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 bill was last introduced in the 42nd Parliament, 1st Session, which ended in September 2019.

Sponsor

Marc Garneau  Liberal

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

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.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Votes

May 22, 2018 Passed Motion respecting Senate amendments 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
May 3, 2018 Passed Motion respecting Senate amendments 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
May 3, 2018 Failed Motion respecting Senate amendments 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 (amendment)
Nov. 1, 2017 Passed 3rd reading and adoption 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
Oct. 30, 2017 Passed Concurrence at report 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
Oct. 30, 2017 Failed 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 (report stage amendment)
Oct. 30, 2017 Failed 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 (report stage amendment)
Oct. 30, 2017 Passed Time allocation for 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
June 19, 2017 Passed 2nd reading 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
June 15, 2017 Passed Time allocation for 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

November 27th, 2018 / 8:20 a.m.
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Liberal

Marc Garneau Liberal Notre-Dame-de-Grâce—Westmount, QC

I think the changes made through Bill C-49 in the modernization of the Canada Transportation Act went in the right direction. That was to try to optimize the movement of commodities. We happen to be at a time when there is a very strong demand for moving goods in this country. You're right to point out that it is the movement of grain, but it is also the movement of many other commodities. I hear regularly from the mining community, from the forestry community, from the potash community. These are important commodities that are headed for our ports. Of course, right now there's an increased demand for shipping oil by rail as well.

The railways know that there is a strong demand, because they're receiving it. At the same time, we have to ensure that there is not a focus that advantages one commodity versus other commodities. That is essentially the situation you have to deal with when the economy is running strongly, as it is at the moment, and there is enormous demand for Canadian products.

Postal Services Resumption and Continuation ActGovernment Orders

November 22nd, 2018 / 11:05 a.m.
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Conservative

John Barlow Conservative Foothills, AB

Mr. Speaker, I rise today to speak to this motion.

We have certainly heard from both sides of the floor different points of view. However, my NDP colleague put it quite profoundly. She took my opening line about talking through both sides of their mouths.

In the minister's presentation today, we heard the reasons for tabling this motion on back-to-work legislation for Canada Post. She said that small businesses across Canada are facing a crisis. She even talked about specific business owners who have reached out to her office saying that they are in jeopardy of closing their doors if they cannot have a dependable postal service. She talked about how important it is to address the issues business owners across Canada are facing, and that is the reason she is taking this step today.

However, at the same time, she said, in response to my question, that they are going to do everything they can to ensure that they come to some sort of agreement. She did not finish that sentence. The end of that sentence is, “small business be damned, regardless of the consequences this is going to have.”

Small-business owners have raised the alarm bells on some very real concerns, as we head into their busiest time of the season, that if they do not make the revenue during the holiday season, it impacts the rest of their year. I certainly have had those conversations with small-business owners in my riding. They make sometimes 60% to 70% of their revenue during the holiday season, and a lot of that business is through online sales.

I will name a couple of examples. Frontier Western Shop, in Claresholm, was a very small western wear business that grew over the last decade into an international success story. It sells its wares across the world. Who would have known that people in Europe want belt buckles and cowboy boots? They do. It has grown into an extremely successful business, built on an online platform. The same can be said for Flys Etc., in High River. It was a very small business that started as a one-man shop, but because of his success in selling reels and rods and his handmade flies online around the world, this small High River business has grown into a great success story.

We can talk about the big businesses that are going to be impacted, but the messages we are getting from our constituents is that the very small rural businesses are the ones being impacted as well. The minister said in her presentation that she has heard stories from business owners who have asked her to take definitive action to get Canada Post back to work. Today the minister said, yes, she has heard their stories, but she is just going to put a motion on the table to talk about it. She is not taking definitive action. She just wants to talk about this some more, while each minute and each hour this goes on, small businesses across the country are suffering.

This is a bigger trend we have seen from the Liberal government. It is its inability to take action when it is needed. There is that desire to stand on both sides of the fence, and we all know what happens when people sit on the fence for two long. They get slivers, very painful slivers. Unfortunately, our small businesses are the ones who are feeling the consequences and the pain of that.

We have seen this story many times during the Liberals' three-year mandate. Let us go back a bit to the grain backlog. We had grain farmers across the country, specifically in western Canada, talking about the pain they were going through not being able to get their commodities to market. We encouraged the Liberal government for months to take action on this issue. It had definitive tools in its tool box to force the railways to start hauling more grain. This started last fall. We went through the winter. Every single time we brought this up to the Liberal government, the response was, “We really trust the railways to resolve this on their own. We are not going to get involved. They are meeting their targets. This is all going to resolve itself.” Meeting their targets meant sometimes meeting six per cent of the contracts they had signed. Six per cent is certainly not what I would say is meeting their obligations. We then went through the spring seeding period, and still no resolution. Finally, the summer came, and the Liberals tabled Bill C-49, the transportation bill, which we asked them to do eight or nine months earlier. If they had taken the legislation the previous Conservative government had done and put it forward, we would have resolved that grain backlog when it still could have made a difference to Canadian grain farmers. However, the Liberals wait until we are in crisis mode.

That is exactly what the minister said today in her presentation, that our small businesses are facing a crisis. What are the Liberals going to do about it? They are going to do almost something, but not quite anything. We are going to come here and debate it a little more and once again try to walk the fence. Our grain farmers in western Canada sure felt the ramifications of that. Even with Bill C-49, it does not force the railways to haul grain. There is no accountability in that bill. Again, it is window dressing so that Liberals can say eventually, when it really does not matter any more and it is way too late, they did something. Really, Bill C-49 does not address anything and hopefully this fall and winter as we go through the harvest once again, we will see what kind of an impact Bill C-49 will have on our grain producers.

Let us also go back to the Phoenix pay system, something that we have all dealt with. The Liberals like to pass the buck onto somebody else. They were told when they won the election that the Phoenix pay system was not ready to go. They needed to take some definitive action to address this situation, which would have impacts on federal employees across the country. Again, they did not take definitive action. They did not address the situation. They just pressed the green button and hoped for the best because hope and hard work solves all one's problems apparently. We have seen the consequences of that inaction. Federal employees across the country can certainly share that information and the impact this has had on their livelihood. Some of them have been overpaid and then been asked to reimburse the federal government. Some of them have not been paid at all. Again, we hear from the minister that they are taking definitive action and are fully aware of the crisis situation. Then what are the Liberals doing? Nothing or very little.

It is unfortunate, because our small business owners are now put in the crosshairs because of the labour disruption with Canada Post. As I said in my question to the minister, in 2011 when the Conservative government took similar steps to address the Canada Post work stoppage, we were criticized severely by the Liberal third party opposition members that we were being overly aggressive, that it was not something we should be doing. How interesting that the tables have turned just a few years later and now the Liberals are in the situation. They think this is something they should do, but they want to go halfway all the time. There is no ability to make a tough decision and follow through on that decision, to remedy the situation for businesses across Canada.

I want to bring some examples in the trend we have seen with the Liberal government over the last few years. One would be the outcry from Canadians, especially in Ontario and Quebec, with the illegal migrants coming across the border. This is a crisis. There is no question about it. We have seen the numbers increase over the last few years. Liberals like to take little snapshots to say in this week of July the numbers went down between two and four o'clock in the afternoon, so they have a handle on the illegal migrant crisis. If we look at the numbers in a broader vision, the numbers have continued to go up.

That is certainly not the impression that Canadians have of the situation, and this would resonate with my colleagues in southern Ontario, Quebec and Manitoba. The situation is not in control. Building permanent housing with tents and trailers along the border is not what I would consider a long-term solution to an illegal migrant crisis. Again, the Liberals do not want to do anything about it except talk about it. They say they are putting things in place. The Minister of Border Security, the minister with no portfolio really, has said ad nauseam that they have the numbers under control. However, in every statistic, in every media report and certainly when we talk to people on the ground, that is certainly not the case. Again, we see this inability to take definitive action when definitive action is needed.

I compare that to the situation we are in now. Canadian businesses across the country are saying that the crisis they are facing now is real. As we get into this holiday season, we have seen the stats, and I think the minister even mentioned them today, that the rotating postal strikes are costing small businesses an average of $3,000 a month. That includes not only lost sales, but also receivables that are not getting to those businesses.

Let us talk about what that impact would be at $3,000 a month. That is two employees who would now have to be laid off. However, if they had that $3,000 over the holiday season, then a couple of employees could be hired to help through this very busy season. The Liberal minister talked about how much of a crisis this is for businesses. There is a ripple-down effect to this inaction.

I have a 20-year-old daughter who is looking for some part-time work over the holiday season. She has gone to some of the retailers for work during the holidays, but a lot of them have said that they are not hiring until they know what is going on with the labour dispute. They do not know if they can afford to hire those additional part-time workers over the holiday season.

A lot of Canadians rely on that extra income. It helps them pay for their own Christmas presents and holiday celebrations. University and college students over the Christmas break absolutely rely on that additional revenue to help them pay for their tuition and school books, which have become more expensive. On a side note, the Liberals felt that tax credits for tuition and school books were not really necessary and that university and college students were too wealthy to qualify for these tax credits. Unfortunately, because of that, they are now having to rely on those part-time jobs over the Christmas holidays; part-time jobs that are not going to be there, because these small businesses are losing up to $3,000 a month due to the disruption in Canada Post services.

My Liberal colleagues were demeaning this by saying that the contrast between the Conservative action and the Liberal action when it comes to these types of situations is that the Conservatives acted quickly but the Liberals took their time with it. I am very proud of the fact that we acted quickly and took definitive action when it was needed, which ensured that our small businesses and companies across the country knew that the government was standing behind them and ensuring they had the tools they needed to be successful. What is frustrating them right now is a government that is taking no action, allowing them to suffer, and would rather stand on the sidelines and let these two groups come to an agreement, which they have obviously been unable to do.

I appreciate the union's position on some of the things it is trying to address, but it is clear that they have not been able to come to an agreement. We understand the situation before us with a very busy holiday season. Therefore, I think it behooves the government to take some definitive action to ensure that our small businesses are not going to be suffering through their busiest season. This is when they make their gravy. This is when businesses make the revenue that keeps them up and running for the rest of the year. There is no question about that. As I said, a lot them make 70% of their revenue during this time of year.

I have certainly heard over the last couple of weeks the frustration from small business owners who do not understand why the Liberal government does not have their backs. We can go back to last fall when the Liberals brought forward these small business tax changes. These were going to be imposed on small businesses across the country that would have been devastated by these tax changes. If not for this tax revolt from our farmers, ranchers and small business owners, there is no question the Liberal government would have gone ahead with these changes. We heard from our farmers that it would be the end of the family farm, because they would not be able to pass their farms on to the next generation. This was shocking, but it was fact. The Liberals do not dispute that fact, because it was true. Even though we were able to get the Liberals to walk back on some of these changes, the changes to passive income are still there.

There are still some challenges for our small business owners. The Liberals hiked CPP and EI taxes on paycheques, which again impacts business owners as well as their employees. The government is going to impose a federal carbon tax and add a tax on the GST and the HST. For whatever reason, the Liberals do not understand that all of these things are devastating our Canadian small businesses.

These small businesses are the ones that create jobs, as much as the Liberal government would like to take credit for that. Governments do not create jobs. Let us get that on the table. Governments can put policies in place that encourage businesses to grow and create jobs, but governments do not create jobs, unless they hire a lot of public sector workers, which is a subject we can save for another day. That is one way the Liberals are creating jobs.

More than 90% of jobs in Canada are created by our small and medium-sized enterprises, SMEs. They are successful because they are entrepreneurs, willing to take the risks. We have to ensure that they have the tools to take those risks, to be comfortable to hire new employees, to expand their business and invest in new equipment, new technology and new innovation. One of those tools is a reliable postal service.

As we go through the past three years of the Liberal government's mandate, it seems that one by one, it is removing every single tool that our small and medium-sized enterprises need to be successful, whether it is by increasing taxes or creating additional carbon taxes or additional regulatory and red tape regimes.

I would like to touch briefly on yesterday's fall economic statement. From my perspective, there was nothing in that presentation that addressed the crisis that we are facing in Alberta. We have a massive differential in oil prices. The Liberals think we are talking about big international businesses, and we are, because they are being impacted also, but all the junior and middle companies that rely on those big businesses are being impacted and rural communities in Alberta are being devastated. They feel everywhere they turn they are being punched.

Three of the biggest companies in the world, Trans Canada, Enbridge and Kinder Morgan, were ready to put private dollars into three major energy infrastructure projects at the start of the Liberals' mandate, and all three have now gone. Unless they hit the ground in Alberta, people cannot understand the impact that has had. Investment has gone. Companies are leaving and jobs are going with them. The impact has been devastating.

My Alberta colleagues and I talk about this a great deal. We cannot understand why the Liberals refuse to see it, why they refuse to understand the impact this is having on Alberta's economy and its small rural communities.

Christmas is coming, and more than 100,000 energy workers are out of work. Some of them have been out of work for more than two years now. They were looking at Christmas as an opportunity to have a small celebration with friends and family but they will not be able to have that either, because small businesses in these rural communities are suffering because of their inability to access their customers and get their receivables.

This is just another hit by a Liberal government that does not seem to understand the importance of small business and how much our rural communities depend on these small businesses and our postal service. These communities are sometimes very secluded.

I understand that email and the Internet are an easy way to do these things, but that cannot be done if there is no postal service, and that is very frustrating. We want to see the Liberals take definitive action on this. We do not want them to just talk about it, but to do something about it.

I have talked a lot about our rural communities and our small towns, but this also has international implications. We have heard now from the United Kingdom, the United States and several of our large partners and allies, many of which are countries our new Canadians and immigrants have come from, that Canada Post has now told them not to send parcels or mail as we are not going to be able to handle it.

That is pretty tough for a trading partner that these businesses, which have operations in other parts of the world, now cannot do business with one another because they are unable to access reliable mail service. This will impact the more than 100 countries who are members of the Universal Postal Union, and the other United Nations agencies this is going to impact. Again, it shows that the Liberal government is not protecting our export markets, our global economy, and the ability of Canadian companies to expand and operate outside our own borders. This has far-reaching impacts on our economy, not just here at home but certainly around the world.

The Liberals, I hope, over the course of the next couple of days will understand that Canada Post is an essential service for rural Canadians in our small towns, who rely on it to do their business and pay their bills. I hope they will hear that message today. I am sure they are going to hear the message loud and clear from my NDP colleagues that they take the situation seriously. They should not just talk about it, but take definitive action. They should not think small businesses are not suffering and can wait. They cannot wait. They need action today.

Grain TransportationOral Questions

October 30th, 2018 / 3 p.m.
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Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Mr. Speaker, the Liberals waited so long to pass Bill C-49 that it may not even have an effect this year.

Yesterday, the Liberal government proved once again that it has absolutely no understanding of the realities faced by supply-managed farmers.

How can the Minister of Agriculture and Agri-Food justify the fact that the USMCA was signed a month ago, yet farmers are still in the dark?

Yesterday, the minister had a chance to announce how much money is available and how it will be distributed, but no, he is still figuring out how to set up two working groups.

Should he not have set up these working groups before he sacrificed our farmers?

October 16th, 2018 / 9 a.m.
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Vice-President, Economic and Northern Affairs, Mining Association of Canada

Brendan Marshall

Sure. I have just a couple of quick remarks on mining and rail generally. Too frequently, and recently especially, rail issues in this country have been falsely characterized as a dichotomy between grain shippers and the railways, and I think we need to move past that. The reality is that non-agricultural resources, minerals and metals specifically, represent over half of the total rail freight revenue, so if we see a precipitous decline in the volume of minerals and metals shipped, then the railways system itself will start to suffer. You would not be able to ship grain at the discounted rate at which it currently is shipped with the MRE without having a robust demand for traffic from other products, so we need to change that channel. That's the first thing I would say.

The second thing I would say is that there is an imbalance between shippers and railways in the rail freight market. I think that's a challenge with respect to the way in which some decision-makers approach addressing the issue. What I mean by that is this. Shippers are at an imbalance relative to the position that railways have in the rail freight market, so when you approach a piece of legislation to address an imbalance, you cannot take a balanced approach to the legislation.

I think in recent years, not just with respect to Bill C-49 but also with respect to previous attempts by the former government to address this issue, there has been this tendency that if we're going to do something for shippers, we also need to do something for railways, and if we're going to do something for shippers in this respect, then we need to make sure we have a balanced outcome. If you have a balanced bill, you will persist in reinforcing the imbalance between shippers and railways in their relative positions in the rail freight market. In this respect, I think what is really needed to address this imbalance is a greater level of political will and courage. I think that's a really important piece.

You asked me for a bit of information about the data regime. You will hear shippers and railways make a great number of claims. Shippers will say that they are not getting the service they need and that they are consistently being dismissed. If they're a captive shipper, they will say their service is such.

The reality is that we don't have any means of assessing the veracity of those claims. Railways consistently year over year come out and say they are spending 20% or 22% of their revenue. Do you know if that's enough for those companies? Should it be more? Does the system demand, based on traffic requirements, a greater level of investment?

The reality is you don't know. We don't know. Transport Canada doesn't know either. The only way we are ever going to get a clear assessment of what's actually happening in the rail freight market is if we get a really robust data transparency regime that allows us to understand where the traffic is moving, at what time, and with what commodities; where the investments are going, and whether they are going into the U.S., into Canada, into new developments, or just into maintaining existing infrastructure. None of these questions will we be able to answer until we get a very clear, data-driven picture of what's actually happening in the rail freight market. That picture would inform decision-makers such as you with a greater ability to delve into specific solutions where they're needed.

October 16th, 2018 / 9 a.m.
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Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Thank you very much, Madam Chair.

I want to welcome our witnesses here this morning.

I would also like to join our chair in welcoming the students who are here from the master's program in political management at Carleton University, as well as Professor Azzi. Thank you so much for joining us today. I hope you enjoy our deliberations this morning.

Mr. Marshall, thank you so much for joining us today. I appreciated your testimony. We had the opportunity of attending the Van Horne Institute Rail to Ports Conference last week, so many of the things that you have said this morning come as no surprise to me because I think we heard the same comments last Friday at the conference.

Before I ask my questions, I would like to also welcome our witnesses from the Montreal Port Authority. You have a champion at this table in Mr. Iacono. He has been urging us as a committee to get to the Port of Montreal to see your operations. It is my hope that we do manage to get there sometime during our study of the transportation logistics strategy.

Mr. Marshall, I want to give you just a little more time to talk about the impact of Bill C-49 on the mining industry in particular. You referenced two amendments that you had hoped would have been passed during our deliberations of Bill C-49, which we all know was a 10-year statutory review. Hearing what you've had to say is deeply concerning as we may not review that legislation for another 10 years if we follow the statutory cycle.

I'm wondering if you could provide us just a little more insight on that, and the robust, leading-edge data collection regime that you mentioned in your last statement. Perhaps, if you have some time, you could comment on Bill C-69 and the impact on the mining industry.

Thank you.

October 16th, 2018 / 8:55 a.m.
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Vice-President, Economic and Northern Affairs, Mining Association of Canada

Brendan Marshall

It costs two to two and a half times more to build the same base or precious metal mine off-grid in the north compared to the south. Seventy per cent of this northern cost premium is directly related to the regional infrastructure deficit.

To date, infrastructure investment decisions that recognize northern challenges and opportunities through the trade and transportation corridors initiative and the investing in Canada plan have been welcome, though the need is far greater than the funds allocated. MAC is aware the northern allocation or $400 million under the TTCI was oversubscribed by greater than five times. Also concerning is that the Canada Infrastructure Bank may not recognize remote and northern realities, potentially limiting the utility of this institution to address northern priorities.

Enabling additional mining development in remote and northern Canada is inextricably linked to the government's indigenous reconciliation and climate change agendas, and the northern infrastructure deficit is the single largest barrier to mining development in the region. To address this, government should, as an immediate action, renew the TTCI in budget 2019, including the $400-million northern allocation, and as a long-term dedicated solution, establish a unique stand-alone Arctic infrastructure investment fund based on the Alaska Industrial Development and Export Authority that recognizes Arctic realities.

Let's move on to the second recommendation, which is to rebalance the relationship between Canada's railways and its customers. Trade begins at home, and Canada's ability to compete against other countries requires a reliable and cost-effective transportation system to get our goods to market. As the largest corporate customer group of Canada's class I railways, accounting for more than 50% of rail freight revenue in 2017, mining is a major stakeholder to transportation policy.

Canada's rail freight system operates primarily as a dual monopoly, shared by CN and CP, Canada's only class I railways. Communities and businesses are often captive, served by only one of these companies, which gives rail customers little or no competitive choice, and the railways market power over their customers. At core, this market power creates an imbalance between shippers and railways in the rail freight market, which contributes to the ongoing protracted relationship between shippers and railways.

The number of rail service-related consultations and legislative measures in recent years reflect the persisting challenges that rail customers face, as well as the failure of these legislative attempts to curtail railway market power. Most recently, Bill C-49, the Transportation Modernization Act, the third legislative attempt to address reoccurring rail freight service challenges in six years, was enacted. While the package of reforms went further than those of Minister Garneau's predecessors, like them, Bill C-49 fell short of rebalancing the position of railways and customers in the rail freight market.

On the backdrop of a costly and reputationally damaging supply chain disruption in winter 2018, the second such disruption in four years, MAC, in partnership with seven other resource shipping associations, advanced two recommendations to improve the bill. The first is agency own-motion powers, and the second is a shipper right to a costing assessment during the final offer arbitration process. One of those recommendations was watered down, and the second was rejected, and this despite the sober second thought of the Senate, twice over.

As of Friday of last week, I can report that none of the new bill's tools have been used since Bill C-49's enactment, despite their having been lauded by decision-makers as key solutions to the challenges that shippers face. Meanwhile, service challenges have been mounting in recent weeks, and shippers across the supply chain are growing increasingly concerned that costly and reputationally damaging supply chain disruption could occur again this winter, as occurred last.

October 4th, 2018 / 9:35 a.m.
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President, Saskatchewan Association of Rural Municipalities

Ray Orb

That's a good question. We've actually been working with the short line association and we have demonstrated that by taking several trucks off our highways and road systems and putting it on a rail car, we're actually reducing greenhouse gas emissions. We should actually be credited for that. We're hoping that the federal government takes it into account when they finally realize that this carbon tax is actually wrong.

I just wanted to mention that the short lines in Saskatchewan are an integral part of moving grain. We have more short-line railroads in Saskatchewan than there are in the rest of the country. They provide a valuable service. They often don't get good service, so we're looking at this legislation. Even though the short lines are regulated in Saskatchewan, we're hoping that the new Bill C-49 actually takes into account the carriers and makes them more accountable, because in the end it's mostly CP Rail that picks up the cars and takes them away.

October 4th, 2018 / 8:55 a.m.
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President, Saskatchewan Association of Rural Municipalities

Ray Orb

We are certainly hoping that's the case. I can tell you that since Bill C-49 was passed, the two major carriers, CN Rail and CP Rail, have been a lot more apt to sit down with organizations like ours. In fact, I'm scheduled to have a meeting with CP Rail next week in Saskatoon.

They have come forward with their plans. They've also come forward now with their winter plans, which obviously we're facing. I think they are being scrutinized a lot more. This year might actually put them to the test. Although it might not be the volume, we have other issues to deal with right off the bat, including the weather.

Thank you.

October 4th, 2018 / 8:55 a.m.
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Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Do you think this shipping year would be a good benchmark to assess whether the changes to the Canada Transportation Act in Bill C-49 will have a meaningful impact for farmers and shippers?

October 4th, 2018 / 8:45 a.m.
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Ray Orb President, Saskatchewan Association of Rural Municipalities

Yes, I will. Thank you.

First of all, I'd like to thank the committee for allowing me to appear this morning. My name is Ray Orb, and I am the president of the Saskatchewan Association of Rural Municipalities, which is known as SARM. We were incorporated in 1905 and have been the voice of agriculture and rural Saskatchewan for over 100 years. We work on behalf of our members to identify solutions and challenges in rural Saskatchewan.

As an association, we are mandated to work in agriculture, which is an important sector in our province. Saskatchewan is a key producer of Canada's wheat, oats, flaxseed and barley, and we are proud to be home to many farms, cattle ranches and dairy operations.

Our agriculture industry relies on the ability to move product efficiently and cost-effectively. An adequate and efficient transportation system is imperative for producers to move their product across the province and across the country.

Saskatchewan, Canada and North America rely on the rural municipal primary weight infrastructure in Saskatchewan to connect to the provincial network to move goods and services in a reliable, timely and safe manner. Our province boasts the largest provincial road network in Canada. Provincial highways contribute 26,000 kilometres, while rural municipal roadways contribute 162,000 kilometres.

The Saskatchewan Ministry of Highways provides funding to SARM to manage a primary weight network grant-funding program for rural municipalities to maintain rural roads at a primary weight. These primary weight corridors enable the seamless transportation of goods and services throughout the province and the country, while protecting the aging provincial system. The program has proven to be very successful, as there are currently 6,500 kilometres of “clearing the path” primary weight corridors in the province.

We also rely on the rail system to ship grain and agricultural products, and SARM has been really vocal about the rail level of service since 2009.

More recently, we provided comments on Bill C-49. We supported the bill, as it provides legislation for increased data reporting. More data means that producers in the supply chain can make better decisions that are based on good information. We also believe that the federal railways should be required to produce plans that detail how they'll deal with demands resulting from the upcoming crop year.

We're pleased to see reciprocal penalties and the provision for informal dispute resolution services included in Bill C-49. It's important that disputes be resolved quickly so that producers aren't faced with additional penalties or delays.

It is also important that the Transportation Modernization Act and related regulations ensure that the Canadian Transportation Agency and Transport Canada have adequate mechanisms to keep railways accountable. SARM believes that the federal government needs the ability to act if it deems a railway's grain plan to be insufficient. Without adequate enforcement options, Bill C-49 would not bring about meaningful change.

Although rail transportation has primarily been an issue for grain producers in western Canada, the increase of oil by rail causes additional concerns. Thousands of barrels of oil on the track not only cause capacity issues for grain but also pose a threat to the environment.

Pipelines are an environmentally favourable alternative to road and rail transportation and should be used where possible to reduce the risks associated with moving dangerous goods by rail. Pipeline development will also take oil cars off the rail tracks and free up cars for the movement of grain.

My last comment is related to the important role that ports play in our rural economies. Since the port of Churchill stopped operations in 2016, SARM has been closely monitoring the situation and advocating for a solution. The port provided an important export point for producers, and its restoration would help move the grain backlog in the Prairies.

Last year, SARM had the opportunity to meet with officials from the port of Vancouver. We have seen first-hand some of the logistical issues and how the port authority hopes to bring about further efficiencies.

The rural landscape has changed over the course of the last century. Demands on infrastructure have increased and will continue to increase. The report “How to Feed the World in 2050” indicates that by that time the world's population will reach 9.1 billion. Food production must increase by 70%. Annual cereal production will need to reach three billion tonnes, and annual meat production will need to increase by over 200 million tonnes. It is imperative that we have a transportation system that enables producers in rural Saskatchewan to do their part in feeding the world.

On behalf of Saskatchewan's rural municipalities, I would like to thank the committee for the opportunity to lend our voice to this important conversation.

October 2nd, 2018 / 10:15 a.m.
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NDP

Alistair MacGregor NDP Cowichan—Malahat—Langford, BC

Thank you.

You also mentioned the transportation problems. Earlier this year we had CN and CP Rail before the committee to explain the problems they are experiencing getting our crops to market. I'm from Vancouver Island. We can see the problems all the way down the line.

We have freighters parked in anchorages everywhere. Port infrastructure is simply not capable of handling what we want to do to export to the Asian market. The railways gave their assurances that they have a plan and that they're working on it, but all the subsequent witnesses who represented farm groups did not believe them. Now that we're half a year forward, is there anything that gives you hope from your point of view? Is there anything more we can do? I know we passed Bill C-49, but is there light on the horizon in this particular area?

September 26th, 2018 / 4 p.m.
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Director, Industry Relations, Pulse Canada

Greg Northey

We very much supported that provision, but one thing we always have to keep in mind is that if the agency needs to investigate, it means it's too late. The failure has probably happened.

If they have the proper data, they can start to see when the supply chain starts to become an issue and they can maybe step in and smooth it out so it's not so bad, but we need to have that kind of insight. We need to have that information to know that this week, we're starting to see red flags around what's happening in the rail network and we need to do something. We need to be able to go to the railways and we need the rails to speak to the customers so they can start to plan: “Okay, we're going to have a problem in the next couple of months.” That did not happen last year.

If they need to investigate a catastrophe or a crisis, it's too late for us. We need to avoid the crisis in the first place. We need to be forward-thinking. We need to be thinking about how we prevent this. Data is a huge example of how we can do it. The U.S. has their data, but I think we can be much better in Canada. We can be much, much better. We don't have to look to them for an example of it. We can set our own regime now. Bill C-49 gave us the ability to do that.

September 26th, 2018 / 4 p.m.
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Vice-President, International Trade and Transportation, Forest Products Association of Canada

Joel Neuheimer

I can start on this one. Thanks for the question.

Actually, this goes back to an ask that a number of the railway's customers made, going back to Bill C-49, which was for for the agency to go out and investigate these types of matters independently. Minister Garneau put some conditions on it. He made it conditional on his approving an investigation and reserving the right to impose certain criteria for how the investigation is conducted. What we think would be even better would be to give the watchdog the power to go out and investigate things that need investigation on its own, without these special limitations.

It's Transport Canada that sets transportation policy in Canada; there should be no fear that the agency is all of a sudden going to make policy. The agency's job is to go out and investigate situations when things are not working the way they're supposed to. I would very much appreciate having the agency act more independently in the scenarios that you're talking about, Mr. Aubin.

September 26th, 2018 / 3:40 p.m.
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Director, Industry Relations, Pulse Canada

Greg Northey

So far in the grain year, service has been quite good from the railways, as you'd expect, because it's very good railroading weather. The crop has been a bit slow to come off. We've had some issues with weather and some stalls in harvest.

The railways are now meant to publish plans on how they plan to move the crop each year. It came out in Bill C-49. Their plans indicate that there is no increase in capacity. They haven't planned for an increase in capacity. When it's really going to matter for us is when we start to get into winter and start to see how they're able to respond and the kind of flexibility they have to be responsive to shippers' needs.

The investments may work, and we may have a great year—

September 26th, 2018 / 3:35 p.m.
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Director, Industry Relations, Pulse Canada

Greg Northey

I can start.

On your last point, one of the items that came out of the process of Bill C-49 was that Transport Canada started a collaborative forward planning exercise. They worked through on the quantity supply chain table. They are trying to wrestle to the ground some of these points as a larger group, so that includes the railways and the shippers.