and Chief Executive Officer, Chemistry Industry Association of Canada]

Yes. Thank you, Madam Chair.

I'm Bob Masterson, president and CEO of the Chemistry Industry Association of Canada. I'm joined today by Ms. Kara Edwards who is our transportation specialist and an expert in all matters related to Bill C-49.

Thank you.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling to order the meeting of the Standing Committee on Transport, Infrastructure and Communities, pursuant to the order of reference on Monday, June 19, 2017, to study Bill C-49, an act to amend the Canada Transportation Act and other acts respecting transportation and to make related and consequential amendments to other acts.

I welcome our witnesses who are here to help us get through Bill C-49 and let us know what your thoughts are. I'll open it up by everybody introducing themselves.

Cereals Canada, would you like to start?

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Benson.

Thank you to all the witnesses.

I think you can see by the questioning that we all care very much about Bill C-49. More importantly, we care about doing the right thing.

I thank you for sharing your thoughts with us. The committee will continue to grapple with this as parliamentarians always trying to do the right thing.

I move adjournment for today.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you all the same for making that distinction. We've gone from one step to a big step. I imagine we're ahead.

I'll now go back to Mr. Hackl and Mr. Benson.

As far as the recordings are concerned, which have created quite an uproar, I think we agree. The TSB asks for access to the recordings to conduct its investigations, and you are prepared to give them, as long as the recordings remain confidential. I think we agree on that. That said, it is a post-accident measure. You have given me a glimmer of hope as to possible measures to counter fatigue.

I would like to address one last point with you. For decades, Canada's rail industry has relied on a visual signal system to control traffic over a significant portion of the network. It has also been more than 15 years since the TSB has steadily emphasized the need for additional physical defence. We are talking here about alarms. It even asks that the train be automatically stopped if the driver misses a signal, for instance. Bill C-49 says nothing about all of these measures. In my opinion, these are genuine rail safety measures, since they allow pre-accident response, not post-accident analysis.

Where do you stand on these measures? I would like to hear your views on establishing additional physical defences on locomotives.

[Greg Northey]

We've had a lot of rail legislation in the past few years. It has been about incremental improvement each step of the way. That's the nature of what happens. We've been discussing this for 100 years. Shippers carry on with what they get—restricted capacity, poor service, unreliable rail delivery. We just soldier on.

In legislation we've certainly seen these incremental steps, and Bill C-49 just adds to that. We would love it if it would really resolve the issues we have and the fact that there is not a functioning market in rail, but it's difficult. Legislation is clearly difficult. We really want to get there, and we think this step could be a big one. We just hope it can be. The intent is there. We're trying. We want to make this work this time to the extent we can.

I'm sorry. It does seem unsatisfactory, but I'll tell you what. When we talk to our stakeholders, they ask exactly the same question, because ultimately when it comes down to it, they are going to ask for results. Is this going to work for them? We look at it, and some of it likely won't work for smaller shippers.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

I would like to speak to Mr. Northey for 30 seconds.

You said something that burns my ears every time I hear it, which is that Bill C-49 is a step in the right direction. If it's in the right direction, why aren't we going there? I find it difficult to understand this approach that makes many witnesses say that the bill is a step in the right direction.

Do we want to get the consent of the various lobbies to arrive at a bill that ultimately doesn't make anyone happy? For some, this is a step in the right direction, and for others it is a step in the wrong direction. Shouldn't Bill C-49 make a decision and go as far as possible in the areas where we can, be it in data or interswitching? I have the impression here that the positions are always neither here nor there.

[Greg Northey]

We wanted it to be made permanent because we were seeing real value for shippers. Service capacity at a fair cost comes from competition. Extended interswitching was providing that. It was very clean and simple, and it worked well.

We had an exhaustive list of other recommendations. At Pulse Canada, we focus heavily on data; we're very data-driven. We're evidence-driven: we don't want to use anecdotes to describe service failure; we want it measured. We have put lot of money into developing new data. Data is a big piece. Bill C-49 really moves the bar on data. It doesn't quite get to where we want it, but it's there.

As to own-motion powers for the agency, for small and medium-sized shippers there are serious roadblocks to being able to access level of service complaints, or FOAs. They have neither the time, the money, nor the desire really to go up against a railway when service is failing. Our view is that in those cases you need a strong regulatory backdrop, and we need an agency that has data and evidence, and that can monitor the network and intervene when service is failing.

As was discussed earlier today, own-motion powers are extremely important for us. We don't see provision for them in the bill, and it's one of our recommendations now. We would like to see such a provision in there.

Those, I think, are the key issues. Reciprocal penalties are also very important. We do see provision for these in this bill. All we really want is a clarification of intent, of what it means. When you talk about a balanced penalty or a balanced amount, what a shipper can pay versus what the railway can pay, and also what that number has to be set at to drive a change in behaviour are very different. If a shipper had to pay a fee of $100 for not loading a car in time, that has an impact, but a fee of $100 for the railway for not delivering cars to a shipper who's shipping 15 cars.... They're probably just going to pay that penalty, potentially.

What is it, then, that will drive a change in behaviour within a contract? That's really what we want. It's all there. It's not a change in the wording of the bill; it's just clarifying the intent of it. Balance needs to take into account the ability of a small shipper versus that of a large railway, and how you drive performance.

I would say, then, those three: data, reciprocal penalties, and creating a competitive option that extends interswitching. We want to make long-haul work. We don't really care what the name of it is or how it works; we want to see a result from it. We're concerned right now by all the exclusions.

As you heard today, the costing.... We support all of that. We really need it to work. It's a result. We're results-based. Shippers don't care what the names of these things are; it's the result.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I want to ask another question of you, Mr. Northey. I noted that in your response to the CTA review report, dated April 18, you had recommended that the 160-kilometre limit be made permanent. You've seen Bill C-49, and I know you made other recommendations.

How does Bill C-49 address the recommendations you made following the release of the CTA review?

[Greg Northey]

I'll just build on what Ian said. We have the building blocks right now in Bill C-49. We've had a lot of shippers here today. There's been pretty strong unity on some key points. Bill C-49 adds a building block to your vision, and that's the intention. I think everyone can see that potential in this bill. It gets very close to what we want, and competition is a big part and long haul is a big part of that as well as the data.

Ultimately, if we're going to achieve those objectives, we need to be able to measure. We need to be able to measure it to see whether the policy is actually working. We have to be able to measure whether people are having success within the system we have.

Bill C-49 brings those data, this idea of data and evidence, into scope for one of the first times. It's just those really minor tweaks to make sure that we actually unlock that and allow it to become a platform to work towards. As well, Transport Canada is also in parallel doing their data and transportation systems. I think everything is there. We just need to bring it together.

[Ian MacKay, Legal Counsel, Fertilizer Canada]

Just to address the member's question, one of the great things about this bill is it recognizes that rail-to-rail competition is important for shippers. In the absence of real rail-to-rail competition, we heard Mr. Johnston from Teck talking about running rights today. That's one version or possibility. But the measures that are proposed in Bill C-49 are crucial in substituting legislative prohibitions for real competition. To meet the goals that you've talked about, we want to make sure that those measures are effective in actually creating an appropriate substitute for competition.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I'm going to continue with the theme that I've been sticking to for these past many hours. I'm going to direct my questions to Mr. Graham.

I'm very much interested in the overall vision. Let's face it: this is all about business. This is about business practice and, with that, trying to establish a balance based on value return on your investments, ultimately giving us, as you stated earlier, a better performance by your company and those you represent. Fertilizer Canada's members provide 12,000 jobs and contribute $12 billion annually in economic activity in Canada alone; 12% of the world's fertilizer supply comes from Canada, making a heavy contribution to GDP that we're counting on; and Canada exports fertilizer to 80-plus countries, with 95% of Canada's potash production being exported; and finally, fertilizer is the third biggest volume commodity shipped by Canadian railways. So with all of that, there is in fact something to be said about that.

What interests me most in this process this week of listening is ensuring that we inject the attributes of Bill C-49 into the overall bigger vision as it relates to proper business practice. It becomes an enabler for you, so that the vision of Minister Garneau with respect to ensuring that future infrastructure investment is aligned with a national transportation strategy commences, and that we don't find ourselves with the same problems and challenges we had going back to the early part of the century when we started building these pieces of infrastructure in silos, unfortunately.

How do we integrate our data, our distribution, our logistics systems? How do we ensure that we integrate not only our national transportation infrastructure but also our international transportation system, so that once again our GDP performs at a better rate well into the future, for 30 to 50 years? My question for you is this. How do we get better at that to become more of an enabler for you to do business?

[Robert Aubin, NDP, Trois-Rivières, QC]

My next question is for you, Mr. Graham. I have to say that I cannot explain the exclusion you're subject to any more than you can.

Should Bill C-49 contain specific conditions for transporting dangerous goods? Currently, the transportation of oil and the transportation of canola oil seem to be handled exactly the same way, which seems a little strange to me. I'm not saying that there is a connection between that and your exclusion, but do you acknowledge that dangerous goods should be handled differently? This isn't in Bill C-49.

[Robert Aubin, NDP, Trois-Rivières, QC]

This brings me to the topic of safety measures that, in my opinion, are even more important, and many witnesses have spoken about this. You can probably corroborate that. Most rail incidents tied to a human factor can be attributed to fatigue, yet Bill C-49 does nothing to address train operator fatigue.

Representatives of the railways tell us that they are in continuous discussions with the unions about this and that it is important, a priority even. However, it seems to me that the slowness with which the government and the railways are implementing measures to combat fatigue is a much more important safety aspect than installing a recorder or not, which will only help with the post-accident investigation.

Do you think there has been any progress and that measures can soon be in place for fatigue?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

Good afternoon, gentlemen. Thank you for being here.

A lot has been said about those voice and video recorders. I don't want to prolong the debate excessively, since I think you did a very good job of expressing your view, and we have heard it.

I just have one question: if Bill C-49 were to clearly and explicitly state that voice and video recorders can be used solely by the TSB and only after an accident, would your position change in any way whatsoever?

[Clyde Graham, Senior Vice-President, Fertilizer Canada]

Good evening, Madam Chair and members of the committee.

Thank you for inviting Fertilizer Canada to speak with you today in relation to your study on the transportation modernization act. We are pleased to appear before you to provide the committee with information about our mandate, as well as to present our recommendations to help enhance the legislation's goal of furthering competition in the freight rail sector.

I will start with introductions. I am Clyde Graham, senior vice-president of Fertilizer Canada. I am joined by Ian MacKay, our legal adviser on rail issues.

Fertilizer Canada represents the manufacturers and wholesale and retail distributors of potash, nitrogen, phosphate and sulphur fertilizer, and related products. Collectively, our members employ more than 12,000 Canadians and contribute over $12 billion annually to the Canadian economy through advanced manufacturing, mining, and distribution facilities.

Our association, which includes companies such as PotashCorp, Koch Fertilizer Canada, the Mosaic Company, CF Industries, Agrium, and Yara Canada, amongst many more, is committed to the fertilizer sector's continued growth through innovative research, programming and advocacy.

Canada is one the world's leading producers of fertilizer. It is our products that help farmers produce bountiful, sustainable food in Canada and the United States and in more than 70 countries worldwide. We therefore play a crucial role in Canada's agrifood industry, an innovative industry identified by the Prime Minister's advisory council on economic growth.

To meet the demand of the world's farmers, we rely heavily on the railway system to move our products along our trade and transportation corridors to national, North American, and international markets. Fertilizer Canada is a proud partner of the Canadian rail system, and our reliance on rail is so extensive that our membership comprises one of the largest customer groups by volume for both CN and CP.

As key stakeholders, we are encouraged to be working with the government, which has demonstrated a commitment to modernizing Canada's transportation system and capacity. We commend the legislation's objectives regarding freight rail, and we are supportive of many of the proposed changes, including those clarifying third party liability, reinforcing rail safety, promoting competitiveness, and increasing data transparency.

In an increasingly globalized world, we appreciate the government's recognition that a nuanced approach to freight rail is necessary to meet the needs of the Canadian economy. We make our following recommendations understanding that the freight rail system should evolve to ensure that management of Canadian railways does not impair Canadian jobs, trade, or healthy competition.

I would like to begin by discussing the exclusions for long-haul interswitching.

Measures proposed in the legislation that would exclude certain materials and certain regions from accessing the benefits of long-haul interswitching are a serious concern for our members. Canada has long adhered to the common carrier principle as a foundation of our economy. This principle prevents shipping companies from discriminating against a particular type of good. It is what has kept the Canadian economy in motion despite our vast distances. Amending the legislation to exclude certain materials and regions from long-haul interswitching will have the negative effect of eroding the common carrier principle—a concerning precedent for all Canadians.

As most of our members operate in communities and regions captive to rail, denying access to long-haul interswitching based solely on their location increases their costs of doing business. From a safety perspective, I would also like to draw attention to measures excluding toxic inhalation hazard materials from long-haul interswitching. One such material, anhydrous ammonia, is a key building block of nitrogen fertilizer, and it is used extensively in Canada for direct application into the soil to grow healthy crops across Canada. It's a vital fertilizer for many farmers.

To date, there is no evidence to suggest that this material is not safely and securely transported by rail. Our members take transportation of their material seriously.

In support of that record, I'll add the following. Our members use purpose-built railcars for safe handling of ammonia. Our members invest significantly in the insurance coverage and safety measures necessary to safeguard the transportation of our products. Our members already pay significantly higher freight rates to transport dangerous material, and our association proactively develops safety codes and educational resources for our supply chain and for first responders to support the safe handling of fertilizer.

Tragedies such as Lac-Mégantic must never happen again. However, having said that, it is critical that we approach the transportation of dangerous goods through responsible, evidence-based policy decisions.

I reiterate that there are not and have not been any safety reasons to discriminate against the shipment of TIH material, such as ammonia, by long-haul interswitching. Our members already pay premium rates, which compensate the railways for their liability in handling it. When it comes to hauling ammonia, the rates are four to five times the rates we pay for other kinds of fertilizer. Any long-haul interswitching rate established by the agency will reflect this and adequately compensate the railways.

I would also like to briefly present two other recommendations relating to changes to extended interswitching and interchanges.

First, we caution against the provisions that would allow rail companies to remove interchanges from service simply by giving notice. We are concerned that the amendments strip the Canadian Transportation Agency of its authority to reinstate interchanges and strengthen the existing power imbalance between shippers and our railway companies. In the past, railways have denied that interchanges exist to avoid having to turn traffic over to connecting railways. We recommend this provision be removed from Bill C-49 to prevent inadvertent harm to captive shippers in the future.

Second, Fertilizer Canada and its members are disappointed in the government's decision to sunset extended interswitching up to 160 kilometres. I think you've heard this over and over again. We have found 160-kilometre interswitching has strengthened competition over greater distances, as Transport Canada has confirmed. Since western Canada's freight rail landscape has not changed in any fundamental manner since 160-kilometre interswitching regulations were introduced in 2014, we are disappointed by the government's decision to sunset extended interswitching.

The Canadian fertilizer sector is a proud partner of Canada's rail system. It is a system that works for all Canadian industries. It's a team approach to moving goods within Canada and to export markets. Together, we support Canada's global competitiveness in the agrifood sector through trade and transportation. Our $12 billion industry and our 12,000 jobs depend on a healthy, modernized, competitive rail system to survive and to thrive. Ensuring that our products are delivered to farmers safely and securely in places such as Niagara, the prairie grain fields, or the B.C. interior is of paramount importance to us, and we have a long proud record of success in that regard.

We are very supportive of much of what this bill proposes and commend its intentions. The captive shippers, who are on one rail line and captive to that railway, need to benefit from our national railway infrastructure. It's great to see the government act to support them. We do believe that more can be done, though, which is why we strongly encourage the members of the committee to consider our recommendations. We believe they can improve Bill C-49 through a considered, evidence-based policy approach.

Thank you. That's the end of our presentation. Ian and I will be happy to answer any questions that you have.

[Roland Hackl, Vice-President, Teamsters Canada Rail Conference]

Thank you, Madam Chair.

As vice-president, I represent members on every freight, commuter and passenger railway in this country. Prior to that, however, some 29 years ago, I was hired as a brakeman at CN Rail. I'm a qualified conductor and locomotive engineer, so I have spent a significant portion of my life cooped up in an 8' by 10' control cab of a locomotive, so I am very familiar with the conditions we're talking about with respect to live video and voice recording.

Bill C-49 would provide for potential relaxations of various pieces of legislation that cause extreme concern to Teamsters Rail. We believe that Bill C-49 would compromise our membership's privacy for what can be stated as questionable safety and public benefits. For example, many of you will recall that a few months ago there was a derailment in north Toronto. A locomotive consist crossed over into a train. There was little damage but a lot of publicity; it was in a very populated area. Immediately following that, senior management from CP Rail, who owned the equipment and the track, came out on record saying that live video and voice recording would have prevented the accident. That's impossible. Live video and voice recording is to be reviewed after the fact, so unless these employers are suggesting monitoring live video and voice at the time it happens, there is no prevention possible. It's a tool, at best, for studying incidents after the fact.

The TSB currently has access to LVVR equipment, so for the past several years both major freight carriers and VIA Rail have been receiving locomotives fully equipped with LVVR equipment. This is live equipment. It is recording to date. In the event of an accident or incident, current legislation provides the TSB with full access to the information or data collected through this process.

The proposed legislation would allow employer or third-party access to LVVR, and we believe that would create a chilling effect on communications within a locomotive. It's a 10' by 8' space, where a person is sitting for 10, 12, 14, or 16 hours, communicating with a fellow employee during that period of time, talking about a lot of things. The concern we have is with the the chilling effect—which has been discovered and was referred to by Parliament some time ago as a culture of fear—that was instilled and fostered and nurtured first by the management of CN Rail. That management all moved to CP Rail. The same type of effect is in place now, especially when I hear CP Rail speaking about using this type of information for disciplinary processes. And that's no secret to us, because they have approached the union to say, “We want to use this for discipline. We want to be able to discipline based on monitoring this equipment.”

We believe that open communication between the employees in the cab, much like that between a co-pilot and pilot in an aircraft, is essential to the safe operation of this equipment. If you stifle that for fear of employers reviewing video recording at their leisure for the sole purpose of disciplining an individual, whether or not something has happened, it's going to create a problem with open communications on a locomotive. The private information will no longer be private. People talk about a lot of things in the course of their daily work. This is a locomotive engineer and conductor's office for 10 or 12 hours a day, sometimes longer, and there are a lot of things discussed. Some of it is relevant to railway operations. Some of it is only the conversation that every one of us has with co-workers during the course of our day. Should employers have access to that for any reason?

We think the bill in its present form is contrary to our rights as Canadians. To exempt 16,000 railroaders from PIPEDA, we believe is not appropriate, and this legislation would call for a specific exemption for the purpose of our employers, the people who have been found to foster a culture of fear, to watch. We have a problem with that.

We think the bill is overly vague in how private information is accessed, collected, and used. What third parties are we talking about? What is the purpose of a third party looking at this information?

As you've heard earlier, at least from CP Rail, the LVVR recordings could be used for a disciplinary investigation and proceedings against employees. The employers already have significant means at their disposal to track. There are forward facing cameras called Silent Witness. These face outside a locomotive and track crossings. There are audio recordings of what's going on outside of the locomotive. In the event of a crossing accident, that information is used. There is a locomotive event recorder, commonly called a black box, that records all of the mechanical functions.

There are Wi-Tronix that track the speed and can be utilized to track cellular use. They will send an alarm to the employer to say when something is wrong. Currently, if a train stops in an emergency brake application, an alarm goes off, triggered by the Wi-Tronix, to tell the employer so. With the existing equipment, the employer can then remotely review the forward-facing camera. That exists today. That's what they're using today, without having the invasive technology that puts a camera squarely in my face for 10 or 12 hours, recording absolutely everything I do.

We believe the bill is contrary to the TSB recommendations in its report on the LVVR. The original TSB recommendations call for non-punitive, non-disciplinary, privileged recording of information. We're fine with that, and we're fine with the TSB having access to this information. There is no apparent limit to what data can be collected. We talked about safety-beneficial uses. It's a very vague term. What is a safety-beneficial use? As it stands right now, a recording is running, 24 hours a day, seven days a week. The TSB has full access to that today. Should an employer have access to that information as well?

Many levels of the legal system, including arbitration, judicial review, court of appeals, and all the way to the Supreme Court, have upheld our existing rights to privacy. This bill would exempt us from those rights. With respect to that, there are multiple cases. I brought two with me. Unfortunately, they're only available in English. In one case, an employer thought it necessary to purchase a camera from a local shop and to install it in a clock in the booking-in facility, where employees report for work, to surreptitiously monitor crews. The employer portrayed this as a rogue manager taking this action on his own, but what we have to keep in mind is that the actions of that rogue manager were defended by a multinational corporation to arbitration. Had those actions been upheld, that would be the law in Canada today.

With the other federal employer, we had an incident where there was some suspicion on the part of a manager that an employee was fraudulently claiming benefits from workers' compensation. The manager took it upon himself to retain a private investigator based on a hunch. There was no proof, no data. The video tape was entered into an investigation, and a manager testified that on the Monday following a hockey tournament, the manager became aware of this. I have to ask what this manager knew on the Friday such that he took it upon himself to hire private surveillance to surreptitiously monitor an employee, when he didn't become aware of the fact until Monday. Again, that is what the employers are doing today with the equipment they have at their disposal. Again, the company portrayed it as a rogue manager taking the law into his own hands, but a multinational corporation defended that to the point of arbitration, and again, had we not been successful at arbitration, that would be the law today.

We believe further that this bill is contrary to section 8 of the Charter of Rights and Freedoms, either because the state is allowing the collection of this private information without proper safeguards, or by virtue of allowing employers to collect this private information without proper safeguards. We do not believe there is an attempt to balance the safety benefits with the rights of employees to privacy, as protected by law.

[Greg Northey, Director, Industry Relations, Pulse Canada]

Thank you, Madam Chair and members of the committee, for the opportunity to discuss Bill C-49 with you.

Pulse Canada appreciates your focus on this bill and your efforts to expedite the study prior to the return of Parliament. We submitted a brief to you, and I will touch on a few of the recommendations contained within it.

Pulse Canada is a national industry association that represents over 35,000 growers and 130 processors and exporters of peas, lentils, beans, chickpeas, and specialty crops like canary, sunflower, and mustard seeds. Since 1996 Canadian pulse and specialty crop production has quadrupled, and Canada is now the world's largest producer and exporter of peas and lentils, accounting for one-third of global trade. The value of the industry's exports exceeded $4 billion in 2016.

The market for pulse and specialty crops is highly competitive, and maintaining and growing Canada's market share in over 140 countries that the sector ships to is a top priority for the industry. Pulse and specialty crops are the most multimodal grain crops in western Canada; 40% of our sector's exports through Vancouver are containerized. Efficiently managing the logistics in these supply chains drives the competitiveness of our sector. As such, predictable and reliable rail service is central to ensuring this competitiveness and economic growth.

It is through this lens that Pulse Canada has assessed Bill C-49. Will it deliver improved service, increase rail capacity and competitive freight rates to the small and medium-sized shippers that constitute much of the pulse and specialty crops sector? Pulse Canada believes that Bill C-49 has the potential to deliver these outcomes, but we would like to offer some recommendations to ensure that the bill delivers the results that government intended, that shippers need, and that the overall Canadian economy expects.

Increased competition is the most effective way to deliver improved service capacity and rates, and this is where the proposed long-haul interswitching rate regime holds the most potential. The competitive forces that extended interswitching delivered to the rail market as a result of Bill C-30 were directly beneficial to pulse and specialty crop shippers, and the sector would like to see the long-haul interswitching deliver the same results.

You have heard significant and detailed recommendations on how to improve LHIR today. So I would only like to reiterate one point: excluding large groups of shippers from accessing the provision or limiting a shipper's access to the nearest rail competitor when the next competitor may offer the best combination of service, price, and routing, significantly decreases the potential impact of this provision. For LHIR to work as intended, by letting market forces and competition prevail—a point shippers and railways agree on—it should not be artificially limited through a list of exclusions that cuts out huge swaths of the economy. These exclusions should be removed to allow shippers and railways to operate under LHIR in as competitive an environment as possible. This will bring maximum benefit to shippers, railways, and the Canadian economy. This would also help reduce the differences in interpretation and intents as well as the expected legal challenges that will plague decisions with this remedy for years to come.

I will now focus on provisions of the bill that are intended to help increase supply chain transparency. Creating a competitive environment with balanced commercial relationships requires a transparent freight rail system so that all involved can make commercial decisions based on timely and accurate information. To achieve this, the bill proposes two significant new data regulations and a transitional provision that would require railways to provide service and performance data based on the model used by the U.S. Surface Transportation Board. This is a good start. However, Bill C-49 proposes that this data will not be available to the commercial market until a full year after royal assent. When the data does become available, the bill allows a three-week lag between collection and publication of this data.

In the U.S. case, the railways and regulator began publication of this data within three months after it was ordered, and it was available publicly one week after the railways provided it to the regulator. With a concerted effort by shippers, governments, and railways, and an amendment to Bill C-49, Pulse Canada believes Canada can match, at minimum, the timelines set in the United States and fulfill the intention of Bill C-49 to provide timely data to the commercial market.

As recommended by the committee in your report on Bill C-30 in December, Bill C-49 has introduced a significant new requirement for the railways to provide confidential, commercial, and proprietary data to the Canadian Transportation Agency.

As you identified, this data is important, as it would permit the agency to more effectively identify and investigate issues in the rail system and exercise its authority to issue orders to railway companies. This is the point that Scott Streiner identified yesterday as an important issue, and it's one that Pulse Canada believes in as well. However, Bill C-49 limits the use of this data by explicitly specifying that it can only be used by the agency to calculate long-haul interswitching rates. Requiring this data from railways, but narrowing its application, severely limits the impact of this new regulatory provision and does not fully achieve the intent for the data to support the agency's delivery of its statutory responsibilities. Equally important, this data could be used to fully measure the impact of Bill C-49 and allow for evidence-based assessments as the bill is implemented.

To conclude, I'd like to address the proposed changes in Bill C-49 that will remove containerized grain from the maximum revenue entitlement. Pulse Canada understands that the government's intent with respect to this policy change is to incent innovation in the container supply chain, increase container capacity, and improve levels of service. These are valuable outcomes, and we must collectively ensure they are achieved, as removing this traffic from the MRE could potentially negatively impact the Canadian pulse and special crop sectors' international competitiveness. The focus, then, must be to ensure that other provisions in Bill C-49 set the necessary conditions for this change to the MRE to be a success and to truly result in more service and capacity. The data recommendations I discussed earlier will help ensure that everyone can measure the policy outcome, but Pulse Canada has recommendations on other provisions within the bill that will ensure that the remedy suite available to shippers in the event of service failure or costing disputes is functional.

First, the reciprocal penalty provision and the accompanying dispute resolution process introduced for service level agreements is a valuable change that will establish commercial accountability between shippers and railways. We applaud the government for introducing this. To ensure that it functions effectively, Pulse Canada asked the committee to consider clarifying that the intent of these penalties is to be sufficient to encourage commercial accountability and performance while recognizing the differences in economic power of small shippers compared with that of the railways.

Second, for small and medium-sized shippers and containerized shippers no longer shipping under the MRE, it will be essential that the general strengthening of the agency's information and dispute resolution services introduced in this bill, Bill C-49, is effective. The agency having the ability to attempt to resolve an issue a shipper may have with the railway company in an informal manner provides shippers with a less confrontational, more cost-effective and timely way to resolve service issues without having to bring a formal level of service complaint to the agency. These are barriers facing shippers when considering accessing agency provisions, and this is why the agency has stated they will increase outreach to shippers. It has nothing to do with the agency “drumming up business”.

To fully realize the potential of this provision, Pulse Canada requests the committee to consider clarifying what it means for the agency to take action on informal resolution. Our view is that taking action can include a wide variety of activities, including such things as questioning, site visits, requesting information, investigating, etc. Clarity on this issue would help during the implementation of this bill. Ultimately, however, Pulse Canada views agency own-motion powers, which has been discussed at length today, as the most efficient and effective way to address disputes and network issues and strongly urges the government to consider the agency's request to be granted these powers.

Finally, I'd like to briefly touch on a provision in Bill C-49 that is specifically focused on the grain sector. The requirement in clause 42 of the bill that railways self-assess their ability to move grain during a upcoming grain year and identify the steps they will take to enable grain to move can be an extremely powerful provision that can establish the basis for measuring railway activities against their plan both during and at the end of the grain year. To strengthen this provision and ensure it delivers the intended outcome, Pulse Canada offers recommendations in our brief to enhance that section to clearly set the parameters for the type of information railway companies must provide. For the pulse and special crops sector, better defining these parameters provides an additional platform for the monitoring and assessment of the impact of the decision to remove containerized grain from the MRE.

Thank you.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Yes, so extended is what you recommend. I would recall for my friend that it was in our Bill C-30, but let's forget that it was a Conservative measure. This is what people asked for, and it's what would help.

Is there any other recommendation or any other issue you would like to see addressed in this bill?

Mr. Audet, you talked about safety. Of course, there are the recordings that can be heard after the fact, but you think the focus needs to be on training. What would you like to see in Bill C-49 to that effect?

[Robert Ballantyne]

I have a couple of other comments.

In April of last year, Mr. Garneau made the following statement: “I see transportation in Canada as a single, interconnected system that drives the Canadian economy.”

If the overall objective is to make our economy as competitive as possible on a global basis, then all the things in Bill C-49, and obviously other pieces of legislation and so on, and our trade agreements, whether NAFTA or CETA or whatever, should be geared towards that objective. One would hope, as we're talking about Bill C-49 today, that the various provisions would help lead to that objective.

I think in talking about it being an interconnected system, one of the inconsistencies that we have, and this is just an issue of a normal free market system, is that each of the players in effect is an island unto themself. They're all trying to maximize their own situation. That's, in a sense, a conundrum in terms of Mr. Garneau's view that it should be an interconnected system.

One of the governance problems, it seems to me, for the government, is how you reconcile the quite legitimate needs of private businesses to maximize the return for their shareholders on the one hand, but make sure that the system is working effectively for the whole economy on the other hand.

I think those are things that hopefully this bill will contribute to.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I want to give you folks an opportunity to think outside the box. Looking at a transportation vision 30 years down the road, 23 years down the road, the minister has put forward a transportation strategy 2030. With this bill, we are looking particularly at trying to establish balance and therefore return in value, in particular as it relates to future investments that support the overall transportation strategy.

That said, managing risks and creating value is of utmost importance. As business, shippers, and service providers, looking through a lens of contributing to economic environmental social strategies, what are your opinions on how we can utilize Bill C-49 to ultimately contribute to an overall transportation strategy and how it's going to help you be a global enabler and lead us to perform better economically on a global stage?

[Robert Aubin, NDP, Trois-Rivières, QC]

You spoke at length about the importance of training for first responders, and I entirely agree with you on that. My concern is not about the fact that this training is necessary, but the fact that municipalities are not familiar with the content of the hazardous products on the trains crossing their roads.

How can first responders react effectively if Bill C-49 has no measures enabling municipalities to find out what products are being carried across their territory?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

I have a question for Mr. Audet.

First, we have just received your documents. Thank you. We will read them carefully.

In light of your tragic experience, how do you explain Canada's delay in rail safety? I would say that Bill C-49 is pretty much silent on the issue, although it's supposed to be the bill that will take us to 2030. It talks at length about voice and video recorders, which can allow the TSB to draw better conclusions after the incident. However, preventive measures are needed instead. I completely agree with you on that.

To your knowledge, does the absence of safety or security regulations fly in the face of international standards?

[Robert Ballantyne]

Thank you very much.

What I wanted to say is this. In our formal submission we did indicate that we support the proposed changes to the Coasting Trade Act that are included in Bill C-49. These give effect to a requirement of the Canada-European Union Comprehensive Economic and Trade Agreement. While it's a relatively minor element in terms of improving global supply chain efficiency, the requirement does do that for Canadian importers and exporters using containers. That is, what it's proposing to do is to allow foreign-flag ships to move empty containers between Canadian ports. That is, if containers were emptied in Halifax, the foreign-flag carrier could move them to the Port of Montreal, for example.

This is something we support. It is something that will slightly improve global supply chains for Canadian shippers, and for importers as well. There is a complication with regard to the large shipping alliances, where there are three or four shipping lines that come together in alliance. We think that the regulations should make sure that this provision would be able to be used within the full alliance, so all the member shipping companies within that alliance could access this provision.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I want to thank all of our witnesses for being here today. It's been a long day, and it's only going to get longer, but I certainly do appreciate everything we've heard today.

I want to start with some questions for you, Mr. Johnston, and for you, Ms. Young, in regard to your presentation. I did look at the document that you circulated. In your conclusion you state that getting the design right on Bill C-49 will help Canada shift away from a status quo that has resulted in continued rail service failures, has damaged Canada's global reputation as a trading nation, has led to the proliferation of quick-fix policy solutions that have not been based on evidence, and has picked winners and losers across industries over the years.

I'm not sure if you suggested that Bill C-49 was the result of a bold vision. I want to give you an opportunity to perhaps speak to some of the areas in Bill C-49 where you see there being that bold vision. Also, I want you to comment on the creation of the corridors in Bill C-49. I'm not sure if that was what you were referring to when you talked about the five areas that weren't going to be able to access long-haul interswitching or that weren't going to be able to use these remedies. I'm wondering if you could speak to that as well.

[Forrest Hume, Legal Advisor, and Partner, DLA Piper (Canada) LLP, Freight Management Association of Canada]

Thank you, Bob.

The recommendations we're making on the rail shipper provisions are summarized in our submissions beginning on page 25. As Mr. Ballantyne has indicated, the recommendations that FMA is making have been designed to give effect to what we believe to be the goals of the transportation modernization act.

Our recommendations deal with the proposed changes to the level of service provisions; the proposed creation of a long-haul interswitching remedy; the need for enhancing the powers of the agency over interswitching; providing the agency with adequate funding and the ability to act on its own motion, and on an ex parte basis where necessary, authorizing the agency to share reasonable railway-provided costs and rate information with shippers, and I stress “with shippers”; clarifying the proposed change requiring the filing of a list of interchanges; and suggesting changes to the service level agreement arbitration and summary process FOA amendments.

Following the filing of our submission with this committee, we received a copy of a Transport Canada document entitled “FAQs—Trade Corridors to Global Markets”, which provides insight as to the issues in Bill C-49 that the bill seeks to address. Unfortunately, the document contains a number of misconceptions that need to be addressed.

For instance, on page 11, the FAQ document claims that various factors help ensure that the LHI rate will be competitive. However, the bill has a provision that ensures that it will not be competitive. For instance, proposed subsection 135(2) requires that the agency not determine the LHI rate to be less than the average of the revenue per tonne kilometre for the movement by the local carrier of comparable traffic. What that means is that an LHI rate will necessarily be uncompetitive with other comparable traffic revenues that are below the average.

The document states in a number of places that the LHI provisions give the agency discretion in defining what traffic is comparable. However, when the agency does that, it is restricted in setting a competitive rate by the operation of subsection 135(2).

Our recommendation to fix the problem is twofold. First, specify in subsection 135(2) that the agency shall not determine an LHI rate that is more than—not less than—the average of the revenue per tonne kilometre for the movement by the local carrier of comparable traffic.

Second, amend the section to require the agency to determine the LHI rate from among rates where shippers have access to two or more railways at origin. If there are no competitive rates, i.e. rates where a shipper has access to two or more railways at origin, the agency should be required to set the LHI rate on a cost-plus basis. Thus, LHI rates would be determined from competitive rates, not from a menu of captive rates. I'll be talking a little more about “cost plus” later, because I understand that to be an issue before you that's somewhat controversial.

On page 11, the FAQ document refers to the many LHI exclusions in the bill, and attempts to justify them by citing possible congestion issues and the difficulty in allocating liability for certain hazardous materials. With great respect, Madam Chair, and members of the committee, these concerns have no merit whatsoever.

Why should the LHI remedy, a competitive remedy, be unavailable to large groups of shippers? Why should the remedy discriminate against shippers because of location or the type of commodity shipped? How does all of that comport with our national transportation policy?

In summing up on the exclusions, the FAQ document at page 12 refers the excluded shippers to other remedies since access to LHI is being withheld from them. This provides little comfort and doesn't say much about the efficacy of the remedy. Our recommendation is to eliminate the exclusions for LHI.

At page 7, the FAQ document states that extended interswitching demonstrated that railways can and will compete for traffic from each other's networks, providing shippers with leverage in negotiations. Similarly, it is expected that LHI will stimulate this kind of competition.

However, the comparison between extended interswitching and LHI is not an apt comparison. Extended interswitching rates—

[Robert Ballantyne, President, Freight Management Association of Canada]

Thank you for the opportunity to appear.

FMA has been representing the freight transportation concerns of Canadian industry, including rail, truck, marine, and air cargo, to various levels of government and international agencies since 1916. We're now in our 101st year, and, despite appearances, I was not at the first meeting.

In our remarks today, we will focus primarily on Bill C-49's amendments to the rail shipper sections of the Canada Transportation Act, but we will make brief comments on the proposed amendments to the Railway Safety Act and the Coasting Trade Act.

There are approximately 50 railways in Canada, but the rail freight industry is dominated by the two class 1 carriers, and these two companies account for approximately 90% of Canadian rail freight revenues. The fundamental problem is that there is not effective competition within the railways, and the barriers to new entrants are so high that this situation will not be rectified through market forces.

The best that can be done, therefore, is to provide a legal and regulatory regime that is a surrogate for real competition and that rebalances the bargaining power between the buyers and sellers in the freight market.

While there is limited competition between CN and CP in a few markets, primarily intermodal, for many shippers the rail market can best be characterized as being a dual monopoly rather than even a duopoly; that is, each of CN and CP is the only railway available to shippers at many locations. It should be noted that this is not just a western Canadian problem. I'd like to stress that. This is not just a western Canadian problem, but it exists in the east as well, including in the Quebec-Windsor corridor. Rail freight is not a normally functioning competitive market, and this fact has been acknowledged in railway law in Canada for over 100 years.

The minister, in introducing Bill C-49, stated the objectives of the bill, as follows:

The Government of Canada...introduced legislation to provide a better experience for travellers and a transparent, fair, efficient and safer freight rail system to facilitate trade and economic growth.

Bill C-49 contains a number of provisions that will go some distance to meeting that objective. In its review of the bill, FMA has analyzed the changes that are proposed in Bill C-49 and how well they will play out in practice when shippers attempt to use them. Our recommendations address the places in the bill where our experience indicates that the provisions, as drafted, will not meet the government's stated objectives.

My colleague, Mr. Hume, will refer to the 10 recommendations that we're making on the rail shipper provisions and comment on the policy basis for Bill C-49.

I should mention that Mr. Hume has worked in the law departments of both CN and CP in his career, and for the past 23 years has built a successful practice representing rail shippers before not only the Canadian Transportation Agency, using all the provisions of the act that are in place now, but in the courts, up to and including the Supreme Court of Canada. He has important insights that are somewhat unique, in that he is one of the few people who has been using these provisions over his career.

At the conclusion of Mr. Hume's remarks, unless we run out of time, Madam Chair, I'll comment very briefly on the proposed changes to the Railway Safety Act and to the Coasting Trade Act.

Forrest.

[Brad Johnston, General Manager, Logistics and Planning, Teck Resources Limited]

Thank you very much.

Chair, members of the standing committee, clerk and witnesses, good afternoon everyone.

My name is Brad Johnston. I'm the general manager of logistics and planning for Teck Resources. Today I'm joined by my colleague, Alexa Young, head of federal government affairs.

Thank you very much for the opportunity to discuss Teck's view on Bill C-49. Teck is a proudly Canadian diversified resource company. We employ over 7,000 people across the nation. As the country's single largest rail user, and with exports to Asia and other markets totalling close to $5 billion annually, ensuring that this bill enables a transparent, fair and safe rail regime, and one that meets the needs of users and Canadians is of critical importance to Teck.

Throughout the consultation process leading up to this bill's development, Teck has sought to advance balanced solutions to address the significant rail service issues that all sectors have regularly experienced. Perennial rail service challenges have impacted our competitiveness, our national supply chains' long-term economic sustainability, and Canada's global reputation as a trading nation. To put this into perspective, the direct costs attributable to rail service failures incurred by Teck alone have amounted to as much as $50 million to $200 million over 18-month periods in the past decade. These are added costs, of course, that our global competitors do not incur. Foundationally, we believe the solution is a legislative regime that inspires commercial relations in our non-competitive market, while maintaining the railways' abilities to be profitable and operationally flexible. This solution would benefit railways, shippers, and all Canadians.

At the heart of our recommended solution has been the need for a meaningful, granular, and accessible rail freight data regime. We've also advanced a definition of adequate and suitable service that acknowledges the unique monopoly context in which we operate. Teck has offered what we believe to be the only long-term and sustainable solution to addressing the acute imbalance in the railway-shipper relationship, and that is for allowing for real competition in Canada's rail freight market by extending running rights to all persons, including shippers.

What do we mean by “running rights”? Similar to when competition was enabled in the telecommunications sector in Canada, we mean opening the door to competition in the rail sector—in other words, allowing new entrants who meet specific criteria to run a railway. While disappointed that the introduction of real competition isn't addressed in the bill, more so than in any past legislative review, we're strongly encouraged by the bold vision Bill C-49 represents in many of its provisions. These include new reporting requirements for railways on rate, service and performance; a new definition of adequate and suitable rail service; enhanced accessibility to remedies by shippers on both rates and service; and a prohibition on railways from unilaterally shifting liability onto shippers through tariffs.

We also believe that Bill C-49 achieves the right balance in reflecting the needs of various stakeholders, including both shippers and railways. However, it's our view that to meaningfully realize the bill's intent and to strike the balance we believe it seeks to achieve, some minor adjustments will be required. The amendments we propose are meant to address design challenges that will have unintended consequences or that will simply not fulfill the bill's objectives. Our proposed amendments also address the reality that, due to having to rely on one rail carrier for all of the movement of our steelmaking coal and/or because of geographical limitations, some of the major provisions in Bill C-49 aimed at rebalancing the shipper-railway relationship won't apply to certain shippers, including Teck. For instance, the long-haul interswitching provisions aren't an option for our five southeast B.C. steelmaking coal mines, because this region is amongst the vast geographical areas that the provisions simply do not cover. Further, our recommended adjustments reflect Teck's actual experience with existing processes within the act.

On transparency, Bill C-49 goes a long way to addressing service level data deficiencies in our national rail transportation system, deficiencies that have led to business and policy decisions being made in an evidence vacuum. However, we're concerned that, as written, certain transparency provisions will not achieve the objective of enabling meaningful data on supply chain performance to be made available. Of specific concern is the design of the data-reporting vehicle outlined in clause 77(2).

The U.S. model that is being relied on is flawed and doesn't provide the level of reliability, granularity, or transparency required for the Canadian context. First, as the U.S. model is based on internal railway data that is only partially reported, it doesn't represent shipments accurately or completely.

Further, the U.S. model was created when the storage and transmittal of large amounts of data wasn't technologically possible. With the data storage capabilities that exist in 2017, there's no need for such a restriction in either the waybill system for long-haul interswitching outlined in clause 76 or the system for service performance outlined in clause 77. Note that railways are already collecting the required data.

To ensure the right level of service level data granularity is struck to make it meaningful, and to ensure it reflects the unique Canadian rail freight context we operate in, we recommend an amendment that ensures all waybills are provided by the railways rather than limiting reporting to what is outlined in 77(2).

For the ability of the agency to collect and process railway costing data, we believe the bill will significantly improve the Canadian Transportation Agency's ability to collect and process this costing data, enabling it to arrive at costing determinations to ensure the rates shippers pay are fair and justifiable. This is critical to maintaining the integrity of the final offer arbitration process as a shipper remedy to deal with the railways' market power. However, we're concerned that as written, a shipper won't have access to that costing determination, which defeats one of its purposes.

Under the current FOA model, it's the practice of an arbitrator to request an agency costing determination only when the railway and the shipper agree to do so. However, we witness the railways routinely declining to cooperate with shippers in agreeing to make such a request. Bill C-49must limit a railway's ability to decline this request. To ensure the right level of transparency and accessibility is struck so that remedies are meaningful and usable, we recommend that shippers also be given access to the agency costing determination that comes out of this process.

On level of service, we're concerned that the language offered in Bill C-49 for determining whether a railway has fulfilled its service obligations doesn't reflect the reality of the railway-shipper imbalance, given the monopoly context in which we operate in Canada. In proposed subsection 116(1)(1.2), Bill C-49 would require the agency to determine whether a railway company is fulfilling its service obligations by taking into account the railway company's and the shipper's operational requirements and restrictions. The same language is also proposed for how an arbitrator would oversee the level of service arbitrations. This language doesn't reflect the reality that in connection with the service a railway may offer its customers, it's the railway that decides the resources it'll provide. Those decisions include the purchasing of assets, hiring of labour, and building of infrastructure. Any of these decisions could result in one or more restrictions.

As those restrictions are determined unilaterally by the rail carrier, it's not appropriate for those restrictions to then become a goal post in an agency determination. As such, we recommend either striking out the provision or making the restrictions themselves subject to review.

In conclusion, as the failures of past rail freight legislative reviews have demonstrated, despite good intentions, legislative design is critical to enabling those intentions to come to fruition. Getting this bill's design right with a few minor amendments will help Canada shift away from a status quo that has resulted in continued rail freight service failures and led to a proliferation of quick-fix solutions that have picked winners and losers across industries over the past years.

Again, as the biggest rail user in Canada, we believe this is the opportunity to be bold and to set a new course in building a truly world-class rail freight regime in Canada to the benefit of shippers, railways, and all Canadians. Thank you very much, and I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much to our witnesses again. Each one of these panels has so much valuable information. It's amazing. We'll know Bill C-49 in and out by the time it gets back into the House.

Thank you very much.

We will suspend until the next group comes to the table.

[Vance Badawey, Liberal, Niagara Centre, ON]

To get back to the productive dialogue that we have been having, I'm really interested, Mr. Pellerin, in hearing your comments. Again, the reason why we're here is that, quite frankly, we do want to strike that balance. We want to ensure that balance—albeit we heard a lot of the challenges from the main lines, from the class 1s earlier, some of which I would agree with, but most of which I wouldn't.

Your situation is something that fills that void. It fills the void for those who are most important, those who are our priority, the customers, and, of course, adds value for Canadians.

I'm going to ask the same question that Mr. Blaney asked and that is, what can we do to this bill? What can we do Bill C-49 to make it a better and more conducive for you to be a part of the ultimate performance that we have globally with respect for our economy, which is to make our transportation system more robust, which you're a part of?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

I am going to continue along the lines of the person who said that we have to continue the discussion.

My question is very clear. What we have here is an omnibus bill that goes off in all directions. I imagine the passengers' bill of rights does not interest you a great deal, except on a personal level, as a consumer. We could also talk about coasting trade, but we fully understand that it is not your favourite subject either.

In terms of the provisions that are of particular concern to you, I would like to know if, in your opinion, Bill C-49 is too fast, or too vague, to provide a viable solution for your problems. Let me put the question another way. Could you accept Bill C-49 if a few amendments were made, or do you feel that there is many a slip twixt cup and lip?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

My thanks to our guests for joining us and for sharing their expertise with us.

When we do this kind of study, consensus is relatively rare. But we seem to be getting one on long-haul interswitching. Some people don't want it just because it's not competitive and others don't want it because it's not effective.

It is occurring to me that Bill C-49 is not achieving that objective at all. If we were to rethink the objectives of interswitching, where should we start from? Should we go back to what was proposed in Bill C-30 or should we correct Bill C-49 so that it includes a provision on interswitching that favours those who need it?

[David Montpetit]

I'll start on this one.

In my opinion, it has been a bit of a miss in Bill C-49. I think Mr. Emerson touched upon this yesterday, and it has been brought up in some of the discussions thus far.

I think it's an area that should be looked at again. If you have investigative powers, you can be proactive versus reactive to these problems, especially with regard to systemic problems within the transportation system and the transportation corridors. That's why we highly encourage this. In every submission and at every chance we've had in meetings with the minister's office, Transport Canada, and even the agency, we're encouraging having more ability and more power to do this.

[Kevin Auch, Chair, Alberta Wheat Commission]

Thank you, Madam Chair.

My name is Kevin Auch, and I am pleased to appear before this committee this afternoon alongside our industry partners from the Western Canadian Shippers' Coalition and the Western Canadian Short Line Railway Association to provide a producer perspective as part of this committee's review of Bill C-49, the transportation modernization act.

I am chair of the Alberta Wheat Commission, an organization dedicated to improving the profitability of over 14,000 wheat farmers in the province of Alberta. I also farm in southern Alberta near the town of Carmangay.

I am here today because rail transportation has been one of the commission's top priorities since its inception in 2012. Costs associated with railway failures are ultimately passed down the supply chain to producers. As a price-taker, I cannot adjust the price of my product, so ultimately, these increased costs reduce my profitability. They also negatively impact my cash flow, making timely bill payments an issue.

These challenges are not unique to my operation. They are widespread and that is because when it comes to rail transportation in Canada, the agriculture sector operates in a monopoly environment. Most of the elevators where farmers in western Canada deliver their grain have only access to one railway, leaving both shippers and farmers captive to monopoly carriers.

This is a significant problem because wheat is a crop that relies heavily on export markets and rail transportation to ship our product from the Prairies to port terminal facilities along the west coast and Thunder Bay, as well as our neighbours to the south of the border. While we appreciate this government's efforts to increase market access for farmers through the establishment of free trade agreements, we will lose credibility with international buyers if we are unable to fulfill their orders due to railway failures. We experienced this in 2013 and 2014 when buyers simply sourced their grain from other countries. Canada's reputation as a reliable supplier to global markets is at risk.

Canada's grain supply chain is making significant investments in order to take advantage of new and growing market opportunities. We are seeing major expansion both in port terminal and country elevator capacity. Grain companies have invested hundreds of millions of dollars to ensure they are ready to service growing international markets, and farmers are preparing to take advantage of these opportunities as well. Farmers' significant investments in research as well as new and innovative technology have led to significant yield increases over the years. In fact, just last month CN Rail announced this growth when they implored the Canadian government to invest in new rail infrastructure in order to accommodate the influx of grain. In 2017, CN moved a record 21.8 million metric tons of grain.

My point is that ensuring adequate rail service is paramount to the growth of our sector and Canada's reputation as a reliable supplier of grain to international markets.

AWC appreciates the government's commitment to legislation that will ensure a more responsive, competitive, and accountable rail system in Canada. We believe that Bill C-49 is in fact an historic piece of legislation that paves the way for permanent long-term solutions to the rail transportation challenges that Canadian farmers have faced for decades.

That is why AWC is pleased to see the inclusion of provisions aimed at improving railway accountability, including shippers' ability to seek reciprocal financial penalties, a clear definition of adequate and suitable service, and enhanced interswitching—all measures that AWC has long advocated for. Bill C-49 also contains important provisions that will enhance the inquiry powers of the Canadian Transportation Agency and require that data on rail system performance be made available to the public.

Furthermore, AWC supports the decision to retain the maximum revenue entitlement with modifications that will reflect individual railway investments, incentivizing innovation and efficiency.

With respect to the role that reciprocal penalties play in this legislation, railways have always had a variety of measures that govern shipper efficiencies, including asset use tariffs. These tariffs are used to penalize shipper failures through monetary fines in order to gain shipper efficiencies. For example, when the railway spots cars at my local elevator and the grain company fails to load them within 24 hours, the grain company faces automatic monetary penalties. On the other hand, if the railway shows up two weeks late, there are no penalties. Therefore, the railways are the only link in the grain logistics supply chain that are not held to account.

In order to create an efficient supply chain, one with balanced commercial accountability, railways need to be held accountable for service failures.

We were recently made aware that CN Rail has included a form of shipper tariffs in about 70% of their service-level agreements. On the surface this seems like good news, but these tariffs are limited to a failure to spot cars and still neglect to address common challenges, including timely delivery or the provision of accurate information. We are encouraged to see that CN has taken some steps to increase railway accountability, and we are confident that the provisions outlined in Bill C-49 will ensure that, going forward, penalties are truly fair and reciprocal.

In addition to increasing accountability, reciprocal penalties will create the incentive needed for railways to focus on performance and invest in the assets that can improve efficiencies. This recommendation positions railways to compete in order to drive efficiencies, lower shipper risks, and ultimately better serve foreign markets for Canadian exports.

Under Bill C-30, which expired on August 1 of this year, extended interswitching provisions proved to be a powerful competitive tool for grain companies. Bill C-49 proposes that, under some circumstances, interswitching distances will be increased to 1,200 kilometres, but unlike the previous extended interswitching option, there are conditions within the new provisions that seem to contradict the true intentions of the legislation, making them less effective than the provisions under Bill C-30.

For example, the previous interswitching provisions allowed shippers to access any interchange within 160 kilometres without the need to obtain a permit from the Canadian Transportation Agency. The provision outlined in Bill C-49 stipulates that shippers must seek permission from the originating carrier or obtain an order from the agency to access the interchange, and it must be the interchange that is closest to them. Not only do these changes make interchanging more onerous and complicated, they can essentially render the provision useless in a variety of scenarios, including if the interchange in question does not service the appropriate corridor. In other words, if it moves the product in the wrong direction, if the nearest interchange cannot accommodate the size of the car load, or if it is serviced by the wrong rail company, the nearest competing line does not necessarily have lines running the full distance to the shipment's final destination.

To address these challenges we would ask the committee to consider the amendments put forward by the crop logistics working group, of which AWC is a member, that would allow shippers to access the nearest interchange that can accommodate their requirements with respect to the direction, size, and preferred carrier.

Costs incurred by shippers are ultimately passed down the line and on to producers. That is why our members are also concerned about the formula outlined in Bill C-49 to determine the rates associated with long-haul interswitching. Proposed subsection 135(2) directs the agency to set a rate not less than the average of the revenue per tonne kilometre of comparable traffic. In our view this encourages monopoly rate setting as it is based on revenue as opposed to a cost-plus model. Rates should allow for a reasonable profit, but should not reflect those previously charged in a monopolistic environment.

In closing, the Alberta Wheat Commission strongly supports the quick passage of Bill C-49 because we believe it will help to correct the imbalance between the market power of railways and captive shippers. We encourage the federal government to continue the conversation with Canada's agriculture sector as it works to develop the regulations to support the spirit and intention of the legislation, which seeks to create a more responsive, competitive, and accountable rail system in Canada.

With that, I would like to thank the committee for the opportunity to share the producers' perspective with you today, and I invite any questions you may have with respect to the comments I've made.

[Lucia Stuhldreier, Senior Legal Advisor, Western Canadian Shippers' Coalition]

Good afternoon.

With respect to the data reporting requirements in Bill C-49, our comments are focused on railway service and performance data. Policy-makers, regulators, and users of the transportation system need this information in order to make evidence-based decisions. They need it to be detailed and they need it as close to real time as possible.

WCSC has two main concerns regarding the interim requirements in the bill. First, the information is too highly aggregated to be of any use. For example, the railways will need to report, on a weekly basis, the average number of boxcars online anywhere in their system in Canada. Those cars could contain refined metals originating in the Montreal area, pulp from a mill north of Edmonton, newsprint from the Maritimes, or any number of other things.

The published data will not tell us that because, unlike in the U.S. where CN and CP have to report separately for 23 separate commodity groups, all of this is going to be aggregated in Canada. There has been a suggestion also that rather than publishing this information separately for each of the railways as is done in the U.S., it might need to be aggregated for CN and CP, and that would further mask what's actually happening in the system. In short, as it stands, this will produce general high-level statistics that are not of any practical value.

Secondly, the information is not going to be available on a timely basis. First, as you've probably heard already, the bill defers any of these requirements for a full year. Once they do kick in, there will be a three-week delay in the publication process. Just for the sake of comparison, that's three times as long as it takes in the U.S. to put this information in front of the public. Historical information is probably useful in tracking overall trends and maybe in assessing past service failures, but when it comes to day-to-day decision-making, it's of very limited usefulness. So we have recommended some changes to those provisions.

The second area I want to talk about is adequate and suitable service. There's a proposed new subsection 116(1.2) in Bill C-49 that states that the agency has to dismiss a shipper complaint if it is satisfied that the railway is providing “the highest level of service...it can reasonably provide in the circumstances”. I was looking for an appropriate example, but this is really a bit like a teacher telling students, “If you get 95% on the final exam, you cannot possibly fail this course.” That doesn't tell the student what happens at 90%, at 85%, or at 65%.

What shippers and railways need to know is when service is no longer adequate and suitable. If the intent is to require the railways to provide the highest level of service they can reasonably provide in the circumstances of the case, we believe the bill should say that, and it should say it clearly. If it doesn't, we expect unnecessary litigation, preliminary objections, and ultimately it may very well be that the Federal Court of Appeal agrees with our interpretation, but we will have spent extra time and money to get there when it can be fixed at this early stage.

Another aspect of the service-related provisions in Bill C-49 has to do with timely access and timely relief. The bill would shorten the time period the agency has to issue a decision from 120 days to 90 days. When you're dealing as a shipper with serious acute shortfalls, waiting three months instead of four months for a fix is really only a marginal improvement. In those cases, it's crucial that the agency continue to have the ability to expedite the process and to make interim protective orders that keep a modicum of service in place while the complaint carries through the process. That can mean the difference between continuing to operate and shutting down, at least on a temporary basis, with all that entails in terms of personnel, cost of restarting major equipment, and loss of business.

As with most administrative tribunals, the agency has the ability to control its own process. What Bill C-49 would do is mandate minimum time frames that the agency has to allow in a level-of-service complaint for the railway and the shipper to present their case. That means the agency will not be able to expedite that process, and it also calls into question whether the agency will be able to issue interim relief on a timely basis. We've made some recommendations to deal with that.

The fourth area I want to touch on is more broadly the agency's authority. One of the things the WCSC has advocated for some time is giving the agency the ability to investigate matters within its jurisdiction on its own initiative. You've heard in the earlier part of these meetings about the investigation the agency initiated into the Air Transat tarmac delays. A similar initiative was taken by the U.S. Surface Transportation Board in the case of CSX and widespread complaints about deteriorating rail service that affected a broad range of their customers. Giving the agency that ability will allow them to better address those kinds of systemic issues.

The second point in this area relates to final-offer arbitration in freight rate disputes. A crucial piece of information that's normally not available to the arbitrator in those cases is how each of the final offers stack up in terms of covering the railways' costs and providing a sufficient return above those costs, and you heard this morning from the railway witnesses how significant that issue is to them.

The agency is an independent body. It has the requisite expertise to make cost determinations and to provide them to the arbitrator, and we're recommending that an agency determination of costs be part of what is provided to an arbitrator in every final-offer arbitration.

Before I get into long-haul interswitching, there is one area that WCSC noticed was missing in this act and in this bill that has historically been part of every major amendment to the railway legislation, and that's the provision requiring the minister to initiate a review of how those amendments are faring. We are suggesting that this would be appropriate here.

[David Montpetit, President and Chief Executive Officer, Western Canadian Shippers' Coalition]

Thank you.

Good afternoon, Madam Chair and members of the committee. On behalf of the Western Canadian Shippers' Coalition, WCSC, I would like to thank you for the invitation to participate in this session. My name is David Montpetit, and I'm the president and CEO of WCSC. With me today is Lucia Stuhldreier, our legal adviser.

WCSC represents companies based in western Canada that move mainly resource products through the supply chain to both domestic and international customers. Our organization focuses exclusively on issues related to transportation. Since its inception, WCSC has been actively involved in providing shipper perspective on numerous amendments to legislation. Most recently, we participated in a 2015 review of the act, led by David Emerson, as well as subsequent consultations initiated by Minister Garneau.

WCSC's goal is a competitive, economic, efficient, and safe transportation system in Canada that permits our members to compete both domestically and internationally. Our members represent a wide variety of commodities, including forest products, oil and gas, cement and aggregates, and sulphur, just to name a few. A list of current members is included in the brief if you'd like to take a look further.

One thing they have in common is that they are all users of rail transportation. Their facilities are located where the natural resources are. Their remote locations and the large volumes they ship make them completely dependent on rail to move their products to market. In the vast majority of cases, our members have access to only one rail carrier at origin. That creates a significant imbalance in the commercial relationship, even for very large shippers, which the majority of mine are. Being able to move a small portion—as indicated this morning, something like 25%—of product by another mode does not change that in any significant way.

Our members do try to negotiate commercial agreements for rail freight rates and service, and their preference is to resolve disputes commercially. However, the market in which they have to do this is not competitive. The option of taking their business to a competing railway when faced with excessive freight rates, large price increases, and non-performance or substandard performance simply does not exist. Effective shipper remedies act as a kind of backstop in commercial negotiations carried out in a non-competitive market. The fact that such remedies exist and can be used helps introduce a measure of balance to the shippers.

With respect to Bill C-49, WCSC is focusing on the following key areas: railway data reporting; railway service obligations; more accurate, timely, and effective remedies; agency powers; a mandatory review of the rail-related provisions of the act; and finally, access to competing railways.

Lucia Stuhldreier, my colleague, will walk you through the concerns and specific recommendations in this area.

[The Chair, Liberal, Judy Sgro]

Thank you all very much.

As you can see, all of the members are very interested in how we're doing with Bill C-49. They want to ensure that we've heard all the voices that are necessary and that it's reflective. Thank you all very much for coming.

We will now suspend for a short period of time.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

I have just one last question and it's in regard to a measure that's included in Bill C-49 that hasn't been mentioned yet, except in the last panel. I recognize you've indicated that you had numerous amendments, 80, and you've boiled them down to just a few that you believe are technical amendments that would truly address the spirit of what was intended.

It's actually that the act is amended by adding the following after section 127, and I'm going to read it. It's under interswitching rate and it says:

127.1(1) The Agency shall, no later than December 1 of every year, determine the rate per car to be charged for interswitching traffic for the following calendar year.

Then it has the considerations, and it states:

(2) In determining an interswitching rate, the Agency shall take into consideration

(a) any reduction in costs that, in the opinion of the Agency, results from moving a greater number of cars or from transferring several cars at the same time; and

Here's the one that I'm really interested in:

(b) any long-term investment needed in the railways.

I'm just wondering if you could comment on that. If you have any comments, was that something you were looking at when you were looking at amendments, or how does this fit in terms of addressing competitiveness?

Also, are you very aware that this is a consideration when looking at an interswitching rate, and how will long-term investment be monitored? Do you know the answer to that?

[Wade Sobkowich]

We see the shippers entering into discussions with railways and negotiations on what a service contract would look like after Bill C-49 passes, presuming that it passes in a similar form to what it is today. We see them entering into negotiations, and then if and when those negotiations fail, the parties would each submit their best offer to an arbitrator and the arbitrator would decide.

We would be looking to the arbitrator to decide that penalties would apply to the shipper and would apply to the railway for similar functions of the same magnitude of a penalty.

For example, if the railways say they're going to.... When grain companies don't load a train of railcars within 24 hours, we pay a penalty of, say, $150 a car. If the railways say they're bringing the cars on a Tuesday and they don't come on a Tuesday, we would see a penalty of $150 a car applied. We're looking for balance in the service contract, something that clearly identifies what the railways' obligations are and what the financial consequences are to them for failure to do so, and the same thing with shippers, and that they be reciprocal. The spirit of it is that you would have penalties of the magnitude that reflect each other's obligations.

That has nothing to do with damages, I might add. We still have issues with damages. If you don't receive the train and you can't get your product to the customer and there are contract extension penalties, or maybe you've had to default on a contract, as we saw in 2013-14, those are still issues that would need to be addressed on the heels of a level-of-service complaint or through the courts. We're just talking about the speeding tickets, if you will, in the system to provide those penalties as discipline to motivate the right behaviour.

[Wade Sobkowich]

That's an excellent question and it gets to the heart of one of our four amendments, actually, which is the list of interchanges. With the introduction of Bill C-49, there will be two different sets of instructions or requirements under publishing a list of interchanges.

For long-haul interswitching, it would say the railways have to publish a list and they can remove anything from that list with 60 days' notice. Proposed subsection 136.9(2) sets out the parameters for the railways to publish a list of interchanges as well as removing them from the list. This is a new provision that goes along with long-haul interswitching. It says railways have to publish a list. They can take something off that list with 60 days' notice. We're worried that a long-haul interswitching order is going to go against them. They're not going to like it. They're going to remove an interchange.

However, we were told that there's already existing legislation that covers interchanges in the act—subsections 127(1) and (2) under “Interswitching”. It says that a party can apply to the agency for the ability to use an interchange and that the agency has the power to compel a railway to provide reasonable facilities to accommodate an interswitch at that interchange.

These are contradictory. One says one thing about interchanges and the other says something about long-haul interswitches, but a long-haul interswitch for one shipper could be an interchange for another shipper, so it doesn't make sense to have two different and potentially divergent sets of instructions on what happens with the interchanges and how they can be decommissioned by the railway.

What we are saying is that you can remove the provision in Bill C-49 on the railways' publishing a list and being able to remove it with 60 days' notice. The existing provisions that talk about the agency's powers to instruct the railways to keep or install an interchange—all this is already in the act and should apply equally to interchanges and long-haul interswitching. Does that make sense?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

I don't know if I will be referring to one of the 76 amendments you have submitted to us, but I would like you to provide me with some explanations.

Interswitching seems almost to be a cornerstone of Bill C-49. But while the rail companies tell us that it is absolutely not needed any more, you are telling us that it is practically vital.

According to Bill C-49, a rail company has to provide grain producers with 60 days notice before an interswitching interchange is removed. Theoretically, companies can remove themselves from an interswitching point. But last week, I read on Transport Canada's site that rail companies are still supposed to honour certain general obligations. That was all they said about it.

Do you know what those general obligations are? Should Bill C-49 be more specific about what would happen if a rail company were to issue a 60-day removal notice?

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you very much. I'd like to address this question to Chris. The railways are asking us to amend Bill C-49 so that facilities within 250 kilometres of the border can't access the long-haul interswitching. What would that do for your members for the value-added processors? What effect would that have on their business?

[Wade Sobkowich]

One of the main opportunities we see in Bill C-49 is the reciprocal penalties piece. We have long been after the ability to get commercial contracts with railways. Every other link in the chain has commercial contracts. We have contracts with farmers, with penalties on both sides for failure to perform. There are contracts with the vessel owners, with the end-use buyer. That's the way business is conducted.

Until now, we've been operating primarily on railway tariffs, so that's a unilateral set of rules and penalties imposed by the railways, supported by statute. Bill C-52 introduced the ability for service-level agreements, but it lacked teeth. There was no ability to include penalties for non-performance in those service-level agreements.

We think that this will go a long way, because now shippers have the ability to try to negotiate penalties. We're talking about balanced penalties here. With regard to the same types of penalties they charge us for certain things, we want to be able to charge them for failure to do certain things. If we can have that in place in something that resembles a normal service contract that you would find in a competitive marketplace, we think that will go a long way.

[Chris Vervaet]

I'll start with that.

That's a good question. Really, for Bill C-49 to work for processors in particular it's the long-haul interswitch. Out of all the grain shippers in western Canada, processors were probably the biggest utilizers of the extended interswitch.

Again, similar to my testimony, it breathed some semblance of competition into the marketplace and provided an opportunity for many of my members, not just to leverage better service but also to access markets that we previously weren't able to access, primarily into the United States. Seventy per cent of our vegetable oil and protein meal produced in western Canada ends up in the United States. To have a level of competition and access to carriers that can move our products to markets that were previously untapped has generated invaluable benefits to our member companies, but also down the value chain to our growers as well.

Access to new markets means new growth potential for our processing facilities as well. That competitive element drives business, profitability, and it drives value throughout the entire value chain.

[Vance Badawey, Liberal, Niagara Centre, ON]

I'm going to take the opportunity to ask the same question I asked the last panel. I expected the answer I received from the last panel. I'm not expecting the same answer from you folks, so I'm going to move on with the intent...as you had mentioned.

We came a week early to the Hill to get this job done, and I'm sure you're anxious to get it done as well. Our intent is to listen and learn, and with that, respond accordingly.

Bills like C-49 are expected to be an enabler for folks like yourselves to work in an environment that, quite frankly, is going to provide the stakeholder the returns they're expecting. With that said, we're trying to create a balance. That balance we're trying to create between the shippers, the providers of the service in terms of transport, was mentioned earlier. You mentioned that you want to ensure you have that value established for all Canadians, in terms of their returns.

Again, being an enabler, we're expecting our GDP to keep rising, as it has in the last few months, and to continue to rise. By utilizing the movement of product, which contributes to our overall enhancement of global economic performance, a lot of that is done by integrating our distribution logistics systems. Bill C-49 is being put forward to provide a platform for good and fair service.

My question is very simple, and I'm going to open up the floor for all three of you to dive in, as I did with the last panel. How can Bill C-49 ultimately contribute to satisfying the objectives contained within your business plans?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

I would like to bring up something else with you.

Progress over 100 years has resulted in bigger harvests, but also in a greater variety of agricultural products. Should Bill C-49 contain a mechanism to specifically review schedule II on a regular basis? For example, I don't understand why soya is not in that schedule.

What is the mechanism to add a product to that schedule? Has it been explained to you at all? If not, do you have a solution to propose?

[Robert Aubin, NDP, Trois-Rivières, QC]

Yes, thank you.

So your producers are concerned about being in a situation where the measures in Bill C-30 have been abandoned and Bill C-49 will not be passed for a number of months. Yet harvest time is almost upon us.

Do your producers have serious concerns about the coming weeks and months?

[Wade Sobkowich]

I could take this one, and then maybe Norm could.

We've definitely seen an increase in harvest volumes year over year. We have an upward trend. If you take a look at the last five years, we're now talking about a crop of 65-million tonnes being an average crop. Man, if we'd gotten that number 10 years ago, we would have been busting the rafters of our elevators. We definitely have more and more grain coming off the fields during harvest time. That's attributable to changes in agronomic practices and changes in technology. Farmers are operating with better practices and that sort of thing.

If your question is what has changed to give us comfort that we won't end up with a similar situation to what we had when we started seeing some of these big crop volumes, from our perspective nothing has changed. We don't have a change in the competitive environment. When we had Bill C-30 and we had extended interswitching, we had a glimpse of a change in the competitive environment, but that has sunsetted. We don't have Bill C-49 passed yet, so really, nothing has changed in the competitive environment and nothing has changed in the legislative environment to give us comfort that if we don't get something passed here, with tools we can use like reciprocal penalties, we won't go back to the situation we had in the past.

Does that answer your question?

[Norm Hall, Vice-President, Canadian Federation of Agriculture]

Thank you, Madam Chair.

As introduced, I am Norm Hall. I'm the first vice-president of the Canadian Federation of Agriculture, but more importantly, I sit here as a farmer from western Canada, east-central Saskatchewan, Wynyard, on the largest saltwater lakes in Canada, which are rising. Thank you for the invitation to appear before this committee.

As you know, CFA has been a strong proponent of advocating for a review of the regulations and legislation that govern and manage the movement of grain for export and the review of transportation. The government's advisory council on economic growth had coined the phrase “unleashing Canadian agriculture”. An important component of unleashing agriculture is building an efficient export corridor through sound legislative and regulatory process, up-to-date infrastructure, and information systems with the full accountability of all transportation and grain-handling participants. It is very important in order for the industry to confidently develop new and larger export markets. The primary stakeholder in all of this is the producer of the product, the farmer.

In 2014-15, Canadian farmers paid $1.4 billion in freight charges to the railways under the MRE. This was not paid by shippers. Grain companies are cost plus brokers. Any charges from the railways get passed through to the producers. They pay the bill. The railways are basically cost plus facilitators. Under the MRE, they are guaranteed a 27% return. A recent study by one of our members, APAS in Saskatchewan, saw that the number was closer to 60% or 65% return to the railroads in profit. It is the farmers who take all the risk in the production stage and the farmers who pay all the costs of production, the cost of freight from farm gate to the inland terminals and transload sites, the freight to export position, and the cost of any disruptions or delays.

Canada's railways and an efficient, low-cost grain rail transportation system are critical to the country's agricultural economy and the financial health of grains and oilseed producers. To ensure that the system works overall, decision-makers must recognize that farmers pay the entire bill for transportation of export grain from farm gate to port. Western Canadian financial livelihoods are captive to the railway monopoly that is trying to maximize profits for its shareholders.

Between 35 million and 40 million tonnes annually are captive to the railway monopoly. Since transportation costs represent one of the highest input costs in grain farm operation, the importance of ensuring competitive environment through regulation and legislation can never be understated. As Emerson so aptly stated, transportation costs, for example, often represent a more significant hurdle to expanded trade than do the costs associated with international tariffs or trade barriers. This was all brought to a head with the failure of the 2013-14 crop year. Twenty million additional tonnes, as was stated by the previous presenters, could have been alleviated if they had contacted the industry and were able to plan that way instead of leasing 400 of their engines into the States and shorting themselves of power for the winter.

While Bill C-49 takes great steps in the right direction, it almost seems as if they are meant to look like improvements without involving real change, leaving railways with far too much room to not comply with the intent and ending up with far short of a competitive environment: requesting more information while restricting the agency's use of that data; institutionalizing long-term interswitching but with historical revenue-based freight rates and not actual costs; avoiding giving the agency powers to pre-empt problems and requiring formal complaints; regulating interswitch options without giving the shipper flexibility to choose interswitches that would really help the shippers and result in higher levels of competition amongst the railroads; continuing to allow the railways to randomly or arbitrarily close producer car-loading sites and interchange facilities; continuing to allow the railways to use 1990s costing data when they've implemented savings on the backs of farmers; and giving railways a full year post-implementation to comply with new information data requirements.

I also want to say that while my comments focus on general policy positions, the CFA fully supports the more detailed technical legislative amendments proposed by the Crop Logistics Working Group, which will be in a letter to your minister.

Under transparency, since 40 million tonnes of grain are annually slated to move by rail, it's absolutely imperative that the railways comply with new regulations for additional data and information to allow proactive logistics and marketing and planning by the entire industry. Real-time data is required to achieve this objective, and timelines for the release of data and information have to be short enough to allow for proactive planning. There is no justification to allow the one year after legislation to come into force before they have to comply.

The use of data information by the agency should not be restricted and should be fully utilized to facilitate and manage the flow of traffic and grain volumes to pre-empt delays, backlogs, and disruptions. For example, if information or data is used for LHI administration, it can be used in other areas and for other purposes. The agency should have the freedom to do so, not for public release, but just for their own use. Further, the agency must be given the authority to find solutions to problems proactively, without waiting for industry to file complaints. The legislation must be amended to give the CTA the added powers to correct service performance failures through their own volition.

Under reciprocal penalties, while this is a contractual agreement between grain companies and railways, I've already told you that any problems arising between these two parties eventually get charged back to the farmers. The CTA must have the mandate and the resources to monitor, regulate, and ensure compliance. Level of service and compliance mechanisms have to prevent the railways, with their monopolistic powers, from becoming nonchalant about service provided, since shippers/farmers have no other options. Producer car loading sites are a good example, and I'll talk about them soon.

The minister must monitor the railways' overall level of service and service availability, and cannot allow the railways to arbitrarily and randomly withdraw services that are required to efficiently and expeditiously transport grain to export markets that provide farmers and shippers with the opportunity to improve their competitive position in the market. Since we're going to be looking at the MRE penalties imposed as a result of this service deficiency or contract, non-compliance must not be allowed to be included in the cost calculations of the MRE.

Under the long-haul interswitch, LHI, railways are concerned about losing market share. Welcome to competition. In one voice, they want to talk about having market-driven agreements, yet as soon as that threatens their monopoly by allowing LHI and U.S. carriers to come up here, they don't want it. They want to have regulation in place.

Under the current interswitch, 30 kilometres, there are four points in western Canada that are naturally served by the two railroads. The 30-kilometre interswitch takes that up to a whole 14 out of 368. Under the 160 kilometres, that extended to 85% of all points, which allowed grain companies to use interswitch if needed, if service was poor.

That is why interswitch is there. It's because of poor service. It gives the opportunity for one company to search for another company for better service. It's supposed to be for competition.

[Chris Vervaet, Executive Director, Canadian Oilseed Processors Association]

Thank you very much.

Madame Chair and members of the committee, on behalf of the Canadian Oilseed Processors Association, or COPA, I would like to extend our thanks to the committee for the opportunity to contribute to this important study of Bill C-49.

COPA works in partnership with the Canola Council of Canada to represent the interests of oilseed processors in this country. We represent the companies that own and operate 14 processing facilities spanning every province from Alberta through to Quebec. These facilities process canola and soybeans grown by Canadian farmers into value-added products for the food processing, animal feed, and biofuels sectors. This not only creates incredible demand for oilseeds grown by Canadian grain farmers but also injects stable, high-paying jobs into the rural areas where we operate.

Our industry’s success is predicated on the ability to access foreign markets. Indeed, 85% of our processed canola products are exported to continental and offshore markets. Efficient rail logistics are paramount to getting our products to these markets in a reliable and timely fashion. To put this into perspective, about 75% of our processed products are moved by rail.

Given the importance of rail to the success of our industry, COPA has been working closely with the WGEA over the last couple of years to advocate for key policy recommendations that we believe are fundamental to creating a more competitive rail transportation environment. In our view, Bill C-49 is, on balance, a good bill. It is not a perfect bill but it contains several critical components that value-added processors feel will improve the commercial balance between shipper and railway. These include the ability to arbitrate poor performance penalties into service-level agreements, along with a dispute resolution mechanism to address disagreements in the application of a signed SLA. We also feel that data transparency and its robustness have been significantly improved in the bill, and we have seen a strengthened definition of “adequate and suitable”.

This being said, our concerns with the bill’s proposed changes to essentially convert the former extended interswitch provisions to long-haul interswitching are especially noteworthy. To be very clear, extended interswitching was an incredibly important tool for value-added processors. For the first time, interswitching breathed a semblance of real competition into rail logistics for our sector where there had never been any before, giving previously captive facilities access to a second carrier for U.S.-bound product in particular. Our industry saw a dramatic improvement in rail service to the U.S. while extended interswitching was available.

Extended interswitching was an extremely simple and effective tool. It put all interchanges into scope and involved no application or bureaucratic red tape to access. Rates were clearly published for set distances, giving shippers the certainty and predictability needed to book freight over a longer term. Moreover, it was also a highly effective negotiating tool with the local carrier, which we found to be much more service oriented and likely to enter into a conversation about better service or rates with the leverage of the extended interswitching.

By contrast, the long-haul interswitch mechanism contained in Bill C-49 presents a number of challenges and removes the key characteristics that we were leveraging in extended interswitching. Most notably, LHI proposes a multitude of complicated parameters and conditions to determine how and which interchanges are accessible for shippers. LHI also proposes setting rates based on historical comparable rates. All comparable rates, to date, have been set under monopolistic conditions. If the rates themselves are not competitive, there is no incentive for my members to apply for long-haul interswitch.

Left unaddressed, both of these provisions as currently drafted would render the LHI to be of little to no use. Therefore, we are interested in working with members of this committee to find solutions to put long-haul interswitch to work as a competitive tool for our industry, as we believe the government has intended in this bill. Similar to WGEA, we see three key areas of concern that need to be addressed to make LHI an effective tool.

You will find some of our technical amendments—again, similar to those of the WGEA—in annex A, which we circulated to the committee members prior to this meeting.

Number one in terms of our list of technical amendments is to clarify that access to the nearest interchange means an interchange that is in the reasonable direction of the traffic and its destination, whether or not a facility is dual served or if there is another interchange within 30 kilometres. Prescribing access that is simply based on shipper access to the nearest competing rail line without taking into account other considerations would limit the value of LHI. Practically speaking, when determining the nearest interchange, consideration needs to be given to whether, one, it is in the right direction of the shipment's final destination; two, it is serviced by the right rail company to move the shipment to the desired destination; and three, it is the right size with the necessary infrastructure to execute the interswitch.

The intended spirit of the LHI mechanism is to give shippers competitive options. These have to be options that we can actually use and are applied equally among shippers. Proposed paragraph 129(1)(a) of the bill stipulates that a dual-served shipper may not apply for a long-haul interswitch, for example. Excluding dual-served shippers simply on the assumption that they have competitive options is a false premise. In many instances, both rail lines do not service the traffic's final destination. As well, restricting access to long-haul interswitch places dual-served facilities at a competitive disadvantage to those who do have access to the long-haul interswitch.

Let me give you a quick example of what that means in practical terms. In annex B we have attached map 2. In Alberta, in the town of Camrose, we have a member operating a processing facility that is dual served by CN and CP. Currently under the long-haul interswitch they do not have access to apply for long-haul interswitch, even though there is an interswitch opportunity at Coutts in Alberta, at the border, where they could have access to BNSF. This not only limits their access to markets served by BNSF in the United States but also puts them at a competitive disadvantage in terms of other members or other facilities that do have access to that long-haul interswitch because they are not dual served.

Two, in terms of the key technical amendments we're looking to propose, we are also very concerned about the ability of the long-haul interswitch provision to address shipper concerns over rate-setting. In other words, the way that Bill C-49 is currently written, it places a floor on LHI rates, indicating that a rate cannot be less than the average of per-tonne kilometre revenue of comparable traffic. The bill needs language that gives the CTA the ability to consider commercially comparable competitive rates when determining the interswitching rates. Looking to historical and comparable rates as a reference to determine interswitching rates ignores the fact that these rates have been determined under monopolistic conditions. The CTA should also give regard to the actual cost to move the shipment, not what the railways have managed to charge in the past when monopolistic powers were at play. In this way, the agency can ensure that a railway gets a reasonable rate of return for conducting LHI business, on the one hand, and also guard against perpetuating excessive rates set under circumstances where competition does not exist.

The third amendment that we're looking to propose is that we are concerned about the ability of a rail company to take unilateral decisions to stop serving an interchange or tear it up altogether without any further check and balance. Again, this runs directly against the original spirit of the new LHI to give shippers more competitive options. We believe the bill requires tighter controls around decommissioning interchanges and in fact recognition of the other common carrier obligations that seem to already limit the ability for this to happen.

Finally, we just would like to add our voice to the growing number of grower groups and associations raising concern over the fact that soybeans and soy products have been excluded from the MRE. The MRE is a viable tool to protect farmers from exorbitant rate hikes. We know that the government and members of the committee share this concern for farmers, thus the decision to keep the MRE in this new iteration of the CTA. It is therefore surprising that soybeans and soy products would be excluded. As Wade mentioned, soy is now one of the major commodities grown in Manitoba and is expected to see similar growth in seeded acreage in the other two prairie provinces. With this growth in acres, there is increasing potential for value-added processing to expand into soybeans in western Canada, where there is currently no large commercial value-added processing for soy. There is no logical policy rationale to exclude soy over any other crop already under the MRE. COPA members and our farmer customers are asking that soybeans and soy products be added to schedule II.

In conclusion, oilseed processors are of the view that Bill C-49 is an important step in the right direction. Our suggested technical amendments on LHI would provide shippers an opportunity to access alternate carriers, which strengthens the overarching intent of the bill to provide a more competitive system.

Thank you.

[Wade Sobkowich, Executive Director, Western Grain Elevator Association]

Thank you very much, Madam Chair and members of the committee.

The Western Grain Elevator Association is pleased to contribute to your study on Bill C-49. The WGEA represents Canada's six major grain-handling companies. Collectively, we handle in excess of 90% of western Canada's bulk grain movements.

Effective rail transportation underpins our industry's ability to succeed in a globally competitive market. We recognize this committee's comprehensive work last year. That was a very important report that this committee completed. The one published in December 2016 largely supported our points of view on the main issues.

In Bill C-49, a number of recommendations made by grain shippers were accepted and a number were not. We were asking the government to strengthen the definition of “adequate and suitable accommodation” to ensure that the railways' obligation to provide service was based on the demands and needs of the shipper, and not on what the railway was willing to supply. The definition proposed in Bill C-49 isn't explicitly based on shipper demand. There are positives and negatives with this new definition.

We were seeking the ability to arbitrate penalties into service-level agreements for poor performance, along with a dispute resolution mechanism to address disagreements in a signed service-level agreement. We are pleased that this is included in Bill C-49. It will resolve many of our challenges on rail performance matters.

We were requesting that extended interswitching be made permanent to allow for the continuation of one of the most effective competitive tools that we have ever seen in rail transportation. Extended interswitching was not made permanent—a significant loss to us.

We were asking that the government maintain and improve on the maximum revenue entitlement to protect farmers from monopolistic pricing. This protection was maintained; however, soybeans remain excluded from this protection.

The WGEA had also supported expanding the agency's authority to unilaterally review and act on performance problems in the rail system, similar to what the U.S. Surface Transportation Board enjoys in the U.S. Bill C-49 includes the provision for the agency to informally look into performance problems, but it doesn't give the agency added power to correct systemic issues.

Lastly, the WGEA was asking the government to improve the transparency and robustness of rail performance data. This has been improved in Bill C-49; however, shipper-related demand data is still not captured. Later this week, some of our colleagues in the grain industry will provide additional perspectives on use of the data, timelines, and reporting to the minister. The WGEA shares their views.

To be clear, on balance, this bill is a significant improvement over the existing legislation and is a positive step forward for the grain industry. As a result, we are choosing to offer only four technical amendments, representing the bare minimum of changes, where the proposed legislation would not be workable and would not result in what the government intended. The main area is long-haul interswitching.

For your reference, annex A, which we circulated to committee members in advance, contains our suggested legislative wording amendments. The extended interswitching order had been in effect for the last three growing seasons and had evolved into an invaluable tool for western grain shippers. Instead, the new long-haul interswitching provision is intended to create these competitive options. In that spirit, shippers need to be able to access interchanges that make the most logistical and economic sense, not necessarily the interchange that's closest.

In terms of reasonable direction of the traffic and its destination, the current wording in proposed subsection 129(1) may give a shipper access to the nearest competing rail line, but this would be of little or no value if the nearest interswitch takes the traffic in the wrong direction for the shipment's final destination, if the nearest interchange does not have the capacity to take on the size of the shipment, or if the nearest competing rail company does not have rail lines running the full distance to the shipment's destination. For the committee's reference, we've circulated annex B, which visually depicts real-world examples of where accessing the nearest interchange makes neither logistical nor economic sense.

Two clauses need to be amended to better reflect the spirit of creating competitive options. If you go to map 1 in the package we circulated, you will see an example of an elevator that has access to an interchange within 30 kilometres, but that interchange takes the traffic in the wrong direction. Bill C-49 stipulates in proposed paragraph 129(3)(a) that a shipper may not obtain a long-haul interswitch if a competing rail line is within a distance of 30 kilometres.

Sending a shipment in the wrong direction or to the wrong rail line is cost prohibitive and in those cases renders the interswitch useless. A shipper that happens to be within 30 kilometres of an interswitch that is of no use to them is excluded from long-haul interswitching and is put at a competitive disadvantage.

A similar problem exists for dual service facilities given the prohibition in proposed paragraph 129(1)(a). The solution to this problem is to add the wording “in the reasonable direction of the traffic and its destination” to proposed paragraphs 129(1)(a) and 129(3)(a). This language already exists in the legislation in proposed section 136.1 for other purposes and needs to be replicated in proposed section 129.

On long-haul interswitching rates, proposed paragraph 135(1)(a) of the bill directs the agency to calculate the rate by referring to historical comparable rates, but most comparable rates to date have been set under monopolistic conditions. If the rates themselves are non-competitive and may be the very reason a shipper wants to apply for a long-haul interswitch in the first place, this process would not effectively address the heart of the problem. We're concerned that without an amendment of the nature that we're proposing, LHI will become like CLRs.

Proposed subsection 135(2) directs the agency to set a rate not less than the average revenue per tonne kilometre of comparable traffic. This enshrines monopoly rate setting. In any reasonable marketplace, profitability is set on how much it costs you to do the business, plus a margin to generate a profit. Simply being able to charge any amount without regard to costs will result in rates divorced from the commercial reality of cost-plus.

We're seeking important changes to proposed paragraph 135(1)(b) and proposed subsection 135(2) to ensure the agency has regard to the cost per tonne kilometre, not the revenue, and that the rates are based on commercially comparable traffic, not just comparable traffic. If long-haul interswitching is to work, the rate has to be based on a reasonable margin to the railway, and not at least as much and maybe more than they can charge in a monopoly setting.

The third area where we have a concern is the list of interchanges. Proposed subsection 136.9(2) sets out the parameters for the railways to publish a list of interchanges as well as removing interchanges from the list. Grain shippers are concerned that the railways would have unilateral discretion to take out of service any interchange they choose.

There is existing legislation already in play: sections 127(1) and (2) under “Interswitching” have a process by which a party can apply to the agency for the ability to use an interchange, and the agency has the power to compel a railway to provide “reasonable facilities” to accommodate an interswitch for that interchange. This same language should apply to long-haul interswitching. From an interchange perspective, both interswitching and long-haul interswitching could apply to the same interchange.

On soybeans and soy production, when the MRE was first established in 2000, soybeans were barely grown on the Prairies, and therefore were not included in the original list of schedule II eligible crops. Since then, soy has become a major player in the Prairies and a commodity that holds significant potential growth for oil, meal, and food uses.

It must be pointed out that the Canadian portion of the U.S. movement of crops into Canada is covered under the MRE. As a result, U.S. corn, for example, that happens to be travelling in Canada is covered under the MRE, while Canadian soybeans are not. There is no reason why the government should not take this opportunity to add soybeans and soy products to schedule II.

In conclusion, Bill C-49 is, on balance, an important step in the right direction.

It's with restraint that we ask the committee to make only four non-invasive technical amendments to ensure it accomplishes what was intended.

Thank you very much.

[Sean Fraser, Liberal, Central Nova, NS]

If I can interject, I take your point that a major multinational corporation based in Canada isn't necessarily the weak partner at the bargaining table that some would have you believe.

I come from a very rural part of our country in Nova Scotia. If we ship east, it's going on a boat; if we ship west, it's going on a train. My concern is folks within the rail industry who really are captive to a single shipper. There's really one rail line in Nova Scotia. They do face a lack of an ability.... Realistically, they have to accept terms or reject them.

If I take a step back and look globally at what's in Bill C-49, this is about providing service to all kinds of shippers, those in rural areas and in smaller businesses as well. Do you see that Bill C-49's intent would be to increase service to these shippers, and do you think it will achieve an enhanced service to some of these rural shippers in particular?

[James Clements]

I'm going to make a couple of comments. We have five pillars around our business plan, on what Bill C-49 does to help us enable our business plan.

Around safety, we would agree that the LVVR amendments, as proposed, are ones that would allow us to move forward and improve the safety. That's the first focus of our organization in anything we do, to operate safely in the communities we serve across the country.

We always talk about providing service as one of the core components of our business plan. We haven't had much commentary around the level of service amendment that has been proposed. One area that we would comment on around this is that we run a network. When we think about providing service, we're providing that service on a network basis and we have to juggle all the push and tug of what every individual shipper would like with the realities of serving everybody across that network. We think there needs to be some consideration in the regulation or the bill around looking at the entire impact of a service agreement or a service arbitration award on the network itself, not just on an individual shipper, because if you give the priority to one shipper, it could subordinate everybody else and have negative repercussions. That would be one additional comment I would make.

[Janet Drysdale]

I'll jump in on that one. In fact, our biggest concern regarding Bill C-49 is that it does just the opposite. One of the greatest challenges we're facing as we look ahead to increasing Canada's trade, export-import activity, is that we need investment in the Canadian rail system that underpins Canada's economy. In order to earn that investment, first of all, we need to ensure that we protect the existing traffic on Canadian rail lines and that we don't give the U.S. an unfair opportunity to come in and take the traffic and increase the density on their rail lines so they can then reinvest it in the U.S. network.

We are a highly capital-intensive business. We spend about 50% of our operating income every year in the context of ongoing maintenance and capital improvements to the physical infrastructure. Our biggest concern about Bill C-49 is the ability to continue to earn an adequate return in order to be able to make those investments that we require to keep the system robust.

At CN we have a particular concern about our remote branch-line networks, as I mentioned, which typically have a lower density of freight, and I think you've heard Michael Bourque speak about some of the challenges that short lines face. The reality is that rail is not particularly competitive when you're talking about distances under 500 miles. A piece of legislation that forces us to have these short-haul movements actually impairs our ability to earn an adequate return on a given movement, which we need to actually reinvest, particularly in those branch lines.

We've seen this happen before. We've had cases where we've actually had to abandon some of our networks in the more remote regions of Canada. Basically what ends up happening is that it encourages more trucking: the truckers have to step in and bring the truck to the more densely populated mainline network of railway. That's not good for our climate change agenda and it's not good for Canadian shippers. These are our concerns about Bill C-49, that in fact it makes it ever more difficult for us to achieve our business plan and to be able to earn those returns that we need in order to reinvest in our infrastructure.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I'm going to dig a bit deeper for you folks and give you an opportunity to explain how Bill C-49 can actually become an enabler for you versus a disabler and, with that said, enable you to basically recognize the returns established by your strategic business plans.

My question to all of you—and I'm going to give you the time to answer this in depth—is to explain how Bill C-49 can in fact contribute to satisfying the established objectives that you've recognized for your strategic and/or business plans and how it can become an enabler for your organization to then execute those action plans that are contained within your business plan.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

Gentlemen, madam, welcome. Thank you for joining us.

I would like to start with a question for all the witnesses about safety.

I certainly heard your comments about the importance you place on audio and video recorders. However, my gut asks whether a voice and video recorder is going to help the TSB draw any conclusions on an unfortunate event that has already happened. I was rather looking to find out about the measures you plan to implement, or that Bill C-49 should implement, in order to prevent accidents.

As Mr. Ellis said, we know that most incidents are linked to human factors.

There are two major questions about the frequency with which the human factor is at play in accidents. First, there is the level of fatigue of locomotive operators. Then there are the repeated demands from the TSB pointing to the need to instal additional means of physical defence. This can mean alarms. or even technological mechanisms that can make a train stop when the driver has missed a warning he should have noticed. It seems repetitive.

In the major companies, what measures are in place, first to achieve better management of fatigue, and second to move towards these means of physical defence?

Perhaps, Mr. Ellis can start, but I invite everyone to respond.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Okay.

Do you feel that you were adequately consulted on the minister's transportation 2030 strategy and in regard to Bill C-49?

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

Thank you to our witnesses for being here today, day two of a four-day study on this issue. We're very interested in hearing your testimony.

I will start by saying that it goes without saying that we understand the importance of our railways to our country and our economy and recognize that there needs to be a balance struck between the railways and the customers they serve. Certainly, looking at the legislation that's before us today, I think we're all committed to doing that and ensuring that this legislation does that.

I'm a little confused by some of what I've heard today in relation to Mr. Bourque's comments around Bill,C-49 describing this legislation as creating additional measures on top of measures that are rarely used. I want to then look at the testimony that was given by Mr. Ellis and Mr. Clements in regard to long-haul interswitching. I think those were the measures that Mr. Bourque may have been referring to, I'm not sure, where you defined the extended interswitching regime as being deeply flawed and generating a number of harmful public policy consequences that ultimately disadvantage the Canadian supply chain.

I want to reflect back on some of the testimony that we heard when we were studying the Fair Rail for Grain Farmers Act. The stats that were provided to our committee during our study demonstrated that extended interswitching was, in fact, rarely used. Our shippers acknowledged that, while that was the case, it was seen as a very helpful tool in negotiating contracts with the railways.

We have folks saying that this was a remedy that was rarely used, but that it created harmful public policy consequences and ultimately disadvantaged the Canadian supply chain. I'm trying to reconcile those comments and would give you an opportunity to speak to that.

[Janet Drysdale, Vice-President, Corporate Development, Canadian National Railway Company]

Thank you, Sean.

There are a number of provisions in Bill C-49 that run a high risk of unintended consequences. The part of the bill with the greatest risk potential is long-haul interswitching, which I'll subsequently refer to as LHI. LHI is a remedy which, until it appeared in this bill, had never been recommended, discussed, or considered. No assessment of this remedy on the rail industry has been performed and we believe that significant unforeseen and adverse consequences could result from its implementation.

CN has an extensive network of branch lines serving remote communities in all regions of the country. Those branch lines present a challenge, as they are expensive to service and maintain while at the same time handling low volumes of traffic. In many cases, the reason we are able to justify keeping those lines in operation is the long-haul business they generate. LHI makes it possible for a customer to require us to take the traffic to an interchange point and hand it to a competitor, who would then get the majority of the move and its associated revenue.

Under this remedy, the other railway is in a good position to offer lower rates, as it bears none of the cost of maintaining the remote branch line where the shipper is located. Needless to say, if this were to become a common occurrence, it would be difficult for us to justify the ongoing investments required to keep those remote lines operational.

During second reading debate, LHI was identified as an option to captive shippers that would “introduce competitive alternatives for their traffic and better position them in negotiations for service, options and rates”.

Let me start with the notion of captivity. The bill defines captive as having access to only one railroad, completely ignoring the shipper's access to alternative modes of transportation. So if a customer ships product today using both rail and truck, Bill C-49 considers them captive to rail. We are proposing an amendment to clarify the definition of captive such that if a shipper uses an alternative means of transportation for at least 25% of its total shipment, that shipper must be considered to have competitive options and therefore should not have access to LHI.

With respect to negotiating service options and rates, Bill C-49 maintains the shipper's access to all of the existing remedies respecting rates and service, including final offer arbitration, group final offer arbitration, complaints against railway charges, level of service complaints, and arbitration on service-level agreements. Consistent with Canada's national transportation policy and that LHI provides a competitive option, we are proposing an amendment whereby a shipper that can access LHI should not have access to the other rate and service remedies.

LHI also provides a non-reciprocal competitive advantage to U.S.-based railroads. Railways in the U.S. already have a significant advantage because of the much higher density of traffic on their lines. They simply have much more traffic per mile of railway. That higher density means more traffic over which to spread the high fixed cost of maintaining the network. Railways are most profitable on long-haul moves. Under LHI we can be required to move goods a short distance and then transfer them to a U.S. railway that would get the long-haul move and most of the revenue. That is revenue that then becomes available for investment into the U.S. network at the expense of Canada.

We don't understand, particularly at a time when NAFTA is being renegotiated, why Canada would give away this provision with nothing in return. Providing such an advantage to U.S. railways creates a risk to the integrity and sustainability of Canada's transportation network, ports, and railways, which depend on a certain volume of traffic to generate the capital necessary to keep Canadian infrastructure safe and fluid and to keep good, middle-class jobs in Canada.

We acknowledge that the exclusions in the act limit the areas where this new remedy is available, but those exclusions are insufficient, especially near the Canada-U.S. border in all three prairie provinces. If we had access to similar provisions in the U.S., we would not be objecting. However, there is no right to interswitching in the U.S., and this absence of reciprocity is prejudicial to the Canadian rail industry. We are therefore proposing an amendment that would create an additional exclusion to provide that a shipper not be entitled to apply to the agency for an LHI order if the shipper is located within 250 kilometres of the Canada-U.S. border.

Another area where we do not understand the need for intervention is the attempt to define the level of service requirement. The current provisions have been in place and effective for a long period of time. In our view, the current provisions are balanced and do not require the proposed amendment. We are also proposing an amendment respecting the provisions of Bill C-49 that introduce penalties when railways fail to meet service obligations.

In 2012, Jim Dinning, a facilitator appointed by government, recommended that penalties of this type should only be introduced when penalties also apply to shippers that commit volumes and fail to meet their commitment. BillC-49 has no such reciprocity. We are proposing amendments that better balance penalties between shippers and railways by making railway penalties contingent on shippers having similar obligations.

We would like to commend the minister for his decision to move forward with legislation making the use of locomotive voice and video recording devices compulsory. This is an important step in our collective goal to increase rail safety. While it is important to have the information provided by these devices available when determining the cause of an accident after it has occurred, they are even more valuable in our ongoing efforts to prevent accidents.

We want to say a word about the provision of the bill that increases the ceiling for the percentage of CN shares that can be held by a single shareholder. The current limit of 15%, a limit no other railway has, impedes CN in attracting the kind of patient, long-term investors that we require in our extremely capital-intensive industry. This change is a good first step to correcting the uneven playing field vis-à-vis our competitors. We will be asking members to consider a minor amendment to ensure that this change takes effect immediately upon royal assent.

Finally, we have a word about grain shipments. In the crop year that just ended, CN moved 21.8 million metric tonnes of grain, the most we have ever moved in a year. We beat the previous record set in 2014-15 by 2% and exceeded the three-year average by 7%. I'm also pleased to be able to tell you that, in advance of the start of the crop year, grain shippers secured approximately 70% of CN's car supply under innovative commercial agreements that provide shippers with guaranteed car supply and that include reciprocal penalties for performance.

We have entered into a period of dramatically increased service, innovation, and collaboration with our customers. We have achieved this through commercial negotiation, improved communication, and a better understanding of the challenges we each face. If the Canadian supply chain is going to move the increased volume of trade that we all support and that we all believe can be achieved, it can only happen with collaboration across the supply chain. Regulation has its place, but experience shows that we reach our goals when it is the exception.

We appreciate the opportunity to speak with you today and look forward to your questions.

[Sean Finn, Executive Vice-President, Corporate Services, Canadian National Railway Company]

Madam Chair, good morning, and thank you very much.

This morning I'm joined by two of my colleagues, first of all Janet Drysdale, who's vice-president of corporate development and sustainability at CN; and also, Mike Farkouh, who is vice-president of operations, Eastern Canada. I'm the chief legal officer and executive vice-president of corporate services at CN.

We appreciate very much the opportunity to meet with you today to discuss Bill C-49, which has significant implications for the rail sector in Canada. CN participated very actively in the statutory review of the Canada Transportation Act by the Honourable David Emerson. We believe the panel did a good job in the review of the act, identifying the sorts of policy changes that are necessary to enable Canada to meet its goals for growing trade in the coming decades. Mr. Emerson and his colleagues commissioned a number of useful studies. With regard to rail we recognize that, unlike some past reviews, the panel based their recommendation on evidence and data and less on anecdotes. The panel also accepted the clear evidence that deregulation of the rail sector supported innovation, which derived benefits to shippers, customers and the Canadian economy. We are somewhat disappointed that not more of the panel's recommendations are included in Bill C-49.

After the report of the review panel was published, we participated in the consultation process undertaken by Minister Garneau, specifically in a number of roundtables held across the country.

We have also been encouraged by the work of the government's advisory council on economic growth chaired by Dominic Barton. We are particularly pleased with their first report's focus on the importance of growing trade and the need to strengthen and grow our infrastructure in order to achieve this. The council also stressed the importance of having a regulatory system that encourages investment in infrastructure and enables the transportation sector to attract the capital needed to invest in growing capacity.

I am sure that you are familiar with CN, but I would like to remind you of some important aspects.

CN operates its own 19,600-mile network, serving three coasts, the Atlantic, the Pacific and the Gulf of Mexico, as well as the port of Trois-Rivières. In Canada, our network extends over 13,500 miles, linking all main centres and access points. This makes CN a strategic partner in Canada's logistics chain.

We have an extremely diversified commercial portfolio. Our biggest sector is intermodal transportation, or import and export container traffic. Container transportation is the fastest growing and most competitive sector in the rail industry.

More broadly, I think it's imperative for the committee to know that deregulation and market-driven forces over the last 20 years have been the key underpinnings enabling investment and innovation in Canada's rail sector. According to the OECD, Canadian shippers today benefit from rail rates that are the lowest in the industrialized world, lower even than in the United States. In addressing Bill C-49, we acknowledge the minister's attempt to design a package that addresses the interests of both railways and shippers; however, we are concerned with the failure to recognize the degree to which deregulation has led to an environment of both lower prices and more reliable services for shippers and the degree to which deregulation has enabled railways to invest heavily in maintaining and growing our network. CN's capital investment over the last 10 years has totalled approximately $20 billion.

I'd like to turn the microphone over to my colleague, Janet Drysdale.

[James Clements, Vice-President, Strategic Planning and Transportation Services, Canadian Pacific Railway]

The rail supply chain is the backbone of our economy. Not only is the Canadian freight rail system the safest, most efficient, and environmentally friendly means of transporting goods and commodities, it achieves these goals while maintaining the lowest freight rates in the world. This is a key point. A healthy rail system is critical to Canada's international competitiveness, given our vast geography. Without a competitive, economic, and efficient rail system that can move products thousands of kilometres to ports for export, at the lowest cost in the world, much of what Canadians sell on international markets could not be priced competitively.

Canada's freight transportation system has been successful because the legal and regulatory environment, particularly in recent decades, has recognized that competition and market forces are the most effective organizing principles. These principles are articulated in Canada's national transportation policy declaration, contained in section 5 of the Canada Transportation Act.

It is important not to lose sight of these principles when reflecting upon legislative changes to the framework that has been proven to be so successful in delivering economic benefit to Canadians. CP is pleased that the government has decided to allow the extended interswitching regime of the previous government's Bill C-30 to sunset, as it was based on what we saw as a deeply flawed rationale, and it generated a number of harmful public policy consequences that ultimately disadvantaged the Canadian supply chain.

Similarly, however, the proposed new long-haul interswitching, LHI, regime contains a number of problematic elements. Most fundamentally, the LHI regime, like the extended interswitching regime it is replacing, is non-reciprocal with the U.S. As such, American railroads would be granted significant reach into Canada, up to 1,200 kilometres, to access Canadian rail traffic, but Canadian railways will not have the same reciprocal ability under American law.

The LHI regime is constructed in such a way that it is asymmetrical in its impact, both in terms of non-reciprocal access for American railroads vis-à-vis CP and in terms of CP and CN, because CP's exposure to American railroads under this regime is much greater than is CN's, given the geographical location of our respective networks, further compounded by the two excluded corridors.

The LHI regime could undermine the competitiveness and efficiency of the Canadian supply chain by incentivizing the movement of Canadian traffic to American railroads and supply chains, thereby eroding traffic density for Canadian supply chains.

The negative consequences to the Canadian economy will not be limited to the rail industry. If Canadian rail traffic is diverted to American trade corridors, it will also dampen shipping volumes at Canadian ports. For CP alone, there is a significant amount of our annual revenue that could potentially be moved to American railways and trade corridors under this proposed LHI regime.

A decision to allow non-reciprocal access for American railroads represents a significant concession by Canada to the U.S. while NAFTA is being renegotiated. This strikes us as an unwise public policy choice for the Canadian economy. The proposed LHI regime ought to be reconsidered in that context.

As drafted, Bill C-49 also imposes an obligation on connecting carriers to provide rail cars to the shippers in addition to their other service obligations. It has been well understood that as part of its common carrier obligation, a railway is required to furnish adequate and suitable accommodation for traffic. However, in some cases, the provision of railcars by a connecting carrier is not practical. For example, tank cars are typically owned by the customer, not the railway. The Canada Transportation Act already addresses a railway's car supply obligation, so it is important to clarify that the railway does not have a higher standard to provide car supply under LHI than already exists.

Since the LHI rate is to be determined by the agency, based on the commercial rates charged for comparable traffic, it follows that traffic moving under an LHI rate or any other regulated rate, such as grain under the MRE, should be excluded from the LHI rate determination since those rates cannot be considered commercial.

Further, American railways operating in Canada and regulated by the federal government should also be compelled to provide rate data to be used by the agency in determining LHI rates.

We will conclude our opening remarks there. I know there are many other elements of Bill C-49 that we have not discussed this morning. Our letter highlights some considerations on those points, and, of course, we are happy to take questions on any element.

Thank you, Madam Chair.

[Jeff Ellis, Chief Legal Officer and Corporate Secretary, Canadian Pacific Railway]

Thank you, Madam Chair, and good morning.

I'm Jeff Ellis, chief legal officer for Canadian Pacific. I am joined by James Clements, our vice-president for strategic planning, and Keith Shearer, our general manager of regulatory.

Thank you for the opportunity to speak with you today. In the interest of time, we will focus our remarks this morning on just two issues, LVVR and long-haul interswitching.

As one of Canada's two class I railways, we operate a 22,000-kilometre network throughout Canada and the United States. We link thousands of communities with the North American economy and with international markets. CP has made and continues to make significant levels of capital investment to improve safety and grow the capacity of our network. Since 2011 we've invested more than $7.7 billion on railway infrastructure. In 2017 we plan to invest an additional $1.25 billion. Should the changes to the maximum revenue entitlement come into effect in their current form, CP will likely make a major investment in new covered hopper cars, creating new supply chain capacity.

CP has been recognized as the safest railway in North America by the Federal Railroad Administration in the U.S. We've achieved the lowest frequency of train accidents in each of the past 11 years. That being said, safety is a journey and not a destination. One incident is too many. LVVR technology is essential if we are to materially improve railway safety in Canada, because human factors continue to be the leading cause of railway incidents. Since 2007 we've had a 50% reduction in safety incidents caused by equipment failures. Similarly, track failures are down 39%. However, human-caused incidents have seen little change over the same time period. According to data published by the TSB, 53.9% of railway incidents in 2016 were caused by human factors. It's clear that we must take action to tackle this category of rail safety incidents.

The evidence is also clear. One example is that since the implementation of DriveCam in New Jersey, New Jersey Transit saw a 68% reduction in bus collisions from 2007 through 2010. The number of passenger injuries fell 71% in the same period. Rail commuter Metrolink in California similarly saw a significant reduction in red-signal violations and station platform overruns.

It's imperative, however, that these regulations allow for safety issues to be exposed before an incident occurs. That would enable us to proactively develop effective and appropriate corrective action. It would be a mistake to amend Bill C-49 to prevent any kind of proactive use of LVVR data by railway companies. It would negate a key safety benefit of adopting the technology. CP recognizes the need to use this technology in a way that is respectful of our operating employees, in accordance with Canadian privacy laws, and we are committed to working closely with Transport Canada and our unions over the coming months to do so.

I'll now turn it over to James.

[Michael Bourque, President and Chief Executive Officer, Railway Association of Canada]

Thank you, Madam Chair.

The Railway Association of Canada represents more than 50 freight and passenger railway operators composed of the six class I rail carriers identified in this bill, and 40 local and regional railways, known as shortlines, from coast to coast, as well as many passenger and commuter rail providers, including VIA Rail, GO Transit and RMT, and tourist railways, such as the Charlevoix Railway.

I should mention at the outset that Bill C-49 potentially affects all of our members, including provincial and commuter railways, because of the proposed safety measures included in the bill.

When I appeared before you last year to comment on the Fair Rail for Grain Farmers Act, I mentioned the negative effect that extended interswitching could have on the short-line rail sector and suggested letting these provisions sunset. We were relieved to see that Bill C-49, by creating the concept of class I rail carriers in its clause 2, has made clear that long-haul interswitching does not apply to short-line railways.

In your report you recommended:

That the Minister of Transport request the Canadian Transportation Agency to examine the railway interswitching rates it prescribes to ensure that they are compensatory for railway companies.

Bill C-49 does not request the agency to review interswitching rates but goes one step in the right direction with respect to LHI, by specifying that the rates set by the agency shall be based on comparable commercial rates.

In addition to setting this average as a minimum, the act says that the agency must consider the traffic density on the line and the need for long-term investments, which, if applied properly, should lead to rates above the minimum, which is the average rate. That is good news, but the devil will be in the details of future decisions from the agency.

There are more experienced people from CN and CP with me to speak to the impact of long-haul interswitching and related service provisions on their businesses. Instead, I thought it would be useful to speak to the recent history of the railway industry, the success of Canadian railways in a public policy context, and some important and hard-won lessons from the past three decades of rail regulation and deregulation.

Successive governments, and indeed this committee, have enabled the positive accomplishments of Canada's railway industry by introducing and improving a regulatory regime that prioritizes commercial freedom and reliance on market forces over government intervention.

Before the introduction of the National Transportation Act in 1967, railway economic regulation in Canada involved increasingly restrictive regulation focused on freight rate control and uniformity. This approach led to inefficient railways that had difficulty undertaking much-needed capital investments to maintain and grow their networks.

Railways in the United States faced similar challenges, leading to the adoption of the Staggers Act and, as a result, significant deregulation in the U.S. rail industry. Canada's National Transportation Act represented the beginning of a dramatic shift in the regulatory environment for Canada's railways. Rigid regulatory constraints on pricing were removed, allowing railways to compete more effectively.

By the 1990s, decades of incremental deregulation placed an increasing emphasis on market and commercial forces, while maintaining a number of protections to ensure balance between railways and shippers. The passage of the Canada Transportation Act in 1996 introduced additional changes that reduced market exit barriers, allowing railways to discontinue or transfer portions of their networks to other carriers so as to become more efficient. This gave railways greater freedom to control costs and generate efficiencies. It also fostered sharp growth in Canada's short-line rail industry. Around the same time, CN was privatized, creating competition between two privately held, publicly traded national systems.

As a result of these policies, Canadian railways evolved into highly productive companies capable of providing low-cost service while generating revenues needed to reinvest into their respective networks. Shippers meanwhile gained access to a world-class railway system and today benefit from freight rates that are among the lowest in the world. Canadian railway performance, in terms of rates charged, productivity, and capital investment, greatly improved under these regulatory freedoms.

Since 1999, Canada's railways have invested more than $24 billion in their infrastructure, which has resulted in a safer and more efficient rail network that benefits customers directly.

Despite this record of public policy success, and a national transportation policy that clearly recognizes that competition and market forces are the most effective way of providing viable and effective transportation services, we are here today debating a bill that adds recourse mechanisms for the sole benefit of shippers.

Three weeks ago, the president of the Canadian Transportation Agency gave a speech in Vancouver in which he stated that existing mechanisms—including mediation services, final offer arbitration on rates, arbitration on service levels that allow the agency to craft service-level agreements, and adjudication on the adequacy and suitability of services provided by railways—are not used very often, and that in fact the agency is planning outreach to stakeholders who are not taking advantage of existing provisions. Yet we're here today to discuss new provisions on top of existing recourse mechanisms that are currently underutilized.

Under this bill, long-haul interswitching is available to a rail customer even if they have access to trucking or marine transport, which are competitive services. It is an example of how we can lose sight of the need to recognize competition and move backwards toward regulation.

Let me now turn to safety, and to the locomotive voice and video recording, or LVVR, provisions of the bill.

Yesterday, I sent all members of this committee an article outlining the reasons for our support of LVVR for both accident investigation and accident prevention. For a long time, railways have advocated the right to use this technology as another safety defence within railway companies' safety management systems. It has always been the industry's belief that LVVR will, simply by its presence, help to prevent accidents by discouraging unsafe behaviours and unauthorized activities that may distract crew members from their duties.

We believe that this technology will increase safety and that it can be introduced in a thoughtful way and used responsibly. Even with significant investments, there are still accidents that can be prevented. The record of class I railways in North America is excellent, but it is not perfect. Until we have full automation of both freight and passenger trains, we are going to see accidents that can be traced to human error.

LVVR is not a silver bullet. Rather, it is an important, proven tool that can help identify dangers and act as a deterrent for the very small percentage of employees who might be tempted to use their smart phone or read a book when they should be alert and working. In this respect, it will help to change the culture of the workplace in a positive way. This has been the experience of companies such as Phoenix Heli-Flight, a Canadian helicopter company that today uses voice and video recorders in their aircraft. In addition, it is expected that in most cases the LVVR evidence would corroborate the statements and explanations provided by the crew members themselves.

Let me talk about privacy versus safety. Some have expressed concern about privacy, but we already know from the introduction of other technologies and from video in the workplace that there are tests imposed by the Privacy Commissioner to guide us on the responsible implementation of LVVR. We are anxious to work with you and with the department on the creation of these regulations.

LVVR is a technology that will prevent accidents. Investigative bodies such as the TSB and the U.S. NTSB have called for its use. When there is an accident, investigators from the Transportation Safety Board will better understand what happened, and everyone will learn from it.

Thank you very much.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call to order meeting number 68 of the Standing Committee on Transport, Infrastructure and Communities. Pursuant to the order of reference of Monday, June 19, 2017, we are studying BillC-49, an act to amend the Canada Transportation Act and other acts respecting transportation and to make related and consequential amendments to other acts.

Committee members, welcome. I'm glad to see that you all came back for a second day, a week ahead of everybody else.

To our witnesses, thank you for coming this morning. We appreciate it very much.

We will open with the Railway Association of Canada, if you'd like to take the lead.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Yes, thank you, Madam Chair. I wanted to follow up on my earlier question about the health and well-being of short-line railways. Saskatchewan certainly has a very robust network. Last year we took a trip to Lac-Mégantic to have a look at the situation there. The locals were showing us some pretty horrible things about the state of repair of that line. So from the engineering side and from Saskatchewan's side, I'd like to hear your comments on short-lines and on any issues you think Bill C-49 may need to address.

[Robert Aubin, NDP, Trois-Rivières, QC]

Could you give us a concrete example of an aspect that you would like to see better defined in Bill C-49?

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I just have a few questions with respect to your comments about life cycle of railways, but I'm going to take it a step further. I'm going to refer to the life cycle of all transportation-related infrastructure, whether waterways, railways, roads, or airports, etc.

Currently there is a strategy that the minister has established, and this legislation, Bill C-49, will complement that strategy when we get it. With that there is going to be—I spoke about this with other witnesses—a need for infrastructure investments as it relates to life cycle, replacement maintenance, and ultimately replacement of those assets 30, 40, 50, 60 years down the road.

My question for you as engineers, as folks who are part of transportation-related systems, is do you find that the life cycle is actually being abided by? Are the strategies and asset management plans being put in place? That's my first question.

My second question is, are those asset management plans actually being financed?

[Martin Shields, Conservative, Bow River, AB]

Thank you.

Mr. Orb, in regard to Bill C-49 I think I heard some concerns and some positives. If you had your choice, what would be the most positive thing you see out of this and what would be the change you would like to see happen?

[Sean Fraser, Liberal, Central Nova, NS]

Oh, great. I'll shift to Mr. Bell, please.

You mentioned, I think quite appropriately, that prevention is probably a better way to go than merely reacting to incidents and accidents as they may occur. I completely agree. I'm wondering if you think that the prevention mechanism being considered in Bill C-49 is okay. Is it okay to allow a random snapshot in time to see how things are going? Do you need to be able to have the full body of video? Do you think the proposed mechanism is an appropriate way?

[Sean Fraser, Liberal, Central Nova, NS]

On the issue of reciprocal penalties, I need another point of clarification. You expressed I think some general support for some of the items in Bill C-49, but on this issue you think it comes up short. I'm looking at clause 23 of the proposed bill. It seems to me that this is addressing the reciprocal penalties portion, where it empowers the agency to order a company “to compensate any person adversely affected for any expenses that they incurred as a result of the company's failure to fulfil its service obligations”.

Is it that this doesn't apply as a reciprocal penalty or that it doesn't go far enough? Or is it that you think there should be some further guidelines?

[Robert Aubin, NDP, Trois-Rivières, QC]

In your opening remarks—tell me if I'm reflecting your comments correctly—I did not sense a great deal of excitement for Bill C-49. You seem to have trouble measuring the impact of some of the provisions and determining whether they are true solutions.

Let me give you a few examples of what I heard. I understood that the reciprocal penalties process should be better explained. My understanding is that you don't think the provisions in Bill C-49 are sufficient. You are saying that interswitching might be useful, but you don't seem sure that it is the solution.

Do you have some more specific solutions that you would like us to recommend to the government?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

My thanks to all three of you for being here with us.

I have questions for each of you and my first question is for Mr. Orb.

Before even talking about Bill C-49, I would like to point something out. It is almost the middle of September and a number of the provisions in Bill C-30 sunsetted on August 1. Without even knowing what will happen in a few months, are the measures that have not been renewed and that sunsetted on August 1 causing problems for exporters?

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Orb, I'm going to ask this question a few times unless some of my colleagues beat me to it in any given round. One thing that is a question in Bill C-49 is the development of a definition for “adequate and suitable” service. When you're speaking with your networks, what do they think about that? Can you give us any directions as to the sort of things we would ask government to think about when coming up with the definition?

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

I'm going to completely change my track of questioning and ask some questions of you, Mr. Orb. Welcome. It's good to see you here. Thank you for taking the time to come to Ottawa to share your thoughts with us.

I noted that in your statement you talked about a number of measures in Bill C-49, but specifically I want to ask you about reciprocal penalties, because you made a comment that SARM was disappointed that these penalties were not officially mentioned in the legislation. I'm going to ask you to expand on that and to then perhaps tell us what your thoughts are in regard to the long-haul interswitching measure in Bill C-49

Thanks.

[Jeanette Southwood, Vice-President, Strategy and Partnerships, Engineers Canada]

Thank you for the opportunity to be here today, Madam Chair. I'm very pleased to discuss Engineers Canada's stance on Bill C-49, the Transportation Modernization Act.

My name is Jeanette Southwood. In my previous role as principal at a global engineering firm, I was global sustainable cities leader and Canadian urban development and infrastructure leader. My team focused on areas that included supply chain, business continuity, and climate adaptation, urban intensification and restoration, and the strategic integration of cutting-edge global innovation and knowledge into solutions for private and public clients. Our portfolio included rail.

I am currently the vice-president of strategy and partnerships at Engineers Canada based here in Ottawa. Engineers Canada is the national organization that represents the 12 provincial and territorial associations that regulate the practice of engineering in Canada and licenses the country's more than 290,000 professional engineers. Together we work to advance the profession in the public interest.

With the entire Transportation Modernization Act open for public review and consultation, Engineers Canada's testimony today pertains directly to section 11 of the Railway Safety Act, specifically in relation to the design, build, and maintenance stages of railway work in Canada, and we have three recommendations in particular that I'd like to touch on in my remarks today.

The first recommendation is that the engineering principles in section 11 of the Railway Safety Act be further defined. The second is that professional engineers be involved in the entire life cycle of railways' infrastructure. The third is that climate vulnerability assessments be carried out on Canada's rail infrastructure and that Canada's rail infrastructure be adapted to a changing climate.

First, regarding engineering principles, in Canada engineering is regulated under provincial and territorial law by the 12 engineering regulators. The regulators are entrusted to hold engineers accountable for practising in a professional, ethical, and competent manner and in compliance with the applicable provincial or territorial engineering act, code of ethics, or legal framework in place. Technical provincial and professional standards of conduct are set, revised, maintained, and enforced by regulators who are all professional engineers in their jurisdiction.

By virtue of being a regulated professional, professional engineers are required to work with the public interest in mind and to uphold public safety. For this reason, Engineers Canada strongly supports and encourages the direct involvement of professional engineers in the design, construction, maintenance, evaluation, use, and alteration of all engineering work related to railways in Canada, not only to increase transparency and public confidence towards a safe and well regulated rail system, but also to uphold public safety and accountability on all railway work.

It is vital that the federal government incorporate professional engineers through the entire life cycle of a rail project, and not just in the final approval of rail work. Engineers Canada encourages the federal government to put measures in place to ensure that this is the case. It is equally important that it be professional engineers who take on the responsibility of overseeing and maintaining the standards and regulations set out by the federal government.

Currently the Railway Safety Act outlines that companies are obligated to report on the qualifications and licences of safety personnel. However, ambiguity and the possibility of misinterpretation are evident in section 11 of the Railway Safety Act, specifically in regard to the definition of engineering roles and engineering principles. The act states:

All work relating to railway works—including, but not limited to, design, construction, evaluation, maintenance and alteration—must be done in accordance with sound engineering principles.

The ambiguity around the term “engineering principles” creates space for misinterpretation and a potential situation where public safety is compromised. The act should specify that where engineering principles are to be applied, they must be applied by a professional engineer. Federal public servants who are tasked with overseeing the engineering work referred to in section 11 must also be professional engineers. Communities are better protected by the consistent application of safety and siting procedures where professional engineers are involved in decisions.

Our second recommendation is regarding the life cycle of railways' infrastructure. Involving professional engineers in the life cycle of rail projects will not only ensure that they are carried out with public safety top of mind, but engineers are also well equipped to design, build, and manage resilient rail infrastructure.

Canada's railway infrastructure is an integral enabler of Canada's growing economy, as we've heard from the two speakers who preceded me, providing services to more than 10,000 commercial and industrial customers each year, moving about four million carloads of freight across the country and into the U.S., and getting approximately 70 million people in Montreal, the GTA, and Vancouver alone to work each year. This vast integrated network needs to operate with efficiency and public safety in mind, both of which require a high level of reliable service.

Finally, I'll turn to our recommendation regarding climate vulnerability. Resilient infrastructure is the driving force behind productive societies, stable industries, and increased public confidence in civil infrastructure. However, Canada's infrastructure report card noted that much of Canada's current infrastructure is vulnerable to the effects of extreme weather, which is becoming increasingly frequent and severe. Vulnerable rail infrastructure presents a risk not only to public safety but also to the productivity of Canadian individuals and businesses and of the country's economy. Without the consistent application of climate vulnerability assessments to inform rail design, public confidence and trust in rail infrastructure will be fragile.

For example, floods and historic record water flows severely damaged Churchill, Manitoba's Hudson Bay Railway tracks on May 23, 2017, just a few short months ago. This major flood severely damaged five bridges, washed away 19 sections of track bed, and required that 30 bridges and 600 culverts be checked for structural integrity. This specific rail line transports food, supplies, and people to the remote community of Churchill, Manitoba, a community frequently visited by tourists during the summer months. With severe damage to the Hudson Bay Railway, service disruptions have now caused goods, services, and people to arrive by air transportation, an expensive mode of transportation to the northern community. The catastrophic damage to the rail line will take months to repair, causing major service disruptions to both individual and business productivity, as well as decreased public confidence in rail infrastructure.

Climate vulnerability assessments provide early awareness to planners regarding the potential impacts that extreme weather events could have on both public and private infrastructure in communities across Canada. Professional engineers in Canada are leaders in adaptation and are ready to work collaboratively with the federal government to provide unbiased and transparent advice to safeguard rail infrastructure from the devastating effects of climate changes. Engineers Canada, in conjunction with Natural Resources Canada, has developed a climate risk assessment tool that greatly enhances the resilience of infrastructure, increases public confidence in rail infrastructure, and decreases the severity of climate change impacts on individual and business productivity.

The public infrastructure engineering vulnerability committee protocol, also known as PIEVC, gives engineers, geoscientists, infrastructure owners, and managers a tool to design and construct rail infrastructure that will withstand today's rapidly changing climate. The protocol has been applied to a wide range of infrastructure systems more than 40 times in Canada, including with Metrolinx, and three times internationally. Engineers Canada encourages the federal government to invest in early assessment and prevention tools, such as the PIEVC protocol, to be a condition for funding approvals, accepting environmental impact assessments, and approving designs for rail infrastructure projects that involve rehabilitation, repurposing, maintaining, and decommissioning existing rail infrastructure. This investment will contribute to maintaining levels of service, safeguarding the environment, strengthening individual and business productivity, and upholding public safety.

Madam Chair, thank you for allowing Engineers Canada to present to the committee today on this important issue. We hope the committee will recognize that professional engineers play an integral role in Canada's transportation infrastructure and that our profession is ready and willing to ensure that Canada's railway system is resilient and safe and continues to be an enabler of Canada's economy.

[Ray Orb, President, Saskatchewan Association of Rural Municipalities]

Yes. Thank you.

Good evening. Thank you for the opportunity to address the committee tonight. I am pleased to be here today.

My name is Ray Orb, and I'm the president of the Saskatchewan Association of Rural Municipalities, or SARM.

SARM represents all 296 rural municipalities in Saskatchewan. Our members are home to a major agriculture sector. Saskatchewan represents nearly 40% of Canada's farmable land. This has allowed Saskatchewan to become the world's largest exporter of lentils, dried peas, mustard, flaxseed, and canola.

In 2016 Saskatchewan exported $14.4 billion worth of agrifood products. For a landlocked province like Saskatchewan, getting these products to market requires an efficient and effective world-class rail transportation system. That is why I'm appreciative of today's opportunity to talk about Bill C-49 since SARM members and the agriculture sector rely so heavily on the transportation system.

SARM has been an advocate for increased data reporting. More data means that better decisions may be made by producers and others in the supply chain. In SARM's view, railways should be required to produce plans that detail how they will deal with demands resulting from the upcoming crop year. This should include railways' contingency plans for larger yields and how they will deal with the cold winter months in the Prairies—that is, the equipment and the number of crews that will be needed, for example.

SARM is pleased to see that Bill C-49 includes an expansion of the Governor in Council's powers to make regulations requiring major railway companies to provide information regarding rates, service, and performance to the Minister of Transport. Enhancing data requirements and making more information available to those in the supply chain is not an immediate resolution to transportation issues, but it is a crucial piece of the solution.

Another advocacy point for SARM has been the need for reciprocal penalties. Holding railways and others in the supply chain to account is important as producers are the ones who ultimately lose out when levels of service are not met.

It appears that Bill C-49 will enable shippers to obtain terms in their contracts dealing with amounts to be paid in relation to a failure to comply with conditions related to railway companies' service obligations. Clarification for producers on how this will function is required. It would be beneficial for all parties involved if the Canadian Transportation Agency would provide further clarification on the issue, such as guidelines or best practices for reciprocal penalties.

SARM is disappointed that reciprocal penalties are not officially mentioned in the legislation. Should an impasse occur between the shipper and the carrier regarding reciprocal penalties, will the CTA intervene? Further clarification on the informal dispute resolution services is required. While there appear to be more details to sort out regarding reciprocal penalties, SARM is happy to see that reciprocal penalties will be allowable.

SARM also welcomes the amendment on the informal dispute resolution services. Providing cost-efficient, effective, and timely dispute resolution services is imperative for producers. Once the harvest is completed, producers must get their products to market in a timely manner to fulfill their contract obligations. Disputes should be resolved as quickly as possible so that producers won't face any additional penalties or unnecessary delays.

Long-haul interswitching may also be a positive new provision for producers. SARM supported the increased interswitching distances in the Fair Rail for Grain Farmers Act. It was hoped that extended interswitching from that act would be made permanent. While the extended radius will benefit more producers who are eligible, they must still negotiate with carriers before applying for long-haul interswitching. It remains to be seen whether this new provision is the long-term solution needed.

The retention of the maximum revenue entitlement, or MRE, is appreciated by SARM and its members. SARM members oppose the elimination of the MRE. This provision protects producers from excessive freight rates, ensures the movement of grain, and allows railways to reinvest in the rail network. Rather than eliminating the MRE, SARM members have passed a resolution requesting that the MRE formula be reviewed as soon as possible. SARM hopes that the changes to the MRE will continue to ensure railway accountability and transparency while still protecting producers from high freight rates.

Overall, Bill C-49 appears to address many of the concerns facing producers. The CTA review provided the agriculture sector with many opportunities to provide feedback and SARM is appreciative of this. SARM will continue to provide comments and feedback at every opportunity and looks forward to continuing to work with the federal government and all agriculture stakeholders to advance the sector.

Thank you again for the opportunity to speak to you today.

[The Chair, Liberal, Judy Sgro]

I call the meeting on our study of Bill C-49 back to order.

Welcome to the witnesses we have with us now. They are Jeanette Southwood, vice-president, strategy and partnerships, Engineers Canada, from the city of North York; and Ray Orb, president of the Saskatchewan Association of Rural Municipalities.

We know you very well. We have a member on this committee who reminds us constantly about Saskatchewan. We're really happy to have you with us here, as well.

Of course, we also have George Bell from Metrolinx.

Welcome to all of you.

Mr. Orb, do you want to start?

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Hardie.

Mr. Emerson, Mr. Streiner, and Mr. Al-Katib, thank you so much. You can see by the interesting questions that your comments are greatly appreciated.

I think Bill C-49 reflects a lot of the work that you've already done, Mr. Emerson.

So thank you all very much. Thank you very much for being here.

For the committee, I will suspend for now.

[Scott Streiner]

At the moment, the legislation, including the act as it would be amended by Bill C-49 , does not give us the authority to go and set standards for or investigate other players in the air travel supply chain. Under the legislation, we are to focus on the airlines and their tariffs. That said, we recognize—and we saw some of this in the testimony at the Air Transat hearing—that there are multiple players and that sometimes events involve more than the airlines. So even in the absence of the authority to make regulations or to adjudicate complaints with respect to other players, to the extent that our assistance could be helpful in facilitating smoother, more fluid, more effective working relationships between the different players, we are more than happy to play that role.

[Scott Streiner]

No, we currently have the ability to look at tariffs. If we get a complaint, for example, about an incident, we can look at whether the airline applied its tariff, but we can also look at whether or not the terms of the tariff are reasonable. Under Bill C-49, we'll be making regulations that establish minimum standards for things like flight delays and lost baggage, and those minimum standards will be deemed to be part of the tariff unless the tariff provides for better compensation than is in the regulations.

[Robert Aubin, NDP, Trois-Rivières, QC]

I fully understand that the perspective is historic. At the time when production was minimal, that was understandable, but today, it would be unacceptable. Thank you.

My second question is about interswitching and, specifically, the possibility for a railway company to request an interchange to be removed from its list. Subclauses 136.9(1) and (2) of the bill describe the obligations of railway companies to keep up to date a list of the locations of interchanges and a process including a 60-day notice to remove an interchange from that list.

From reading that, my understanding was that, after a 60-day notice, the obligations no longer applied since the time expired. However, in its FAQ last week, Transport Canada notes that the railway companies have other general obligations that they must continue to fulfill beyond the 60 days.

There is an issue with the consistency between Bill C-49 and Transport Canada's FAQ. At the very least, there is a lack of clarity in terms of the general obligations that carriers must fulfill.

[Scott Streiner]

We already have an obligation under the Canada Transportation Act to report annually to Parliament on trends that we see in air traveller complaints, including how many complaints have been filed with respect to service by different airlines. So that's already in the public domain. Bill C-49 would provide additional provisions with respect to the submission of performance information by airlines, and some of that information may well be available to travellers as they make assessments on the airlines with which they wish to book.

[Scott Streiner]

Madam Chair, I trust that the members will understand that as an adjudicator I have to be careful about interpreting legislation that's not yet on the books and on which we don't have an application. Having said that, as I read the bill, it doesn't dictate to the CTA that the traffic must flow in one direction only, so I think we will make that determination and other determinations, if Bill C-49 is passed into law, based on the facts before us and the arguments brought by the parties.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

I feel like my colleague Mr. Fraser. There are many things I would like to ask, but I am going to go to you, Mr. Streiner, and circle back to some of the comments you made in your opening remarks.

You said that perhaps the most significant rail-related change in Bill C-49 is replacement of the CTA's authority to set interswitching distances beyond 30 kilometres and of the competitive line rate provisions with long-haul interswitching. I think it connects quite well with what Mr. Al-Katib said in terms of the angst around interswitching. This would be one of the issues that is raised with me time and time again when I'm meeting with stakeholders around the long-haul interswitching, so some of my questions are based on the conversations with them.

For you, Mr. Streiner, I first want to ask about long-haul interswitching orders and reasonable direction of the traffic. In the bill, clause 136.1 states that an LHI order should be applicable to the “nearest” interchange “in the reasonable direction of the...traffic”. In southern Manitoba, for example, traffic is often moving north to an interchange in Winnipeg, before it moves somewhere down into the lower 48 states. There are, however, closer interchanges at the border, but these are not of the same size or efficiency as the Winnipeg interchanges.

Does Bill C-49 allow for an LHI order to have traffic still move to Winnipeg even if there's a closer but less efficient interchange?

[Murad Al-Katib]

Well, one of the things that are being attempted with the long-haul interswitching solution is to expand that out to various sectors and across the country. There is one glaring criticism at this point of the Bill C-49 provision: the Kamloops-Vancouver corridor is actually excluded from the long-haul interswitching. It's not very clear to me why that is the case, and I think it's certainly something that needs to be looked at. But from the perspective of having it accessible, one thing is that when we did our consultation, the broad 160-kilometre interswitching wasn't being used. It was being used after we filed our report. We couldn't find a single incidence of it being used at the time. That being said, I'm not a fan of remedies just hanging out there for the convenience of shippers. But with a well planned remedy, like the long-haul interswitching, if we can get the CTA to react quickly and to extend that from year to year quickly, I think it's a very effective mechanism, and it is going to inject competition into the system.

[Sean Fraser, Liberal, Central Nova, NS]

Excellent, thank you very much.

I could probably spend an entire day with this panel, so to the extent you can keep your answers short, and I'll try to do the same with my questions, it would be helpful.

First, Mr. Streiner, you mentioned a relative explosion in the number of complaints you dealt with when the public learned that the CTA was there to help. I'm picturing that through a well-publicized process, including these committee hearings and debate in the House of Commons, if C-49 passes, Canadians are going to be very well aware that they have some sort of recourse for the ordinary frustrations that come with travel. Do you have the capacity to deal with a further explosion of complaints? If not, what mechanism can be put in place to give you that capacity?

[Robert Aubin, NDP, Trois-Rivières, QC]

Wouldn't it have been possible for Bill C-49 to give an overview of what those regulations could be, so that we would know where we are headed? I think that is relatively clear, since we are among the last countries to implement a passenger bill of rights.

Had we benefited from the experience of others, we would have already implemented certain elements. But the consultation will be based on major philosophical principles or regulatory proposals, which we could improve and completely remove or add new ones.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

I am asking you this because that bill, which had received the Liberals' support but did not make it through, contained very specific descriptions that are in line with Mr. Emerson's report. It said that the passenger bill of rights should be consistent with or close to what was being done in the United States or in Europe. Most of the measures were very specific. For example, in case of a cancelled flight, the airline company was asked to provide two or three options. Failing to do so, the company would have to pay a fee that was even costed.

With Bill C-49, we are light-years away from that. We are in the philosophy of what the passenger bill of rights should have been. We will go into consultations once Bill C-49 obtains royal assent. So are we not losing precious time, given the work that has been done already and the fact that problems are becoming more and more persistent?

[Scott Streiner]

I assume that your question is with respect to what's proposed in Bill C-49.

[Erin O'Toole, Conservative, Durham, ON]

Thank you very much, Madam Chair.

Thank you to all of our witnesses for being here. I certainly appreciate your testimony today and your participation in a review of our transportation system.

Mr. Emerson, it would be my privilege to ask you a couple of questions. We're at an interesting time in Canada. In your report, the “Pathways” report that you provided to government, which in some ways was the precursor to Bill C-49, you said on a few occasions that the theme of the report was the relationship between trade and our systems of commerce, and our transportation system, and getting those goods to markets in Canada, in North America, and around the world.

You, as a former minister of international trade, would know that we have a unique opportunity in that we're renegotiating and modernizing NAFTA at the same time that we are supposed to be modernizing our transportation networks for the next 30 years.

In your consultations, did you hear a demand, particularly from the air and the trucking side, for the transborder cabotage approach to linking the North American transportation system, and wouldn't this window—of renegotiating NAFTA— which didn't exist when you wrote the report, be an obvious opportunity to integrate the transportation system in North America?

[Murad Al-Katib, President and Chief Executive Officer, Former Advisor, Canada Transportation Act Review, AGT Food and Ingredients Inc.]

Thank you.

I'm Murad Al-Katib. I'm CEO of AGT Food and Ingredients Inc. I had the honour of serving with Mr. Emerson on the Emerson report as well. I was his lead adviser on the grain sector, on the western Canadian rail chapter, as well as on natural resources, including oil and gas and the mining sector. I'm going to bring to you some perspectives not only in that role, but also as president of one of Canada's largest container intermodal shippers. AGT Food is among, maybe, the top five or seven container shippers in the country. We're also the largest class 3 railway in the country now as well, with the purchase of a short-line railway in Saskatchewan.

Let me pick up on a couple of points that were made by my colleagues. One concerns the work we put forward and the work before you now as Bill C-49. For Canada as a trading nation, transportation infrastructure and the interaction of policy with that infrastructure is one of what I would consider to be Canada's most important generational activities. It means taking a look at how we enable the economy to seize the opportunity, as trade continues to grow, particularly to get our products to market, because of the large geographies we have in our blessed country. With these physical distances, the regulation within the system needed to be addressed in a number of areas. I'm going to break them down into bite-sized pieces.

Transparency of the transportation system was a resonating point of our report and a point that continues to resonate within industry. I think that Bill C-49 addresses greatly one of the major criticisms of the system previously. At least now we have a system such that, if these measures are put forward, the railway systems will be not only encouraged but mandated to provide data input to a system. That data will come into the CTA, will be synthesized, will be published, and will allow policy-makers to make more informed decisions instead of attempting to react on the fly. I think data transparency is a very important part. It is something that was demanded by industry, among the recommendations we made, and certainly it is something we see within Bill C-49.

When we looked at transparency, though, to reiterate both of my colleagues' comments, there was quite a strong desire for ex parte powers of the agency to investigate and be able to look more like a Surface Transportation Board, like a U.S. type of system. We seem to be falling a little bit short on that within this particular round, but we are encouraged as industry, I think, by the type of moves that are being made.

In talking about transparency, I always made the point to industry to be careful what you ask for, because it comes with responsibility. One thing you have to recognize always is that this is a transportation system. Think of it as a supply chain in which each link in the chain is essential for the link directly in front of it and directly behind it. One thing we have in the transportation system is a tendency whereby each link only blames the link ahead of or behind it.

This is a very important element, in that the responsibility of the industry becomes also reliable reporting of our forecasting, reliable reporting of our performance within the system. Efficiency is something that data transparency will drive in the system. I think this is a very important element. This isn't just about railways; it's about each link in the chain.

As that chain continues, fair access to the system is part of what we were looking to see achieved, and I think we made some very good measures in Bill C-49. What we were aiming for in our recommendations was a system whereby the playing field would be levelled to a point that we could encourage commercial agreements.

I think we have to also be very careful. Over-regulation of the transportation industry is a very slippery slope. Over-regulation of our railway system can certainly also have unintended consequences. We have a difficult environment, with long distances, the physical attributes of our terrain, and climate, such that with over-regulation we could actually drive a non-competitive system to become a drag on the economy. But while I say that, I think that fair access to the system and encouraging commercial agreements was really part of the foundation of what we were recommending.

So let's get to some of those.

Shipper remedies were quite strong within Bill C-49. There were a number of moves on the agency's authority to make operational terms within service level agreements more permanent. Reciprocal financial consequences were mandated, which was a major ask of shippers for well over a decade, and which were actually skipped in a number of the previous policy revisions. So it was a very popular move within the shipper community to encourage, then, that when you would sit at the table with your railway on a service level agreement, those operational terms would be defined, reciprocal financial consequences would be mandated by each side, and the agency could then impose those on the parties if they couldn't come to a commercial agreement.

Streamlined dispute resolution mechanisms were key. I think we made some very good progress on those. With regard to the definition of adequate and suitable accommodation, you're probably going to hear a lot about that over the next three or four days, but I do think we've certainly made some very good progress there.

In terms of the overall efficiency piece within the system, long-haul interswitching is also something that there's a lot of angst about in the system, because within the grain industry in particular, with the Fair Rail for Grain Farmers Act, we actually had 160-kilometre interswitching available, hanging there as a shipper remedy that was basically accessible. It was there, and it was extended. That has been sunsetted now, and long-haul interswitching has been introduced as a potential new remedy. I think the angst amongst shippers is from not understanding whether or not it truly can be implemented. Having heard the comments of my colleague Mr. Streiner, I have a level of optimism that in essence shippers will have a chance to apply for 12-month long-haul interswitching, which will involve distances much longer than 160 kilometres, and combining interswitching and the competitive line-haul rates could be an effective mechanism.

It is a new system, and I think that sometimes leads to angst, and as Mr. Streiner has stated, the CTA will be judged by its ability to react and implement. I've also made very strong recommendations to both Transport Canada and the agency to consider expedited renewal processes. So once it is approved for a one-year duration, how do we get the second year and the third year approved on a quicker and quicker basis? Those are service delivery things that I have some optimism about.

In terms of the maximum revenue entitlement, the modernization started within the provisions of Bill C-49 being suggested here, we recommended much broader modernization of the maximum revenue entitlement. There are some first steps that I think are very positive. The container intermodal traffic being excluded and the interswitching revenues being excluded are, I think, common sense provisions, and it made a lot of sense to include those within the modernization. To me, the ability of the railways to reflect individual railway investments was always a ludicrous provision; when one railway invested, that investment was split between the two railways. We've now fixed those. We've fixed out, with the proposals, adjustments to incentivize hopper car investments. These are all positive provisions that still protect the farmer within the MRE and still allow time to see what effect those mechanisms have, but I think they have been very positive.

There are the regulated interswitching rates as well, and then the reduction or the elimination of the minimum grain volumes.

We've made some good progress, I think, and I'm looking forward to being here over the next hour to answer your questions and to give our perspective as you need.

Thank you, Madam Chair.

[David Emerson, Former Chair, Canada Transportation Act Review Panel, As an Individual]

Thank you, Madam Chair, and honourable members. I'm appearing here not really on behalf of anybody except myself. I headed up a transportation review, some two and a half to three years ago, of the Canada Transportation Act. Much of what I have to say will reflect some of the conclusions of that report.

In the interest of disclosure, I also serve as the chairman of the board of Global Container Terminals, which is in the transportation space, as you know. I am not speaking on behalf of that organization; I'm speaking on my own behalf here today.

I'll just read a statement into the record.

Never before has the triangulation of trade, transportation, and technology been so central to Canada's economic success. We are a small trading nation spread out over a massive and diverse geography. Canada has to get transportation right, in the interest of our competitiveness and of future generations of Canadians. Getting it right requires that we recognize the massively complex, tightly integrated, multimodal, and international nature of the transportation system. It's increasingly a system that is in constant motion, 24 hours a day, seven days a week.

In 2014, as I alluded to, I chaired a committee charged with conducting a wide-ranging review of the Canada Transportation Act and related matters. Some 56 recommendations came out of the report, plus over 100 sub-recommendations. An overarching theme in the report was the need for better, more timely decision-making adapted to the evolving nature of today's trade, transportation, and logistics networks.

Many recommendations have been or are being acted upon, at least in spirit, by the government of the day, for example, elevated priority to infrastructure investment, including development of financing mechanisms and a more systematic database on the state of Canada's infrastructure; an increase in the foreign ownership limit for Canada's airlines; recapitalization plans for the Canadian Coast Guard; greater and more comprehensive focus on the transportation needs of Canada's north; a serious move to separate passenger rail lines and operations from freight in the high-density corridors of Ontario and Quebec; a major funding initiative to continue developing Canada's transportation and trade corridors; enhanced rights for air travellers—Mr. Streiner was alluding to that in his remarks—and strengthened standards for travellers with disabilities.

The core of the CTA review was a recognition that there are no magic fixes or silver bullets, and that getting it right involves improving governance. By that we mean establishing frameworks for decision-making that are better adapted to the massive complexity of the modern transportation system and its millions of users and service providers. Getting it right means recognizing that transportation crosses all sectors of the economy, all parts of the country, and virtually all parts of government and public policy. In few areas is the so-called whole-of-government approach more critical to our long-term future. Getting it right also means that the regulator, the CTA, Transport Canada, and other agencies, have the information, the mandate, and the tools to deal in real time with a massively complex and dynamic system.

Bill C-49 includes some significant steps to improving the information base to enable better decisions, improve dispute resolution, and generally enhance the regulatory framework. However, in my view, more is needed. Perhaps the most glaring omission in the context of Bill C-49 is the continuation of the reactive, one-at-a-time, complaint-driven approach of the CTA. I believe the agency needs the mandate and capacity to anticipate and deal with issues before they become systemic crises. Dealing with one complaint at a time when many complaints are symptoms of a broader malaise is simply not effective.

Similarly, the agency needs the power to self-initiate investigations. Where there is real and substantial evidence of an emerging problem, the agency needs the own-motion power to self-initiate an investigation, and it should have the ability, where practical, to initiate mitigating or preventive measures. None of this should detract from the ultimate authority of the minister and Parliament to direct the agency, but it should enable better, more timely decisions that lubricate the transportation system in support of better service to the travelling and shipping public.

Getting it right also requires the establishment of robust governance frameworks for organizations created and empowered by government to run various aspects of the transportation system. Airport authorities, for example, were set up 25 years ago to recapitalize and operate Canadian airports. In general this has worked very well, but the governance arrangements need to be refreshed. Airports are for the most part local monopolies with de facto powers of taxation. I note airport improvement fees, for example, buried on airline tickets, tepid accountability to the public, and no real shareholder to hold boards and management to account for the way in which capital is deployed. Similar arguments could be made about port authorities. For the most part there are no legislated guiding principles spelling out public interest considerations. Authority relationships with tenants and customers are important aspects of the public interest, yet there is no clear guidance against abusive pricing power or limiting preferential arrangements with tenants that may undermine the common user principles that are so critical to well-run public facilities. Also, should authorities be permitted to go into business in competition with their own tenants, for example?

At the moment, there is no practical mechanism of appeal for possible abuse of power over tenants and/or customers. An aggrieved party can't even appeal to the CTA because the agency is not empowered to deal with it, and appealing to the minister is generally not practical. There are many mandated entities outside of government. They operate across different modes of the transportation system and with arrangements that are generally spelled out in ground leases, bylaws of the entities or some other form of contractual arrangement. Many of these governance issues were highlighted in the CTA review.

Again, decision making in the world of transportation, where thousands of service providers interact to serve millions of customers and shippers, is all about governance. A healthy, vibrant, global, competitive transportation system requires clear accountabilities in combination with strong checks and balances. The Canada Transportation Act should spell out the principles of good governance to be applied to regulatory bodies as well as non-governmental facility operators and service providers. The act should also include the formal requirement for ongoing renewal of a national transportation strategy. The concept of a decennial review is archaic and it should be done away with in favour of an evergreen process.

Thank you, Madam Chair and honourable members. I look forward to our discussion.

[Scott Streiner, Chair and Chief Executive Officer, Canadian Transportation Agency]

Thank you, Madam Chair.

Thank you to the committee for the invitation to appear before you today.

The Canadian Transportation Agency is Canada's longest-standing independent and expert regulator and tribunal. Established in 1904 as the Board of Railway Commissioners, the CTA has evolved over the years in its responsibilities as Canada has evolved, its transportation system has evolved, and its economy and society have evolved.

Today the CTA has three primary mandates. The first is to help ensure that the national transportation system runs smoothly and efficiently. This includes dealing with rail shipper issues, rail noise and vibration complaints, and challenges to port and pilotage fees.

Our second core mandate is protecting the fundamental right of persons with disabilities to accessible transportation services.

Our third core mandate is providing consumer protection to air travellers.

Among the CTA's most important activities in recent years is the regulatory modernization initiative. Launched in May 2016, this initiative is a comprehensive review of all regulations the CTA administers to ensure they are up to date with business models, user expectations, and best practices in the regulatory field.

Over the next 10 minutes, I would like to speak about how Bill C-49 will affect the CTA's roles and how, if and when it is passed, we will implement those elements for which we will be responsible.

I would like to note that my observations are offered from the perspective of the arms-length organization that has primary responsibility for day-to-day administration of the Canada Transportation Act.

The Minister of Transport's principal source of public service policy advice is Transport Canada, and I would defer to the minister and his department with respect to questions regarding the policy intent of the bill's various sections.

I will structure my remarks around two key elements of Bill C-49: air passenger protection and mechanisms for addressing rail shipper matters.

Air travel is an integral part of modern life. Usually it's uneventful, but when something goes wrong, the experience can be frustrating and disruptive, in no small part because as individual passengers we have little control over events.

Bill C-49 mandates the CTA to make regulations establishing passengers' rights if their flights are delayed or cancelled, if they are denied boarding, if their bags are lost or damaged, if they are travelling with children or musical instruments, and if they experience tarmac delays of more than three hours. This is a significant change.

The current regime simply requires that each airline develop and apply a tariff: written terms and conditions of carriage. The CTA's role as it stands right now is to assess whether an airline has properly applied its tariff and whether the tariff's terms are reasonable.

We have said it's important that air passengers' rights be transparent, meaning that they can be found easily by travellers; clear, meaning that they are written in straightforward, non-legalistic language; fair, meaning that they provide for reasonable compensation and other measures if something goes wrong with the flight; and consistent, meaning that travellers facing similar circumstances are entitled to the same compensation and measures.

Last fall we launched public information efforts to help make travellers aware of the recourse available to them through the CTA if they have a flight issue that they are not able to resolve with an airline. We did so because we believe that for remedies created by Parliament to be meaningful, the intended beneficiaries have to know that those remedies exist.

The results of these efforts combined with the Minister of Transport's and media's focus on air travel issues have been dramatic. Between 2013-14 and 2015-16 the CTA typically received about 70 air traveller complaints per month. Over the last year, since we started our public information efforts, that number has risen to 400 complaints per month. And over the last week alone we have received 230 air traveller complaints. That is to say that in one week we have received one-third as many complaints as we used to receive in an entire year.

This jump suggests that the need for assistance has always existed and once Canadians knew that the CTA is here to help, they began turning to us in far greater numbers.

If and when Bill C-49 is passed the CTA will move quickly to develop air passenger rights regulations. Our goal will be to balance, on the one hand, the public's high level of interest in air travel issues and desire to shape the rules with, on the other hand, the expectation that those rules will be put into place quickly. To strike this balance we will hold focused, intensive consultations over a two to three-month period with industry, consumer rights associations, and the travelling public using both a dedicated website and in-person hearings across the country. Once in force, the new air passenger rights regulations will give Canadians travelling by air greater and long overdue clarity on their rights and what recourse is available to them.

Let me turn now to the second main component of Bill C-49: changes to the provisions dealing with relations between freight rail companies and shippers.

Facilitating these relations has been a key part of the CTA's mandate from the beginning. That reflects both the fundamental importance of the national freight rail system to Canada's prosperity, and the enduring concern among shippers about what they see as an equal bargaining power between them and the small number of railway companies on whom they depend to move their goods.

The CTA has observed that, notwithstanding these concerns, shippers make relatively limited use of the remedies available to them under the law. If this is because good-faith commercial negotiations are producing mutually satisfactory agreements across the board, that is excellent news. But if it is because the cost and effort involved in accessing the remedies are perceived to outweigh the likely benefits, or because of challenges with how these remedies are structured, the provisions in question may not be fully realizing their objectives.

We have also noted that there is relatively little information available about the performance of the freight rail system. This paucity of information affects the effective functioning of the market and evidence for decision-making, and stands in contrast to the situation south of the border.

The freight rail elements of Bill C-49 have the potential to address some of these issues. Amendments related to rate arbitrations, service level arbitrations, and level of service adjudications may help recalibrate the cost-benefit analysis that shippers make when considering whether to access recourse mechanisms. The the requirement that railway companies submit more data and that the CTA publish performance statistics online may help fill information gaps.

Perhaps the most significant rail-related change in Bill C-49 is the replacement of both the CTA's authority to set general interswitching limits beyond 30 kilometres and of the competitive line rate provisions with a new mechanism called long-haul interswitching. The CTA's role with respect to long-haul interswitching will be to order that the requested service be provided if an application is made and certain conditions are met, and to establish the rate for that service.

The bill gives the CTA 30 business days to receive pleadings from parties and to make these determinations. We've already begun to develop a process to ensure that we can meet that extremely tight timeline. We know that the parties will be watching our decisions on long-haul interswitching closely. Those decisions will be based on the criteria that Parliament ultimately adopts and on the CTA's analysis of facts before us, because as a quasi-judicial tribunal and regulator, what guides us is nothing more and nothing less than the law and the evidence.

Before concluding, I would like to mention one item that is not contained in Bill C-49: extension of the CTA's ability to initiate inquiries on its own motion.

The CTA already has this authority for international flights—and most recently used it to undertake an inquiry into some of Air Transat's tarmac delays. That case shows how relevant the authority—

[The Chair, Liberal, Judy Sgro]

We will reconvene meeting number 67 on Bill C-49. We have with us now in this next segment the Canadian Transportation Agency as well as the Honourable David Emerson.

It's nice to see you again, David.

We also have AGT Food and Ingredients.

I'll turn the floor over to whoever would like to go first.

Mr. Steiner, go right ahead. Thank you very much for coming this afternoon.

[Kathleen Fox]

We've talked about the foreign rail. There are several in air, one in marine, and then there are two multi-model, one of which we've talked about, which is the slow progress in addressing TSB recommendations by TC. But we're here specifically about the C-49 provisions for the LVVR, which is one of the 10 items on our current watch-list.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

I want to come back to the issue of recorders, which have to do with the category of accidents related to human error. If such recorders were in place, the authorities could know whether the train had violated a specific rule or whether it was travelling faster than the speed limit, for example. Are the rules reviewed? Does Bill C-49 provide for a mechanism to monitor the evolution of technology in rail transportation or in any other mode of transportation?

[Sean Fraser, Liberal, Central Nova, NS]

An additional question back to the watch-list that came up during one of my colleague's lines of questioning, I believe the specific item has been on the watch-list since 2012 or roughly thereabouts.

I'm curious if there are things on this watch-list item that could be better done through Bill C-49, or does the text of the proposed legislation satisfy this watch-list item completely in your view?

[Kathleen Fox]

Again, some of these details will be worked out as part of the regulations.

Right now, under the provisions of Bill C-49 the information gathered as part of random sampling or resulting from an incident or accident investigation conducted by the railway company may not be used for disciplinary purposes, competence, or for judicial proceedings unless it involved tampering with the equipment or there were a threat to safety determined as part of that sampling.

What constitutes a threat to safety remains to be determined under the regulations. This is why we are emphasizing that those regulations and the powers of enforcement have to be strong to make sure there's not inappropriate use or misuse of the data by those who have access to it.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Okay.

I want to go back to the questions my colleague was asking concerning the permitted uses and the protection of workers and follow up your last response to him, which referenced what this information will be collected for in investigating incidents and accidents, but which also said it may be used to identify best practices.

I'll just observe that I'm going to be interested in seeing how you marry the random sampling of data by companies with the fact that for the protection of the workers there will not be continuous monitoring. I don't know how you capture best practices and those kinds of things if you're not actually monitoring continuously. I'm looking forward to seeing how that plays itself out in the regulations.

I want to follow up on the fact that you commented on the watch-list. You said that this was something you had identified many years ago on your watch-list. Is there anything else on your watch-list that perhaps should have been included here in Bill C-49 or that you would have liked to see included?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you once again, Madam Chair.

When we study a bill that is as comprehensive as Bill C-49, we can make amendments to its content. We can also say what the bill is missing and talk about amendments that should be part of it.

I understand your position on voice and video recorders. However, last year, a study on aviation safety showed that many recommendations issued by the TSB remained without a response.

When it comes to rail transportation, or any other mode of transportation, as Bill C-49 is broad in scope, are there two or three priority issues—aside from voice and video recorders—you would like us to add to such an important bill as Bill C-49?

[Kathleen Fox]

If we look at the use by the railway companies, they can use it in two specific circumstances under Bill C-49. One is to investigate an incident or an accident that is not being investigated by the TSB.

The other is that on a random-sampling basis, as part of their safety management system, they can do samples to look at how crews are operating the train. During that period, they may identify procedural deficiencies or training deficiencies, on which they could then take action on a systemic basis to reduce risk.

[Robert Aubin, NDP, Trois-Rivières, QC]

Do you see those automatic measures in Bill C-49 or not?

In this era where means of transportation are increasingly intelligent—our vehicles can recognize a potential accident—instead of having a recorder, would it not be more important to adopt measures or have technology on locomotives that makes it possible to intervene and not only to determine where the error was after the fact?

[Robert Aubin, NDP, Trois-Rivières, QC]

That gives me a good opening. For the incidents that represent 42% of all accidents, to what extent could voice and video recorders have helped prevent what I consider the greatest factor in accidents involving human error, namely, conductor fatigue?

In such cases, could a digital recorder change anything at all? Does Bill C-49 fail to provide sufficient clarity? It does not contain any measures to prevent conductor fatigue and, unfortunately, we will not know until after the fact that nothing could have been done.

[Jean Laporte]

Yes.

Under the new legislation, under Bill C-49, in the case of LVVR, we would be able to work with Transport Canada. Also, Transport Canada would have enforcement powers under the Railway Safety Act.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

We heard from the department officials from Transport Canada that they had undertaken extensive consultations on everything that we see before us in Bill C-49. Was the Canadian Transportation Safety Board involved in those consultations on this specific issue?

As an observation, the main union representing train engineers has historically been opposed to LVVRs. Can you tell us what has been done to ease their concerns with this measure that is included in Bill C-49?

[Kathleen Fox, Chair, Canadian Transportation Accident Investigation and Safety Board]

Thank you, Madam Chair.

Good afternoon and thank you very much, Madam Chair and honourable members, for inviting the Transportation Safety Board of Canada to appear today so that we can answer your questions regarding Bill C-49.

As you know, this bill introduces changes to the Railway Safety Act and to the Canadian Transportation Accident Investigation and Safety Board Act, and these changes would require a mandatory installation of voice and video recorders in locomotive cabs operating on main track and would expand access to those recordings to Transport Canada and the railway companies under specified conditions. You may also know that these kinds of recordings have been in widespread use on board ships and aircraft for many years.

I bring with me today three colleagues who offer a wealth of experience.

Mr. Jean Laporte is our chief operating officer. He has been with the TSB since it was created and has extensive knowledge of our mandate and processes.

To my left, Mr. Mark Clitsome is a former director of investigations for the air branch and has been working closely with Transport Canada on the proposed legislative changes as well as those changes proposed to our own act.

On my far right, Mr. Kirby Jang is our director for rail and pipeline investigations and was heavily involved in the study on locomotive voice and video recorders that was released last year.

I'll keep my opening remarks brief today so that we can get to your questions quickly. In fact, there are just four key points I would like to make.

Number one is that at the TSB we need voice and video recorders in locomotive cabs to better conduct our investigations.

This is so critical that we have made two recommendations to this effect and put it on our Watchlist of key safety issues. Without locomotive voice and video recorders, or LVVRs, our investigators do not have access to all the information that they need to find out what happened—information that we need to help make Canada's rail network safer.

Let me give you an example.

On February 26, 2012, a VIA Rail passenger train derailed near Burlington, Ontario, killing the three crew in the cab and leaving dozens of passengers injured. The event recorder on board gave us some data, which is how we know that train was travelling 67 miles per hour on a crossover with a maximum speed of 15 miles per hour. What we were never able to determine with certainty was why. Did the crew not see the signals telling them to slow down, or did they see them but somehow misinterpret them? We just don't know, and we never will. An in-cab voice and video recorder would have provided a better understanding of the operational and human factors affecting that crew and would have helped point investigators toward safety deficiencies that could then have been mitigated.

This brings me to my second point. The information obtained from voice and video recorders must remain privileged. It must not be shared publicly. It must remain protected so that only those with the authority and the direct need to use it for legitimate safety purposes may do so.

Third, the information from selected voice and video recorders should be made available to railway companies for use in the context of a non-punitive, proactive safety management system.

Railway companies should be able to review the actions of their employees, for example, to see if track signals are always being called out, or if a train's limit of authority has been exceeded—actions that on their own might not directly cause an accident, but which could still indicate areas where safety can be improved.

This should not be for the purposes of discipline but rather to identify and correct systemic issues, which might lead to improvements in operating procedures or training. I stress, though, that this must happen in a non-punitive environment, which is why I make my last point. Notwithstanding the fact that we want railways to be given some access to these recordings, appropriate safeguards must be built into the legislation and the regulations to ensure that this information is not used for disciplinary purposes, except in the most egregious circumstances.

This final requirement may ultimately prove to be among the most challenging, in part because it relies on the existence of something called a “just culture”. This can be defined as an environment that draws a clear distinction between simple human mistakes and unacceptable behaviour, one that does not immediately blame the worker but seeks first to find systemic contributing factors.

Canadian railways, however, have often demonstrated a very rules-based punitive culture. While progress is being made to improve that culture, the TSB nonetheless understands employee concerns about the use and possible misuse of this kind of data.

Transport Canada should also have access to these recordings for safety oversight and should be able to use these recordings when taking action against an operator, but not against individual employees.

The proposed legislative changes are a departure from the way things have always been done, but as transportation evolves, so too must the way we do our work. There is little doubt that the information contained in voice and video recordings can be a valuable tool when used for legitimate safety purposes. The legislation and its implementation need to achieve the right balance between the rights of employees and the responsibility of operators to ensure the safety of their operations.

Thank you. We are prepared to answer any questions you may have.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

My question pertains to the Federal Railroad Administration, which is also opposed to voice and video recorders. In the report, they say the recorders are detrimental to staff relations.

I raised the following question when I spoke earlier. I wonder whether recorders are really the solution or whether Bill C-49 should instead introduce every measure possible to prevent accidents. Consider the transportation of dangerous substances, for example, which is barely mentioned in Bill C-49. This refers to transporting all kinds of substances by rail. Yet Bill C-49 does not include the development of a transportation mode for the future or specific features for dangerous goods. These include inflammable products, for example. Since trains are getting longer and longer, the risk of rail crashes is even greater.

Have these issues been considered or are recorders being offered as the answer to everything?

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

One of the questions I have then is with regard to long-haul interswitching rate setting. I know that in Bill C-49, paragraph 135(3)(b), in setting an LHI rate the CTA has to have regard for the rates of comparable traffic for the distance over which the traffic is moved. However, in the “frequently asked questions” document that was circulated last week, it is noted that this does not mean that an LHI rate would be a simple pro-rated amount for the LHI short-haul based on the total distance from origin to destination of the long haul.

Will the total distance from origin to its ultimate final destination and the rates for comparable traffic for these distances be taken into account when setting an LHI rate? Really, it's based on what is perceived to be two different explanations by Transport Canada.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I just want to follow up on some of my colleague's questions around long-haul interswitching as it goes to the extended interswitching that was in Bill C-30. I thought I heard you say that some of the measures in Bill C-30 have been carried over in Bill C-49, but in fact there are no measures in place right now when it comes to interswitching or long-haul interswitching or extended interswitching because that legislation was allowed to sunset on August 1, before this legislation has received royal assent. So right now our shippers are without any ability to do any kind of long-haul or extended interswitching. Is that correct?

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

I would like to draw some more comparisons. For a bill as important as this one, as for any other bill, I think it is important to compare ourselves with others.

You used this approach earlier in answering Mr. Fraser's question about the 49% maximum. For my part, I would like to go back to the two points I mentioned earlier, locomotive voice and video recorders and the passenger bill of rights.

It appears that voice and video recordings are not taken into consideration in Canada, unlike European countries, New Zealand and Australia. As to the passenger bill of rights, those same countries, and in particular European countries, have a much stronger bill of rights than what is proposed in Bill C-49.

There will be consultations. Why isn't Canada doing what is being done elsewhere? That is my main question. In the upcoming consultations on the passenger bill of rights, would it not be helpful to draw on a specific example rather than broad philosophical principles?

[Sean Fraser, Liberal, Central Nova, NS]

Thank you very much to our witnesses, to our chair, and to my colleagues, for being here.

I'll focus my questions on the portion of Bill C-49 that deals with air travel for now, and start with the passenger bill of rights.

You mentioned in passing, Ms. Borges, how these stories sometimes make the news in a rather undesirable way. It doesn't surprise me that some of these videos go viral and I think it's because when we see a passenger mistreated, we have an emotional and visceral response because it sometimes reflects our own experience. I've had my articles of clothing come out one at a time on the conveyor belt before. I've been sitting on the tarmac for hours at a time and I've had my instrument delayed an entire flight before I could pick it up, so I respond the same way the public does and I understand the frustrations.

You mentioned at the beginning a laundry list of the irritants and that language was to be required to be put in place so that essentially consumers understand what the remedies are and how they can enforce them. Could you perhaps go into greater detail to assure Canadians that they are going to have a remedy when their rights are infringed.

[Erin O'Toole, Conservative, Durham, ON]

Certainly I don't want to pry into the confidential negotiating positions of Canada, but I'm wondering whether, within the context of Bill C-49 and the NAFTA negotiations, studies were done on the efficiencies of cabotage, namely in marine, rail, and trucking, and whether an assessment of greenhouse gas emissions was done by your or another department. I'm wondering—without getting into the confidential negotiating positions—whether any studies on those two areas can be shared with this committee.

[Mark Schaan, Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Department of Industry]

Thanks so much. Bill C-49 proposes a new approach to metal-neutral joint ventures, or joint ventures in the air sector. Right now they are assessed solely on the basis of competition and competition law, wherein the primary considerations are duration of competition and economic understanding.

What C-49 does is broaden that examination to include a whole and robust competition assessment by the bureau. It also includes public interest benefits, which may include things like connectedness, safety, or the traveller experience. Insofar as a joint venture raises concerns, I think those would be that the public interest benefits assessed by Transport Canada in that review process are insufficient to overcome what would be the significant lessening of competition in the sector. What C-49 does is to attempt to balance potential negatives in any proposed transaction with potential public surplus benefits that Canadians might experience. It is necessary for one to overwhelm the other in order to go forward. It's a voluntary system by which the proponent has to have a reasonable assumption of likelihood of passage to be able to pursue the voluntary process to get the minister's authority.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair. It is a pleasure to see you at the helm of our committee again.

Welcome to everyone with whom I had the pleasure of working last year and whose faces are familiar to me. Welcome also to those of you who are joining us, and I hope you will be here permanently. If not, I heartily commend you. That is all for my greetings, since I probably have more questions to ask than the time available will allow.

I would like to draw particular attention to a sentence in your opening remarks. You said that Bill C-49 seeks transparency, fairness and efficiency. I must admit that I stumbled over the word “efficiency”. Let me cite a few examples from various modes of transportation that do not illustrate efficiency.

The first example is probably voice and video recorders. The report about these recorders, conducted by a working group of the Transportation Safety Board, or TSB, found that the use of these recorders would have been helpful in arriving at definitive conclusions in their investigations in less than 1% of cases. Less than 1% of cases. If we are talking about recorders, that is unfortunately because there has been an accident. In the interest of efficiency, I would think that train conductor fatigue should be addressed before the recorders. In our air safety study last year, we found that pilot fatigue was an important factor to be considered.

Why is Bill C-49 so specific about requirements for recorders while saying so little about conductor fatigue?

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Good morning. I'd also like to welcome you back.

In your opinion, do you think there's a gap between Bills C-49 and C-30?

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

I'll follow up with another question that drills a bit further down into one of the reasons I asked that question. Given that a review of the Railway Safety Act has just been initiated, I believe, why would we include the provisions for the LVVR measures in Bill C-49 rather than looking to include them in the Railway Safety Act?

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair, and I would echo the comments welcoming all of you here today. I appreciate the opportunity to ask you questions about Bill C-49.

You welcomed us here and thanked us for taking the time to be here, but it was because of a motion by this committee that we're actually here a week early, and so I want to thank you for being here and taking the time.

I also want to extend a welcome to my colleagues. I hope everyone had a good summer and I am looking forward to working with all of you, going into this session. Of course, there could be some changes. I also want to welcome my two colleagues on this side of the table who aren't normally members of this committee but who have graciously accepted the duty and the opportunity to be here as we work through Bill C-49.

I do appreciate the work that has gone into a bill like Bill C-49, and I think even your own opening remarks demonstrate how broadly this bill casts its net. In fact, we would have suggested that it were an omnibus bill, covering three modes of transportation and addressing a number of issues. One would probably also readily admit that the bill may not be perfect, and so I think what we're here to do is to have the opportunity to ask questions, and hear from witnesses to find out for ourselves what measures you got right, and whether there are amendments or recommendations that our stakeholders might offer.

Given those initial observations, I guess what I would like to ask is when and why was the decision made to create this very large bill that addresses so many different modes of transportation?

[Helena Borges, Associate Deputy Minister, Department of Transport]

Thank you, Madam Chair. It's a pleasure to be here today.

I am Helena Borges, the associate deputy minister of transport. I have been before this committee before, so maybe you'll remember me.

I have with me several colleagues from the department, as well as the Competition Bureau. Alain Langlois is our chief counsel on this file. Brigitte Diogo is our director general of rail safety. I have Marcia Jones, who is our director of rail policy; Sara Wiebe, who is our director general of air policy; and Mark Schaan from ISED.

First, I would echo the chair's thanking you for coming back early and taking the time to study this bill before Parliament resumes. I must say that if you haven't been in Ottawa all summer, this is officially the first week of summer, at least weather-wise, because it has been raining here non-stop. This is actually summer as we'll have it.

Bill C-49, the transportation modernization act, contains proposed legislative changes that would allow the government to move forward in delivering on initial measures as part of transportation 2030, the government's strategic plan for the future of transportation in Canada, which the minister announced last fall. The plan was announced following an extensive consultation process with industry stakeholders, indigenous groups, provincial and territorial governments, and Canadians, which built on the findings and recommendations from the Canada Transportation Act review report. You will hear from Mr. Emerson, who was the chair of that panel, later today. This process allowed us to hear a broad range of views on the future of transportation over the next 20 to 30 years, and how we can ensure that the national transportation system continues to support Canada's international competitiveness, trade, and prosperity.

Bill C-49 promotes transparency, system efficiency and fairness. The bill proposes legislative amendments that would better meet the needs and service expectations of Canadian travellers and shippers, while creating a safer and more innovative transportation network that would better position Canada to capitalize on global opportunities and thrive in a high-performing economy.

Let me highlight the key features of the bill.

I will begin with the air initiatives. Bill C-49 proposes the creation of new regulations to enhance Canada's air passenger rights, ensuring that they are clear, consistent, and fair for both travellers and carriers. The Canadian Transportation Agency would be mandated to develop, in consultation with Transport Canada, these new regulations and would consult Canadians and stakeholders should royal assent be given to this bill.

The overriding objective of this new approach is to ensure that Canadians and anyone travelling to, from, and within Canada understand their rights as air travellers without negatively impacting access to air services and the cost of air travel for Canadians.

Bill C-49 specifies that these regulations would include provisions regarding the following most frequently experienced irritants, some of which you may have heard about: providing passengers with plain language information about carriers' obligations and how to seek compensation or file complaints; setting standards for the treatment of passengers in the case of overbooking, delays, and cancellations, including appropriate compensation for these; standardizing compensation levels for lost or damaged baggage; establishing standards for the treatment of passengers in the case of tarmac delays over a certain period of time; seating children close to a parent or guardian at no extra charge; and requiring carriers to develop standards for transporting musical instruments.

Finally, this bill also proposes that regulations be made for data to be collected in order to be able to monitor the air traveller experience, including air carrier compliance with the proposed passenger rights approach.

The legislation also proposes to liberalize international ownership restrictions from 25% to 49%. To protect the competitiveness of our air sector and support connectivity, this provision is accompanied by associated safeguards.

These safeguards include restrictions that a single international investor would not be able to hold more than 25% of the voting interests of a Canadian air carrier and that no combination of foreign air carriers could own more than 25% of a Canadian carrier.

This policy change would not apply to Canadian specialty air services such as heli-logging, aerial photography or firefighting, which would retain international ownership levels at 25%.

Liberalizing international ownership restrictions means Canadian air carriers—and this includes passenger and cargo transportation service providers—would have access to more investment capital that they can use for innovation and, potentially, further expansion.

This would bring more competition into the Canadian air sector, provide more choice for Canadians, and generate benefits for airports and suppliers, including new jobs.

More competition in the market could in turn reduce the cost of air transportation and open other markets to consumers and shippers in Canada. This could include the creation of new ultra-low cost carriers serving new areas of the Canadian market.

The bill also proposes a new, transparent, and predictable process for the authorization of joint ventures between air carriers, taking into account competition and wider public interest considerations and establishing clear timelines for the rendering of a decision.

Joint ventures are a common practice in the global air transport sector. They enable two or more carriers to coordinate functions on specific routes, including scheduling, pricing, revenue management, marketing and sales.

Whereas currently proposed joint ventures in Canada are solely examined by the Competition Bureau under the Competition Act, and thus focus exclusively on anti-competitive impacts on specific markets for air travel, the proposed new legislation would allow for the consideration of wider public interest benefits.

In addition, the new process would include clear timelines for the review process, both for the review of potential competition considerations by the bureau and the assessment of public interest benefits to be undertaken by Transport Canada. It is anticipated that this more holistic and timely review would allow Canadian carriers to engage in this industry trend, which confers benefits not only to the partnering air carriers, but also to consumers who will gain from enhanced flight connectivity and Canadian tourism, which we expect to grow based on expanded network options.

Canada's aviation sector has shown interest in investing in and accessing passenger screening services, beyond those already provided by the Canadian Air Transport Security Authority, in order to facilitate travel and gain economic advantages.

The proposed amendments allow for this opportunity on a cost-recovery basis.

Let me now move to the rail initiatives.

A reliable freight rail network is critical to Canada's success as a trading nation. Many of our commodities, from minerals to forest products to grain, depend on rail to move to markets both here and abroad. Canada enjoys efficient rail service with the world's lowest rates.

To sustain this, Bill C-49 aims to address pressures in the system so that it can continue to meet the needs of users and the economy over the long term. To this end, the bill promotes transparency, efficiency and strong private sector investment in the rail system, as well as accessible shipper remedies. The key measures include new data reporting requirements for railways on rates, service, and performance that would greatly increase system transparency; a definition of adequate and suitable rail service affirming that railways should provide shippers with the highest level of service they reasonably can in the circumstances; the ability for shippers to seek reciprocal financial penalties for breaches of their service agreements with railways; updated remedies for rate and service complaints, to make them easier for shippers to access; and more timely, long-haul interswitching, a new measure for giving captive shippers across all sectors and regions the option of accessing a competing railway.

These measures would address the needs of shippers for greater competition in the freight rail system while also safeguarding the ability of railways to make crucial investments in the railway network, which benefits all shippers and the broader economy.

The proposed amendments to the Railway Safety Act to mandate installation of voice and video recorders in railway locomotives are designed to further enhance rail safety while safeguarding the privacy of employees. They respond to recommendations from this committee, the CTA review panel, and the Transportation Safety Board, whom you will hear from immediately afterwards.

These recorders would further strengthen rail safety by providing objective data about crew actions leading up to, and during, a rail accident. This technology would also provide companies with an additional safety tool for analyzing trends identified through their safety management systems with the objective of preventing accidents before they happen.

Through its oversight role, Transport Canada would ensure that companies comply with the limits on use and privacy requirements specified in the proposed legislation.

I will now turn to marine initiatives.

Finally, Bill C-49 proposes to amend the Coasting Trade Act to allow all vessel owners to reposition their owned or leased empty containers between locations in Canada using vessels of any registry. This measure would support industry's request for greater logistical flexibility and address the shortage of empty containers for export purposes.

Bill C-49 also proposes to amend the Canada Marine Act to allow Canada Port Authorities access to loans and loan guarantees from the Canada Infrastructure Bank, which is starting to happen.

In conclusion, this bill combines proposed legislative initiatives into a single bill that are essential to advancing priority measures related to improving the efficiency and safety of the Canadian transportation system.

In addition to having undertaken a comprehensive consultation process, these proposed amendments are based on solid evidence. For instance, with respect to freight rail measures, we sought technical expertise of stakeholders from the rail sector, the Canadian Transportation Agency, key federal departments, and other authorities as part of consultations for the bill. We analyzed freight rates, investments across jurisdictions, as well as commodity movements across Canada using internal data, and grain monitoring program, and railway waybill data, as well as other data.

The measures contained in this bill are a reflection of the priorities we heard from stakeholders and Canadians during the consultation process. It brings forward proposed legislative changes that promote a safer, more efficient transportation system that would enable growth while strengthening the rights of Canadian travellers to better meet their needs and expectations.

I would add that this bill responds to many of the recommendations this committee put forward in a study last year of the Fair Rail for Grain Farmers Act.

I would like to thank the committee once again for having me here today. My colleagues and I are available to answer any questions at this meeting and throughout the entire study of the bill. We would be happy to provide any information that you don't have.

On that point, I will mention that we have made available to the committee a series of issue papers and fact sheets that may help you in understanding some of the provisions and the history behind some of the issues that we're dealing with here, the frequently asked questions on some of the items, because we know that there may be confusion amongst stakeholders about what these mean and how they would apply, as well, of course, the clause-by-clause. If there's anything more we can provide, we'd be happy to do so.

Thank you, Madam Chair.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call to order meeting number 67 of the Standing Committee on Transport, Infrastructure and Communities, 42nd Parliament, first session, pursuant to the order of reference on Monday, June 19, 2017, Bill C-49, an act to amend the Canada Transportation Act and other acts respecting transportation and to make related and consequential amendments to other acts. We will start this process now.

Welcome to all our members. Thank you very much for coming back a week earlier than everyone else on the Hill. It shows everyone's commitment to seeing that we continue and get our work done.

To the staff who are here as well, welcome. I hope you all had a good summer.

I will now ask the departmental officials if they would introduce themselves and proceed.

Amendments to Standing Orders

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Speaker, I want to thank the member for Scarborough—Agincourt for sharing his time with me. It is emblematic of the duties we have been sharing over the past year as I have been working with him to back him up in his deputy House leadership duties.

While my dream of fixing the clocks in this place to be digital remains unfulfilled, there are a number of more serious Standing Order issues that need to be addressed. While the opposition has often accused Liberal members in this place of wanting to change the Standing Orders to government advantage, I would argue that the opposite is true.

Many of us on this side were here when we were in opposition. A few of us survived the decimation to third party. I started as a staffer, working for Frank Valeriote, the previous member for Guelph, in his constituency office early in the 40th Parliament. I eventually found myself working here for the member for Ottawa South, where I worked when the government was found to be in contempt of Parliament and an election was forced in early 2011. I subsequently worked for both those members as well as the current members for Halifax West, whom I take great pride in calling Mr. Speaker today, and the member for Coast of Bays—Central—Notre Dame, all, for a short period, at the same time.

Working for four excellent members of Parliament, with different personalities and areas of interest, I gained a great breadth of experience and perspective, which has been a key part of learning how to do this job. It also gave me an up-close perspective on the abuses of power, on a daily basis, by the previous government. That is the perspective from which this motion has been written, that of the third party. To make the point, I want to go over Motion No. 18 one piece at a time.

In 2008, most of us will remember that the Liberals, NDP, and Bloc got together in an effort to take down the freshly re-elected Harper government. Whatever one thinks of the details of that agreement, a majority of members intended to vote no confidence in a sitting minority government. To avoid this, Harper visited then governor general Michaëlle Jean and asked her to prorogue Parliament, a request she granted after a couple of hours of deliberation.

Parliament is often prorogued between dissolutions. Of the past seven Parliaments, only one did not have at least one prorogation, that being Paul Martin's minority 38th Parliament. Proroguing itself is definitely legitimate. In the 2008 instance, however, it was used as a tool to avoid a confidence vote. We all know how history played out after that, and it was a tactical success for Prime Minister Harper.

The first clause of Motion No. 18 would not prevent a prime minister from proroguing, but it would require the executive to explain why they felt it was necessary and would mandate the procedure and House affairs committee to revisit the matter. It would not prevent abuse, but it would raise the bar on prorogation.

It is a bit of a marvel to me that, in my experience, no one has tried to do a massive private member's bill that rethinks the role of government from one end to the other. It would be a pretty interesting two-hour debate and is only currently prevented by convention, not rule.

In the last Parliament, the government had some impressively scattered omnibus bills. The standard here is not about how many laws a bill amends but rather if those various and sundry changes all serve the overall purpose of the bill. For example, Bill C-49, which passed at second reading here only yesterday, was cited by many in the opposition as an omnibus bill because it intends to modify 13 existing acts. However, this is spurious, because all the changes legitimately and clearly fall under the concept of the name of the act, the transportation modernization act, and some of those 13 existing-act changes are both relevant and miniscule.

For example, clause 91 of Bill C-49 is the section that would amend the Budget Implementation Act, 2009. This change reads, in whole, “Parts 14 and 15 of the Budget Implementation Act, 2009 are repealed.” A quick investigation will reveal that Part 14 is amendments to the Canada Transportation Act and Part 15 is amendments to the Air Canada Public Participation Act, both well within the purview of the Minister of Transport to modernize within his mandate. Both sets of amendments from that Budget Implementation Act, 2009, which was called Bill C-10 in the second session of the 40th Parliament, came with a coming into force clause that read, in part, “come into force on a day to be fixed by order of the Governor in Council made on the recommendation of the Minister”. The most remarkable part of this eight-year-old piece of legislation is that the Governor in Council never brought these changes into force.

Getting rid of obsolete, never implemented bits of transportation law is clearly within the frame of transportation modernization.

In 2012, the Conservative government brought in a wide-ranging budget bill that implemented much of what it called Canada's economic action plan, but it also went after environmental legislation that had nothing to do with the budget. Among other things, it stripped legal protection for Canada's millions of lakes and waterways. This was slowed down, but not stopped, by more than 1,000 amendments to the bill at the finance committee, resulting in an around-the-clock filibuster-by-vote at clause-by-clause. I was there as staff for the final shift of that marathon vote.

The second section of Motion No. 18 would attempt to address these problems. Any bill presented in the House that did not focus on a single theme or overarching purpose could be split by the Speaker. While there would be an exception for budgets, the phrasing of that section, which would be standing order 69.1(2), would only seek to clarify that the objectives outlined in the budget would in their own right define the purpose. Attempting to change environmental law in a budget implementation act, without having defined it in the budget itself, for example, would permit a point of order to be raised and accepted by the Speaker to carve that section out of the BIA. This change is important and is something we committed to doing.

The third change is a little more arcane.

I was a staff member on the public accounts committee for a short period in the 41st Parliament and was a member of government operation and estimates early on in the 42nd Parliament for about the same length of time. I do not pretend to have any great understanding of the minutiae of the estimates process and defer to those who do. That is a big part of the point here. I welcome anything that can help bring clarity to the estimates process.

The fourth change in the Standing Orders in this motion is a particularly interesting one, covering sections 4 to 6 of Motion No. 18.

In the last Parliament, I believe most of us who were around had the same experience. Committees were run by parliamentary secretaries. They sat next to the chair, moved motions, voted, and otherwise controlled the committees. This utterly and totally defeats the point of parliamentary committees. The parliamentary secretary is, by definition, the representative of the minister. In this capacity, parliamentary secretaries serve a critical role in liaising between the committee and the department the committee oversees.

Being able to answer questions about intent and plans from the committee on a timely basis or bringing concerns or issues for study that ministers would like feedback on in the course of their duties are completely appropriate. However, when parliamentary secretaries run the committees, these oversight bodies cease to oversee much of anything and simply become extensions of the executive branch of government. If that is what we are to have, the committees serve little purpose. Including parliamentary secretaries on committees as liaisons with their departments instead of as the planners and executors of the work of those committees is the right balance.

This is really important. During the Reform Act debate in the last Parliament, the member for Wellington—Halton Hills, for whom I have great respect and have for many years, commented to me that as a backbencher, he was not government. “Like you,” he said to me, “my role is to keep the government to account. The difference is”, he concluded, “I have confidence in the government.”

This critical bit of political philosophy has stuck with me since that day. Our role as backbenchers is indeed to keep government to account whether we are on the government or opposition benches. One of the most critical tools to achieve that is committees, and when this government talks about restoring independence to committees, it is not a meaningless catchphrase or sound bite; it is legitimate. I have seen the transition on committee function from last Parliament to this Parliament and it is truly something. Keeping parliamentary secretaries in a participatory, but not controlling, role on committees is a critical element of this.

The last change, section 7 of the motion, is particularly interesting. The one place where the opposition has immense power, even in a majority government, is in the power of the filibuster at committee. An opposition member determined to prevent a vote from taking place or a report from being written at a committee has the absolute power to do so, as long as he or she is willing to talk out the clock and stay reasonably on point. Our colleague from Hamilton Centre is an expert at this task, often joking that after half an hour of talking he has not yet finished clearing his throat.

When we had the debate on reforming the Standing Orders that went sideways at PROC a few weeks ago, we were accused of trying to kill the filibuster. This could not be further from the truth.

In that debate, we sought to have a conversation about how to change the Standing Orders. The government House Leader had written a letter with her ideas of what changes she hoped we would discuss on top of the numerous ideas already before us on account of the Standing Order 51 debate from last fall. However, but if we refer back to the previous elements of this speech, where we landed was up to us as a committee. An idea floated was that members at committee be limited to an unlimited number of 10-minute speaking slots rather than a single slot with no end.

The way I understand this would work in practice is that any member can speak for as long as he or she wishes at committee, but when another member signals his or her interest in speaking, the member would have 10 minutes to cede the floor before the other member would take over, before giving it back again if the first member so chose. The effect of this would be to ensure that every member on a committee would have an opportunity to speak in any debate, but would not limit anyone from tying up committee and would not kill the filibuster either in the instance or in principle. It certainly would make it easier to negotiate our way out of one by giving others a chance to get a word in edgewise.

However, the change proposed here is not about that. It is about getting rid of one of the most absurd abuses of committee procedure we saw in previous parliaments: that a member of the committee majority would take the floor, even on a point of order, and say to the chair something like, “I move that we call the question.” The chair would correctly say that it was out of order and reject the request for the vote. The member would then move to challenge the chair, the majority would vote that the chair was wrong and the question could be called, and the motion to debate, study, report draft, or whatever was happening, would come to an abrupt, unceremonious, and totally acrimonious end. That was the only effective, if not exactly legitimate, way of ending a filibuster.

In Motion No. 18, we are defending the right to filibuster.

As I said, Motion No. 18 is about defending the rights of the opposition, informed by our experience in the third party. Not one line of this motion benefits a majority government. All, however, benefit the improved functioning of this place. I look forward to its passage.

Transportation Modernization Act

[The Speaker, Liberal, Geoff Regan]

It being 3:10 p.m., pursuant to order made on Tuesday, May 30, 2017, the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-49.

Call in the members.

The House resumed from June 16 consideration of the motion that Bill C-49, an act to amend the Canada Transportation Act and other acts respecting transportation and to make related and consequential amendments to other acts, be read the second time and referred to a committee.

Changes to the Standing Orders

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I have two brief questions for the government House leader.

First, Bill C-49 is a wide-ranging transportation modernization act, so called. Bill C-51 is a very wide-ranging Criminal Code change. I wonder if the government House leader thinks either, or both, of these constitutes improper uses of omnibus legislation.

Second, I want to ask about the powers given to parliamentary secretaries because now, the way the Standing Order change is set up, a committee could theoretically bar members of Parliament who are not members of the committee from attending in camera meetings. That would mean they would have additional members of the government who are parliamentary secretaries who are able to remain in the room, but they would have other members of Parliament who might be interested in the discussion who cannot be in the room. Does the government House leader see a problem with that? Would the government House leader agree that any member of Parliament who wants to listen in to an in camera discussion if he or she is an elected member of Parliament, regardless of whether the member is a parliamentary secretary, should be able to do so?

Transportation Modernization Act

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, having formerly been in the transportation industry for over 22 years, I have a lot of questions regarding Bill C-49. On the airline part of the bill, the bill does not specify what the compensation levels for passengers would be under the passenger bill of rights, and that causes concern.

There is something I have not seen in the bill, which I would like to ask my colleague about. Just a week ago, we were debating the Liberals' legalization of cannabis and I spoke at length about my concern of how that is going to impact the transportation sector. Bill C-49, the transportation modernization act, is an omnibus bill and I have not seen anything with respect to drug use, drug policy, and specifically cannabis addressed. I am wondering if my hon. colleague could comment.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I am rising today to speak to what is essentially the government's omnibus transportation bill. Unfortunately, I will not be able to hit on all the points of what is contemplated in the bill because, frankly, there is too much. It changes laws having to do with everything from shipping to railways to the airlines. It changes a number of different acts, and with a number of different purposes in mind. It would have been better to break the bill up into its component pieces so that they could be studied properly and on theme, rather than trying to rush it all through at once.

I would remind members of the House that debate in this place is not just for the sake of opposition politicians, or even backbench MPs on the government side, wanting to talk a lot. When we are talking in the chamber, and during the time it takes to pass the bill, Canadians and civil society are also learning about the bill and forming a judgment about whether they think it is a good idea or not, and having the time to be able to mobilize, either in support or against aspects of the government program.

When we talk about criticizing omnibus bills, it is not just for the sake of members in the House who want to go on talking. While we talk about that bill, Canadians are talking about it too, and they are getting a chance to weigh in. They are able to contact us, and become, through us in this place, part of the debate. Therefore, when governments lump a whole bunch of significant changes together and ram them through Parliament, they are not just cutting out parliamentarians from that debate. That is the time it takes in order to have a meaningful, civil engagement with respect to changes.

Bill C-49 contemplates many significant changes in a number of different areas of transport within Canada. As someone who comes from a rail town, I am particularly concerned about the provisions that purport to be about railway safety. Actually, what they are about is supervising workers in the workplace and tramping on their right to privacy in the workplace. We know that in terms of railway safety, the predominant issue has to do with fatigue management. What we hear time and again from people who are working on the trains is that railway companies in Canada are doing a very poor job of fatigue management. We know that is having real consequences for Canadians and the extent to which they feel safe in their own communities.

A government that was genuinely sincere about wanting to do something about railway safety in the country would be taking action on the issue of fatigue management. However, that would require getting involved in telling the railway companies something they do not want to hear. What we have seen from the government is that it is not willing to stand up to big companies and tell them what they do not want to hear. That is certainly true of railway companies.

It is not only true of railway companies. It was true when Bay Street corporate magnates came to Parliament Hill and told the Liberals to break their promise on closing the CEO stock option loophole. It was true when Air Canada came knocking and said it wanted to be off the hook for when it broke the law and exported the maintenance work on its planes, which rightfully belonged to Canadian maintenance workers. The government retroactively changed the law, and shame on certain members of the House. I am thinking of some colleagues of mine from Winnipeg, particularly the member for Winnipeg North, who stood with those workers and said the previous government should enforce the law and then became part of a government that changed the law and pulled the carpet out from beneath the feet of those workers who were successfully challenging Air Canada in court.

It is a theme of the Liberals to play pushover to big companies. The provisions around railway safety in the bill are no different. The railway companies came to them and said, “Let's not talk about fatigue management. Let's talk about putting video and audio surveillance in the cabs of trains so that we can watch the workers”.

If the Liberals were sincere about making it a safety issue, there would be provisions in the bill that would say only the Transportation Safety Board would have access to those recordings, and only when something happened, so it could go back and find out what was the root cause of an incident and rule on that. Instead, the legislation would give that 24-7 surveillance material to the companies, any time they like, for whatever purpose they like. Therefore, it is hard to believe that this is really about railway safety when the government is silent on the real issue facing railways and railway communities when it comes to their safety, and is giving unfettered access to that material to employers who we know will be able to use that information for other purposes.

The other thing about omnibus bills is that, for as much as certain things that require more legislation and more study do not get that study, by mingling issues, some things where there is widespread agreement, for instance some of the provisions in the bill for grain producers on the Prairies, who in part because of the elimination of the Wheat Board now need a legislative fix in order for them to be able to get a fair price for shipping their grain, do not get passed as quickly as they might.

The problem with the legislation is that the Liberals took so long to take action on that particular issue, which was not a surprise and did not have to wait on developing. To the extent that the government was putting all these issues together, and it is not a very fulsome air passenger bill of rights, because it wanted to present it in an omnibus bill, the Liberals took far too long to address a real problem on the Canadian Prairies for grain growers.

Now we are going to have a gap between when the old rules were in place, as a bit of band-aid solution to be able to help those grain producers on the Prairies, and when these new rules come in. If the Liberals were not so committed to omnibus legislation, they could have introduced those measures separately. They would have found that there was enough agreement to be able to expedite passage of those provisions. On this side of the House, we care about western grain growers and we want to make sure that they can get a fair price for shipping their grain.

However, the Liberals wanted to tie all these issues together in order to be able to conflate the issues and say that opposition parties are opposing good pieces of legislation, or were supporting bad pieces of the legislation. It is all tied together. In other words, in order to cover their political behinds, Canadian grain producers are the ones who are going to suffer.

It is wrong of the government to ask Canadian grain growers to essentially pay for political cover for the government. That is a big part of what is going on here.

I just want to take a moment to thank the member for Windsor West, not only for sharing his time with me today but also for the work that he did on the air passenger bill of rights. He actually helped to develop a substantive air passenger bill of rights. I will also recognize one of my NDP predecessors for Elmwood—Transcona, Jim Maloway, who did good work on an air passenger bill of rights. He paved the way and presented a bill in the last Parliament that the now Minister of Transport actually supported. It took forever to produce and the changes that were necessary to actually protect consumers were spelled out in that legislation, a bill the Minister of Transport supported.

However, do we see the substance of that bill represented in this omnibus piece of legislation? No, we do not.

This is just how complicated omnibus legislation gets. Canadian grain growers were waiting for legislation to fix a legitimate problem the government knew about since it took office. The Liberals came up with a lame phantom version of an air passenger bill of rights that was already developed while they were really just having discussions with the railway on how to institute 24-7 surveillance, so that the railway companies could know about the issues that were being discussed in the workplace between workers who were members of the union and who wanted to file grievances or take up other issues with their employers.

That is how muddled it all gets when things that have absolutely nothing to do with each other are all rammed into the same bill. That is really what is going on with the bill. It is kind of a big tossed salad of different legislative measures, some of which the government probably could have found widespread agreement on and would have been able to advance quickly, and some of which is just sort of a hollow version of previous legislation that the Liberals have no excuse for having taken this long to get around to. Had they adopted more substantive provisions, they probably would have found more widespread agreement.

All of that is going on so that the Liberals can work with certain companies, and in this case I would say particular rail companies, in order to do something that has nothing to do with rail safety and everything to do with employers at the railway being able to put employees under their thumb. It is a travesty.

[Bradley Trost, Conservative, Saskatoon—University, SK]

Mr. Speaker, it has been a few years since I was last on the transportation committee, I think four or five, if my memory serves me correctly, but I enjoy speaking about these issues. One reason I enjoy talking about them is that in a country as vast as Canada, transportation really matters. Every country has its unique issues, but Canada's would be distinctly different from most countries in the world. Perhaps Australia, the United States, and Russia face some of the same challenges as Canada, but very few other countries in the world would have the exact same problems.

The other thing I find very interesting about the legislation is that it deals with an underlying problem, which is different economically than many issues with which we deal.

Before I discuss that, let me say a few basic words for context about this broad legislation.

Bill C-49, the transportation modernization act, is legislation that we call, for people watching at home, an omnibus bill. Many elements from different areas are put together under one larger theme. We have heard members from various opposition parties point out that not all elements of the bill really fit together. In fact, I suggest the government would have been better off breaking the bill into three, or perhaps even four, pieces of legislation.

A very small element of the bill deals with marine issues. There is a larger element that deals with railway issues, which could have been subdivided into separate legislation to deal with railway safety issues and broader economic railway issues. It also deals with issues related to airlines, consumers, the financing of airlines, foreign ownership rules, and so forth.

In many ways, the government has put together many things that really do not belong in a single piece of legislation, which makes it somewhat difficult to comment on. Some things in the bill are well-intentioned and could possibly be useful and good for the country. Other pieces of the legislation the government should rethink. I will take apart as many elements of the bill in the time allotted to me.

One of the biggest rail transportation issues in Canada is that there is a natural monopoly tendency. That is not caused by the railways through any malice or problem; it is just that there are some very natural realities. To build a railway, a large capital investment is required, making it very difficult for competition. Railways also serve specific geographic areas exclusively. They need to have that natural monopoly. To pay for the underlying capital cost, they need to capture the majority of the market. That, then, leads to a problem of a power imbalance.

If commodities can be shipped by means other than railways, for example, oil can be shipped by pipeline or perhaps trucking is better for other commodities, that is not a problem. However, for certain commodities and situations, rail may not be available. That is where a problem tends to result and get argued about when it comes to rail transportation.

In highly competitive markets where a lot of commodities enter and exit and product substitution is easily done, etc., there is no call for the government to get involved because there are few issues with the market. No monopoly is ever naturally total or pure, but to some degree railways in our country have those sorts of issues.

That has therefore caused a long history of the governments of Canada regulating, subsidizing, and interfering in the rail transportation industry, particularly in the west. If we look at the population centres of eastern Canada, they are much closer to the United States and commodities can be trucked. In that case, there is a considerable amount of competition.

That tends to be the underlying issue the government has to deal with whenever it deals with rail transportation issues.

In a previous Parliament, there had been some issues on grain transporting in the Prairies due to bottlenecks. Some of this was perhaps due to the railways, some of it perhaps due to weather issues, and the large crop in western Canada. The previous government put in some adjustments, which allowed shippers to use the railway system within 160 kilometres. This is a bit of a simplified interpretation. They were allowed to use the existing railways, and have the right, to ship their grain and other commodities to the United States and then connect.

It is this interconnection that is being discussed. It used to be 30 kilometres and was then extended to 160 kilometres. For those in places like Regina who needed to ship their grain and CN, CP could not get it out, they could then get them to ship it to the United States at which point a railway like Burlington Northern would have the option to ship the grain. As has been noted, that is coming to an end.

What the government has suggested is changing the rules to introduce something it is calling long haul interchangeability rights, eliminating this 160 kilometre rule.

This is very similar to what has already been in the legislation before and has not been used. If the government is putting in a new provision but it is almost identical to something that has been in the legislation since the 1990s but has not been used, what is the purpose? What is the government trying to accomplish?

The government will have to deal with this at committee. Why is it eliminating something that has helped eliminate a bottleneck situation and going back to an older system that has not worked well. That is my first criticism and question for the government.

The second thing I want to point out, particularly with the rail issues, is that I do not see anything the government is doing in this to bring down the costs. Service is important, and commodity shippers in western Canada have told me they are willing to pay more if they can get timely and accurate services. That is very good. Ultimately, time is money when shipping products.

I am failing to see where the government is dealing with ways to make the regulatory process quicker and smoother. In fact, most of the legislation seems to add more layers onto it. I understand it goes back to that underlying problem, the natural monopoly and how to dealt with it. We often deal with it through regulation.

There is a second question I would like to put to the government. With the rail situation and the added costs that will soon come through the carbon tax, which will ultimately hurt the producers, the shippers, and other Canadians involved, how will it do things to lower the costs?

Finally, there are elements in the bill which personally interest me and many of my constituents. They are around the creation of a passenger's bill of rights. In many ways, this sounds very good. As someone who flies a lot, and most western Canadian members of Parliament joke that our third office is an airplane, I am very familiar with problems airlines can have.

My question is this. What has been costed and how will this cost be passed on to the customer? Costs for airline flights in Canada are some of the highest in the world. We all have a major concern with that. If our businesses are going to grow, if we are going to have better connection and the ability for places like Saskatoon, where I come from, to move out and do business in the world, we need costs to be dealt with.

Therefore, these are the basic questions. Why is the government taking away something that has worked and replacing it with something that has been tried and seems to be wanting? Where is the government's ability to bring down costs, both for railways and air passengers? Also, how is it going to simplify the regulatory burden?

These are questions the government needs to deal with when the bill goes to committee. The Liberals would have been wiser if they had split the legislation into smaller bills so we could deal with it in more bite-sized pieces.

The House resumed consideration of the motion that Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts, be read the second time and referred to a committee.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Mr. Speaker, it is my privilege to rise today to speak to Bill C-49, the so-called transportation modernization act.

Before I go any further, I would like to say that I will be sharing my time with the member for Saskatoon—University. I look forward to his presentation on this as well. He comes from a neighbouring province to the west, and he also has a great knowledge of what is required in this field.

It is a privilege to put on the record again, as I had the opportunity to do with our opposition day motion on Monday this week, how important the movement of grain is to western Canadian farmers, as my colleague just said. However, it is not just important to the farmers but to the whole industry and economy of western Canada, which affects us all. We are one of the largest exporters of grain in the world with regard to the percentage that we grow.

I think the changes that have come forward in the bill would be somewhat detrimental, although there are a few that will work very well on the grain side.

Bill C-30 was brought in by my colleagues when we were in government due to the conditions that took place in the Prairies in the winter-fall of 2013 and the spring of 2014. I will never forget that because that is when I was elected as a member. Having farmed in western Canada all my life prior to getting into politics, I certainly know the importance of making sure that we have a reliable system of moving grain and exporting it, not just for the farm community but for the logistics of the rail companies and the port authorities and facilities on the west coast, east coast, and in Thunder Bay. At that time, there was also some grain movement through the Port of Churchill.

Before I get into too much of that, I would like to say that what we need to do in the Prairies with regard to the evolution of the transportation system, as we move forward, is to make sure that we look at processing more of these grains on the Prairies than we have in the past. I was in the room with the minister from Regina—Wascana, which I believe was his constituency at the time, in 1995, when the Crow benefit changed and was taken away. I lobbied to make sure that happened. I did that because my farm was located halfway between Vancouver and Montreal at the time, and we would have been faced with the highest freight rates on the Prairies, right in my kitchen.

We did that so that our future family members, our children, in western Canada would have a job locally by processing more of that grain. That is one of the key reasons for a lot of the lobbying that went on in those days to make changes not just to the rail system but to the way grain was marketed. My colleagues in the House have also brought forward the opportunity to allow farmers to sell their own grain and do their own marketing, which is key to the future development of more processing plants and those types of facilities in the Prairies.

The processing of grain is an example of how important this can be. We have rail lines that begin in Winnipeg and pretty well run parallel out to Portage la Prairie, and then branch off to Calgary and Edmonton through the west. That is why the interswitching that my colleague has brought in, and extending it from 30 kilometres to 160 kilometres, was a great advantage for farmers and competitive rates in the Prairies. It did not only work for them but also for the grain companies. It gave them the ability to have a bit more competition.

The types of things that we gained from the 160-kilometre range of interswitching would be taken away in this new bill, Bill C-49, which I think is a detriment to the longevity of the competitiveness we could have. One example is that we can only do it at a point where that interswitching is available. If one's grain is in northern Alberta or the Peace River areas of northern B.C., the first point of interswitching is Kamloops.

Of course, then one cannot really have much competition for all of that grain in northern Alberta and the Peace River area, if one cannot get access to a competitive rate until it gets to Kamloops. I worked there in the early seventies. I know the city well. It is a great place. I know my colleague from Kamloops agrees with me. This would not allow the type of rate competitiveness that we could have seen in the Prairies.

Bill C-30 also mandated the rail companies to carry half a million tonnes each of grain per week to catch up on some of the backlog that was there at that time. This bill just allows them to continue to talk. It does not mandate a level of grain shipments. That was for a period of time until that backlog got taken care of, which happened later on that summer. We hope we do not see those kinds of conditions, but we do have cold weather on a regular basis in western Canada in wintertime and there was a lot more at stake than just the cold weather in forcing that grain back on to the Prairie farms at that time.

There may be some opportunities here. We cannot haul all of the grain in the Prairies by truck. It has to get onto a rail system at some point. Now that there are more opportunities for farmers to move their own grain, I have young farmers coming to me every day talking about the movement of their grain north-south by truck. Some of that is entering into the United States.

We also purchase a lot of grain in feed form, and that sort of thing, from the U.S., and we need to look at continuing to expand our processing. We need to make sure we continue to have that mechanism to move the grain and also to import from the United States.

We also need to make sure that we are continuing to process even more of the product we have on the Prairies. That is being done in many places in Saskatchewan and Alberta. Some of it is being done with the expansion of our livestock industries, because they consume an awful lot of feed grains in western Canada, which then gets moved in another form. Most of it ends up being slaughtered in some of the largest processing plants in the world in Alberta, in Brooks and High River. We know there is an opportunity there to continue to move that product.

It is being done in Manitoba with the largest pea processing plant in the world, coming to Portage la Prairie. It is a $400-million investment by a French company. The Manitoba government is putting very little infrastructure money into this, other than connecting the hydro lines and natural gas.

These are the kinds of investments we need. I know Bill C-49 will not be as good as Bill C-30 was, as far as that goes. It also speaks to other areas though, such as the air industry and marine industry as well. We need to make sure that while there are changes taking place, they are not detrimental to the future of those industries as well, because we do rely quite heavily on our export ports, particularly on the marine side, to be able to export and move this grain.

Bill C-49 eliminates some of the things that were good parts of Bill C-30, particularly in regard to ordering the railways to compensate any person for expenses caused by the railway's failure to fulfill service obligations.

I will end there and see if anyone has questions before my colleague, the member for Saskatoon—University, takes over.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I am going to explore the questions from the member for Aurora—Oak Ridges—Richmond Hill. She was quite indignant when asking my colleague to give three reasons on Bill C-49. The irony is that the Liberals are limiting debate on all of these subjects.

We have a government that has only passed 19 bills in its time in office, and now the Liberals are using time allocation on virtually every piece of legislation, limiting debate, yet they are not giving any reason for that. This is a bill that addresses rail, marine, and air safety, and the Liberals are limiting debate on it. Then when we ask questions or give speeches here in the House, they suggest that it is not sufficient debate.

I would ask my colleague what he thinks about the Liberal government not permitting debate or even the questioning of their decisions in our nation's interests. It is quite concerning, and I would like my colleague's comments on that.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, I would be pleased to withdraw those words if I had said them, but I did not. Therefore I will not withdraw them.

I thought them, though, but I restrained myself because sometimes the Liberals do in fact include some good measures in their bills. There are some, in Bill C-49, that we could support, particularly with respect to western grain producers. We are prepared to support them, and we wish to do so.

If the government did the right thing, which is to split the bill, it would have the opposition’s support to pass the positive measures introduced by the Liberals. There are not that many. That is why I did not say it. I thought it, though.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, I thank my colleague for his question, which is very relevant and gives me an opportunity to talk about another equally important topic, the relevance of the opposition.

My colleague also read the bill and saw the impact that Bill C-49 will have on all of the areas he just talked about. In response to the statement about how we are only concerned with a few issues, I would say that only a few members will have the opportunity to speak. If the government would let us all talk, we could hear people's opinions on every aspect of Bill C-49. Since the government is muzzling us and denying us the right to speak, we have to focus on the essentials. We have to focus on what affects us directly and what will have the greatest impact on Canadians. If the Liberals would give us more time, we would address Bill C-49 in its entirety, from beginning to end.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I thank my colleague for his speech.

I wish to raise two points that he talked about in his speech. It seems to me that the theme both these points have in common is the arrogance of this government. The fact that there will be a period of time between when the old rules expire and when the rules proposed in Bill C-49 are brought in is a real problem for western grain farmers. This does not seem to be a problem for the Liberals; they look after their own when they should be fulfilling their duty to work on solving the problems of western grain growers.

The member also mentioned the fact that in the bill, an integral part of the transportation strategy is the infrastructure bank, a contentious subject here in the House of Commons as well as in the other place. The bill may not pass in time. When the Liberals stated that something Parliament has yet to vote on will be a part of their transportation strategy, their arrogance was on full display yet again.

Have I forgotten other aspects of the member’s speech touching on this theme of arrogance?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, I would ask my hon. colleague, who said that I spent over half of my time talking about things that had nothing to do with Bill C-49, to withdraw her remarks.

I will check, but I am sure that I spent 100% of my time talking about the impact of Bill C-49. The fact that we are debating this bill when they are imposing time allocation is a fact that has to do with Bill C-49. Perhaps she misunderstood my intention.

One clause alone has major repercussions for western grain farmers—the one that extends them protection and makes it permanent. What, then, gives my colleague the right to say that my remarks are irrelevant? I would like her to explain herself to western grain farmers and answer that question.

Why does she not consider these measures to be important for western grain farmers?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, I am pleased to rise and add my remarks to the debate on Bill C-49.

Before I begin, I would like to take a second to acknowledge a very poignant moment today in the House. I was here when the Clerk, Marc Bosc, arrived for his last shift here in the House of Commons as Acting Clerk of the House, as we have heard from a number of sources.

Mr. Bosc was the person who welcomed the members who had been newly elected in 2015 to the House. It was a very emotional time for us. To us, Mr. Bosc is the Clerk of the House, because he is the only one we have ever known. Mr. Bosc has always been there for us and has always shown the utmost professionalism. He was respected by all, at least by everyone on this side of the House. Mr. Bosc has always served with enormous professionalism, and we have always respected him.

For me, Mr. Speaker, it was a very poignant moment to see him enter the chamber this morning and take his place before us, to begin his final sitting day in the House of Commons. I trust that Mr. Bosc will always hold a place of honour here in Parliament.

In closing, we found out about this rather suddenly. I would have liked the opposition parties to be consulted more on the process to replace the Clerk. No offence to the incoming Clerk, but I just wanted to take a few moments on behalf of my colleagues, myself, and my family, who shared in all the emotion that we experience when we first arrive here, to acknowledge Mr. Bosc's excellent work.

Mr. Bosc has been here much longer than I have, but like me, he has seen his share of governments and their different approaches to ensuring that their bills get passed.

Bill C-49 is another example of the government using closure to prevent giving the opposition opportunities to speak to this bill or criticize it. By the minister's own admission, this bill is quite complex, and it will make significant changes to Canada's transportation industry. Even so, we will have just a few of hours of debate to discuss it and raise what I think are some very important points.

Why is this especially troubling in the case of Bill C-49? It is because this bill does not amend just one or two sections or one or two acts. It amends 13 pieces of legislation.

For the past two days, I have been listening to the arguments given by the Minister of Transport who says that the opposition is overreacting, since 80% of the changes proposed in Bill C-49 will amend just one law, and therefore the opposition has no reason to protest so loudly. What? How is that an argument? It is as though one section of an act were more important than another. If the 20% of Bill C-49's clauses that amend 12 other laws are not all that important, why bother including them? Why are we talking about them? If they are not that important, if everything is focused on just one law and the opposition is outraged, why keep the other 20% of the amendments? Why not remove them and create another bill with those amendments and consider it separately? It does not matter, because everything is in the same bill.

Clearly, this argument simply does not hold water. It is particularly troubling. As members know, I have been a member of the Standing Committee on Transport, Infrastructure and Communities since I arrived in this place. Obviously, transportation affects all Canadians in every field. Transportation has an impact on the daily lives of all Canadians, whether we are talking about the transportation of goods or people.

They say this is a complex bill, that they will not give the opposition much time to talk, and that, since 80% of it is specific to one act, there is no need for us to protest so loudly. I think the minister should go back to the drawing board, take another look at what is in his bill, and think carefully about the repercussions that each amendment in Bill C-49 will have on the day-to-day lives of all Canadians.

Here is the lowdown on Bill C-49. The Liberals' omnibus transportation bill will establish a new air passenger rights regime; liberalize international ownership restrictions for Canadian air carriers; enable the Minister of Transport to consider and approve joint ventures by two or more airlines; update the Canadian freight system; require railways to install audio-video recorders in locomotives; expand the Governor in Council's powers to require major railway companies to provide rate, service, and performance data; and amend the Canada Marine Act to allow port authorities to access Canada infrastructure bank loans.

However, there is nothing there. According to the Minister of Transport, a few hours of discussion are enough to address all of these issues, since he did not think that the opposition had anything relevant to say during the first hours of this debate. Why would the government want to continue listening to opposition members provide supposedly irrelevant information when it can simply expedite the process by muzzling them? At least, that is what the minister seems to think.

Since when are opinions that differ from the government's irrelevant? The big problem with the Liberals is that, when we do not agree with them, on this or any other issue, they feel threatened and under attack. They think that anyone who does not share their opinion and does not think like they do is irrelevant, and so they have no reason to take any interest in what those people have to say in the House. That explains a lot.

It explains a lot, such as Motion No. 6 and the many time allocation motions that have been imposed on us since the beginning of this session. It explains the infamous discussion document that the Leader of the Government in the House of Commons tabled to supposedly improve the way the House operates. When we read that document carefully, we learned that the Liberals' intention was once again to avoid hearing what the opposition parties had to say.

It is not complicated. When things do not sit well with the government, it decides to muzzle dissenting voices that cast grey clouds over Liberal sunny ways. Well, I have news for the Liberal government. The official opposition and all the other opposition parties, I am sure, have no intention of staying quiet. We have no intention of letting changes slip through. We have no intention of completely agreeing with everything the Liberals put in front of us. We have no intention of being the people who enable the Liberal Party to push through their entire election platform. That is not our role here. Our role is to present criticisms.

As an aside, let us talk about the Liberal platform. It did not take long for the Liberals to realize that much of what they wanted to do is simply impossible. They promised big spending and small deficits. They kept only one of those promises. They are spending big, but they have come to realize that that requires huge deficits. That is something the government does not want the opposition to criticize. They would like us to keep quiet and just watch them and applaud them because they really like applause. That is not what we are going to do. That is not our role.

Let us come back to Bill C-49 because it seems like we are off topic, that we just keep providing an overview, and that we keep talking about everything but Bill C-49. Let us talk about Bill C-49 and what it amends. As I was saying, it significantly amends 13 different laws and has repercussions on three modes of transportation. This legislative measure will weaken legislative protections for shippers and western Canadian farmers.

We want to concentrate on proactive measures to make travel less expensive and more convenient for all travellers. This would include abolishing the carbon tax, instead of the Liberals’ plan to establish reactive compensation that will benefit only a small segment of the population.

This bill provides very little detail about the proposed air passengers’ bill of rights, and it does not have the support, in its current form, of many passengers’ rights advocates. Also, port authorities and their wholly owned subsidiaries will have access to loans and loan guarantees from the Canada infrastructure bank. There is an inconsistency here. That does not make any sense to me, since this bank does not exist yet. It remains a proposal for now, and it is held up in another house, for very good reasons.

Like us, the senators think that the infrastructure bank warrants its own bill, given the impact it will have and the $15 billion that the government intends to provide to it. That is $15 billion from Canadian taxpayers to be given to a board of directions to manage on our behalf without any accountability to Parliament.

These points alone justify our opposition to the passage of Bill C-44, which is currently being studied on the other side in its current form and includes all these budget measures as well as creating the infrastructure bank. I hope that people will get the message.

In Bill C-49, they already assume the outcome. Port authorities are being given approval to access loans from the non-existent infrastructure bank. What I do not understand is that the government, ever since it began telling us about the infrastructure bank, keeps saying that it will be an independent bank. As an aside, the process to find the president for this non-existent bank has already started.

Therefore, the infrastructure bank, which does not exist, will be made up of a so-called independent board of directors who will manage the money given to them by the Liberal government. At the same time, these supposedly independents will be told that they have to invest $1.3 billion in Montreal’s Réseau électrique métropolitain and provide loans to port authorities. To sum up, here is an independent infrastructure bank that will not be independent and does not yet exist. However, we are being asked to approve a clause of the bill that will allow port authorities to secure loans from this infrastructure bank that will be created in the near future.

It is clear that something is not working, that they are improvising, and that the minister wants to move quickly. We do not understand why he insists on moving so quickly. Some will tell us that it is because they want to settle the matter of Bill C-30 before it expires on July 31 in order to protect western grain producers in their rate negotiations with the railways. That could be the case, but that is not what is going to happen, since even if Bill C-49 is rushed through today or Monday and is referred to committee, the committee meetings are scheduled for September.

The committee was prepared to meet in July if the government agreed to hive off all the measures concerning Bill C-30. That would have allowed us to study them quickly in order to avoid having a legal vacuum for western grain producers. These meetings could have been held before August 1. The committee was prepared to meet in the middle of summer, during vacation—at least, the opposition members of the committee were. That would have been a major sacrifice for some of us to show up and study a bill to help western grain producers.

Why was the official opposition prepared to do that? Because we get that this is important. Right now, grain producers are concerned about what is going to happen this fall if there is a legal vacuum. We do not know exactly how the market will react. These people are negotiating right now.

We see another problem here. I myself am not a grain producer. However, several of my House of Commons colleagues represent western Canadian ridings, and they know a lot about grain production. From what I understand, grain producers usually harvest their crops in the fall. What time of year is busiest for grain producers? The fall, when they are bringing in the harvest.

The government is going to ask grain producers to testify on Bill C-49, which will have a major impact on their future, in the fall. The government is going to ask them to leave their machinery and their fields so they can come testify in Ottawa in September. That is when they should be in their fields doing their work, doing what we support them doing, and making their contribution to Canada's economy by producing and working. This makes no sense.

That is why the opposition was prepared to agree to move quickly on that part of the bill. We were prepared to let many things slide in order to move quickly. Why? Canada's grain producers are far more important to us than adding another number to our legislative record. The farmers need us to come to Ottawa to protect them, stand up for them, and help them succeed. That is our role.

If we are not taking extraordinary measures to get Bill C-30 passed before the deadline, then there is no urgency to justify speeding up the process and muzzling the opposition. The government probably does not want to let the opposition speak because it does not want to hear arguments like mine in defence of western grain producers.

I want to talk about another initiative that was very well received by the public, I admit. This was the main point in the message from the Minister of Transport. Indeed, he wants to create an air passengers' bill of rights. This is urgent. Like all of us, all Canadians who have flown over the past few months have seen the coverage of some of the dramatic incidents that have taken place in the U.S. Since the bill announced the creation of an air passengers' bill of rights, we thought we would get some information. We thought we might be told what to expect, but no, all the minister did was mandate the Canadian Transportation Agency to begin consultations that will eventually lead to regulations and, at some point, the air passengers' bill of rights.

Do we really need a bill to ask the Canadian Transportation Agency to begin consultations on a bill of rights? It makes no sense. There is no need for urgency when it comes to Bill C-49, apart from the legislation protecting western Canadian grain farmers; on that, we agree.

We believe that the only way to go and the only explanation or justification to make this measure acceptable, to make this gag order acceptable, would have been to split the bill and immediately pass the measures in Bill C-30, in order to make certain temporary measures permanent. We were ready to go ahead with that, but everything else could have waited; there is no need to panic. The only emergency here for this government is to silence the opposition. The government is not ready. It is improvising and presenting measures that just do not make sense.

For all these reasons, and despite a few good measures in the bill, the official opposition cannot support Bill C-49.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, I would like to come back to the question that I asked my colleague earlier, which was about the fact that 80% of the amendments pertain to a single law.

Bill C-49 is an omnibus bill that amends 13 laws, and 80% of those amendments pertain to a single law. Does that mean that the other laws that are being amended are not important? Does that mean that, when just one provision of another law is amended, it is not important? That is exactly what we were trying to tell the minister. Why is the government insisting on introducing omnibus bills that cover so many topics?

We are talking about rail transportation, financial participation, a passengers' bill of rights, video surveillance on trains, and more. The government wants us to make a decision on all of these topics, which are so very different, with just one vote on a bill that amends 13 laws.

Does my colleague think that one law is more important than another?

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Mr. Speaker, Bill C-49 is a fulsome approach to improving our transportation system. It is really about evidence, increasing security, and increasing access for Canadians to transportation within and across Canada.

I encourage the member to express her views on this bill. I look forward to the debate continuing today and to comments members have in this House.

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, I would like to ask my colleague whether the Liberals would agree to divide Bill C-49 since it is an omnibus bill that amends 13 laws, as my colleague just said. We think this is yet another sloppy bill. The only measure we can support is the one for grain shippers that help western producers get their crop to market, but all of these measures would come into force on August 1, 2017, which is a bit too soon. Because it is part of an omnibus bill that amends 13 laws, it will be impossible to implement all of this at the same time and help grain producers.

Would my colleague be prepared to separate the section for grain producers from the rest of the bill so we can at least agree on that one?

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Mr. Speaker, I look forward to hearing the member's speech on this very important topic.

The hon. member talked about the different acts Bill C-49 seeks to amend. I can say that 80% of the bill is specific to the topic at hand. Debate in the House is very important. It is crucial to our democracy, and I am very happy to be participating in this debate. I know that many members have participated and will participate on legislation that affects Canadians on a daily basis.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, I thank my colleague for her speech. I am sure she appreciated the opportunity to have her say on Bill C-49, a bill that amends 13 other laws.

Yesterday, the minister said that over 80% of the legislative changes are specific to a single act. The thing is, amending just one section of an act can determine whether someone is charged with sexual assault or not. The number of sections amended does not matter as much as what those sections do.

My colleague must have been pleased to have a chance to talk about this bill. Does she believe that what she has to say or what I have to say is more important than what other members want to say but cannot because the government decided to limit debate on this bill?

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Mr. Speaker, it is an honour for me to rise before the House to speak to Bill C-49, which proposes concrete measures to respond to several concerns of Canadians regarding transportation. We can agree here on the importance of a transportation system that is safe and secure, green, innovative, and integrated; that contributes to our trade and the economic growth of our cities and communities; and that creates a cleaner environment for our children, not to mention the well-being of Canadians.

On this last point, I want to focus for a moment on one of the important aspects of this bill: the protection of our rights as air passengers. As everyone knows, air transportation has become more widely available and accessible by the public due to a relative decrease in price for this mode of transportation. Canadian travellers are concerned about the value of the tickets they buy, their comfort, and the availability of flights. They are also concerned about how they are treated as consumers by airline companies. This was highlighted in recent media reports about certain airlines.

In contrast, the context in which airline companies operate imposes significant costs associated with safety and security, both in the air and on the ground. Increased availability in the airline industry has contributed to making our aviation system more complex, with both the growing number of passengers transported and the amount of air traffic, which may result in delays for passengers. Air carriers are faced with a relative decrease in their performance, not only because of sustained competition but because of pressure from consumers for lower airfares. Comfort and luxury, once offered to passengers on airplanes, have given way to new practices that are leading airline companies to offer a multitude of à-la-carte services to passengers to remain viable. For example, companies no longer hesitate to make their passengers pay for the size or weight of their baggage, seat selection, and drinks or meals during flights. Carriers have also resorted to overbooking to maximize their revenue. The advent of ultra-low-cost carriers in the airline industry, such as Ryanair or easyJet, has also pushed traditional airlines to re-examine their original business models. Carriers are trying to do more to maximize the use of their aircraft and develop new revenue generation strategies. This has contributed to reduced passenger comfort and general satisfaction when they travel by air.

Let us return to us, the passengers. In general, the main issues we face relate to delays, cancellations, being denied boarding as a result of overbooking, lost or delayed baggage, a lack of information communicated to us when things are not proceeding as planned, long tarmac delays and wait times, or even seat assignments when parents or guardians travel with young children.

Several countries have therefore chosen to legislate or regulate certain practices in the airline industry by establishing mandatory measures or minimum levels of passenger services offered by carriers. It is time for Canada to align its current approach with practices that are in effect elsewhere in the world for the benefit of both travellers and our country.

Bill C-49 proposes to develop an approach that protects the rights of air passengers, and will meet the expectations of passengers, by establishing a clear, predictable, and fair framework that governs the practices and responsibilities of the airline industry while not imposing an economic burden or undue operational restrictions on it. In this regard, Bill C-49 proposes adopting a legislative framework within which the Canadian Transportation Agency can establish detailed and specific regulations that address common situations we face as passengers and thus establish standards and minimum service and compensation levels we can claim when our travel plans are affected.

Moreover, Bill C-49 would gather various indicators and data relating to passenger experience that could assist the government in better understanding, and if necessary, acting on situations or problems travellers may face.

In closing, a new approach to protecting the rights of air passengers could contribute to improving the general satisfaction of users. The government is actively working on this. However, it would be wishful thinking to believe that all concerns or criticisms of carriers or the airline industry made by passengers would be resolved. The reality in Canada is that flights will continue to be affected by the harshness and vagaries of our climate. It is not guaranteed that an approach, however prescriptive and broad it may be, will contribute to limiting the impact on users in such situations, even if it allows them to benefit from some mitigation measures, where applicable.

I ask my hon. colleagues to support Bill C-49, which aims to implement several measures to make a transportation system that is safe and secure, green, innovative, and integrated and that will contribute to our economic growth and a cleaner environment, not to mention the well-being of Canadians when they travel.

The House resumed from June 15 consideration of the motion that Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts, be read the second time and referred to a committee.

Bill C-49—Time Allocation Motion

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I have the impression that the minister would really like us to work more quickly. We did not refuse, far from it; we even agreed to meet starting in early September, before the business of the House began, to move the bill forward.

However, if we are seeking efficiency, why did the minister refuse to split the bill in two so that, for example, grain carriers would have answers and concrete measures on the prerogatives of Bill C-30, which is ending on July 31?

Grain producers are currently negotiating contracts. They have lost all competitive advantage in the negotiation because the measures will not be extended from the day the measures in Bill C-30 expire to the day Bill C-49 is passed.

Why is the minister refusing to extend the measures set out in Bill C-30 in the meantime?

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Madam Speaker, I move:

That, in relation to Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts, not more than one further sitting day shall be allotted to the consideration at second reading stage of the Bill; and

That, 15 minutes before the expiry of the time provided for Government Orders on the day allotted to the consideration at second reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and, in turn, every question necessary for the disposal of the said stage of the Bill shall be put forthwith and successively, without further debate or amendment.

Business of the House

[Bardish Chagger, Liberal, Waterloo, ON]

Mr. Speaker, tomorrow the House will debate Bill C-49, on transportation modernization, at second reading.

On Monday we will debate our changes to the Standing Orders. Following that debate, we will resume second reading debate on Bill C-51.

Tuesday the House will debate Bill S-3, on Indian registration, at report stage and third reading.

Following that debate, we hope to make progress on the following bills: Bill S-2, the bill respecting motor vehicle recalls, at second reading; Bill C-17, respecting the environmental assessment process in Yukon, at second reading; Bill C-25, on encouraging gender parity on the boards of federally regulated organizations; Bill C-36, the bill to give Statistics Canada greater independence; Bill C-48, the bill to impose a moratorium on oil tankers off the B.C. coast; and Bill C-34, the bill to reinstate sensible conditions for public service employment.

Bill C-49—Notice of time allocation motion

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, I would like to advise that agreement could not reached under the provisions of Standing Order 78(1) or 78(2) with respect to the second reading stage of Bill C-49, an act to amend the Canada Transportation Act and other acts respecting transportation and to make related and consequential amendments to other acts.

Under the provisions of Standing Order 78(3), I give notice that a minister of the crown will propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the said stage.

Opposition Motion—Canadian Economy

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Madam Speaker, I am pleased to rise this evening to contribute to this debate on the complete failure of the Liberals on this economic file.

For a government that would have us believe it is all about the middle class, as it is wont to add that at the end of every statement it makes, for example, more ethical government for the middle class, a Liberal commissioner of official languages for the middle class, new standing orders for the middle class, better innovation for the middle class, and a carbon tax for the middle class, it is remarkable just how out of touch Liberals are on the most important issues facing the middle class: jobs, the economy, and affordability.

On housing, for example, as the price of homes rose significantly faster than inflation in Toronto and Vancouver, the Liberals decided to implement a one-size-fits-all mortgage policy designed to cool down the housing markets of Toronto and Vancouver. Unfortunately, this policy is having a similar impact across the country, regardless of whether Canadians live in Warman, Saskatchewan or Queen West, Toronto.

Before the Liberals made these changes to the mortgage rules, a person with $50,000 pre-tax income could qualify for a $277,000 mortgage. Now, that same person qualifies for a mortgage of $222,000. This change makes buying a first house more difficult for many. Several people looking to buy their first home, and realtors, have raised concerns about this policy with me. However, these changes have not had the attention they deserve, considering the disproportionate impact they are having on first-time homeowners in smaller communities where housing prices are typically more affordable.

The Liberals are also tone deaf when it comes to western Canada. On May 12, the Minister of Transport introduced the oil tanker moratorium act, a bill that his own political staff conceded would only impact the future development of Canada's oil sands, and no other activity in northern British Columbia. Let us think about that.

It was not enough for the Liberals to reverse the independent National Energy Board's 2014 decision to approve the northern gateway pipeline subject to Enbridge fulfilling 209 conditions. They decided to go one step further by opting to handcuff future governments should they want to diversify Canada's energy exports. Bill C-48, the oil tanker moratorium act, will do nothing to enhance marine safety in British Columbia. U .S tankers will continue travelling up and down the coast between Alaska and Washington state.

This is the epitome of political irony. Venezuelan oil in Quebec is okay. Saudi Arabian oil on the east coast is okay. Canadian oil in Vancouver is okay. Alaskan oil in northern B.C. is okay. However, Canadian oil in northern British Columbia is not okay. Blocking tidewater access for western Canadian energy producers was not enough. To add insult to injury, this year's federal budget removed incentives for small companies to engage in energy exploration in Canada.

Furthermore, the new carbon tax will disproportionately impact energy-producing provinces. What the Liberals fail to realize is that Canada does not have a monopoly on the production of energy. In North America alone, western Canadian producers are competing against companies operating in the Gulf of Mexico, Alaska, the Permian Basin, and the Bakken formation. As the U.S. is making important efforts to reduce obstacles to energy development, Canada is going the other way.

Capital and expertise in this sector is very mobile, and Canada is in very real danger of being left behind. Canadian firms and foreign investors will not invest in the Canadian economy if the overall cost of doing business vis-à-vis our American counterparts is higher, as has been mentioned. However, the energy sector is not the only sector being targeted. Western Canadian shippers, and especially captive western Canadian grain shippers, are feeling particularly ignored by the Liberal government.

Unlike Ontario and Quebec, where many products can be trucked to their final destination or to a port for overseas export, western Canada is particularly reliant on rail to get product to market. That is why the Minister of Transport's inaction on critical and time-sensitive rail transport issues is leading to uncertainty for both shippers and railroads. Both need it as they negotiate shipping rates for the season and invest in the required infrastructure to keep products moving to market in a timely manner.

That is why, over the past several months, I have asked many times whether the government intended to renew or build on the sunsetting measures of Bill C-30 before they expired on August 1, 2017. The response, time and time again, was that the government recognized the urgency to get this done and that legislation was forthcoming. Unfortunately the Liberals now acknowledge that the key measures in Bill C-30 will sunset before any replacement legislation can receive royal assent and become law.

Since the transportation modernization act was introduced on May 16, the government has set aside less than two and a half hours to debate it, with the Minister of Transport taking the floor to lead off debate at 9:45 p.m. on a Monday night. This means there will be at least a two and a half month gap from when Bill C-30 measures sunset and Bill C-49 receives royal assent.

By the time this legislation has passed, the majority of contracts for the year will have been negotiated with the law in flux. Because of the government's mismanagement of its legislative agenda, these popular measures will sunset without any replacement, and shippers will be the worse off. What is worse is that while this two and a half month gap will negatively impact both railways and shippers this year, the replacement legislation will weaken shipper protections from what they are today. While something is better than nothing, the transportation modernization act is not a replacement for the Fair Rail for Grain Farmers Act.

What the government is proposing in its omnibus transportation legislation is to take a little used existing remedy called a competitive line rate and rename it long haul inter-switching.

Under a competitive line rate, a shipper could apply to the agency to set the competitive line rate, the designation of the continuous route, the designation of the nearest interchange, and the manner in which the local carrier shall fulfill its service obligations. We know from history that this remedy was infrequently used because of the prerequisite that the shipper must first reach an agreement with the connecting carrier and the two main carriers effectively declined to compete with one another through CLRs. While the requirement that the shipper must have an agreement with a connecting carrier prior to requesting a CLR has been removed, the greater issue is whether the terms imposed by the connecting carrier will be acceptable to the shipper.

While railways do have a common carrier obligations, we know there are ways to avoid doing a haul. For example, both railways have set the price of hauling uranium so high that it is no longer economical for it to be shipped by rail. Furthermore, while long haul inter-switching will be extended to 1,200 kilometres or 50% of the total haul distance, the first inter-switch location from any captive shippers in north Alberta and northern B.C. will be located within the Kamloops-Vancouver corridor, where inter-switching is not allowed beyond 30 kilometres. Therefore, these captive shippers will not be able to utilize this remedy to increase railway competition.

By borrowing and spending in good times, the Liberals have made it harder to deal with real crisis. According to the PBO, even a minor recession would cause deficits to be as large as during the great recession, and that is before considering the fiscal costs of any response.

The Liberals have mismanaged Canada's finances and have closed many doors for economic development. Unfortunately, the full effects of their policies have not reverberated across the entire economy yet.

The choices the Liberals have made to date are not random. They are the result of an overarching vision of picking winners and losers. Right now, my province is coming out on the wrong side of nearly every Liberal policy decision.

For a government that professes to be focused on the middle class, first-time homebuyers, farmers, shippers, and energy workers are all feeling left out in the cold.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Mr. Speaker, it is always a pleasure for me to rise as the representative of the magnificent riding of Rivière-des-Mille-Îles.

I would like to begin by thanking the member for moving this motion, since it gives me the opportunity to once again talk about Bill C-49, the transportation modernization act, a bill that will help our farmers and others who transport their goods using our rail system.

Rivière-des-Mille-Îles is home to a great company called Elopak, which manufactures containers for liquid food, and it needs the rail system. It brings in big rolls of paper to manufacture containers for cream or juice, such as the refrigerated juice that we buy at the grocery store. Canada's rail system is important for moving goods and services within the country.

Users have been asking for many years for an effective, long-term solution to improve this system, and I am proud that our government can keep its commitments.

Our government is committed to ensuring that the grain industry has a balanced, effective, and transparent rail transportation system to get its products to market. That is why Bill C-49 includes a large number of measures to help meet that objective.

Specifically, Bill C-49 is making the most significant changes to rail policy in a generation. This legislation caps the maximum grain revenue entitlement to keep grain transportation rates low. Our government listened to the concerns of Canadian farmers on this issue, which is extremely important to them. Having the chance to sit on the Standing Committee on International Trade, I have often heard about this issue. Furthermore, we are making changes to the maximum revenue entitlement, or MRE, to encourage investment in railway companies and expand the network to benefit all users.

Bill C-49 provides monetary penalties for railway companies. These penalties will hold them accountable for poor service. As well, we clearly set out in the bill that the option for shippers to seek penalties from railway companies will not prevent them from seeking full compensation for expenses or losses due to poor service, such as late charges.

This is a long-standing issue for the grain industry, and this legislation will keep in place the Canadian Transportation Agency’s temporary authority to award compensation for such failures. This bill also provides a robust definition of “adequate and adapted” services by specifying that railway companies must provide the highest level of service under the circumstances. The level of service would be available to everyone, including farmers affected by poor railway service.

To ensure that this mechanism will provide quick compensation, we are reducing the agency’s timeframe for rendering a decision from 120 to 90 days.

Furthermore, Bill C-49 ensures that small users can use a centralized process to challenge high rates charged by railway companies.

We will raise the cargo load limit for access to final offer arbitrage from $750,000 to $2 million, indexed to inflation.

This system will be easier for small users. Since there are no hearings, small users will not have to provide evidence in their case against the facts provided by railway companies regarding alternatives for moving their goods.

Users will be able challenge rates, and an arbitrator can make a decision applicable for a period of up to two years.

Bill C-49 will also enhance transparency. For the first time ever, big rail companies will be required to provide detailed information about the rates they charge, including amounts to be paid under the terms of confidential contracts. They will also be required to make all important information about their services publicly available through the agency.

Under this bill, we will establish new requirements for railways with respect to their plans and the steps they are taking to enable them to move grain for the following crop year. The agency will also have clear authority to hold hearings and issue recommendations on any issue of concern.

Taken together, these measures will ensure that problems are identified ahead of time and that all affected parties can take steps quickly to ensure that what happened in the winter of 2013-14, when record grain production and a harsh winter caused major delays, never happens again.

Through the measures included in Bill C-49, our government is protecting our reputation as a reliable trade partner and ensuring that we can grow our economy to benefit all Canadians.

This bill includes an important new measure to promote competition between the railway companies. Railway interswitching would provide users with access to an alternative railway company for distances up to 1,200 kilometres or 50% of the total long-haul distance in Canada, regardless of which is greater. This would give users a significant bargaining tool when negotiating prices and service options.

Members of the House will recall that this was temporary legislation passed in response to extreme circumstances that are no longer an issue in the transportation and grain shipping system. In that context, we will allow Bill C-30 to lapse as planned on August 1, 2017.

There are four measures in this legislation that our government looked at in detail. We heard the users' concerns about each of them and we considered their future in order to ensure that adequate conditions will remain in place for the long term.

First, the agency has the authority to order a railway company to compensate users for inadequate service. As mentioned earlier, Bill C-49 makes that measure permanent.

Second, the agency has the authority to clarify service agreements that users have submitted for arbitration. This solution allows users to obtain a service contract when negotiations fail. Bill C-49 also makes that measure permanent.

Third, the temporary measures concerning the minimum volume of grain for Canadian National and Canadian Pacific will finally be removed as planned. Users have said that the minimum volumes were having an adverse effect on the system and that some corridors had received preferential treatment. Although it was understandable given the situation, I am sure all members of the House will agree that this is not the type of policy that we want to maintain in the long term, given its unintended consequences. Long-haul interswitching therefore provides a national solution to the major problem of captive shippers.

The report by the Hon. David Emerson on the state of transportation in Canada, began in 2014, recommends that railway interswitching in the Prairies, introduced in the Fair Rail for Grain Farmers Act, be withdrawn as planned. This report did not make any recommendations about some alternative instrument for encouraging competition or providing users with additional tools for negotiating with the railway companies.

Our government did not think that this was acceptable. Captive users told us that it was crucial to get better service and rate options. That is why Bill C-49 proposes long-haul interswitching. While that would encourage competition in the system, railway companies would be appropriately compensated for directing traffic to a competitor.

This provides me with an opportunity to commend the Minister of Transport for his extensive efforts in consulting farmers and other users before introducing this bill. Our government took the time to listen to farmers. That is why this bill provides them with considerable support.

Our government understands the importance of a balanced and competitive railway system for its users and for farmers. That is why we are calling on all parliamentarians to act quickly. Meanwhile, the grain industry will continue to enjoy maximum revenue entitlement protections, something that keeps rates low and maintains processes such as arbitration around service delivery.

Bill C-49 is not a temporary fix; it proposes comprehensive measures to ensure the long-term success of Canada’s grain industry. Passing them all at once would greatly expedite the legislative process. I am pleased to note that the Standing Committee on Transport, Infrastructure and Communities has already agreed to come back earlier, before the House resumes, to consider Bill C-49.

[Sean Fraser, Liberal, Central Nova, NS]

Mr. Speaker, it is my pleasure, as always, to rise in the House to contribute to the discourse on what may be the most important issue facing my constituents, and that is the Canadian economy. The motion essentially seeks to address four constituent parts. The first is a broad statement about the Canadian economy. Then it has three sub-issues: softwood lumber, the western Canadian energy industry, and the western Canadian grain farming, specifically the transportation sector.

Before I get into each of these and explain why I will not support the motion, I would like to point out that the assumptions built into the language of the motion do not accurately reflect the facts at hand. I will start with the statement of the overall economy.

There is an attempt to build a narrative that the governing party is not an effective manager of the economy. I disagree wholeheartedly.

I find it somewhat ironic that around the same time the motion was put forward, we saw a very positive jobs report. Specifically, we have seen over one-quarter of a million new jobs in Canada over the six month period preceding, including just last month, with 55,000 new full-time jobs. Unemployment has gone down from 7.1% to 6.6%, and GDP growth is at 3.7% in the first quarter.

The reason I lay these statistics out is because I find data to be a helpful tool when we form analyses. Instead of projecting a narrative that we would hope would be true, it is important we consider the facts along the way.

We have seen a plan starting to take hold. I know history will be the judge of the success of this government and its economic performance, but the early signs are encouraging in my opinion. The economy is growing. The plan seems to be working, and I am quite proud to be part of it.

I would like to address each of the sub-issues raised in the motion, the first being the softwood lumber dispute.

Of course this is an important and challenging issue that faces regions of the country differently, including Atlantic Canada where I live. There is a number of stellar producers in my own backyard, like Scotsburn Lumber, Williams Brothers, Ledwidge Lumber, that have done a great job, historically, of employing Canadians. This is a fight that we continue to fight every day.

The opposition would have Canadians believe that we have stumbled over this as a federal government, but the agreement did expire under the last government. Although it is not our fault, it is our problem. I have been working closely with the minister and with my Atlantic Canada and Nova Scotia colleagues to help find a solution to this pressing issue for our producers.

In my conversations with the minister on this file, I have full faith in her ability to go head-to-head with the toughest negotiators south of the border. However, the fact is that right now she is facing a climate of protectionism that we have not seen in my lifetime when it comes to this file or trade more generally. Our neighbours are going to do what they think is in their best interests. However, the folks at the helm on our side are very capable and I have full faith in their ability to get a resolution. In the interim, we have introduced an important aid package to ensure we are there to help at a time when help is desperately needed.

On the energy file, specific reference is made to the western Canadian energy sector and carbon pricing. This is of extraordinary importance. I am no enemy to the energy industry. I have made a living working as a lawyer in Calgary and have significant experience working with oil and gas companies in different parts of the energy sector. I understand the strategic importance of this industry to the Canadian economy. However, the characterization of a price on carbon as an attack on the economic industry is wrongheaded, respectfully to the member who has put forward the motion.

We have to understand that the atmosphere in Canada and across the world belongs to all of us. Polluting that atmosphere is not and should not be free. Putting a price on carbon is the most effective way to reduce emissions and help mitigate the negative impacts of pollution that contribute to anthropogenic climate change. Moreover, I see this as a massive opportunity for us as Canadians. With the ability to develop a skilled workforce, we can take part in a growing industry that will contribute to clean growth and help reduce emissions at the same time. When this opportunity is staring us in the face, I cannot help but take a crack at it, and we are on the right track.

We are making investments in green infrastructure and putting a price on carbon. Some of the biggest energy companies in Canada and around the world are proponents of this approach, companies like Synovus, Suncor, Shell, CNRL, Total, TransCanada, Enbridge, and so on. Some of the people who on a first blush might stand to lose the most are some of the biggest supporters of this kind of an approach to climate policy. I am proud we have industry leaders who have stepped up to the plate.

The final issue raised in this motion has to do with grain farmers, specifically the impact of certain rules and the potential expiry of a unique feature of Canadian transportation called inter-switching.

In 2013, we were facing a truly unique circumstance, with a bumper crop in western Canada and a very harsh winter that made it very difficult to get all our products to market in a timely way. I have had some exposure to this issue, although I am from Atlantic Canada, in my role as a member of the transportation, infrastructure, and communities committee, where we dealt with it. What we saw was that at the time, there was actually a short-term, prudent measure that helped, in an emergency situation, get products to market. This was a difficult situation that needed to be addressed.

The tool created at that time to deal with a pressing circumstance may not be the best tool for the long term. What we have in Bill C-49 is a commitment to long-haul inter-switching such that if there was only one company that could meet transportation needs to get goods to market, we would introduce competition of sorts that would allow a farmer to piggyback on the rates that would be offered had there been another rail company there.

We have made a commitment that rather than dealing with short- or medium-length inter-switching to 160 kilometres, we are going to implement a long-term solution. I cannot help but notice that Alberta's barley growers have indicated that this is fantastic news. The Western Producer, a publication in western Canada, said that the Minister of Transport met with producers and listened carefully and agreed with what was said.

This is a positive development. We have engagement with different communities and policy that is going to, hopefully, meet their needs in the long term and not simply be a response to a short-term issue.

I will try to wrap up by revisiting the initial point I made. What we are trying to do is focus on steps that are going to improve the economy in the long term. I recognize that there are communities that are hurting today, including many I represent, that need jobs more than anything. What we are trying to do is put a plan into action that is going to help kick-start economic growth in the short term and sustain policies that will contribute to long-term economic growth.

We are seeing investments in innovation. For example, at St. Francis Xavier University, Dr. Risk's Flux Lab has, with the help of federal funding, been able to create a product that has entered into a commercial partnership. It detects gas leaks by affixing a detector to the front of a vehicle. This kind of technology would not have benefits just in my community. It would be able to help reduce greenhouse emissions across Canada by preventing leaks and would employ people in the process.

We are seeing investments in infrastructure, such as municipal infrastructure projects, that have kept people in my communities employed during months when they might ordinarily be laid off.

We are seeing commitments to expanding trade relationships between Canada and its trading partners, because we know that with the natural resources we have and the skilled workforce we have, we can produce more and higher-value goods than we can consume as a country. What we need to do is expand our trade relationships to ensure that communities across Canada have the opportunity to benefit.

I appreciate that this may take some time, and more time than many members of this House would like, including me. If there was a job for every one of my constituents tomorrow, I would be the first person advocating for the policy that would give it to them. The fact is that this is a long and difficult process, but we have to start today. I believe that the government is on the right foot, and I look forward to the historical record that will be laid down, because I have to say, the early signs are quite encouraging.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Mr. Speaker, I am pleased to rise today to speak to the opposition day motion brought in by my colleague, the member for Selkirk—Interlake—Eastman, which indicates that the government has been very ineffective with respect to the care and due diligence of this nation.

In particular, I want to say that damaging Canadian industries and diminishing Canadian economic stability, as he has pointed out in his motion, are certainly things that we care about every day in the House. We hear it from our constituents when we get back to our constituencies on weekends and during constituency weeks. It is certainly a situation that I have heard about quite regularly from my constituents.

My colleague, the member for Durham, has just pointed out that there is a huge deficit in place in Canada although the Liberals talked about small deficits during the election campaign. They have outgrown that by $30 billion, which is about 30 times what the Liberals said they would have. That is terrible mismanagement. Our future generations are going to have to pay for that every day of their lives as they move forward, not to mention the fact that all of us in this chamber today will share in that burden as well.

There are three major areas of concern that the member has pointed out: the softwood lumber deal, the carbon tax, and in particular, the current rail service agreement with respect to rail transportation in the Prairies.

The member has talked at great length about the softwood lumber deal, so I do not need to say much more. Suffice it to say that thousands of jobs are dependent upon an agreement between Canada and the United States. With the tariff that has been put in place by the United States today, we clearly see that the government did not have an answer when it came up with about $870 million as payment to cover some of the costs that will be borne by our industry. We need to find long-term leadership with respect to this matter. These stopgap measures are not good enough. That is what we are seeing in the other areas too.

The carbon tax that the government has implemented or is forcing upon provinces is certainly something that is going to continue to put people out of jobs. There were 200,000 jobs lost in Alberta alone. There are jobs lost in my constituency. We have a very small oil industry in western Manitoba, most of which is in my constituency. People have been put out of work there as well. We are only seeing some stability back in that area because of the stability in the price of oil right now, as well as an upgrade in the American economy. There has been a bit of a boost there. That is giving us some stability right now in Canada. However, it is very nebulous as to how long that may continue and if it will be on a long-term basis.

The area that I want to speak about today is mainly the current rail service agreements that ensure that our farmers can get their products to market.

In the spring of 2014, through the winter of 2013, our government brought forward Bill C-30, the Fair Rail for Grain Farmers Act, with our transportation minister, at the time, and our agriculture minister. They did an exceptional job of putting a program in place that would allow farmers some protection with respect to the movement of grain. There were extenuating circumstances, for sure, that winter. At that period of time, we had some of the coldest weather we have ever had. However, we are used to that in Canada, particularly in western Canada, so that is not an excuse with respect to being able to get grain to port on time.

There were three or four areas that were very important in that whole venue with that act. One of them was allowing interswitching to move up from a 30-kilometre basis to 160 kilometres, which made it quite effective to have a bit of competition in the industry, which we do not have most times when we have two railroads with, basically, a duopoly with respect to being able to move grain in the Prairies.

Trucks can only move so much grain effectively and we do not have the processing plants to process all of the grain in the Prairies. In fact, at that particular time, about 50% of the grain in Canada was going for export. That is why we desperately need to have that kind of openness and a bit of protection against the movement of other products. We cannot just leave grain, because of the massive volumes of it alone, and because it is basically in a captive area. It has to be grown every year. It has to be moved and marketed, perhaps not all in one year, but it does have to be moved, and it is a perishable product in the long run.

That is why it is so important that we move forward for Canadian families and businesses on the Prairies and in Canada as a whole, because wheat contributes greatly to the gross domestic product of our nation. Millions of jobs in Canada depend on the shipment of grain in the agricultural industry.

The minister has brought forward Bill C-49 but there is great concern as to whether it will have any teeth and whether it will get passed before we rise in the House for the summer. I commend the minister for bringing it forward, but I would encourage him to talk to his colleagues and move forward with it. If the bill does not move forward there is going to be a huge gap in this whole area. Bill C-30 will take over again, and it dies on July 31. That would leave the huge gap I referred to earlier and farmers will go into the coming harvest without any type of rule or regulation in place that will allow for the convenience of knowing the conditions under which grain can be shipped for the coming year.

I referred to interswitching rights earlier. Long-haul interswitching could be utilized. It certainly allowed for competition within that 160-kilometre radius. Interswitching is a tool that we brought in with Bill C-30. It is a much better rule than using competitive line rates, which have been in since the change in the Crow benefit in 1995. Competitive line rates, while sounding good, really were an ineffective way of providing the certainty that farmers and grain companies would have some competition. That is why the grain companies and the farm groups have joined together to lobby the government to put a stronger rate in place, a much stronger and more useable mechanism to use in that area.

A number of groups in Saskatchewan, and a growing chorus of western Canadian groups, have called for an extension of the Fair Rail for Grain Farmers Act that we had in Bill C-30. I am calling on the government today to extend that again. It was extended once by the government but it needs to do it again. That will provide fairness and equity and predictability in regard to the movement of product into the fall.

The government is talking about proroguing the House. If the House is prorogued this summer or early in the fall, the legislation would die on the Order Paper and the government would have to start all over again. This would provide unpredictability in the industry for some extended time down the road. It would be the spring of 2018 at the earliest or the fall of 2018 before we would have any kind of predictable rules to carry on with the movement of grain products in western Canada and to get grain to port in the just-in-time fashion that is required today to meet the markets that we built up so extensively through the 40-some free trade agreements that the Harper government signed with our trading nations. Keeping markets open is one of the best things that a government can do in relation to our agricultural industry.

The government needs to also look at the coordination of the grain grading system between Canada and the United States because there is much grain movement back and forth. A lot of livestock goes back and forth. Having sat on the western standards committee of the Canadian Grain Commission for a number of years as a farm representative, I know how important access to the U.S. is.

There are other things that I would ask the Minister of Transport to do. One of them is to get the Minister of Agriculture on side to move forward with some of these areas as well. He is looking at removing deferred grain tickets, cash tickets, and that would not be helpful to farmers either. The Minister of Agriculture needs to move more quickly in regard to the PED virus in hogs and cleaning trucks in Manitoba.

There were nine cases last month, and there has still been no action on that to make sure we maintain a strong hog industry.

All of that fits into the transportation of product. We are talking about the transportation of grain, but the movement of livestock is part and parcel of the use of grain on the Prairies.

I look forward to any questions.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I will be sharing my time with my colleague from Edmonton Strathcona.

I am pleased to help outline some of the NDP's thoughts and objections to the motion before us, which has all the thematic unity of a recipe for leftovers soup.

As is the case with leftovers soup, even if people find the totality of it distasteful, it does not always mean they do not like particular ingredients that were thrown into it. There are some good ingredients to this motion, but when taken together, unfortunately we feel we need to oppose it.

The aspect of the motion dealing with softwood lumber is an ingredient we think is a good one. It is right to draw attention to the fact that the government has simply failed to come up with a reasonable solution to the crisis in softwood lumber.

As one of my colleagues in the NDP has just pointed out, it is a little challenging in some ways to hear that criticism come from the Conservatives. They were in government when the agreement expired. They had 10 years. They could have come to another agreement on it, but they did not. They left it to the Liberals, who then made a big deal of their great relationship with the Obama administration and what this would mean for Canadian softwood lumber producers. The Liberals would be able to go ahead and get not just any deal but the best possible deal for producers. That agreement still has not materialized.

A compensation package has been announced, presumably which is a bad omen for Canadian producers who hoped to get a deal that would allow them, through their work, to provide for them and their families, and not have to do that through a government compensation package. I suppose if the Liberals are not going to get it together to get a deal, then that is the next best thing. We would hope, however, to have a government that fights to get that agreement so softwood lumber producers can get back on their feet.

Even the agreement that was in place before was not a great agreement. It was signed by the Harper government. Today Conservatives members want to draw the attention of people to that fact. The leverage the prime minister at the time had was that successive challenges by the United States to the Canadian softwood lumber regime at the WTO and NAFTA had failed. The WTO and NAFTA had supported the Canadian softwood lumber system. In fact, we were on the cusp of getting another decision by the WTO that experts thought would affirm the Canadian position.

Instead of getting to hear that ruling and the benefit that would accrue to Canadian producers by having that ruling on the books, the Harper government went off and cut a side deal. That deal left a billion dollars of the $5.4 billion, which were taken out of the pockets of Canadian producers, in the hands of the U.S. It had taken that money, and not rightfully. That is not just the NDP position; that is the opinion of NAFTA and WTO tribunals.

These are under agreements that we, frankly, do not always like. They were coming to the conclusion that Canada had been wronged by the United States, yet the rug was pulled out from under the feet of Canadian producers who wanted to get the money, which had been taken from them in unfair duties, back. The Harper government did not allow for that. It left a billion dollars of that money on the table.

The Harper government did it with another element of that story, which no one else seems to talk about today. It did it with a Liberal turned Conservative trade minister, David Emerson. Perhaps other parties in the House also want to explore that theme today. No only are the Liberals and Conservatives so close together on this issue, in their common failure to provide a lasting solution to softwood, even under the rubric of the WTO and NAFTA of which they were great supporters, but they felt comfortable using the same guy to negotiate for them on this file in the lead-up to and following the 2006 election.

With respect to this ingredient, we do need a lasting solution for Canadian softwood lumber producers, and it is incumbent on the government to deliver that. It has given us a lot of words, but not a lot of action. However, to hear that criticism coming from the Conservative Party, when it is pretty hard to distinguish the two on this file, is a little rich, too rich to soup me, that is for sure.

Grain is another aspect of this motion. It is quite different from softwood lumber, but nevertheless, here they are together. The issue there, as we started to discuss in questions and comments, is that the big crisis in grain transportation for western Canadian grain farmers occurred after the Canadian Wheat Board was abolished. Partly what we see here is Conservatives criticizing Liberals for failing to find a solution to a problem created by the Conservatives. They found a Band-Aid solution with legislation that is expiring soon, and the problem with the Liberal approach is that while they do suggest some solutions in Bill C-49, the House has yet to pronounce on the adequacy of those provisions. The problem is that it is unlikely those provisions are going to be passed before the expiration of the interim or Band-Aid solution offered by the Conservative Party.

I will remain neutral on whether or not what the Liberals are proposing would provide a lasting solution, but what is clear is that there is going to be a gap between the Liberals' proposed solution and the Conservatives' Band-Aid solution. That puts grain farmers, particularly western Canadian farmers, in a tight spot that they ought not to be in, because we could see this problem coming from a long way off. The Liberals had extended the Conservative Band-Aid solution once before, so they knew when the deadline was coming. The fact that they have not been able to put in place a more lasting solution in time for what is essentially their own deadline is sad. Canadian grain farmers deserve better.

The last bit of the soup has to do with carbon pricing, and this is the ingredient that the NDP finds most objectionable. It is not about criticizing the Liberals' approach to carbon pricing, but it tries to say that any form of carbon pricing, the very principle of carbon pricing, cannot work with a functional, growing economy. That is a claim that we simply reject.

I watched as all but one Conservative member voted last week in favour of a motion for this Parliament to support the Paris climate agreement. The idea that we could go on with our current policies, as the Conservatives advocate, in further development of the Alberta oil sands and pipelines and not put any price on carbon is just not feasible. This aspect of the motion stands in contradiction to the position that they took only last week with respect to the Paris accord. Something has to change in terms of Canada's environmental policy if we are going to make good on our commitments under the Paris climate agreement. That much is clear.

When we get into the details, it does not take long before a lot of controversy is sparked, and there is certainly a lot of fair criticism that one can level at the government for its lack of concrete action.

For instance, if we are going to meet our Paris accord commitments, clearly we would need targets to get us there, but we do not have targets. We have the inadequate targets of the previous Stephen Harper government that the Liberals ran against, but the Liberals have not provided newer, more ambitious targets, so there is a clear problem in how we are going to get there.

In my view, part of the problem with the Liberals' carbon pricing plan is that they have given all the responsibility for implementation to the provinces, which means it may be implemented differently in different parts of the country. This situation raises the issue of equity between provinces, and Canadians living in some provinces may live under a different carbon pricing regime from Canadians living in other provinces. That is a real issue, and it is not one that the Liberals have managed to adequately address.

There is an equity issue as well in terms of people on low or fixed incomes being disproportionately affected by a carbon tax. Other governments, such as the NDP government in Alberta, have sought to address this issue by bringing in a rebate program for low-income people that operates along the same principles as our GST rebate. It is not an insurmountable problem and it is one we could address, except that the Liberal government's approach has been to divest itself of all responsibility for implementation and put it onto the provinces. Once again, whether people will be disproportionately affected by this tax will depend on whether they live under the NDP in Alberta or live under governments in other parts of the country.

There is a lot to talk about and there is a lot to criticize. It is very disappointing to read in international papers this weekend, for instance, about Angela Merkel looking for support within the G20, thinking she could count on our current Prime Minister to stand up to Donald Trump on climate, and finding that she cannot.

It flies in the face of the motion that the Liberals themselves presented in the House last week to affirm our commitment to the Paris accord, a motion that we all supported nearly unanimously. Now we see that the Liberals' actions do not meet their words. It is Kyoto all over again.

We need to do better, but I do not think this motion is about a good-faith attempt to solve that problem.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

They are being thrown under the bus, Mr. Speaker, as my friend from Durham just said, by the Liberals. That is not acceptable. It is callous and inconsiderate. The Liberals are hurting those who need every penny kept in their own pockets, but the pickpockets on the Liberal side just love to pull more revenue from Canadians through additional taxes.

The Liberals are also going after the gas and oil companies by putting in place things like a methane tax, again increasing the cost of doing business and not doing anything to change the story on climate change.

When fuel prices go up and energy costs rise, Canadians still have to buy their gas, their diesel, their electricity, and their home heating fuel. Higher prices do not reduce consumption rates. All they do is generate more dollars for the coffers of the Government of Canada and the provinces, and that is not appropriate. Doing that kills jobs.

There is a jobs crisis in Alberta, Saskatchewan, and British Columbia, provinces that depend on the oil and gas sector, and in western Manitoba and places in Ontario, Newfoundland, and Nova Scotia, with the Hibernia oil fields and offshore drilling. Those jobs are being lost, yet those jobs support communities. When oil workers leave the field, who is going to be in those small businesses up and down Main Street, those pa and ma shops? If they have no one to come in to do business, how will they stay in business? If they are not able to sell their wares, sell their services, that is unacceptable.

Finally, the other issue I want to talk about today, and the House will hear in detail from my colleagues about this, is how the government's Bill C-49, what the Liberals call the modernized transportation act, is the opposite of that. The bill would put shippers and grain farmers across Canada at risk.

For western grain farmers, August 1 is a new crop year. Those farmers will have more difficulty moving their grain when the current shippers service agreements expire August 1. It will be more difficult for them to get the new crop to market. The bill would put all the power back in the hands of the oligarchs at the railways.

I am looking forward to hearing all the arguments brought forward by my colleagues on today's important motion.

Alleged Premature Disclosure of Contents of Bill C-49—Speaker's Ruling

[The Speaker, Liberal, Geoff Regan]

I am now prepared to rule on the question of privilege raised on May 17, by the hon. member for Carlton Trail—Eagle Creek concerning the alleged premature disclosure of the contents of Bill C-49, an act to amend the Canada Transportation Act and other acts respecting transportation and to make related and consequential amendments to other acts.

I would like to thank the hon. member for Carlton Trail—Eagle Creek for having raised this matter, as well as the Parliamentary Secretary to the Leader of the Government in the House of Commons and the hon. member for Elmwood—Transcona for their submissions.

In raising this question of privilege, the member for Carlton Trail—Eagle Creek explained that the media had made public specific details contained in Bill C-49 before it was introduced in the House. By drawing comparisons between what was revealed in several news reports from Monday, May 15 and the contents of the bill which was introduced in the House on Tuesday, May 16, she alleged that the required confidentiality before the unveiling of the legislation in the House was simply not respected and members' privileges were breached as a result.

The member stated her belief that this was not due to a simple accidental leak but, rather, was the result of a systemic advance briefing of the media.

For his part, the Parliamentary Secretary to the Government House Leader contended that at no time had the government prematurely divulged any details of Bill C-49; rather, it had simply held extensive consultations on the review of the Canada Transportation Act, as is the government’s prerogative. He added that the minister and his staff were clearly aware of the need for confidentiality, declining to comment on any specifics of the bill when asked by the media.

The right of the House to first access to legislation is one of our oldest conventions. It does and must, however, coexist with the need of governments to consult widely, with the public and stakeholders alike, on issues and policies in the preparation of legislation. Speaker Parent explained on February 21, 2000, at page 3767 of Debates:

Although the members of the House should always be the first ones to examine legislation after it has been introduced and read the first time, this rule must be balanced against the need for the government to consult both experts and the public when developing its legislative proposals.

When ruling on a similar matter on November 1, 2006, Speaker Milliken concluded that the government had not divulged confidential information on the bill, nor the bill itself, but rather had engaged in consultations prior to finalizing the legislation in question. At the same time, he explained at page 4540 of the House of Commons Debates:

The key procedural point...is that once a bill has been placed on notice, it must remain confidential until introduced in the House.

In acknowledging this important nuance, he made room for both consultation and confidentiality, but also saw the distinction between the two.

In the case before us, the Chair is asked to determine if the level of detail reported upon by various media outlets in advance of the tabling in the House of Bill C-49 constitutes sufficient proof of a leak of the contents of this bill, and thus constitutes a prima facie breach of the member's privileges. In examining the bill, and noting the obvious similarities to the information cited in the media, the Chair can appreciate the seriousness of the matter raised.

When ruling on a similar question of privilege on April 19, 2016, I found a prima facie case of privilege in relation to the premature disclosure of Bill C-14, an act to amend the Criminal Code and to make related amendments to other acts (medical assistance in dying). In that particular case, the government had acknowledged the premature disclosure of the bill while assuring the House that this had not been authorized and would not happen again. In other words, the facts were undisputed.

That is not the case with the situation before us. The parliamentary secretary has assured the House that the government did not share the bill before it was introduced in the House but conceded that extensive consultations were conducted. Nor is the Chair confronted with a situation where a formal briefing session was provided to the media but not to members.

Finally, it is a long established practice to take members at their word, and the Chair, in view of this particular set of circumstances, is prepared to accept the explanation of the Parliamentary Secretary to the Leader of the Government in the House of Commons.

In the absence of evidence that members have been prevented from conducting their parliamentary functions due to the premature release of the bill itself, I cannot find that a prima facie case of privilege exists in this case.

Business of the House

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, this afternoon, we will continue the debate we began this morning on the NDP opposition day motion.

This evening, we will return to Bill C-24, an act to amend the Salaries Act and to make a consequential amendment to the Financial Administration Act. Following that, we will begin second reading of Bill C-50 on political financing.

Tomorrow will be dedicated to debating Bill C-44 on the budget.

As for next week, our hope is to make progress on a number of bills, including Bill C-6 concerning citizenship; Bill C-50 respecting political financing; Bill C-49, transportation modernization; and Bill S-3, amendments to the Indian Act.

Finally, next Monday, Tuesday, and Wednesday shall be allotted days.

As the member very well knows, I always look forward to working with all members. I look forward to continuing our conversation.

[Vance Badawey, Liberal, Niagara Centre, ON]

Are we going to discuss Bill C-49?

[The Chair, Liberal, Judy Sgro]

Now, with respect to Bill C-49—

Mr. Badawey, is that on infrastructure?

[The Chair, Liberal, Judy Sgro]

Okay, we've had enough discussion on that one, and I think we all know what the intent was.

Oh, wait a minute. Mr. Rayes is the last person to comment before we move to our Bill C-49discussion.

[The Chair, Liberal, Judy Sgro]

We're going to have that in the next discussion, once we close off the discussion on this one, which I think we have now talked about enough. August 1 was the suggested date, but we'll go into Bill C-49 and see what the committee suggests.

At the moment that's what we have decided, so we can get any of the suggested witnesses in by June 14, so that the clerk has them when the time allows for us to move into that particular study.

Mr. Badawey.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I'm finding it interesting that we are going into such detail about a study that we don't have on the calendar yet. I'm thinking it probably won't get on the calendar until sometime in late September or early October given that we don't know if we're going to get through our aviation study by the end of this session, and given that we have a schedule before us that's going to see us sitting for four days before the session even starts, for a total of 20-some hours, on Bill C-49. We're then going to have to report that back to the House, and yet we're going into great detail about a study that we don't even have on the calendar yet. I recognize that you've asked for witnesses by June 14. When do you want the witnesses for Bill C-49 in?

[The Chair, Liberal, Judy Sgro]

I mentioned the other day that we need to get our witness list for this study on smart cities by June 14, so we will have it by the time we get to this.

Okay, Ms. Block, I have a list here. Hold on.

Then we need to move on to Bill C-49.

Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

When the minister comes out, is your expectation that he will talk about Bill C-49?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you, Madam Chair.

To signal our interest and extend a formal invitation to the minister, I move that the committee formally invite the minister to appear in order to discuss Bill C-49.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

We definitely do have time to deal with the aviation study in the three meetings that would follow a meeting with the minister and his departmental officials. Again, for the purposes of having something on the schedule, not knowing whether or not we're going to be able to deal with the report on Tuesday, I think this makes the most sense given the sense of urgency that I know we are feeling based on what we are hearing back from our producers and other stakeholders with regard to Bill C-49—at least with regard to those measures that are due to sunset in August.

I can't stress enough how much I really do think we should go ahead with that initial meeting with the minister and his departmental officials on Tuesday and look at spending the rest of this session closing the loop on the aviation study until we rise on the 23rd.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

Right now, no one is more torn than I am over these two proposals.

There is absolutely no question that we have to hear from the minister on Bill C-49. It seems to me that it will be a lot more complicated to get him here in September, given that the House will not be back yet and he'll likely be travelling all over the country.

I'd like to know whether my Conservative colleagues want the full two hours on Tuesday or prefer to spend an hour with the minister and meet with department officials in September.

[The Chair, Liberal, Judy Sgro]

But being realistic, which I always am, once we get into Bill C-49 in the fall, we will be tied up with that for a while. Then we're going to have to go back, and if we don't do some substantial work on the body of the report and the recommendations on the aviation study, we will be going back to the aviation study sometime in the fall. That's a long time since when we heard the testimony, and so on.

If the minister were to come, he probably would only be here for an hour, so that would leave us one hour—

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Madam Chair, I think the proposal by my colleague was that we plan for the minister to come on Tuesday, given the uncertainty about the report. At least then we will know that we've got something scheduled for Tuesday. If he can't come and all things align and we end up dealing with the report, that's fine, but I think in an effort to have something planned for Tuesday, given the uncertainty, we are proposing that we move ahead with the invitation to the minister for Tuesday, knowing that we'll get that part of the initial study on Bill C-49 done, and then we move to the aviation study report on Thursday, and perhaps into the following week and the next, until we rise.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I support inviting the minister to come on Tuesday. That would build in the flexibility we're looking for, given the timing of the report we're about to receive. It would perhaps address the sense of urgency that I know my colleague across the way was responding to when he suggested we meet prior to the start of the fall session, and perhaps what I believe to be a very heavy schedule for a week in terms of the testimony we want to hear and given that we need to get names of witnesses in by Wednesday next week. It may be a demonstration to our grain farmers and those folks who have deep concerns about the measures due to sunset on August 1 if we were to bring in the minister to talk about Bill C-49.

We would do that anyway. I'm sure we would kick off a study on Bill C-49 by bringing in the minister and departmental officials, if that could happen before the House rises. Perhaps we could even focus on those measures due to sunset and get testimony from him on that. That could be a good way of addressing both the study being proposed for that time in September and the need to build in the flexibility that we're looking for on the aviation study report.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

I think we could invite the minister to the prestudy of Bill C-49. We could address some of the issues to the minister that we heard from our constituents and all the stakeholders on that file. We will have to argue about this little part of Bill C-49 really fast, and we know we will not have time to discuss all of C-49 in September. Let's start on this bill next week. That's why it's important to talk about this on Tuesday.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

—because I want to suggest that we invite the minister next week to talk about Bill C-49 in a prestudy because of the railway thing, the farmers' grain thing. Maybe if the minister can be here on Tuesday, that will let us—

[The Chair, Liberal, Judy Sgro]

I'd like to finalize the aviation study direction first, and then we're going to Bill C-49.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Chair, what I have to say may help us figure this out. The subcommittee wasn't able to meet to plan out the days and weeks ahead or specifically discuss the motion on the committee's study of Bill C-49, expected in September. Your assistant sent me a proposed schedule for the study of the bill. As we've seen, the stakeholders, namely grain producers out west and railway representatives, are anxious to know what the approach is going to be.

In terms of this study, before discussing the proposed schedule for September—

Air Transportation

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, first the Liberals took aim at the parliamentary budget officer, and now they have the Commissioner of Competition's powers in their sights. In 2011, the commissioner blocked a deal between Air Canada and United Airlines because it would have eliminated competition and raised the cost of flying. Under Bill C-49, the minister will have sole authority to approve such deals, and it just so happens that Air Canada and United Airlines are planning to resubmit the exact same proposal.

If the commissioner rejects the deal again, will the Prime Minister tell his minister to listen to the commissioner, or will he once again bend to Air Canada's will?

Rail Transportation

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, a closer look at Bill C-49 reveals that the Liberals are trying to sell shippers a weaker version of the Fair Rail for Grain Farmers Act. Adding insult to injury, the pro-shipper measures contained in Bill C-30 will sunset on August 1. As a result of the minister's delay tactics, farmers will be forced to negotiate next year's contracts without the benefit of a law.

This omnibus bill is too late for western shippers. Will the minister now separate the rail shipping measures for expedited scrutiny?

Transportation Modernization Act

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

When we resume debate on Bill C-49, the hon. member will have 10 minutes to finish his speech.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Mr. Speaker, I thought I would only have 10 minutes, but it sounds like I will have 20. I will try not to bore you too much and close off nicely this long day that the Liberals have granted us.

The subject of today's debate is the transportation modernization bill. The Liberals have proposed this transportation bill—an omnibus bill, I might add. Bill C-49 establishes new rights for air passengers and liberalizes international ownership restrictions for Canadian air carriers; enables the Minister of Transport to consider and approve joint ventures by two or more airlines; updates the Canadian freight system; requires railways to install audio-video recorders in locomotives; enables the Governor in Council to require large railways to provide rate, service and performance data; and amends the Canada Marine Act to allow port authorities to access Canada infrastructure bank loans. I will focus on that last aspect in a few minutes.

I am saying all this to show how huge this part of the bill is. Unfortunately, we will have little time to discuss it. This part is hidden in an omnibus bill. The government has found a way to muzzle us so that we cannot point out the flaws in this bill.

The Emerson report is a study of the Canada Transportation Act that was led by the Hon. David Emerson. The study was launched on June 25, 2014 to address a variety of changing conditions and challenges, especially in the grain transportation industry across the Prairies.

Liberals tabled this report on February 25, 2016. Then, they launched a new process because the work done by the Hon. David Emerson was not enough for them. This means that today we have very little time to discuss this issue. The bill was introduced after 18 months of work. It built on the work done by the previous government and contained 60 recommendations to deal with a variety of changing conditions and challenges in Canada's transportation industry.

Unfortunately, the Liberals decided to launch another consultation process, and are only now introducing another bill. We will study it to make sure it strikes the right balance between the industry and consumers rights. That is the thorough work we, the opposition parties, will do together to try and support the government, who needs a lot of help implementing structuring bills for all Canadians.

This bill is supposed to amend the Canada Transportation Act but surreptitiously empowers the mysterious Canada infrastructure bank. This particular clause can easily be overlooked, and yet it raises many questions. We are not even sure why this infrastructure bank is being created in the first place.

That is what I what to speak to in the House tonight. The infrastructure bank is funded with taxpayers' money to the tune of $35 billion. Those same citizens will have to guarantee these $35 billion if foreign investors fail to bring projects to fruition. Thus, it will be the citizens taking the risks. The Liberals are putting their infrastructure bank in place for all of their friends around the world, those foreign investors our Prime Minister likes to visit outside of the country.

The top infrastructure bank official said it was created to underwrite funding for carefully planned, complex projects.

“Underwrite” means that if someone defaults on a loan, the underwriter is responsible for the debt.

In this case, Canadians taxpayers will assume all of the risk for the Liberals' bank venture. Considering how they are managing the deficit, we have every reason to be concerned about how they will manage the $35 billion if that is really how the bank was set up.

I would like to tell the House the story of the infrastructure bank.

In October 2015, the Liberals promised small deficits on the order of $10 billion and announced the creation of an independent infrastructure bank. We know what happened next. In November 2016, the highly anticipated bank was announced. At a meeting of the Standing Committee on Transport, Infrastructure and Communities, I asked the minister where the money would come from. All I got was radio silence. There was no response in the budget.

The next day, I again asked where the money would come from, and I was told that the government would take the $15 billion out of the infrastructure program that was supposed to help all Canadian municipalities.

The minister decided to take that money and put it in the infrastructure bank to finance projects worth more than $100 million in the municipalities.

Now we get to the really good part because a few weeks later, I had an opportunity to ask the Minister of Finance and the Minister of Infrastructure and Communities questions about who would really benefit from these $100-million-plus projects they wanted to fund through the infrastructure bank.

We are wondering about this because most municipalities cannot afford projects of $100 million or more except maybe Montreal, Toronto, and Vancouver. We get the feeling that the government has diverted $15 billion that should have been given to all Canadian municipalities to support infrastructure projects and put it in a new infrastructure bank that it created for its little friends. The government is still trying to figure out what kind of projects can really be funded under this program.

In November, December, January, February, March, April, and May, we asked the Minister of Infrastructure and Communities to name a single project of $100 million or more that could be carried out in Canada's small or medium-sized municipalities. Every time, we got complete radio silence, despite the fact that, at one point, the minister was surrounded by his cohort of senior officials and experts at a committee meeting. We repeated that it was not a complicated question and asked him to name, not five or six, but just one single project. We wanted to know one project that a small or medium-sized municipality in Canada would need the infrastructure bank to carry out. Radio silence.

That is normal, because over the past 10 years, and not over the past six months or 10 days, the average cost of infrastructure projects in Canada was not $100 million or $500 million, as certain investors would like. It was $6.7 million. The difference between $100 million and $6.7 million is a lot of money. This is simply to prove that this infrastructure bank will not serve many people, apart from reassuring investors by making sure that it will be Canadians all across the country who carry the risk for these projects.

I think the Prime Minister is missing something about the Robin Hood story. Indeed, instead of taking money from the rich and giving it to the poor, he decided to take taxpayers' money and give it to his friends and Liberal Party donors. This is where we get a sense of the dishonesty of these plans for the infrastructure bank.

Then we learned that Michael Sabia, president of the Caisse de dépôt et placement du Québec, and other investors who are working with the infrastructure bank, will want returns of 7% to 9%.

As a former mayor of a municipality of 45,000 residents, I can say that I never would have accepted funding at a cost of 7% to 9% when I had access to all kinds of municipal bonds at a rate of return of roughly 2% to 2.5% at most.

Once again, one might wonder why a municipality would need to go looking for financing. Just last week I had the opportunity to meet with the vice-president of the Union des municipalités du Québec, who is also the mayor of an important city in Quebec. I do not want to name him and put him on the spot here tonight. He is probably sleeping at this hour, but he might be listening on CPAC. I asked him whether, during all his years as mayor and at the council table, he had ever needed to go looking for financing from a bank. It has never happened.

It is late and we all want to get to bed. I thank you, Mr. Speaker, for the time you have given me to speak to Bill C-49. However, it is not nearly enough time to speak to such an important bill.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, I hope I can comment sufficiently on the question from the member for Sherbrooke.

Bill C-30 really looked at grain. It was looking at a bumper crop situation and it had to do something. It was really a Band-Aid solution that focused on the grain market.

In the case of today's market and what we propose in Bill C-49, we would also be handling lumber. We are looking at softwood lumber being an issue in the United States. We are looking at new markets in Asia. How do we get lumber to either coast, and a lot of it? Lumber would be something that we would want to address. In the case of mining, resources coming out of the ground, how do we get that efficiently to market? How do we get auto parts to market in southwest Ontario?

It is really more than just a Band-Aid solution for grain. We need a comprehensive solution that is part of an integrated transportation strategy. Bill C-49 addresses that need.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, it is my pleasure to speak today to Bill C-49, which proposes amendments to the Canada Transportation Act to advance the efficiency and competitiveness of our freight rail system. This is especially important to Guelph, which is home to one of Canada's three federally chartered railways.

The Guelph Junction Railway was established in 1886 by a special act of the federal government to foster economic growth in Guelph and in the surrounding communities. The City of Guelph has owned the railway since 1908. The GJR operates 38.6 kilometres of track that runs from Guelph Junction near Campbellville, Ontario, to Guelph's northwest industrial park. It is a strategic line that runs between the Canadian Pacific Railway and the Canadian National Railway.

Canadian exporters today have the advantage of the lowest freight rates in the world, even lower than in the United States, and a track record of significant investment by the railways that is essential for keeping these rates low in the future. However, even the strongest system has room for improvement, and we have heard concerns from both shippers and railways through our consultation process. We have heard in particular about system bottlenecks and other constraints that slow the movement of our goods. We have heard about delays in shipping that can affect our nation's reputation for reliability, and about regulations that dampen investment in the network to everyone's detriment.

Canada's rail system is the backbone of our export trade. It moves our goods to destinations across the country, to the United States, and for export overseas. The conditions we establish now, in 2017, will be essential for our nation's long-term growth and prosperity.

Following extensive consultations, our government is proposing new measures that would lay the groundwork for future success.

The bill would promote greater efficiency and investment in the system for the benefit of all Canadians. First, the bill proposes a new competitive access tool for shippers that would allow them to obtain better options for service and rates. This new tool, long-haul interswitching, would allow a shipper served by only one railway to access a competing railway at a rate and on service terms set by the Canadian Transportation Agency. Long-haul interswitching has been designed to meet the needs of captive shippers across a wide range of sectors: grain, forestry, and mining just to name a few. It would apply at a distance of 1,200 kilometres or more to ensure that some of our most remote shippers could benefit.

By providing competition between railways, this measure would improve system efficiency in moving goods to market, and at the same time, railways would be fairly compensated for their services and for the cost of maintaining infrastructure. The agency would set the rates under this measure based on comparable traffic. This would help prevent the risk that railways might under-invest or even close their lines due to lack of revenue.

As a part of this, we would allow extended interswitching in the prairie provinces to sunset as planned on August 1. Many members will recall that this measure was adopted in 2014 under the Fair Rail for Grain Farmers Act in response to the unique challenges in the grain handling and transportation system at that time and in that season.

Most challenges no longer exist, and extended interswitching is problematic in many respects. It only applies up to 160 kilometres and only in the prairie provinces. It does not cover other shippers in Canada who have told us about railway service issues. Its rates are far too low to compensate railways for moving the traffic, which would erode investment over time. A key beneficiary of this measure is not the shipper community but the American railway, the railway that scoops traffic away from Canadian railways but makes comparatively little investment in the Canadian network.

Long-haul interswitching is a far better tool as it would apply across sectors and across regions of Canada.

The grain sector would be far better off, as all captive grain shippers would have access to this competitive tool, not just those falling within a specific zone. The railways would be compensated appropriately to ensure that the system runs smoothly and grain moves to market effectively. The proposed new measure is also being carefully structured to minimize the risk of American railways unfairly taking traffic.

Many members will recall that the Fair Rail for Grain Farmers Act also imposed minimum volumes of grain to be moved by the railways. In our consultations, we have heard that this had negative effects. It benefited specific shippers to the detriment of others. It was good for the large companies, but not for the farmers. More importantly, the unique challenges of 2014, and that growing season, no longer exist. For these reasons, the volume requirements would be allowed to sunset as planned on August 1.

Our government recognizes the importance of moving grain and other commodities efficiently to market. Greater transparency on how well the system is working is obviously critical to efficiency. That is why Bill C-49 would require railways to report publicly every year on their plans to move grain and to manage weather-related disruptions. They would also need to report service and performance metrics that help them measure how the system is doing. The agency would have clear new authorities to hold an inquiry into any emerging issue at the minister's request. These measures would help all parties to keep track of emerging problems and work together to find solutions before the crisis point hits.

Importantly, this bill would provide shippers with the ability to maintain reciprocal financial penalties in service agreements. Applying penalties for service failures would encourage the most efficient service possible. Our rail system can only flourish within the right regulatory framework. To promote system efficiency, the bill would also modernize the Canada Transportation Act. For example, it would update the insolvency regime for railways, which dates back to 1903 and cannot address the complexity of modern business arrangements.

The railway industry must invest significantly in the network to keep it running safely and smoothly. That is why this bill also proposes measures to promote continued investment. For example, it would loosen shareholder restrictions on CN Railway that have been in place since it was privatized in 1995.

Bill C-49 would also fix problems with the maximum revenue entitlement, which caps the revenue per tonne that CN, CP, and Guelph Junction can earn for moving western grain. I just threw in Guelph Junction. It would fairly credit their investments in the network, and encourage them to obtain new modern hopper cars. It would also promote the movement of grain by containers, which is an innovative way to provide service and extra capacity at peak periods when the system is full. Again, this would apply across all regions of Canada, including Guelph.

Together, these amendments would achieve the goals of a competitive, efficient freight rail system, a system in which commercial forces drive efficiency but legislative backstops are in place to ensure that the system is fair, balanced, and transparent, a system in which the conditions are right for low rates, future investment, and future success.

I urge colleagues to adopt Bill C-49 as quickly as possible so that we can serve our farm community.

[Joe Peschisolido, Liberal, Steveston—Richmond East, BC]

Mr. Speaker, before I begin my comments, I would like to note that I will be sharing my time with the hon. member for Guelph.

In commenting on Bill C-49, I will be focusing on the liberalization of the international rules of Canadian airlines.

Canadian travellers and their experiences are top of mind for our government. During consultations conducted by the Minister of Transport, we asked Canadian travellers for their feedback and they were clear. They wanted lower cost air travel, more opportunities for leisure and business travel, and they wanted to see Canada become a more attractive travel destination for visitors. They asked for long-term sustainable competition, which would allow for the introduction of additional air services, improved air connectivity, and perhaps above all, more choice. The government has listened and is committed to achieving tangible improvements to the traveller experience.

As a result of the feedback we received, a number of proposals have been introduced in Bill C-49 to help improve the traveller experience in Canada.

For example, the government intends to liberalize international ownership restrictions for Canadian air carriers. What does this mean for Canadian travellers? Let me begin by briefly describing this initiative.

Like most countries, Canada limits international ownership and control of domestic air carriers. Under the Canada Transportation Act, non-Canadians currently cannot possess more than 25% of the voting shares of a Canadian carrier. Additionally, Canadian air carriers must also be controlled by Canadians, which means they may not be subject to controlling influence by international investors.

Limits on foreign ownership and control of air carriers are the norm around the world. For instance, in the United States, the limit is 25%, while the European Union, Korea, Australia, and New Zealand allow up to 49%, and Japan allows 33.3%. Limits vary depending on the circumstances of each country and the circumstances of each region.

However, Canada's current ownership limits may be acting as a barrier to new services and enhanced competition. Two prospective ultra low-cost carriers, Canada Jetlines and Enerjet, have already applied for and received exemptions to the current limits on international ownership from the Minister of Transport. Both companies successfully argued that under the current 25% limit, there was insufficient risk capital in the Canadian market to support the launch of new services.

Reflecting on this reality and the Canada Transportation Act review recommendations, the government is proposing changes that would allow international investors to own up to 49% of the voting shares of Canadian air carriers by introducing legislation that would amend the act and all other relevant acts.

As mentioned earlier, countries have different approaches to international ownership of air carriers, and our government wants to ensure that Canadian carriers compete on a level playing field. To protect the competitiveness of our air sector and support connectivity, no single international investor or any combination of international air carriers will be allowed to own more than 25%.

The direct impact of higher levels of international investment is that Canadian air carriers would have access to a wider pool of risk capital. This would allow air carriers to be better funded and could allow new carriers, which are otherwise not able to find sufficient risk capital, to enter the Canadian market.

New carriers, including ultra low-cost carriers offering extremely competitive prices, are expected to bring more competition into the entire Canadian air travel sector. This could in turn reduce the cost of air transportation and open new markets to Canadian consumers and shippers.

Small markets currently underserved by existing carriers could also benefit from services by new carriers. For instance, airports in smaller cities that currently offer services to a very limited number of destinations could benefit from the addition of new services, since we know that ultra-low-cost carriers use these smaller airports as their hubs. All of this could lead to more choice when purchasing an airline ticket; more travel destinations for all travellers, including those from smaller cities; and lower prices for Canadian travellers. Additionally, there could also be benefits for airports and suppliers and the entire country as more jobs and more prosperity are added to the Canadian economy.

To finish, let me underscore that the experience of Canadian air travellers is a great priority for the Government of Canada. We know that it is also a priority for Canadians. This is why we have proposed to increase international ownership restrictions for Canadian air carriers. If this initiative is implemented, we believe it could significantly improve the travel experience for all Canadians. Once in place, it could also help lower prices, support increased competition among air carriers, provide more choice to Canadians when it comes to purchasing an airline ticket, and ultimately improve service and connectivity for Canadian travellers.

The House resumed consideration of the motion that Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts, be read the second time and referred to a committee.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I thank my colleague for the question. I would be curious to know who the minister consulted on that specific subject. I have a feeling that workers' groups were not consulted.

If such a recording device were available to the TSB to help them get to the bottom of what caused a particular accident, I would not necessarily be against it. What really bothers me is what little we are doing to help prevent accidents from happening in the first place.

Where are the provisions in Bill C-49 that would make it so that accidents are not recorded on audio or video tape because they never happened in the first place? Where are the provisions around train conductor fatigue? Where are the provisions that will prevent accidents from happening or at least reduce their occurrence as much as possible?

Audio and video recording devices will not prevent accidents. They only allow us to understand what happened after the fact and maybe help us reduce or prevent the same type of accident. However, nothing in Bill C-49 addresses the issue of train conductor fatigue.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I thank the member for the question.

The events we have witnessed over the past few weeks undoubtedly made an impression. I had hoped that Bill C-49 would feature a clause setting out clear, straightforward rights for passengers who are “victims” of overbooking.

We are being told that Transport Canada will submit a proposal to the minister sometime over the coming months, a proposal which the minister will be free to accept or refuse. If he were to refuse it, the question of passengers' rights would be delayed even further. As I mentioned, when it comes to the passengers' bill of rights, Bill C-49 is an empty shell.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I would say that I am deeply disappointed in many ways, as I rise to speak to Bill C-49.

First, the bill was sponsored by the minister whose name I must not mention in the House, but who was an astronaut in his previous career. I admit that I have a virtually unbounded admiration for all Canadians who pursue a career as an astronaut. They are truly remarkable people with extraordinary resumés.

That is why when the Minister of Transport, a former astronaut—once an astronaut, always an astronaut, I imagine—told me in the House that he was studying the bill, that answer had tremendous value to me. I recognize him for the intellectual that he is, and I told myself that his reflections would surely bear fruit.

When I heard him answer that he was thinking about the relevance of the high-frequency train, for example, at first I was motivated and awaited his response impatiently. When the minister told us, month after month, that he was studying the transportation issues in Bill C-49, I told myself that the bill he finally tabled would be a bang-up piece of legislation.

For example, we are now awaiting the results of an inquiry into the events at Lake Saint-Pierre. I am thinking that will also be extraordinary.

However, on this rare occasion where the minister introduces something in the House, Bill C-49 in this case, I must say that my disappointment is as strong as my expectations used to be.

What do we find in this legislation, into which the minister has invested more than 18 months of study, thinking, reading and, I expect, exhaustive consultation? We find three kinds of measures.

I would say that the first category is made up of empty shells and the second, of questionable measures. The term “questionable” does not necessarily mean that they are bad. Some are definitely bad and should be removed. Others may deserve some amendments or would require a better argument to show how they may deliver on the promised Eldorado.

The bill does include a few good measures, which are sadly lost in a sea of measures trying to tackle any and all possible aspects of transportation. As a result, as happens too often in this House, we are asked to cast only one vote and to swallow a lot of nonsense in order to support the few measures that may make a difference. As my colleague rightly said earlier, this bill should be split in two.

Let us then focus on these three categories. I will try to give examples that are concrete enough to see what things could look like. Let us see first what has probably been, in the media, the most high-profile element of the minister's presentation on Bill C-49, the new passenger bill of rights. To me, it is the perfect example of an empty shell.

I said earlier, while asking a question to the minister, that in the previous Parliament, the NDP had introduced a passenger rights bill, which the minister voted for. The bill was complete and skilfully written. It was the result of much hard work. Let me give just one example to see what that bill looked like.

First, let us talk about cancelled flights, something that probably happened to each one of us. Clause 10 of the NDP bill provided for a reimbursement or re-routing. The clause reads as follows:

The air carrier shall offer without charge to every passenger to whom this section applies the choice between

(a) reimbursement of the full cost of the ticket at the price at which it was bought, for the part or parts of the journey not made—and for the part or parts already made if the flight is no longer serving any purpose in relation to the passenger's original travel plan—together with, when relevant, a return flight to the first point of departure at the earliest opportunity;

Furthermore, there was money allocated to all of that. We were therefore talking about flight cancellations and flight delays, with very specific and well-thought-out measures. We were also talking about the rights of passengers who, sometimes, have to wait long minutes, if not hours, on the tarmac because the plane cannot take off for some reason and who, at this time, have no rights. We were talking about passengers being denied boarding, their rights to be refunded or redirected, and their right to information. In short, this bill already contained all the necessary measures.

What does Bill C-49 propose? With regard to flight cancellations, we are going to ask Transport Canada to make proposals. With regard to flight delays, we are going to have to wait for Transport Canada's proposals. With regard to passengers' rights, including on the tarmac, Transport Canada will probably conduct a study on this. We realize that the list is getting longer and that, right now, air passengers have no idea what their rights will be under Bill C-49.

As we say back home, the minister has simply kicked the can down the road, but one day, he will have to deal with the can. The government is going to ask me and all members of Parliament to vote on that according to our conscience? Should I be for or against the total lack of substance? It seems to me like a figment of my imagination or an abstract idea on which I cannot vote. If the minister has not finished his bill, he should do his homework first, then present us with his bill later.

In fact, I find it rather puzzling that the minister asks airlines to comply with the spirit of the law while we are studying Bill C-49 and while the transportation agency will be drafting regulations that the minister could well reject, which would delay the process even more.

Could someone explain to me the spirit of an empty shell? I simply cannot understand it.

The foreign ownership limit for air carriers, which I asked about earlier, will increase from 25% to 49%. What is this decision based on? It is based on a recommendation of the Emerson report, which does not show beyond any doubt, or even with some doubt, the relevance of this measure when it comes to market competitiveness and the results or positive impact that it could have for passengers in terms of air ticket costs, for example.

A study by the University of Manitoba shows the exact opposite. It shows, beyond any doubt, that an increase in the foreign ownership of a Canadian airline cannot be linked to an effect on airfares.

Again, why is the government introducing this measure? I do not know. Bill C-49 is nebulous. I do not think we will be able to solve this issue given the short amount of time that will be available to the committee to study a bill as large as this one. There is another serious problem here, namely the Liberal bulldozer. The Liberals dragged their feet on introducing measures, that is, if there are even any in the bill, and they are now trying to rush the bill through.

I would like to come back to the agreements between airlines, which the minister also talked about. Again, like we have seen many times before, the legislation enhances the powers of the minister. I must say that every time that happens, a little light goes on. It tells me that we should be worried about what is happening. What powers does the minister want, and what good comes from it?

Basically, these joint venture agreements are nothing but a type of partial merger that is approved when rules of competition continue to apply. That is why entities like the Competition Bureau, which is the competition tribunal, exist.

Members will recall the joint venture between Air Canada and United Continental Holdings. These two airlines asked to merge their operations for 15 air routes. At the time, the Competition Bureau approved five of them, and the situation has not changed since then.

That means that even if that is against the rules of competition, in the public interest—another concept that is not defined in bill C-49—the minister could muzzle the Competition Tribunal, and authorize that joint venture for the 15 air routes. Again, there is a lot of uncertainty, and I am unsure as to how to vote on this bill, for as long as I do not understand its implications.

As for the Coasting Trade Act, maybe members will recall that during the elections, liberals had promised not to touch it. That is another example of a broken promise that liberals intend to be flexible on, circumvent, or, more specifically, break.

Therefore, what is being proposed in the bill? We are now told that the repositioning of containers, which was allowed only for Canadian shipowners, will now be permitted for ships registered in other countries. One could say this is meant to promote a competitive market, but we all know that foreign shipowners do not necessarily have to follow the same rules and the same requirements regarding their staff as Canadian shipowners. Chances are that we will never see what I would call fair competition.

Dredging and the carriage of bulk commodities will be allowed between the ports of Montreal and Halifax for ships registered in a member state of the European Union. I suppose this is meant for the government to implement the agreement it is about to sign with the European Union.

However, before making such a public statement, one should specify what the reciprocal measures are to look like. Will Canadian ships be allowed to carry bulk shipments on the other side of the Atlantic? The bill does not say anything about this. The law would also be amended to allow ports to obtain financing from the famous infrastructure bank, which everyone talks about because it would not serve anybody's interest, except the Liberal Party's wealthy friends.

Let me remind everyone that the infrastructure bank is supposed to finance projects worth $100 million or more. Therefore, for an ordinary port like the one in Trois-Rivières, I am not sure that bank is the finding of the century. This is part of the measures that are not very well explained in the program.

As far as the Railway Safety Act is concerned, it would have been interesting to see a clear and precise provision in the bill ensuring that a rail bypass was built for our fellow citizens in Lac-Mégantic. Instead, we are being told again that corporations' interests will prevail over the workers' interests. Among other things, railway companies will have to equip their locomotives with voice and video recorders.

First of all, if the goal is to give the Transportation Safety Board, or TSB, additional tools so it can investigate after an accident and make sure that whatever caused it would never happen again, one could say that the voice and video recorders are the equivalent of the black box aboard airplanes and might be acceptable. The point where things become unacceptable is where railway companies have access to these audio and video recordings for, perhaps, security reasons, but also potentially to monitor the work of their own employees. It bears asking whether such a measure, which enables employers to watch employees through a camera lens all day long, violates the employees' right to privacy. This question has to be asked.

It is especially important to ask how having a voice and video recording device in a locomotive would somehow resolve the issue of conductor fatigue. That is a problem that has absolutely not been resolved. Ostensibly for security reasons, we have completely side-stepped the main issue and the main risk factor, namely human fatigue. It is absolutely unbelievable; so much for that.

The previous speaker spoke at length about grain transportation. There is a glimmer of hope in that section of Bill C-49 that could alleviate some of the long-standing concerns that producers have and potentially address the issue of standards sunsetting on August 1. I have a really hard time understanding this. Given the time necessary to give a bill royal assent, even in a streamlined fashion, I fail to see how royal assent could come down from the Senate like a dove from the sky before August 1.

There an urgency about these measures, and a lot of them seem interesting, but they cannot be demonstrated, and we do not have the time to consult with key stakeholders to see if, for example, new provisions about interswitching fit their needs, and if the new ways to calculate the guaranteed minimum income meet their expectations. There are several.

I want to talk about two things. It is clear from what I am trying to explain, and will not have the time to finish, that supporting this bill at second reading will be very difficult for me. That being said, even if I vote against Bill C-49 at second reading, I will make sure to work as hard as possible in committee to propose amendments to strengthen it. We could even support the bill at third reading if the Liberals can show its usefulness.

For this purpose, in the interest of consistency and to prioritize issues of grain transportation and postpone studying the bill's other sections that do not involve such tight deadlines, I seek unanimous consent of the House to move the following motion: That, notwithstanding any Standing Order or usual practice of the House, Bill C-49, an act to amend the Canada Transportation Act and other acts respecting transportation and to make related and consequential amendments to other acts, tabled in Parliament on May 16, 2017, be amended by removing the following clauses: (a) clauses 3 to 13 and 22 to 59, related to grain transportation; that the clauses mentioned in section (a) of this motion do compose Bill C-51, an act to change temporary agreements related to grain transportation; that Bill C-51 be deemed read a first time and printed; that the order for second reading of the said bill provide for the referral to the Standing Committee on Transport; that Bill C-49 retain the status on the order paper that it had prior to the adoption of this order; that Bill C-49 be reprinted as amended; and that the law clerk and parliamentary counsel be authorized to make any technical changes or corrections as may be necessary to give effect to this motion.

That is the motion, and it is a simple one. It seeks to remove from Bill C-49 all clauses related to grain transportation, so that we can quickly study the legislation in time for the August 1st deadline. We would look at the remaining clauses later.

That is both my proposal and my conclusion.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I appreciate working with the member on committee. As he said, often we find ourselves on the same page when it comes to our responses to the governing members' comments and initiatives.

My response would be that the member is absolutely right. When we take a look at the measures that are included in Bill C-49, for some there are absolutely no real explanation for why they are included, except to perhaps state that they were part of the Emerson report. This is a report that the minister has had in his hands since December 2015.

As committee members, we thought that we were going to be taking a systematic review of that report and dealing with all of the recommendations that Mr. Emerson and his panel had come forward with. We have done none of that. Instead, in the last couple of weeks, what we have gotten is an omnibus bill that has a couple of issues chosen that the minister wants to highlight, rather than a systematic approach to looking at the issues within our transportation sector.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I know this is something that is very near and dear to the member's heart.

Coming from Alberta, knowing that the Fair Rail for Grain Farmers Act was actually addressing issues that grain farmers in the Prairies were experiencing, I can tell members that what we have been hearing from stakeholders, as they have begun to review the legislation and as they have begun to take these two pieces of legislation and compare them, is that they are confused. They do not understand exactly what the changes are meant to accomplish. They believe that the devil is in the details.

While they continue to look at this, they continue to highlight the fact that these measures in Bill C-30 are sunsetting on August 1. There will be a gap. That is why we asked the committee to consider calling upon the minister and the government House leader to break out at least the measures in Bill C-49 that would address the measures in Bill C-30 so that we could at least address the concerns of our shippers and our producers as they are bumping up against that August 1 deadline.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, on the contrary, I think I pointed out at the beginning of my speech that what we have in front of us is an omnibus bill. We actually tried, in committee, to encourage the members to consider breaking out the different modes of transportation so that we could actually study them more effectively, and in fact, expedite those measures that are in Bill C-49, which were meant to replace the measures that were in Bill C-30.

My answer is absolutely not. However, I think that we could have taken a more systematic approach and not had all of these measures included in an omnibus bill, which is probably not going to get the due consideration it needs.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I am pleased to rise this evening to debate Bill C-49, the transportation modernization act, at second reading.

The bill could simply be renamed the transportation omnibus act for the number of different bills being amended, with many of changes being more than just technical in nature. The Air Canada Public Participation Act, the Canada Transportation Act, the CN Commercialization Act, the Railway Safety Act, the Canadian Transportation Accident Investigation and Safety Board Act, the Canadian Air Transport Security Authority Act, the Coasting Trade Act, the Canada Marine Act, the Bankruptcy and Insolvency Act, the Competition Act, the Companies' Creditors Arrangement Act, the 2009 Budget Implementation Act, and the Fair Rail for Grain Farmers Act are all being amended.

How this squares with the Liberal election promise not to use omnibus legislation is beyond me. Do not get me wrong, I am not complaining about an omnibus bill, just the fact that the Liberals did and then made a promise they knew they would not keep. Furthermore, when I introduced a motion in transport committee last week calling on the committee to write to the Minister of Transport and his government House leader to ask them to split the bill into the following sections, rail shipping, rail safety, air, and marine, to provide an enhanced and possibly expedited scrutiny, every single Liberal member voted against it without even a single comment as to why.

I found this vote particularly ironic, as it was the Liberal member for Niagara Centre who raised the idea of expediting the passage of the bill in the first place, in order to provide grain farmers with a greater amount of certainty as they negotiate contracts for future shipping seasons.

The more measures that a bill contains, the more time it takes to provide adequate scrutiny. Separating the bill would be the easiest way to facilitate expedited passage, and thus my motion calling on the bill to be split into several parts.

Unfortunately, Liberal members were unwilling to split the bill into these natural divisions. This does not inspire confidence that when the bill eventually does reach committee, the Liberal Party members will be open to any amendments. While Bill C-49 is supposed to be the Minister of Transport's legislative response to the 2015 Canada Transportation Act review led by the Hon. David Emerson, it would appear that what we have before us is a bill that is designed to change the channel from some of the bad news that keeps piling up for the Liberals.

The government's communications strategy for this legislation has overwhelmingly concentrated on the air passenger compensation regime that is being introduced, and not the other very consequential measures. Here is what the Minister of Transport posted on his Twitter feed as he introduced this legislation, “These air passenger rights will ensure that travellers are treated like people, not just a number.”

Like many members here, I travel a lot and only have positive things to say about all the employees working for the airlines and at our airports. Of course, on occasion, flights do not go as we hope, but the Minister of Transport appears to be willing to pit passengers against airlines rather than fixing the structural problems in Canada's aviation regime.

This legislation does not spell out what the compensation regime will be, just that there will be one. The bill states that after consulting with only the Minister of Transport, the Canadian Transportation Agency will make regulations concerning carriers' obligations toward passengers. However, for even greater clarity, subsection (2) of proposed section 86.11 states that the Canadian Transportation Agency must comply with any instruction from the minister with regard to setting regulations concerning carriers' obligations to passengers.

What this means is that the Canadian Transportation Agency is tentatively responsible for setting what financial penalties a carrier would have to pay to the passenger in the case of a service breach, unless the minister is dissatisfied with the level of prescribed compensation that the CTA decides is appropriate, in which case he or she can dictate what that level of compensation will be.

It is noteworthy that the agency will, by law, only be allowed to consult with the Minister of Transport concerning the setting of these regulations, and not with consumer advocate groups, airlines, airports, Nav Canada and other stakeholders in the sector.

I do not understand what the purpose of consulting only the minister is. If the Canadian Transportation Agency is to be an arm's-length organization, this legislation clearly diminishes its independence. If the minister will not allow the agency to independently set the parameters of the passenger compensation regime, he should just spell out in legislation what it will be and let members of Parliament and stakeholder groups decide whether this is a good proposal or not.

If this legislation were truly aimed at reducing the cost of travel for the passenger, while increasing service and convenience, the minister would immediately lobby to have the government's carbon tax, which will make every single flight more expensive, withdrawn. He would reform the air passenger security system, which was universally identified as a major irritant for all passengers during the Canada Transportation Act review by all the organizations that participated in the process.

While it would be preferable to have the sections of the bill dealing with air and rail examined as stand-alone pieces of legislation, I can only surmise that the government's complete mismanagement of the House's agenda has led us to the point where an omnibus transportation bill is what we have in front of us today. At least we have finally begun debating something in the transport sector, now that we are two years into the government's mandate. So far, the only achievement the minister has to show in terms of legislation is the act to amend the Air Canada Public Participation Act.

Let us talk about Bill S-2, an act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another act. This was first introduced by the government's representative in the Senate 13 months ago and passed third reading in the Senate on February 2. The minister claimed that Bill S-2 was a priority in his speech to the Montreal Chamber of Commerce in November 2016, yet it has not been touched since.

On May 12, just days before the introduction of the legislation we are debating today, the Minister of Transport introduced the oil tanker moratorium act, a bill that his own officials conceded would only impact the future development of Canada's oil sands and no other activity in northern British Columbia. Equally concerning about this oil tanker moratorium, which could be renamed the oil pipeline moratorium, is that there is considerable support among first nations on B.C.'s coast for energy development opportunities, but the wishes of these first nations are being ignored. For the Liberals to move forward with this tanker moratorium without properly consulting coastal first nations is extremely hypocritical.

The Liberals go to painstaking lengths to emphasize the amount of consultation they undertake, but it is becoming more and more apparent that their interest in consulting is about being told what they want to hear and not about listening to differing views. If anyone needs further proof that Bill C-48 was introduced only for political purposes, it is that this moratorium has been introduced as a stand-alone bill and not as part of this omnibus package we are debating today.

The Minister of Transport's silence and inaction on critical and time-sensitive transport issues, especially rail transport, is leading to uncertainty for both shippers and the railroads, which both want certainty as they negotiate shipping rates for the season.

That is why over the past several months I have asked many times whether the government intends to renew the sunsetting measures in Bill C-30 before they expire on August 1, 2017. The response I have been given time and time again is that the government recognizes the urgency to get this done and that legislation is forthcoming. Unfortunately, the Liberals have made a muck of this, and the key measures in Bill C-30 will sunset before any replacement legislation can receive royal assent and become law.

Last week in the transport committee, a Liberal member moved a motion calling on the committee to begin its consideration of this bill, Bill C-49, in September, before the House begins sitting, to expedite the study of the sections of the bill that deal with the shipping of grain. While Conservatives have no objection to considering this legislation in September before the House returns from the summer break, government members fail to realize that our producers needed them to turn their attention to this months ago, as the measures will sunset on August 1 of this year. At best, there will be a two-and-a-half-month gap between when the measures in Bill C-30 sunset and replacement legislation is in place.

By the time this legislation has passed, the majority of contracts for this year will have been negotiated with the law in flux. Because of the government's mismanagement of the legislative agenda, these popular measures will sunset without replacement, and shippers will be the worse off.

This is important to note, because for a combination of reasons, including a lack of rail capacity, preparedness by railways and shippers, weather, and the size of the crop, western Canada's 2013-14 grain crop did not get to market in a timely manner. Consequently, the previous Conservative government introduced Bill C-30, which gave the Canada Transportation Agency the power to allow shippers access to regulated interswitching up to 160 kilometres, mandated that CN and CP both haul at least 500 tonnes of grain per week, and introduced a new definition of adequate and suitable service levels. With this extension, the number of primary grain elevators with access to more than one railroad with the extended interswitching limits increased from 48 to 261.

These measures were met with universal support from the members of the shipping community, because even if they did not use interswitching, they could use it as a tool to increase their negotiating position with the railways, as the shippers knew exactly how much the interswitch portion of the haul would cost them.

At the same time, the government announced that the Canada Transportation Act statutory review would be expedited, and it began a year early to provide long-term solutions to the grain backlog of the 2013-14 shipping season and other problems in the transport sector within Canada. The hon. David Emerson, a former Liberal and Conservative cabinet minister, was tasked with leading the review. This review was completed in the fall of 2015 and was on the Minister of Transport's desk shortly before Christmas. The minister then tabled this report in mid-February 2016 and promised wide consultations on the report. As the key measures of Bill C-30 were going to sunset on August 1, 2016, and parliamentarians were hearing from the shipping community that it would like to see these extended, Parliament voted in June 2016 to extend those provisions for one year.

In the fall of 2016, the Standing Committee on Transport, Infrastructure and Communities undertook a study of Bill C-30 and held a number of meetings on the merits of these measures and whether they should be allowed to sunset. We were assured that if we lived with this extension, these issues would be dealt with by August 1, 2017.

The vast majority of the testimony heard was supportive of maintaining the 160-kilometre regulated interswitching limit at committee, which is why the committee's first recommendation was the following:

That the Canadian Transportation Agency retain the flexibility provided under the Canada Transportation Act by the Fair Rail For Grain Farmers Act to set interswitching distances up to 160 km, in order to maintain a more competitive operating environment for rail shippers with direct access to only one railway company.

Anyone who has read this bill will know that the government ignored the committee's main recommendation. At some point during this debate, I hope to hear from Liberal members on the transport committee about whether they believe that the government was right to ignore the committee's recommendations, and if so, whether the entire committee study was just a waste of time.

Basically, what the government is proposing with this legislation is to replace the 160-kilometre interswitching limit with the creation of a new long-haul interswitching tool that would be in effect between Windsor and Kamloops on hauls of up to 1,200 kilometres, or up to 50% of the length of the entire haul. Shippers would be charged the regulated interswitching rate for the first 30 kilometres of the haul and then a Canada Transportation Agency-determined rate, which would be determined on a case-by-case basis based on the price of a similar haul, for the remainder of the distance to the interswitch point. Shippers would only be able to interswitch at the first available interswitch point within the zone.

What the government has done is take a little-used existing remedy, called a competitive line rate, and rename it long-haul interswitching.

Under a competitive line rate, a shipper could apply to the agency to set the amount of the competitive line rate, the designation of the continuous route, the designation of the nearest interchange, and the manner in which the local carrier would fulfill its service obligations. We know from history that this remedy was infrequently used because of the prerequisite that the shipper first reach an agreement with the connecting carrier, and the two main carriers effectively declined to compete with one another through CLRs. What we do not know is what the difference will be at a practical level between this new long-haul interswitching and the existing competitive line rates.

Like competitive line rates, long-haul interswitching is a much more complicated system for shippers to use, and the jury is still out on whether this will achieve the minister's stated objective of improving rail access for captive shippers. When Bill C-30 was first introduced, there was universal support among shippers for the extended interswitching. So far, very few organizations I have spoken to can say that this tool is better.

In conclusion, this much is certain: the key measures in Bill C-30 will be allowed to sunset on August 1, before this legislation receives royal assent. The Liberals have had nearly a full year to get new legislation in place but failed to do so, and shippers will suffer the consequences.

Canada remains one of the most expensive jurisdictions in which to operate an airline, and it is about to become even more so with the imposition of a national carbon tax. This bill does nothing to address the systemic cost issues, which are passed on to passengers, that were identified by the Transportation Act review. As has been the case with almost everything with the current government, optics trump everything, and this bill exemplifies that.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Madam Speaker, my colleague will know that transport is a vast domain. It covers rail, the marine side, the air side, the movement of cargo and freight, and it also covers people.

I was very careful to point out that Bill C-49, the transportation modernization act, is but a first step in transport 2030. I encourage her to read my document, “Transportation 2030”, because we touch on all sorts of other things, including the one that she brought up, which is passenger rail.

That is something we are working on. We cannot do everything in one shot, but I will let the member know that we are working on passenger rail.

[Marc Garneau, Liberal, Minister of Transport]

moved that Bill C-49, an act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts, be read the second time and referred to a committee.

Madam Speaker, there are special moments in a politician's life when we get to do something truly transformative.

May 16, 2017 was one of those moments for me. I had the great pleasure of introducing Bill C-49, the transportation modernization act, which will help bring our government’s vision of a state-of-the-art national transportation system to fruition.

This legislation breathes life into transportation 2030, a strategic plan for the future of transportation in Canada, to promote our government’s agenda for economic growth and job creation.

It fulfills our promise to review the Canada Transportation Act and related legislation. We want to ensure our laws and regulations position Canada to capitalize on global opportunities, thrive in a high-performing economy, and better meet the needs and service expectations of Canadians.

This bill represents a first legislative step to deliver on early Transportation 2030 measures. It consolidates into a single bill some of the essential components required to advance a strategic and integrated plan for our country’s transportation system.

Bill C-49 proposes a range of improvements to better meet the service requirements and overall experience of the Canadian traveller. It aims to create a safe, innovative transportation system that takes advantage of international best practices, opportunities for international investment and contributes to a highly productive Canadian economy.

Bill C-49 focuses on our immediate priorities in the air, rail and marine sectors. It addresses the needs of air passengers for fairer and more transparent rights, the needs of the Canadian air industry for greater investment, the needs of shippers for safer and more efficient rail transportation, and the needs of railways for strengthened trade corridors to global markets.

Specifically, the bill proposes to strengthen air passenger rights; liberalize international ownership restrictions for Canadian air carriers; develop a clear and predictable process for approval of airline joint ventures; improve access, transparency, efficiency, and sustainable long-term investment in the freight rail sector; and, increase the safety of transportation in Canada by requiring railways to install voice and video recorders in locomotives.

Before I explain each of these in greater detail, let me first make clear that action in these areas reflects the priorities identified by Canadians.

We undertook extensive consultations over the past year following the release of Canada Transportation Act review report. We heard from more than 300 Canadian transportation and trade stakeholders, including indigenous groups and the provinces and territories, about how to ensure that the national transportation system continues to support Canada's international competitiveness, trade, and prosperity.

We also heard from individual Canadians in communities, large and small, all across the country regarding their concerns about our transportation system. Canadians have expressed their disappointment with their air travel experiences. I am committed to improving those experiences.

The concerns of Canadians have been highlighted in recent weeks with much-publicized cases of the unacceptable treatment of air travellers both in this country and south of the border. Stories of passengers forcibly removed from flights and other unacceptable industry practices that have significant impact on consumers have made the news headlines.

The bill, if passed, would provide assurance to Canadians that if they choose to travel by air, they would be aware of their rights, and should they feel that their rights have been violated, they would have a clear, simple, and timely mechanism for resolution.

Bill C-49 proposes to mandate the Canadian Transportation Agency to develop, in partnership with Transport Canada, new regulations to enhance Canada's air passenger rights. These new rules would ensure air passenger rights are clear, consistent, and fair for both travellers and air carriers.

I believe that when passengers purchase an airline ticket, they expect and deserve the airline to fulfill its part of the transaction. When that agreement is not fulfilled, passengers deserve clear, transparent, and enforceable standards of treatment and compensation. Under this proposed legislation, Canadians would benefit from a uniform, predictable, and reasonable approach. The details of the new approach would be elaborated through the regulatory process, which would include consultation with Canadians and air stakeholders.

My objective is to ensure that Canadians have a clear understanding of their rights as air travellers without negatively impacting on access to air services and costs of air travel for Canadians. Bill C-49 specifies that the regulations would include provisions regarding the following: first, providing passengers with plain language information about carriers' obligations and how to seek compensation or file complaints; second, setting standards for the treatment of passengers in the case of overbooking, delays, and cancellations, including compensation; third, standardizing compensation levels for lost or damaged baggage; fourth, establishing standards for the treatment of passengers in the case of tarmac delays over a certain period of time; fifth, seating children close to a parent or guardian at no extra charge; and sixth, requiring air carriers to develop standards for transporting musical instruments.

I have been clear that I also intend that the regulations would include provisions ensuring that no Canadian is involuntarily removed from an aircraft due to overbooking. I have issued a challenge to Canada's air carriers on this matter, and that of seating arrangements for minors, that they move to strengthen their practices even before new air passenger rights are finalized.

The bill also proposes that data would be required from all parties in the air sector flow to be able to monitor the air traveller experience, including compliance with the proposed passenger rights approach.

The legislation also proposes to liberalize international ownership restrictions from 25% to 49% for Canadian air carriers, with associated safeguards. For example, a single international investor would not be able to hold more than 25% of the voting interests of the Canadian air carrier, and no combination of international air carriers could own more than 25% of a Canadian air carrier.

I should point out that the policy change would not apply to Canadian specialty air services, such as heli-logging, aerial photography, or firefighting, which would retain international ownership levels of 25%.

Liberalizing international ownership restrictions means that Canadian air carriers, which include all passenger and cargo providers, would have access to more investment capital, which they can use for innovation. This would bring more competition into the Canadian air sector, providing more choice for Canadians and generating benefits for airports and suppliers, including new jobs.

In fact, in the fall of 2016, I exempted from the ownership restrictions of 25% two companies that wanted to enter the Canadian market supported by increased foreign investment. This decision is now permitting Enerjet and Jetlines to pursue their intention to create low-cost carrier services for Canadians. Liberalizing the foreign investment provisions will give Canadians more frequent access to air travel within Canada, and from Canada to transborder and international locations.

Another improvement in the bill is that it proposes a new, transparent, and predictable process for the authorization of joint ventures between air carriers, taking into account competition and wider public interest considerations.

Joint ventures are a common practice in the global air transport sector. They enable two or more air carriers to coordinate functions on specific routes, including scheduling, pricing, revenue management, marketing, and sales.

In Canada, air carrier joint ventures are currently examined from the perspective of possible harm to competition by the Competition Bureau.

Unlike many other countries, notably the United States, Canada's current approach does not allow for the consideration of the wider public interest benefits other than competition and economic impacts. Furthermore, the bureau's review is not subject to specific timelines.

The bill that is before this House proposes amendments that would allow me to consider and approve air carrier joint ventures, where it is in the public interest, taking into account competition considerations. On this latter concern, I would work in close consultation with the Commissioner of Competition to ensure that I am properly informed regarding any concerns that he or she may have with regard to competition. Air carriers that would choose to have their proposed joint ventures assessed through the new process would be given clear timelines for an expected decision.

I am also convinced that providing Canada's air carriers with such a tool would also benefit the air traveller. By joining up networks, air carriers could allow seamless travel to a wider range of destinations and reduce the duplication of functions. For Canadians, this could mean more seamless access to key global markets, easier in-bound travel in support of tourism and business, as well as increasing transiting traffic through our airports, thus increasing flight options.

Globally, airports are making investments in passenger screening to facilitate passenger travel and gain global economic advantages. Canada's largest airports have expressed an interest in making investments in passenger screening, either through additional workforce or technology innovation, and smaller airports have shown interest in obtaining access to screening services to promote local economic development. In the last two years alone, 10 small airports across Canada have requested screening services.

The proposed amendments in the bill would create a more flexible framework for the Canadian Air Transport Security Authority, known as CATSA, to provide new or additional screening services on a cost recovery basis. This would enable industry stakeholders to enter into agreements with CATSA to increase access to screening services at small, low-risk airports.

In turn, this would support our efforts to maintain an aviation system that is both secure and cost effective. It would also strengthen Canadian communities' competitiveness as they attract new commercial routes.

Bill C-49 proposes significant enhancements to increase the safety of the rail sector, too. Once in place, this legislation would build a safer, more secure rail transportation system that Canadians trust.

As a top priority, the legislation would amend the Railway Safety Act to require that railway locomotives be fitted with voice and video recorders. Mandating the installation of the recorders would strengthen rail safety by providing objective data about crew actions leading up to, and during, a rail accident. Beyond that, the requirement would also increase opportunities to mitigate risks and prevent accidents from occurring.

The updated act would not only require companies to install the recorders. It would limit how the recorded data could be used, within strict criteria. For instance, while the Transportation Safety Board would have access to recorded data for post-accident investigations, Transport Canada and railway companies would also have access to the data for proactive safety management, and for following-up on incidents and accidents not investigated by the Transportation Safety Board.

The specific limits on the use of the data are designed to maximize the safety value of this technology while limiting its potential to infringe on employees’ privacy rights.

Canada's freight rail system is a cornerstone of our economy. Bill C-49 would strengthen the freight rail policy framework to foster greater transparency, balance, and efficiency in the Canadian rail system. The proposed improvements would provide fair access through stronger remedies for shippers on service and rates, promote increased efficiency of the rail transportation system, encourage long-term investments in the railway network, and deliver improved data on rates and service.

As I committed last fall, fair access measures would allow for reciprocal financial penalties in service-level agreements to ensure that railways are held accountable for service failures. They would improve access to and end the timelines of the Canadian Transportation Agency processes to settle service and rate disputes. The new measures would ensure the agency offers informal dispute resolution options and guidance to shippers. The legislation would also broaden eligibility for rate remedies, benefiting small and medium-sized shippers, and allow an arbitrator's decision to apply for two years instead of only one.

We would also create a new mechanism called long-haul interswitching. This would be available to all captive shippers in all regions of the country and all sectors. It would introduce competitive alternatives for their traffic and better position them in negotiations for service options and rates. Other measures would modernize the methodology to calculate the maximum revenue entitlement in order to promote long-term investments in the rail system. Among other things, these improvements would better recognize railway investments, including in hopper cars.

The bill would also make it easier for the agency to update regular interswitching rates so that they adequately compensate railways for interswitching costs. As well, Canadian National's single shareholder restrictions would be relaxed from 15% to 25%.

To enhance transparency and level the playing field, the amendments would require large railways to report some performance, service, and rate data relevant to their Canadian operations. Transport Canada would have the authority to publicly report rate trends.

In the context of these advancements for the freight rail system, the short-term measures in the Fair Rail for Grain Farmers Act would be allowed to sunset as scheduled. With Bill C-49 we are taking important steps to ensure that the right conditions are in place for a successful winter season in the grain handling and transportation system this year and for years to come.

These are not the only ways we propose to improve trade and global markets. Bill C-49 would also amend the Coasting Trade Act to enhance marine transportation as well.

The proposed amendments would allow vessel owners to reposition their owned or leased empty containers between locations in Canada using vessels of any registry. This is something the Shipping Federation of Canada began asking for as far back as 2009. Extending the repositioning of empty containers to all ship owners would support industry's request for greater logistical flexibility and also would help address the ongoing shortage of empty containers for export purposes.

Equally important is Bill C-49's focus on marine-related infrastructure. The legislation proposes amendments to the Canada Marine Act that would allow Canadian port authorities and their wholly owned subsidiaries to access Canada infrastructure bank loans and loan guarantees. As members are aware, the bank would be responsible for investing in key infrastructure projects. Enabling port authorities to access the bank would support investments in key trade-enabling infrastructure, creating the conditions for companies and communities to build, expand, and thrive.

I am proud to table Bill C-49, the first legislative step toward making Transportation 2030 a reality. I trust I can count on the support of all parliamentarians to seize its immense potential, and to pass these measures as soon as possible.

Business of the House

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, this afternoon, we will continue debate on the Conservative's opposition motion. This evening, we will proceed with Bill C-45, the cannabis act, at second reading.

Tomorrow morning, we will commence report stage of Bill C-44, the budget. In the afternoon, we will return to Bill C-45.

Our hope for Monday and Tuesday is to send Bill C-45 to committee, and also to deal with report stage of Bill C-44. Other bills for next week include the Senate amendments to Bill C-6, the Citizenship Act; and Bill S-3, provided the bill is passed by the Senate.

Should time permit, we would also like some debate on Bill C-49, transportation modernization; and Bill C-24, to amend the Salaries Act.

We have had a conversation among House leaders. I look forward to continuing those conversations, and I will do my best to report to this House the information that I have, and we will do our best to work well together so that all members can do the good work that we are sent here to do.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you.

I'm going to go into another issue, Madam Chair.

I appreciate the comments by Ms. Block because this is the transport, infrastructure and communities committee and we have a pretty big mandate with these three files, especially with respect to Minister Garneau's announcement of transportation 2030, and everything that falls under that. We're looking at focusing on that now, with the earlier motion that passed and, of course, bringing forward Bill C-49 as part of that discipline in bringing forward the minister's vision.

The second isMinister Sohi's vision with respect to infrastructure. It's nice that we all come from somewhat the same background. We've all dealt with infrastructure as former mayors, councillors, and municipal representatives, and we do understand how saddled municipalities are with respect to infrastructure; but most importantly, we know how to do infrastructure right, to make those proper investments so that they're sustainable.

This weekend, for example, we have the Federation of Canadian Municipalities in town. I've already started to speak to a lot of the mayors from big and small cities in the past day or so. One of the messages I'm getting loud and clear, Madam Chair, is their appreciation for not only Minister Sohi's budgetary commitments, at $180 billion, but also for the comment he made in the House most recently when he committed to having a sustainable infrastructure funding envelope for municipalities. That is big news for municipalities, since, Madam Chair, you were one of the authors of the new deal for Canada's cities back in 2004, I believe, with the gas tax.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I would like to move my motion that I put on the order paper on Tuesday, so I know we have it.

It's the one I read it out earlier today, so I won't read it again. I know it's been circulated to all the members.

In introducing and speaking to my motion, I made a lot of the comments I wanted to. I'll just reiterate that I introduced this motion for two reasons: the first being that we are dealing with an omnibus bill addressing a number of issues within numerous modes of transportation. The second would be that the members opposite, the government members, wanted to see us expedite the study of this bill, which I think demonstrated the need to address certain measures in the bill in a more timely way than others perhaps. That led me to ask at the last meeting if the members would be willing to break out the part of Bill C-49 that addresses the measures that are due as a result of the sunsetting of Bill C-30. As I was not able to get an answer then because of time constraints, I introduced the motion.

I want to respect and believe in my colleagues' desire to provide clarity and certainty to our producers. As I've pointed out, I don't think the time frame he's outlined within his motion will make any difference. That window has closed. I think the only way to redeem it is to break out this section of Bill C-49 and do a study as expeditiously as possible.

Thank you, Madam Chair.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

For the sake of consistency, I would like to say this. You gave me an idea of what the study of Bill C-49 might entail in scope. You mentioned 23 hours. You probably relied on your experience, since we have not even sent our list of witnesses. However, we know that there will be a certain number of witnesses. In my opinion, 23 hours is the equivalent of roughly four weeks of meetings. That does not even allow us to meet the objective of starting earlier to get this study done before the work resumes.

I feel that everyone is tugging on the blanket and I see no consistency. We are ignoring the only real emergency. So I can hardly support the motion.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

I will not expand on everything my colleague said. I fully agree with what she is saying about the urgent need to begin studying Bill C-49. I think there is indeed urgency, but it is as if we were going to put out a fire and realized that we had to buy a fire truck. We could have bought the fire truck earlier.

What are we going to do in a situation like that? We are not going to wait for the fire to go out before we buy a fire truck; we find another fire truck.

This other fire truck is my colleague's motion to split Bill C-49 to deal with the measures for grain farmers out west as quickly as possible. We do not have to wait until September. We can do it while the farmers are available.

I really wanted to share my concern about that with my colleagues on the committee. We are going to study this important bill during the busiest time for grain farmers. It will be very difficult to get witnesses like that to appear. Those days would cost them a great deal. They cannot really miss a day and leave their grain to meet with the committee in Ottawa. It may well be very complicated. We should be sensitive to that. It is not a policy issue.

So, if necessary, let's move up this study to the summer, I have no objection. However, we must consider the fact that witnesses may not be available.

If we manage to split Bill C-49 quickly, it will probably not take that long. We could study that issue quickly. That would be for the benefit of those for whom we work. If we had to study Bill C-49 in its entirety solely to deal with the urgent case of grain farmers, I think we would be making a big mistake.

Let me give you an example. The government has just announced that a committee is being created to review the Railway Safety Act. This very day, some people are meeting with government officials. Representatives from FCM are here. Pauline Quinlan, Mayor of Bromont, has been appointed by your government to this committee, which is undertaking some very serious work. However, Bill C-49 already contains measures that will amend the Railway Safety Act, particularly in terms of cameras being installed in locomotives. That has implications. I think it is important to wait for this review committee to finish its work.

I do not want to talk about this for too long. I just wanted to support my colleague's comments.

I want to salute my colleague Mr. Iacono, who apparently missed me very much during the first hour of this meeting, since he pointed out my absence. When I heard that, I rushed off to the committee meeting so that he could enjoy my presence, Madam Chair.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair, and perhaps it would have been helpful to deal with our motions before we dealt with Mr. Badawey's just because the questions that Mr. Aubin might have been answered first.

There are two observations I would make. While I do somewhat appreciate.... In response to what I'm hearing from Mr. Badawey, creating this sense of urgency to meet outside of the session to deal with Bill C-49, I think it should be stated that the fact of the matter is producers are already negotiating their contracts for this year. They're doing that. So if we meet in September, that isn't going to impact the contracts they're negotiating today.

I think the second thing to recognize is that the time frame that we're establishing to do this study is probably coming at the busiest time for some of the producers whom we might want to invite to be witnesses for our study. I'm sure you're aware that harvest happens in August and September and into October, and sometimes into November.

So I think that sense of urgency being created now should have been there a few months ago. I agree totally with my colleague that what we are dealing with here is an omnibus bill. It's addressing numerous modes of transportation, and I can tell you that since Bill C-49 was introduced in the House not quite two weeks ago—maybe it will be two weeks tomorrow—my schedule has been challenged to accommodate the requests I'm receiving from numerous stakeholders who want to discuss this bill. What I'm hearing from them is that the devil is in the detail, as always, and that these are complex sectors and they need time to take a look at this legislation to determine exactly what their positions will be coming out of that review.

Moreover, I think we have to talk about the timing of this bill. As I indicated at our last meeting, we, the members of the official opposition, have been highlighting the need to address these measures for quite some time. In this regard, let's take a look at the facts of some of the things Mr. Badawey has presented. Yes, this is coming out of the review of the CTA. That began under our government, as you pointed out, with a couple of years of review by the Emerson panel. The minister was given that report on Christmas Eve of 2015. We undertook a study of it in September 2016. Before we undertook the study, the extension had already been granted, I think, at a request of this committee. We undertook a study recognizing that we were going to be bumping up against a deadline of August 1, 2017.

So now here we are. We are bumping up against that deadline in spite of all of the efforts we've made to create a sense of urgency to deal with it and to do the study as a committee and get the recommendations before the minister long before this sunsetting was to take place. However, the minister chose to wait until six weeks before the session ends to introduce his omnibus bill. Given the assertion made by the House leader that Bill C-49 is a priority, I think some of the responsibility for this has to land at that individual's feet, for not getting this onto the agenda a little sooner, although she has said it is a priority.

In light of Mr. Badawey's suggestion that the committee extend our sittings by coming to Ottawa during the summer recess, I think splitting Bill C-49 to review the measures that address the sunsetting measure seems like an appropriate undertaking. I think if we were to have that conversation, we would better know what kind of time we have to allocate outside of the meetings that are already scheduled to the end of this session, and however many days we might feel need to be added at the beginning of the next session.

Those conversations need to happen, but as far as creating a sense of urgency now goes, I think it's a little late for that. We need to do justice to this piece of legislation and not try to rush through it.

I certainly support the notion of breaking it out so that we can deal with the measures you have highlighted in your own motion.

Thank you.

[The Chair, Liberal, Judy Sgro]

Before I go to Ms. Block, just to try to answer your question, Mr. Aubin, it's my understanding, based on an overview of the witnesses who would probably want to speak to Bill C-49, the committee would have to spend an estimated 23 hours on this however we choose to roll it out—and they're all amendments to the current Transportation Act.

So I'll go now to Ms. Block, and then to Mr. Berthold.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

My thanks to Mr. Badawey for this motion.

The first thing is that the date of our work does not matter to me. We are elected to do this work. As soon as it is necessary, we will be there. It could be in July, August or September. That's not really the issue.

However, there are some questions I cannot find an answer to.

First, let's face it, Bill C-49 is an omnibus bill because it amends 13 pieces of legislation. If we meet before work resumes in September to answer questions about Bill C-30, we will be late because the deadline is August 1 or July 31. I do not understand why we would meet in September to solve a problem for which we would already be late.

If I were told that we would be meeting for one or two weeks, holding two to four meetings to deal urgently with what needs to be done for grain transportation, it would be one thing. However, I also see that we want to study Bill C-49 in the interval between the dates proposed in the motion and the return to the House for the new session. In that case, I say no.

Before I vote in favour of the motion, I would like to get an idea of how many hours we want to spend on Bill C-49. No less than 13 pieces of legislation are affected. There is no way that we will manage to do it properly in four meetings. That doesn't quite make sense. I wonder where the urgency to work in September comes from if we are already late.

Can we have an idea of the time that we want to spend on Bill C-49, to see if we have time to cover all the topics? I know that the first come, first serve game works, but there is also a motion coming up that proposes that the minister be asked to split the bill so that we can quickly study what is urgent and take the time we need to study the rest of the bill.

If I have to vote on those motions in the order in which they are moved, because I do not have the information I need and the ruling has not been made to ask the minister to divide his bill so that we can deal with what is most urgent and study the rest afterwards, I will unfortunately have to take issue with that. However, that's not because I don't want to work in September.

[Vance Badawey, Liberal, Niagara Centre, ON]

As I alluded to at the last meeting, colleagues, you will recall that we conducted a study on freight rail transportation in 2016 and, more specifically, the transportation of grain and agricultural products. We heard from numerous stakeholders that the measures in Bill C-30, also known as the Fair Rail for Grain Farmers Act, including extended interswitching, were not in fact ideal. The legislation was often characterized as a temporary band-aid, hastily applied after the grain-handling crisis in 2013 and 2014, a piece of legislation with many flaws.

Many farmers and other shippers felt that the 160-kilometre extended interswitching did not go far enough. Notably, sectors such as mining and forestry, in particular, pointed out that they too would like to benefit from interswitching but were usually outside the 160-kilometre radius. At the same time, rail companies objected to the rates not being determined on a commercial basis and argued that this would be a disincentive to them as regards making needed investments in their infrastructure.

In the absence of a solution that could address these various conflicting interests, this committee ended up passing a motion calling on the government to extend the provisions for interswitching that were due to sunset for one year, until August 2017, but only until such time as the minister could find a better—and I want to stress this point—longer term solution.

The good news is that with Bill C-49, the proposed transportation modernization act, the minister is proposing just such a long-term solution, including a new measure, calling for longer haul interswitching, which will be available to captive shippers within a 1,200-kilometre radius.

I understand that the initial reaction from shippers, including farmers, has been very positive thus far. However, there will be a legislative gap between when the interswitching provisions in Bill C-30 sunset in August 2017 and when Bill C-49 receives royal assent, assuming it does, likely sometime later this year, depending upon how long it takes to get through the House and, of course, the Senate. Some shippers are understandably concerned about this gap and would like to start benefiting from the new and improved measures contained within Bill C-49 as soon as possible. I know our government has heard these concerns and wants to help, and I'm sure that members of the committee, especially those in sensitive areas such as Saskatchewan, have heard the same concerns.

I understand that the government House leader has indicated a willingness to deal with Bill C-49 at second reading and get it to our committee before the summer adjournment. If that in fact happens, I propose that our committee meet prior to the House's returning in the fall to study Bill C-49. This would provide us an opportunity to hold extended meetings and do a lot of work in a relatively short period of time. Ideally, we could even complete our study before the House gets back in September.

I think this would go a long way to speeding up the process and delivering results for our grain farmers and other captive shippers who are eagerly awaiting the passage of this bill and will certainly be supportive, in our view, of the certainty that this bill will provide.

Bill C-49 also includes a number of other important measures, notably a passenger rights regime for air travellers that is long overdue and that I'm eager to start studying.

I hope our colleagues in opposition will join me and the rest of the members of the committee in supporting our farmers and agree to hold the meetings prior to the return of the House in September. I know that on this side of the table we're prepared to do that work. We're prepared to bring this bill forward, we're prepared to support our farmers, and we're prepared to expedite this process to hopefully get Bill C-49 through and fill the gap between the August 1 sunsetting and the passage of this very important bill.

Thank you, Madam Chair.

Alleged Premature Disclosure of Contents of Bill C-49

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I am rising to respond to the question of privilege raised by the member for Carlton Trail—Eagle Creek on May 17, 2017, on the alleged premature disclosure of the contents of Bill C-49, the transportation modernization act.

The member alleges that the media reports on the bill prior to its introduction constitutes a breach of the privilege of the House. Our government holds parliamentary privilege in the highest regard and takes seriously any allegations that privileges were not respected.

In the case before the House, I submit that the government took great care to ensuring that the details of Bill C-49 were not prematurely divulged prior to its introduction.

I would like to draw the attention of members to the extensive consultations that were held on the review of the Canada Transportation Act. In fact, these consultations began under the previous government. As part of these consultations, over 480 meets and roundtable discussions were held and over 230 written submissions were received between June 2014 and December 2015. The current Minister of Transport supplemented this work with a wide-ranging set of consultations, holding 10 major round tables across the country between May and November 2016, as well as holding engagement sessions on social media.

Following these extensive consultations, the minister made a speech on November 3, 2016, which outlined his vision entitled “Transportation 2030 - A Strategic Plan for the Future of Transportation in Canada”.

Following the launch of the transportation 2030 strategy, the minister continued to meet with a wide range of stakeholders in the transportation sector, gave speeches and media interviews, and spoke in the House about issues he intended to address through upcoming legislation. That is to say, any reporter or interested stakeholder would have had a very good idea of what issues were to be addressed in Bill C-49.

Before turning to the facts of the matter before the House, I would point out that the Speaker must judge the extent to which the issue has infringed upon the ability of members to discharge their parliamentary duties. Page 145 of the second edition of House of Commons Procedure and Practice states:

In deliberating upon a question of privilege, the Chair will take into account the extent to which the matter complained of infringed upon any Member's ability to perform his or her parliamentary functions or appears to be a contempt against the dignity of Parliament.

On October 4, 2010, the Speaker ruled that it is indisputable that it is a well-established practice and accepted convention that the House has the right of first access to the text of bills that it will consider. At no time were the specific details of the bill made public. In fact, the minister and his staff refused to comment on the specific details of the provisions of Bill C-49, which was reported by a number of media outlets.

The member cites the March 2001 ruling by Speaker Milliken, which is a clear acknowledgement of the government's prerogative to consult with stakeholders and Canadians in the development of government policy. The ruling states:

In preparing legislation, the government may wish to hold extensive consultations and such consultations may be held entirely at the government's discretion. However, with respect to material to be placed before parliament, the House must take precedence.

I submit this is precisely what the government has done with respect to Bill C-49.

The case that the member cites is drastically different than the situation before the House. The 2001 ruling referred to by the member involved a minister of the crown who gave a detailed briefing on a government bill to the media in advance of the introduction of the bill. Moreover, members and their staff were not permitted to attend the briefing. As a result, members were unable to respond to media inquiries on the content of the bill. This situation sits in stark contrast to the situation before the House.

Let me take a few moments to show why this is not a legitimate question of privilege.

First, in the evening of May 15, the CBC website stated, “Passenger bill of rights will set national standard for air travel”. Stating the general goals of proposed legislation is not a detailed description of the specific measures contained in the bill.

I would submit that this is a general statement of the objective to address an issue. There was no reporting on what the national standards would be or the modalities of scheme. In fact, this would be impossible, since the bill simply authorized the development of regulations to address this issue.

Similarly, CTV News referred to minimum standards for reimbursement for travel disruptions and lost luggage but did not, and I submit could not, refer to what the minimum standards would be, since these standards would be set through the regulatory process. This was confirmed by a CBC report and on CTV News. I am not sure how the member believes that the disclosure of the proposed standards would be in regulations constitutes in any way contempt of this House.

In instances such as this one, where the government has consulted extensively on the development of policy, there are bound to be cases in which an issue, such as air passenger rights, would be made public prior to the introduction of a bill. What differentiates a bona fide contempt of the House through the premature disclosure of the contents of a bill and the case before the House is that no specific details were released.

Moreover, the minister and his staff were clearly cognizant of the imperative of not disclosing the specific details of the bill to avoid a contempt of the House.

For example, I would refer to the May 14 Globe and Mail article where the minister's office denied to comment on the specifics of the bill until properly introduced. Again, in the Canadian Press article of April 11, the minister's spokesperson is quoted as declining to say if the legislation would set industry-wide standards, or raise compensation levels offered in the United States or Europe.

The difference between divulging specific details of a bill and speaking about current issues that may be addressed in a bill should not be lost on members. Speaking about general issues to be addressed in a bill without divulging the specific content of the bill is not only permissible but reasonable. While the government consults on issues which may be made public during the course of consultations, the specific details of provisions to address such issues are only made public following the introduction of the bill. This is precisely the case before the House.

I would refer to the Speaker's ruling of April19, 2016, with respect to the premature disclosure of the content of Bill C-14, where the Speaker highlighted that the specific details of the bill were prematurely disclosed, which had the effect of impeding members in the discharge of their parliamentary duties.

The government brings forward bills that were mentioned in the party's electoral platform, Speech from the Throne, Budgets, mandate letters, or were subject to public consultations. Would a bill to implement an initiative announced in one of the aforementioned policy proposal be automatically be deemed to constitute a prima facie question of privilege once the bill has been introduced?

That cannot be the intent. Media reports leading up to the introduction of Bill C-49 did not reveal specific measures. Nor did these reports act in any way as to impede members in the discharge of their parliamentary duties.

In conclusion, the matter raised by the member for Carlton Trail—Eagle Creek does not meet the threshold of constituting a prima facie question of privilege.

Resuming debate

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, I invite the parliamentary secretary to listen to the rest, as it is very interesting. I would add that I was hanging on his every word throughout his speech,

As I was saying, when we want to voice our points of view, on the opposition side, it does not work. The Liberals do not want to hear them, and as a result, they make serious mistakes, like the one they made this afternoon when they voted against the autism motion. It would be very much to the government’s advantage to demonstrate good will and allow the opposition the time it needs during these long, hard sittings we will be starting shortly.

This evening, I am going to talk about Bill C-46, after motion No. 14 is passed. I have things to say to the government about what has been done badly in the bill. I am pleased to have the time to do it and to stay here late tonight to voice my disagreement on several aspects of Bill C-46. However, I would also have liked the government to acknowledge, with just as much enthusiasm, that when we have something to say, it may be equally interesting.

I understand why the government is in a hurry and absolutely wants to extend sitting times. It is because few government bills have received royal assent since the start of the session. By contrast, in the first 18 months of the Harper government, more than twice as many government bills had received royal assent.

In short, the Liberals are in a bit of trouble, because the bills they present to the House are slipshod and do not really reflect what Canadians expect. Canadians expect that the government will prepare good bills. This is not because of a shortage of consultation, however, since the Liberals have done nothing else since the beginning. They consult a group on the left before making a decision, then they go and consult another group to find out whether the decision is satisfactory. Then they raise the subject in the House and we discuss it. For some time, however, they have been preventing the opposition from talking about it. They pass a closure motion, and they send the bill to the Senate. That is where the big problems start for the government, because its bills come back with amendments.

That is the new way that things are done. They wanted to elect independent senators. They told them that they would be able to state their opinions and their wisdom would be used to improve bills, but what happens when there are amendments to the bills? Everyone is up in arms, the government sends them back, telling them that this was not their job and it does not accept their changes. The result is that the government is unable to get its bills passed.

If the goal was to embark on an ambitious agenda to speed up the passage of crucial programs for Canadians, then why not? However, that is not happening. They are being asked to attend to urgent matters. For example, this afternoon, the Standing Committee on Transport, Infrastructure and Communities had a discussion about the defunct Bill C-30, which is set to expire in August. The government addressed this very recently through the Minister of Transport's Bill C-49, an omnibus bill that changes just about every transportation-related law imaginable. Then the government realized that part of the bill absolutely had to go through before August or western grain producers would run into problems, so the Standing Committee on Transport, Infrastructure and Communities was told there had been a little mistake and it would have to speed up its study of the whole bill in order to pass this one little measure.

We moved a motion to split the bill so the government could get the job done faster, achieve its goals, and deal with grain producers' concerns. I am looking forward to its response. We have come up with some good, reasonable proposals to move this country's legislation and files forward, but nothing the opposition suggests is good enough for the government. That is the problem.

The government wants our trust, but that is hard. Remember Motion No. 6 and the attempts to change the rules of the House, not to mention the consultations that never happened on partisan appointments as in the case of Mrs. Meilleur? The government wants our trust and says it is going to work hard, but it is making no promises not to take full advantage of this extraordinary measure to change the rules of the House. That brings me to our other condition: the government must pledge not to move a motion to change the rules of the House. Maybe then it will have the people's support.

In short, we are ready to work. To conclude, I am going to quote the Parliamentary Secretary to the Leader of the Government in the House of Commons, who told the Hill Times, in an article published on May 29, that their goal was to feel productive inside the House of Commons.

Giving the impression of being productive does not produce anything. It simply gives the impression of work. What we want is some real work. We want to work late, and we are prepared to do that and to collaborate with the government, but we are asking it for two little things. If the government really wants us to recommend its bills and if it really wants us to help it move its agenda forward, which is not as ambitious as all that, I would note in passing, then let it give us, too, the opportunity to make our motions and to present our concerns as they relate to Canadians. The government will then certainly have the support of our party and the official opposition.

This is an invitation to collaborate that I know will go nowhere.

[Robert Aubin, NDP, Trois-Rivières, QC]

I'm being presumptuous, here, but I think that, rather than clarify where he is going, Mr. Iacono really wants to suggest that we move in camera. We were actually supposed to meet in camera, but my Liberal colleagues were the ones who suggested that we meet in public. For the sake of consistency, then, let's continue the meeting in public.

What we are in the midst of discussing isn't a crime of lese majesty, and we aren't going to get all worked up in public in an effort to bring some clarity to our work. I would remind you that I would like an answer to my question.

Considering that all our discussions since the meeting began have been in public, the people following our proceedings might be puzzled—to put it politely—as to why the committee would suddenly move in camera at the precise moment when our questions were finally going to be answered. It would be as though the television channel were suddenly cut. We've all experienced how frustrating it is to be watching a playoff game when the score is tied and suddenly the cable goes out during the third period. That's exactly what this would be like. I can't see how we could justify the decision to move in camera when the entire meeting thus far has taken place in public.

It's not that embarrassing of a discussion. The bills are public, and the questions we are asking are quite clear. They have to do with procedure. There is another equally, if not more, important question we need to answer, because it affects the day-to-day work of farmers all over the country, who are stuck in, what I would call, a no man's land; that question stems from the fact that Bill C-49 is a massive bill that came to us late.

We agree that one of the Minister of Transport's characteristics seems to be his studious nature and his lengthy examination of bills before bringing them forward. That approach probably has some merit. However, once the bill is introduced, he has to allow enough time for the work to be done properly given the issues in question.

Bill C-49 is so massive that the best thing would be to split it. I realize that our committee doesn't have the authority to divide a bill, but we can, at the very least, make a recommendation. I would think that the Minister of Transport would pay more attention to a unanimous recommendation than a majority one. We would then be in a position to act in the best interests of everyone involved, procedurally speaking.

[Robert Aubin, NDP, Trois-Rivières, QC]

I was just going to say that that is an aspect of our procedure here, in this committee, I can't quite get a handle on, but I really want to understand. To my mind, when we give the analysts drafting instructions, we shouldn't tell them to go in a certain direction. Instead, we should tell them what form we want the report to take and which subjects we want it to cover, in light of all the input we gathered.

It seems to me that to instruct the analysts on our findings even before the report has been drafted is to walk a rather fine line, at the very least. What makes our analysts so valuable is precisely the fact that they are completely non-partisan. They cannot have any political affiliation whatsoever. They must be able to be as objective as possible in looking at all of the comments of the witnesses, who appear before the committee to voice their support or opposition and sometimes qualify their positions. It is the analysts' job to produce as accurate a report as possible of what they took away from the committee's discussions.

It is the committee's job to bring out the various arguments. I think, then, that the least we can do is exercise some restraint in our drafting instructions to the analysts.

I'd like to know what you consider acceptable, Madam Chair, in terms of the committee's recommendations to the analysts on the drafting of the report. I expected that we would just provide instructions on the form of the report, not on its substance. I thought we would debate the substance once we received the draft report.

Since we seem to be all over the place, I'm going to go ahead and switch gears, because we don't have any real direction here. I would very much like to bring the discussion back to my suggestion that we ask the government to split the mammoth bill that is Bill C-49, so we can focus our efforts on the measures affecting farmers.

Once again, Madam Chair, I would point out that we have two or three issues on the table at the same time. This is all very confusing.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Just in follow-up to that, is it the will of the committee to make a request of the minister and the government to carve out those measure that are creating a sense of urgency for us in looking at Bill C-49? Is it the will of the committee to ask for that?

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Given that we have at least another hour to hear from witnesses on the aviation safety study, and the sense of urgency that Mr. Badawey has highlighted in dealing with Bill C-49, I'm wondering if we could postpone the drafting instructions. We do have 20 minutes left to discuss my colleague's suggestion to carve out the measures in Bill C-49 to deal with that legislation in a much more timely way. We could discuss that for the remainder of the time today and figure out if that is something that could be done, and then seek to provide drafting instructions on the aviation safety study after we've heard from the final witnesses on Thursday.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Aubin. I appreciate that.

We still have to discuss our drafting instructions for our aviation study. If it's the wish of the two vice-chairs to have a subcommittee meeting to discuss it, I just note that we stopped doing so because we couldn't get our schedules working. We were able to agree to add additional meetings for the aviation study and on infrastructure. So we have been functioning reasonably well.

My staff will reach out to my two vice-chairs, and we can have a further discussion as far as committee business is concerned. I would appreciate it if we could all manage to find the time to do that. My staff will be contacting your staff this afternoon to find an hour so that we can start to plan our future agenda, giving consideration to the comments on Bill C-49.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

I want to raise two issues.

The first has to do with how the committee functions.

With all due respect, Madam Chair, as much as I appreciate the miracles you have managed to work since I've been on the committee, I must say that our sense of collegiality seems to be slowly slipping away. It fades every time we meet.

Clearly, I think that if proper subcommittee meetings were held more often, it would help ease some of the tension we're seeing. I'm not trying to force anything on you, but that is what I would strongly suggest. I think the committee should favour that approach.

It would probably also help us iron out the bulk of our work plans and thus avoid surprises and frustrating situations like this morning's, not to mention what happened at a meeting you unfortunately weren't at, Madam Chair. I think that's one solution that would help the committee get back to its former self.

As for possibly having to work on Bill C-49 in the summer, I would simply say that, if we must, we must. That was never the issue. The argument is that farmers are a priority, and I agree with that. In terms of the measures in Bill C-30, keep in mind that the priority according to farmers—the message they were championing—was that they would be happy to see the measures made permanent. I'm having a hard time, then, wrapping my head around how the government party can claim this is an absolute priority that we need to deal with as quickly as possible, when it opted to insert the measures into an omnibus bill. I'm well aware that this isn't the right place to debate the matter, but I would just point out that, if this is indeed a priority, one solution would be to take the measures out of the mammoth bill that is Bill C-49. That way, the committee could study the measures in a timely manner and make everyone happy.

Instead, the government is trying to fast-track consideration of an omnibus bill that affects just about every sector of transportation, including grain transportation, which has a direct impact on farmers.

Truth be told, Bill C-49 could be divided into a number of bills. Even though the government has absolutely no intention of doing this, it seems to me that, if it wanted to give priority treatment to farmers, the best option would be to extract the provisions from Bill C-49 related to Bill C-30 . It could then make Bill C-30 the priority and refer it to our committee. That way, we could deal with the matter expeditiously while following through on the government's wish to prioritize farmers and deliver the support they are expecting from us.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

Once again, I apologize for being repetitive. We've heard loud and clear the concerns of the farmers. We've been hearing them for past year and a half, going back to when we discussed this issue in the first place and dealt with it last year. Here we are, ready to deal with it again.

The minister has had a great dialogue and consultation with the stakeholders. We've heard loud and clear the concerns raised, especially by Saskatchewan farmers. The Saskatchewan farmers have brought their concerns to our attention, through their MPs, through, I'm sure, the new Leader of the Opposition, as well as through our MPs, including those on this committee.

Grain farmers do, in fact, want long-term certainty. This is what we're trying to put in place with this bill. With that, what I'm asking of the committee is for it to ensure that the rights of farmers are a priority, and therefore to deal with this issue sooner rather than later.

Yes, we can meet. I'm available all summer, quite frankly. Some might not want to hear that, but this is something that's a priority. If, in fact, we have to meet during the summer, if in fact we come back a week earlier, prior to the rising of the House in September, so be it.

Once again, I want to reiterate, Madam Chair, that grain farmers do want long-term certainty, and they want their rights to be a priority. This is, in fact, our intent. This is, in fact, what my recommendation is, to bring that forward for those very reasons.

Again, on Bill C-49, the intent is to bring it to the House for second reading, and therefore for us not to have to deal with it upon the rise of the House in September, and then have it go into December and possibly even the new year's timeline, which was proposed originally.

We can, in fact, if we start work earlier, deal with this earlier, and then have that certainty brought forward in an expeditious manner. That, quite frankly, is what I'm requesting, Madam Chair.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

I don't think anyone asked the minister to wait until June to begin the study of the bill in the House. It's a long and meaty bill. Bill C-49 is clearly an omnibus bill: there's something in it for everyone, including measures on grain transportation.

I think the committee members have done excellent work. We have gotten things done and responded quickly. The delay between the two should not be laid at the committee's feet. We would never do anything to delay the implementation of the measures in Bill C-30.

These people have been waiting, and once again, I would point out that it wasn't the committee that decided to wait until June to bring forward the bill. It's unfortunate; the government could have chosen another approach.

I would also like to hear what my fellow member and vice chair of the committee has to say about the situation. Here we are, in full committee, studying motions on committee business and other issues we need to talk about. We often find out about things at the last minute, however, so we don't have time to prepare or respond. Yet again, today, the schedule has been changed a few times.

As vice-chairs of the committee, not only were we elected by our peers, but we are also paid extra by the House to hold subcommittee meetings precisely to discuss scheduling and suggestions of this nature.

After the subcommittee meets, we are able to consult our colleagues about the committee's upcoming work—at least, that's what I would do. It would certainly be a better idea if we were to proceed that way more often, Madam Chair. It would give us an opportunity to learn about these types of intentions sooner and to find some common ground even before beginning our work with the entire committee present. The committee would run a lot more smoothly that way.

Using the subcommittee would also prevent situations like the one involving Mr. Rayes' request to resume debate on his motion. The subcommittee could've discussed it and realized that it wasn't possible. We could have done things the right way. It's unfortunate that we didn't.

When everything is going fine, we don't need to meet, but I think we need to talk and meet more often so as not to bring in witnesses unnecessarily or be caught off guard by proposals like this one at the last minute.

Mr. Badawey's suggestion that the committee meet when the House is not sitting didn't come out of nowhere. I think you talked about it amongst yourselves. The government party is aware of the idea, and you are getting ready to vote on it.

I'd like to hear what my colleague has to say. I think the subcommittee could help because it could resolve issues like these and ensure that the committee's proceedings ran smoothly.

[Vance Badawey, Liberal, Niagara Centre, ON]

Excuse me.

The minister has, in fact, taken the time in the past few months since our last dialogue on this issue to have dialogue and consultation with the stakeholders. We're now at a point at which he now feels it's time, after that dialogue and consultation, to bring forward Bill C-49. The House leader has indicated that she would like to introduce it to the House for second reading in a timely fashion.

This, Madam Chairman, simply goes to this committee, as well as Ms. Block's interest in dealing with this issue, and we feel the same way. I'm proposing that we have a choice. We can stay on the schedule we have in place in terms of our time frame coming into this session and going into the new session in the fall, which would then put us back into the December, if not January, time frame.

What I'm attempting to do is expedite the time frame to hear the concerns of the stakeholders and to bring this forward sooner, coming back from our summer constituency time a week earlier. I believe we're supposed to be back in the House September 16 or 18, so we would be cutting that constituency time by one week— coming back to Ottawa one week earlier to get back to work. Doing this would expedite Bill C-49 and alleviate some of the concerns that are being raised by stakeholders such as the farmers on the Prairies.

[The Chair, Liberal, Judy Sgro]

To be able to bring forward C-49 and do it earlier than our normal schedule in September, the concern would be to get the witnesses and the 25 or 30 hours of testimony dealt with in a solid week—as Mr. Badawey suggested—so that we would get the bulk of those hearings on Bill C-49 done prior to the House's coming back. Once the House comes back, possibly at that time, the committee would be prepared to go to clause-by-clause.

[The Chair, Liberal, Judy Sgro]

No matter what we do with Bill C-49, it cannot be passed until the House resumes.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I think what I would do is go back to Mr. Badawey's suggestion regarding Bill C-49. Just to be clear on what he is suggesting, the measures in Bill C-30 were due to sunset a year ago, and we extended them in the understanding that we would undertake a study on Bill C-30 and bring forward recommendations to the minister.

We undertook that study in September 2016. You reported our findings and recommendations to the House. The minister, then, has had our recommendations on the measures contained in Bill C-30 before him.

What Mr. Badawey is suggesting is that, because we are in this very tight time frame now to deal with these measures that are going to sunset on August 1, this committee now needs to study this legislation throughout the summer, perhaps holding wide consultations with stakeholders, which is what the minister told us he was doing when we tabled the report in the House between that time and now.

What's happening is that members are now being asked to consider meeting in the summer to expedite Bill C-49, which won't actually have any impact on the expiration of the measures in Bill C-30, because this bill will not be passed until the fall.

Is that correct?

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I understand, from our discussions, that the government House leader has indicated a willingness to deal with Bill C-49 based on some of the comments made, both by the committee and by the opposition in the House of Commons, with respect to bringing it to second reading and getting it to this committee before the summer adjournment.

If this happens, I would propose that our committee meet to study Bill C-49 prior to the House's returning in the fall so we can attempt to expedite this—again, based on some of the comments we've heard here in the testimony, as well as comments made specifically by the opposition in the House of Commons.

Madam Chair, this would provide us with an opportunity to hold extended meetings with the stakeholders and do a lot of work in a relatively short period of time to deal with the issue, as was articulated by members of the opposition in the House. There is a need to expedite this because of the sunset clause attached to Bill C-30.

As part of our work program moving into the fall, that's what I would propose, and I think it would go a long way toward speeding up the process and delivering results for our grain farmers and other captive shippers who are eagerly awaiting the passage of this bill. It would certainly provide them with the service levels they expect.

As members of the committee understand, Bill C-49 also includes a number of other important measures, notably a passenger rights regime for air travellers. Our studying this is long overdue, as well as hearing from those who are being impacted dramatically by it.

Madam Chair, I would throw that out there for discussion. Hopefully, we can get to this sooner rather than later because of the expediency it well deserves and needs.

[The Chair, Liberal, Judy Sgro]

They will be here for the first hour on Thursday. Thank you very much. I'm really glad when we can work together.

Now we have 15 minutes left to talk about committee business: what we have outstanding that's coming to us or that we still have to deal with.

We have Mr. Bratina's motion on water quality, which we have to deal with before December 1. We have a draft report on infrastructure that our analysts have done, which we have not gone back to review. We can take action on it, or we can simply leave it there until the fall, depending on the will of the committee on those two issues.

Legislation-wise, at some point we're going to have Bill S-2, Bill C-48, and Bill C-49. That's the legislative agenda ahead of us, over and above all the other issues that we'd like to dealt with.

As we look forward to the committee business ahead of us, we should sort out how we're going to deal with some of it. Bill C-49 is a very important piece of legislation, given the fact that it affects the issue of the sunset clause in Bill C-30.

That's what's ahead of us. We need to sort out how we are going to get these issues dealt with in the couple of meetings we have left.

I'm going to open the floor.

Mr. Badawey, go ahead.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

So I was saying that, during the election campaign, the Liberals promised very small deficits of about $10 billion. We recently learned that the deficit for the current year would exceed $20 billion.

To satisfy my colleague who is wondering why I am talking about deficits, I would say that it's because certain factors lead to those deficits. What are those factors? They are quite simply unreasonable government expenditures. How will those unreasonable expenditures be repaid? By imposing a carbon tax on Canadians. So there is a direct link to the Liberals' promises to create very small deficits.

In reality, the deficit will exceed $21 billion this year. The Liberals are hungry and are trying to get as much money as possible anywhere they can to deal with those huge deficits. The carbon tax will be used to pay for the interest on the Liberals' credit card, which unfortunately doesn't seem to have a limit.

I could compare that to a family with a young child. This is in fact a young government of only 18 months that has access to credit and suddenly decides that it is wonderful to have a credit card without a spending limit and not to have to pay back the debt for another 30, 40 or 50 years. To hell with spending. They get into it, they spend and they will see later. Others will have to manage the debt. The children of our children will have to manage it.

However, a few people see things more clearly and tell themselves that borrowing is fine and well, but we have to at least pay back the interest on the credit card. The carbon tax, which is supposedly a tax to help protect the environment, is actually nothing but a way the Liberals have found to get even more money out of the pockets of taxpayers, families, SMEs and big companies to handle those large deficits.

When the Minister of Environment and Climate Change appears before the committee, she could answer those questions. Did she take action to improve the environment, to work on climate change, or did she simply react to an order from the Minister of Finance, who was unable to find funds anywhere other than in taxpayers' pockets? How to find money and make people pay by giving them the impression that it's the right thing to do? By imposing a carbon tax to protect the environment.

However, a tax is still a tax. The money taken out of people's pockets is money they cannot use themselves. That limits the decisions they will make with regard to their budget or actions they will take to protect the environment. The means to take action are being taken away from them.

I want to come back to the example of very small deficits that have now become very large deficits. We now understand better why, when we asked the Department of Finance to provide us with details on the real costs of the new federal carbon pricing strategy for Canadian families, those figures come to us blacked out. We understand why department representatives have no interest in disclosing those figures. It is because they know full well that people will be shocked and insulted by the extent of the costs for families.

That obviously affects the transportation industry. Many changes have been made. Bill C-49, which has been introduced, will allow foreign companies greater participation in airlines' shareholder structures. Some companies are trying to provide the most affordable transportation services possible. Very recently, the media reported that there are significant differences in the costs of regional transportation, be it in Quebec or elsewhere in Canada. Airlines in particular are very worried about the competition they will see from foreign companies, especially when it comes to long flights, owing to the carbon tax they will have to pay on fuel. I heard that here during the meetings we had with airline representatives. Will we be hurting our airlines through these measures? I believe that question deserves to be asked.

Concerning airlines, we want to ask the Minister of Environment and Climate Change whether she has analyzed the repercussions of the carbon tax on the transportation sector. We want to know whether she has only considered the quantity of products sold and the quantity of carbon produced before imposing a tax in order to produce revenue, without looking into the effects the tax could have on companies' competitiveness or the accessibility of air transportation for middle-class Canadians and those working hard to join the middle class. We want to know whether the minister has assessed the effects on them, on their wallet, as well as on airline companies. The same reflection applies to transportation companies....

[Sara Wiebe]

As I mentioned, Bill C-49, the transportation modernization act, is just the first step for Minister Garneau in the implementation of this transportation 2030 plan. There are other elements and other policy issues that the department continues to study—

[François Choquette, NDP, Drummond, QC]

Thank you for that clarification.

You talked earlier about Bill C-49. It was a long time ago when Commissioner Graham Fraser called for legislation to clarify and strengthen the application of the Official Languages Act as regards air travel. Correct me if I am wrong, but in terms of legislation, Bill C-49 does not do anything for the official languages.

[Sara Wiebe]

This is where I mentioned that with Air Canada we keep an open and ongoing dialogue on a wide series of policy issues, including official languages. What we try to do—and I think you see some of this reflected in the proposal the minister has made in Bill C-49—is identify those policy issues that could continue to ensure the strong viability of our Canadian carriers, including Air Canada. This is where we look at issues such as joint ventures, and where we take a look at other issues such as international ownership.

We're constantly looking at measures to make sure that we strengthen the existing carriers while continuing to ensure competition. In that way, we try to create that broader framework within all of our air carriers, including Air Canada, so that they can continue to grow and prosper and to serve Canadians well.

Extension of Sitting Hours

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

moved:

That, notwithstanding any Standing Order or usual practice of the House, commencing upon the adoption of this Order and concluding on Friday, June 23, 2017:

(a) on Mondays, Tuesdays, Wednesdays and Thursdays, the ordinary hour of daily adjournment shall be 12:00 a.m., except that it shall be 10:00 p.m. on a day when a debate, pursuant to Standing Order 52 or 53.1, is to take place;

(b) subject to paragraph (e), when a recorded division is demanded in respect of a debatable motion, including any division arising as a consequence of the application of Standing Order 61(2) or Standing Order 78, but not including any division in relation to the Business of Supply or arising as a consequence of an order made pursuant to Standing Order 57, (i) before 2:00 p.m. on a Monday, Tuesday, Wednesday or Thursday, it shall stand deferred until the conclusion of oral questions at that day’s sitting, or (ii) after 2:00 p.m. on a Monday, Tuesday, Wednesday or Thursday, or at any time on a Friday, it shall stand deferred until the conclusion of oral questions at the next sitting day that is not a Friday;

(c) notwithstanding Standing Order 45(6) and paragraph (b) of this Order, no recorded division requested after 2:00 p.m. on Thursday, June 22, 2017, or at any time on Friday, June 23, 2017, shall be deferred, except for any recorded division which, under the Standing Orders, would be deferred to immediately before the time provided for Private Members’ Business on Wednesday, September 20, 2017;

(d) the time provided for Government Orders shall not be extended pursuant to Standing Order 45(7.1) or Standing Order 67.1(2);

(e) when a recorded division, which would have ordinarily been deemed deferred to immediately before the time provided for Private Members’ Business on a Wednesday governed by this Order, is demanded, the said division is deemed to have been deferred until the conclusion of oral questions on the same Wednesday;

(f) any recorded division which, at the time of the adoption of this Order, stands deferred to immediately before the time provided for Private Members’ Business on the Wednesday immediately following the adoption of this Order shall be deemed to stand deferred to the conclusion of oral questions on the same Wednesday;

(g) a recorded division demanded in respect of a motion to concur in a government bill at the report stage pursuant to Standing Order 76.1(9), where the bill has neither been amended nor debated at the report stage, shall be deferred in the manner prescribed by paragraph (b);

(h) for greater certainty, this Order shall not limit the application of Standing Order 45(7);

(i) no dilatory motion may be proposed after 6:30 p.m.;

(j) notwithstanding Standing Orders 81(16)(b) and (c) and 81 (18)(c), proceedings on any opposition motion shall conclude no later than 5:30 p.m. on the sitting day that is designated for that purpose, except on a Monday when they shall conclude at 6:30 p.m. or on a Friday when they shall conclude at 1:30 p.m.; and

(k) when debate on a motion for the concurrence in a report from a standing, standing joint or special committee is adjourned or interrupted, the debate shall again be considered on a day designated by the government, after consultation with the House Leaders of the other parties, but in any case not later than the twentieth sitting day after the interruption.

Mr. Speaker, I rise to speak to government Motion No. 14. For the benefit of members, the motion would extend the sitting of the House until we rise for the summer adjournment.

We have much to accomplish in the coming weeks. Our government has an ambitious legislative agenda that we would like to advance in order to deliver on the commitments we made to Canadians in the last election. Let me reflect on our recent legislative achievements before I turn to the important work that lies before us over the next four weeks.

In our last sitting week, the House and Senate were able to reach agreement on securing passage of Bill C-37, which would put in place important measures to fight the opioid crisis in Canada. I would like to thank members of the House for the thoughtful debate on this bill and for not playing politics with such an important piece of legislation. In particular, I would like to thank members of the New Democratic Party for co-operating with the government to advance this bill when it was in the House and for helping us dispense with amendments from the Senate. This was a high watermark for the House and I hope that we can take this professional and courteous approach forward. I would also like to thank senators for their important contributions to this bill.

I would also like to point out the passage of two crucial bills related to trade. The first, Bill C-30, would implement an historic trade agreement with the European Union. The second, Bill C-31, would implement a trade agreement with Ukraine, a country that is dear to many members.

I am proud that our government continues to open the doors to trade and potential investment in Canada to grow our economy and help build a strong middle class.

In looking forward to the next four sitting weeks, I would like to highlight a few priority bills that our government will seek to advance. I will start with Bill C-44, which would implement budget 2017. This bill is about creating good middle-class jobs today while preparing Canadians for the jobs of tomorrow.

I will provide some examples of the initiatives that will contribute to building a strong middle class. The budget makes smart investments to help adult workers retain or upgrade their skills to adapt to changes in the new economy and to help young people get the skills and work experience they need to start their careers.

The budget also provides for investments in the well-being of Canadians, with the emphasis on mental health, home care, and health care for indigenous peoples.

Bill C-44 would provide financing to the provinces for home care and mental health care. It would also create leave for those who wish to care for a critically ill adult or child in their family. These initiatives help build stronger communities.

I would also like to point to initiatives in the budget that deal with gender equality. The first-ever gender statement will serve as a basis for ongoing, open, and transparent discussions about the role gender plays in policy development. Our government has other initiatives that aim to strengthen gender equality. For example, Bill C-25 encourages federally regulated companies to promote gender parity on boards of directors and to publicly report on the gender balance on these boards.

Another bill, which I will discuss in greater detail later in my remarks, is Bill C-24, a bill that would level the playing field to ensure a one-tier ministry. The bill has a simple premise. It recognizes that a minister is a minister, no matter what portfolio he or she holds.

Our government has committed to legalizing and strictly regulating the production, distribution, sale, and possession of cannabis. I look forward to the debate on this important bill tomorrow. I will note that the bill would provide strong safeguards and deterrents to protect young people from enticements to use or access cannabis.

The government has taken a responsible approach in seeking to legalize cannabis by ensuring that law enforcement agencies have approved methods to test the sobriety of drivers to guard against cannabis use while operating a motorized vehicle. This afternoon, the House will continue to debate this bill, which, I will happily note, has support from all opposition parties in the House. I hope that we can agree to send this bill to committee on Wednesday.

Now I would like to return to our government's commitment to improving gender equality. Bill C-24, which stands in my name, seeks to formalize the equal status of the ministerial team. This bill is very straightforward in its nature. It is fundamentally about the equality of all ministers. We strongly believe that the Minister of Status of Women should be a full minister. We believe that the Minister of Science and the Minister of Democratic Institutions should be full ministers.

I am disappointed that the Conservatives do not share this fundamental belief in equality. I think we should send this bill to committee for a detailed study of what the bill actually does.

I would like to draw members' attention to another piece of legislation, Bill C-23, regarding an agreement with the United States on the preclearance of persons and goods between our two countries.

This bill is currently being studied by the Standing Committee on Public Safety and National Security. The principle of the bill is simple. It is about ensuring a more efficient and secure border by expanding preclearance operations for all modes of transportation. This will increase the number of trips and the volume of trade, which will strengthen both of our economies.

As members may know, preclearance operations currently take place at eight Canadian airports, and immigration pre-inspection is also conducted at multiple locations in British Columbia in the rail and marine modes.

Once that bill comes back from committee, I hope that we can work together to send it to the other place.

In our last sitting week, our government introduced comprehensive modernization of our transportation systems. A strong transportation system is fundamental to Canada's economic performance and competitiveness. Bill C-49 does just that. The bill would enhance the utility, efficiency, and fluidity of our rail system so that it works for all participants in the system. Freight rail is the backbone of the Canadian economy. It moves everything from grain and potash to oil and coal, to the cars we drive, the clothes we wear, and the food we eat.

I would also like to draw to the attention of members provisions in Bill C-49 that would strengthen Canada's air passenger rights. While the precise details of the air passenger rights scheme will be set out in regulations, the objective is that rights should be clear, consistent, transparent, and fair for passengers and air carriers.

Finally, our government committed to creating a national security and intelligence committee of parliamentarians. Bill C-22 seeks to accomplish two interrelated goals, ensuring that our security intelligence agencies are effective in keeping Canadians safe, while at the same time safeguarding our values, rights and freedoms, and the open, generous, inclusive nature of our country.

I appreciate the work that was done in the House committee to improve the bill. The bill is currently before the Senate national security committee, and I look forward to appearing before that committee with my colleague, the Minister of Public Safety and Emergency Preparedness.

Sitting a few extra hours for four days per week will also give the House greater flexibility in dealing with unexpected events. While it is expected that the Senate will amend bills, it is not always clear which bills and the number of bills that could be amended by the Senate. As we have come to know, the consideration of Senate amendments in the House takes time. This is, in part, why we need to sit extra hours. I know that members work extremely hard balancing their House duties and other political duties. I expect that extending the hours will add to the already significant workload.

I wish to thank members for their co-operation in these coming weeks. As I reflect upon my time as government House leader, there were examples where members of the House came together, despite their political differences, and advanced initiatives that touched directly upon the interests of all Canadians. I hope that over the four remaining sitting weeks before we head back to work in our ridings, we can have honest and frank deliberations on the government's priorities and work collaboratively to advance the agenda that Canadians sent us here to implement.

In the previous Parliament, when the government decided to extend the sittings in June of 2014, Liberal members supported that motion. We knew then, as we know now, that our role as legislators is a privilege, and we discharge our parliamentary functions in support of our constituents.

There will be initiatives that the government will bring forward over the coming weeks that will enjoy the support of all members, and there will be issues on which parties will not agree. Our comportment during this time will demonstrate to Canadians that we are all in this together, despite our differences, for the good of this great country. Let us not lose sight of that.

I believe the motion before the House is reasonable. I hope opposition members can support sitting a few extra hours for four days a week for the next few weeks to consider important legislation for Canadians.

Alleged Premature Disclosure of Contents of Bill C-49

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I am rising on a question of privilege concerning the leak of the contents of Bill C-49, an act to amend the Canada Transportation Act and other acts respecting transportation and to make related and consequential amendments to other acts, which was introduced yesterday. It has become an established practice in the House that when a bill is on notice for introduction, the House has the first right to know the contents of that legislation.

As Speaker Milliken explained on March 19, 2001, at page 1840 of the Debates:

In preparing legislation, the government may wish to hold extensive consultations and such consultations may be held entirely at the government’s discretion. However, with respect to material to be placed before parliament, the House must take precedence. Once a bill has been placed on notice, whether it has been presented in a different form to a different session of parliament has no bearing and the bill is considered a new matter. The convention of the confidentiality of bills on notice is necessary, not only so that members themselves may be well informed, but also because of the pre-eminent rule which the House plays and must play in the legislative affairs of the nation.

The required confidentiality expected before the unveiling of this bill was simply not respected due to the government's so-called pre-positioning for Bill C-49 earlier this week.

Allow me to explain.

First, for context, all the information the House had when a notice for the bill was tabled Friday afternoon was that it would bear the long title, “An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts”. Considering the wide scope of the activities of Transport Canada, a title like this one could be used with respect to any mode of transport or any type of activity the department undertakes. However, despite the ambiguous bill title, yesterday's Toronto Star revealed that this legislation would be called the “Transportation Modernization Act” and reported many of the bill's details. That short title, set out in clause 1, only became known to us once the bill was tabled, well after yesterday's Toronto Star had gone to print.

Furthermore, the CBC website, on Monday evening, stated, “The...government will introduce legislation for a passenger bill of rights Tuesday in a move that will set a national standard for how airline passengers are treated in Canada”. The bill's summary reads, on page 2:

With respect to air transportation, it amends the Canada Transportation Act to require the Canadian Transportation Agency to make regulations establishing a new air passenger rights regime and to authorize the Governor in Council to make regulations requiring air carriers and other persons providing services in relation to air transportation to report on different aspects of their performance with respect to passenger experience or quality of service.

CTV National News offered more information to its viewers on this legislation during its broadcast Monday night. It stated, “CTV News has learned the government will mandate minimum levels of reimbursement for travel disruptions and lost luggage.” I was watching the news at the time and was extremely surprised to see such detail being made public for a bill that had not yet been made public in Parliament. Later in the same CTV report, I heard, “Under the bill Transport Minister...will table tomorrow, airlines would provide clear and transparent rules so passengers know when they're entitled to compensation; airlines would compensate travellers for flights delayed or cancelled, though not for weather or air traffic...”

Turning to clause 19 of Bill C-49, we see that CTV News was reporting on the proposed new paragraphs 86.11(1)(a),(b), and (c) of the bill.

Meanwhile, on CBC's The National, viewers were told, “CBC News has learned the legislation is also expected to stop airlines from charging parents extra to sit with their kids.” In this case, CBC was reporting on the proposed new paragraph 86.11(1)(d) from the bill, which says, “respecting the carrier’s obligation to facilitate the assignment of seats to children under the age of 14 years in close proximity to a parent, guardian or tutor at no additional cost.” This is specific detail of the legislation that could not have been guessed at ahead of time by the CBC. Details of the bill were clearly leaked.

Furthermore, the CBC report noted “don't expect exact compensation levels tomorrow. They won't be written into the law.”

If you were watching CTV Monday night, Mr. Speaker, you would have known that “The exact rates for compensation under the new rules will be set at a later date by the Canadian Transportation Agency and reviewed regularly.”

This was in reference to the proposed new subsection 86.11(1) of the bill, which reads, “The Agency shall, after consulting with the Minister, make regulations in relation to flights to, from and within Canada, including connecting flights.”

It is clear this was no simple, accidental leak, though that would also be inexcusable, but, rather, this appears to be the result of a systemic advance briefing of the media about pending legislation as there would be no other way for them to know such specific detail about the bill. Details such as airlines not being able to charge extra for parents to sit next to their children, or that the fines would not be detailed in the bill, or that airlines would be forced to compensate travellers for delays and missed flights could only be known by the media as a result of a leak.

As the Conservative Party critic for transport, I cannot hold the government to account if I learn about the content of the legislation through the news and not through Parliament. That is why this is so important.

As Speaker Milliken said in the ruling I cited earlier:

To deny to Members information concerning business that is about to come before the House, while at the same time providing such information to media that will likely be questioning Members about that business, is a situation that the Chair cannot condone.

Speaker Milliken also found a prima facie case of privilege in connection with advance leaks to the media about a bill to be introduced, on page 6085 of the Debates for October 15, 2001.

Indeed, Mr. Speaker, you also had occasion to find a prima facie case of privilege last year, on April 19, 2016, on the premature disclosure of the contents of Bill C-14, the assisted dying bill. On page 2443 of Debates, the Chair stated:

In this instance, the chair must conclude that the House's right of first access to legislative information was not respected. The chair appreciates the chief government whip's assertion that no one in the government was authorized to publicly release the specific details of the bill before its introduction. Still, it did happen, and these kinds of incidents cause grave concern among hon. members. I believe it is a good reason why extra care should be taken to ensure that matters that ought properly to be brought to the House first do not in any way get out in the public domain prematurely.

Thus, the available precedents lead me to conclude that this incident constitutes a prima facie question of privilege...

The House considered and passed a motion to refer that matter to the procedure and House affairs committee, which has yet to report on the situation. I understand it was last considered in September, when the Liberal majority voted down a number of motions intended to allow the committee's investigation to continue.

It is incumbent upon us, as the opposition, to call out the government for these abuses of Parliament, and to place before the Chair any perceived breaches of the privileges of the House of Commons, since you, Mr. Speaker, are the defender of the rights and privileges of the House.

Based on the facts I have presented, and the clear precedents on this matter, I believe you should have no trouble in finding a prima facie case of privilege.

[Bob Masterson]

Today, in the U.S. Senate there was a bill introduced that would provide significant federal support to create the infrastructure in Pennsylvania to store the natural gas liquids that are abundantly available to facilitate the processing of that industry, so you have a partnership approach. It's not just financial. There's a true partnership approach to try to intentionally develop the chemistry sector in states like Pennsylvania, Louisiana, and Texas.

Here, to be honest, it's more of a laissez-faire approach. If the investment comes, fine; if it doesn't, fine. That will hurt us in the long term if we don't get more aggressive and try to figure out what we need to do to recruit that investment. I think today's introduction of Bill C-49 takes a number of important steps that will improve transportation competitiveness in Canada. That's a good step in the right direction. Many of our investing companies tell us the cost of transportation in Canada is the second most important factor they look at when deciding whether to invest.

Transportation Modernization Act

[Marc Garneau, Liberal, Minister of Transport]

moved for leave to introduce Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts.

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