Agriculture Committee on March 31st, 2014

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Got it.

There are a lot of farmers in my riding, too, and they have a lot of grain sitting in their bins that we're concerned about. We're also concerned about the other commodity groups. I have a lot of forestry in my riding, too, and a lot of mills that are also seeking access to that same crammed logistics system that exists today. They're concerned that some of this capacity directed to farmers is somehow unfair.

Maybe fairness is a hard question for you to answer, but how can the other commodity groups be assured that they still have access to that same track and the same logistics system that our farmers have?

[Scott Streiner]

I'll provide perhaps a partial answer to the question because it starts to move a little into policy choices, and of course, those policy choices reside with ministers.

What I will do is reiterate what the ministers have said here and have said publicly, which is that the one million tonne objective was, in their eyes, ambitious but reachable. It was established in an attempt to surge capacity towards what was clearly, objectively, the most pressing problem facing the rail network, which was moving grain because of the extraordinary crop and because of the winter conditions. There was an attempt to balance that with the needs of other commodities and not to set that bar so high that transportation of other commodities would be affected.

That was the policy approach which the government adopted and so far, as we've seen, the railways appear to be meeting the targets that were set for them.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Thank you.

[The Chair, Conservative, Bev Shipley]

You have half a minute.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Actually, I'm good with time. My next session will take longer.

[The Chair, Conservative, Bev Shipley]

I'm sure Mr. Eyking will appreciate it. Five minutes, please.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you for coming.

I have a couple of questions.

First, is there anything in the new regulations that is going to have a cost review on the whole system?

Second, will the government's new power to regulate contracts between farmers and grain companies require that the grain companies limit the amount they deduct from the farmer's grain cheques as the basis for a “demergence”, so to speak? Can you disclose fully how that basis is calculated?

Those are my first two questions. If you keep the answers short, I'll have another question.

[Greg Meredith]

Mr. Eyking, I can talk to you about what's in the amendments that would affect the CGC. Those provisions would be respective clauses that would include performance and then penalties or compensation. It's up to the CGC to make those regulations. Whether it would be on the basis or whether it would affect the basis, I doubt it because that would extend beyond penalties to regulating the actual price.

They would have the capacity to look at the farmer's out of pocket for storage. Alternatively, if the farmer had to sell into the cash market at a price lower than the contracted price, they would have the ability to make regulations about keeping the farmer whole.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

And that will come in this.

[Greg Meredith]

That will be in the regulations.

[Scott Streiner]

Mr. Chair, with your permission, may I request a clarification?

In terms of your first question, Mr. Eyking, you said a cost review for the system. Are you referring to the transportation system? Could you clarify that?

[Mark Eyking, Liberal, Sydney—Victoria, NS]

The whole system, the whole supply chain, there hasn't been one for 20 years.

[Scott Streiner]

No. There hasn't been a cost review for 20 years. There's nothing in the legislation providing for a cost review.

As Minister Raitt noted, we will be accelerating the initiation of the Canada Transportation Act review. Minister Raitt will be considering what should be scoped into the mandate for that review. I can probably say that input from members of Parliament among others would be welcome in terms of establishing that mandate.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

The other thing is, in layman's terms, you have farmers in the Fraser Valley who can't get enough grain. You have farmers in the Peace Valley who are trying to move their grain. When this all comes into play and they're still not getting more grain, they're still very low on grain in the Fraser Valley for their livestock.

You talk about the Grain Commission monitoring or being a policeman on this, but how are we going to change that around? Who's going to be the police to say, “Okay, you have grain, and it's not moving here; we're not getting grain in; somebody has to act”?

How is this going to change that situation?

[Greg Meredith]

I don't know that there is a magic bullet.

Part of the problem for the feed mills and the feedlots is there's not as much grain coming back out that's been cleaned in some of the silage that comes back out of the ports. The port terminals are about 40% down what their normal stocks would be at this time of the year. That's part of the issue.

What I would point to in terms of the enhanced reporting requirements that will be part of our grain monitoring program is the much more timely and granular perspective on where the problems are. It's going to be reporting by corridor and it will be weekly uploads. It will be weekly spotted cars with much more detailed information and much more real time than we have now.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

That's the monitoring thing.

How is it going to work? Is somebody going to call up and say, “This is not happening. We want to see this in a week's time”?

[Greg Meredith]

There is no magic bullet there.

What I'm suggesting is that a better understanding of how the entire supply chain is working will help us understand what more needs to be done, if anything, in order to get those bottlenecks cleaned out.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Who would compensate the farmers who are not getting the grain? Could you foresee a situation where we have all this grain in Canada but we could lose livestock with not enough feed? Is that conceivable?

[Greg Meredith]

I haven't seen any evidence of that.

I have heard about shortages and not as many cars as preferable going into the feedlots and the feed mills per se. We haven't had anybody identify yet that there would be an animal welfare problem or anything of that scale.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I'm just wondering that all of a sudden we are going to be exporting more grain and still the internal domestic consumption is not going to be really dealt with. That's my last kind of—

[Greg Meredith]

It would be speculative of me to go down that road.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Do you have any comments on that?

[Scott Streiner]

I would just make two observations.

I would note that the order in council that was issued on March 7 requires the movement of a million, or to ramp up to a million tonnes per year. That's not all to export; that's movement, so the movement to domestic clients and to North American clients south of the border counts as well.

The other point I would make is that the government did commit, and has reaffirmed this commitment, to establishing a commodity supply chain table, something which was called for by the rail freight service review. We'll be moving forward with that. It could provide a forum, using the data that Greg talked about, to talk through some of these issues and bring greater transparency and greater cooperation between the different supply chain partners.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Eyking.

We'll go to the second round. Just so members know, we have some business to attend to at 5:10 p.m.

Mr. Lemieux, for five minutes, please.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thank you, gentlemen, for being here.

I would like to ask you to highlight the difference between the order in council and this legislation. The order in council was a very first step. It was a very definitive step. It's easy to either forget that it happened now that the legislation is here, or to ask what the differences are between those two different mechanisms. There definitely are differences, even though at first blush they seem to be striving to achieve the same thing, which is one million tonnes of movement of grain a week.

I'm wondering if I could ask you to explain the differences, the very practical differences, between the order in council, which in fact would be in effect today, and the legislation, which we want to get into effect quickly.