Agriculture Committee on April 7th, 2014

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

Thank you, Chair.

I think that at the end of the day we're all hoping that this legislation is going to help farmers and help them make more money. I think it's important to give them as many tools as possible to get their crop to their customer. I think this is another tool.

We know about the Japanese boat that had to go to Seattle. But for various reasons, with global warming, we could be in a very good position in Canada for producing more grain, and the United States could have a problem. They have a lot of grain cars down there, so why not have that accessibility?

We've talked about Burlington Northern coming up here. Maybe sometimes our grain could go south and then west. The lines are there and the capacity is down there, so I think we have to make that available as much as we can. I think it's another tool that farmers can use so they're not stuck.

Sure, we'd like all our grain to be exported through our own ports. I think that's the idea. But when it's not happening, for various reasons, maybe with these other rail lines we can get our grain out through other ports in the United States. I think we can keep our farmers' options open when they're shipping grain, or the shippers' options, and I think it also gives some competition to the railroads. They might have to pull up their socks a bit.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Eyking.

Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Chair.

First of all, that was an interesting intervention from the member who made a career of promoting the closed shop and not arguing for openness.

I don't even know where to begin on all the problems with this particular amendment. First of all, I'm not sure that the Canadian Transportation Agency implements any plans, if you will. I don't think that's a function of the CTA. We may want to check. I don't know if the officials have an opinion on whether the CTA would implement a plan, but my understanding is that's not within the agency's scope.

Second, if you're talking about running rights for the traffic of grain but for no other commodity, what do you do with a mixed train as opposed to a train entirely full of grain? I think there are problems with this.

Third, I don't recall a single witness asking for this, so this is introducing an idea maybe from somewhere in the political bag of things on the other side to try to put everything into a bill. We didn't even get a chance to question witnesses on an idea like that. It wasn't even introduced at the table, but it's being introduced as an amendment.

I think in fairness, Chair, there is a CTA review coming up. I think if the member wants to talk about running rights, that might be an appropriate place to do that rather than trying to amend a bill here with an amendment that is very problematic and that has a number of flaws in it. So I am against the amendment.

[The Chair, Conservative, Bev Shipley]

Mr. Payne.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you. My colleague Mr. Watson here just talked about the grain-only aspect of this thing, and that was another element I was concerned about. I guess there are a couple of other questions out there. What about the railways, would they agree to this?

I think when we're looking at it, we're looking at it on a commodities and commercial basis, so certainly I don't support this.

Thank you.

[The Chair, Conservative, Bev Shipley]

Mr. Lemieux.

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

Thank you, Chair.

I appreciate the comments that have been made by my colleagues.

I'd just like to ask the officials if they'd like to add anything to the discussion.

[The Chair, Conservative, Bev Shipley]

We've had some pretty good clarifications, I believe.

We'll end up with Mr. Dreeshen, please.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you.

I think most of the things I wanted to address have already been addressed. Of course, what we were talking about was interswitching, and the discussion was based entirely on that. Had we sat down and asked our witnesses about specifics of running rights, I think we could look at those. But even from our discussion today, I would say when we have this accelerated review, that would be the time to look at those.

[The Chair, Conservative, Bev Shipley]

Shall amendment NDP-6 carry?

(Amendment negatived: nays 5; yeas 4)

[The Chair, Conservative, Bev Shipley]

We will now move to amendment NDP-7, reference 6501372.

Please go ahead, Madam Brosseau.

(On clause 8)

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Thank you, Chair.

This is regarding clause 8 to be amended by replacing line 6 on page 5 with the following:

for the purposes of paragraphs (1)(a) to (c), and requiring that the railway company or the shipper, as the case may be, implement those operational terms within 90 days after the day on which they are established by decision of the arbitrator.

Basically this requires that the regulators implement what constitutes operational terms within 90 days. So again, it's just more clarification.

[The Chair, Conservative, Bev Shipley]

Thank you, Madam Brosseau.

Are there any comments on amendment NDP-7?

Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

Briefly, I think it is fairly well established that the definition of “operational” would occur in a regulatory framework in which there is some flexibility to do that rather than by making the legislation a little more prescriptive. I'm against the amendment.

[The Chair, Conservative, Bev Shipley]

Any other comments?

(Amendment negatived: nays 5; yeas 4)

We will now move to amendment number 4 by the Liberals. It's reference number 6512505.

Mr. Eyking, please.

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

Thank you, Mr. Chair.

There's quite a bit in this amendment; I think there are six clauses in there. I think everybody has a copy of it, it's pretty self-explanatory. Chair, I don't need to read the whole thing do I? I can just give my—

[The Chair, Conservative, Bev Shipley]

That's totally up to you.

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

Okay. So I'll let it stand as it is and I'm going to read the explanation for why we have it here.

Now, of course we know about Bill C-52 last year and the problems we had with that. So now we have Bill C-30 here, and as many witnesses have come forward and told us, Bill C-30 as it sits is quite vague.

What they've always said is that service levels are very important, and they say they're not meaningful the way they are. Virtually every witness told us this: they want a clear, mandatory service-level contract with enforcement remedies that are reciprocal both ways. They don't want to be tied up in courts for 10 years. As we mentioned before, some of this stuff can be tied up quite a long time.

This amendment helps fix that problem. In the first part of proposed subsection 169.31(1)(1.2) we provide a definition of service obligations that all the shippers agreed upon last year. It's precise, it's practical, and it's to the point. These are the things that an arbitrator will need to cover in any of these contracts. When this thing starts rolling out, somebody has to be an arbitrator here, and they're going to have to have more defined rules and regulations.

In the second part, in proposed subsection 169.31(1)(1.3), we shine a clear statement of principle of how you can tell when an adequate performance has been provided, which is key.

And then in the final part, we make the point about reciprocal consequences. This needs to be clearly spelled out in any contract imposed by CTA arbitration. That's what proposed subsection 169.31(1)(1.4) does.

So, Mr. Chair and colleagues, this amendment was also.... The Minister of Agriculture from Saskatchewan recommended many of these here. We even have the Mining Association, the canola growers, The Fertilizer Institute, the western grain growers, I mean the list goes on of everybody who wants more defined rules.

They're not just rules everybody has to follow, it's how we enforce them, how we process people when they're wrong done by, and how people get paid at the end of the day.

So I think they're all here, and we went through this process last year. I think this is a great opportunity to have these amendments in here, and it would give everybody in the system a better idea and something to work with.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Eyking, He didn't read through them, but everyone has the amendments in front of them.

Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

First of all, Mr. Chair, I know you mentioned the Western Grain Elevator Association. For clarity, if I recall the testimony, I believe Mr. Sobkowich suggested that if it could be done in regulation, that would be fine by them. So to be clear on the representation by the Western Grain Elevator Association, I think that point has to be reiterated. You could check the Hansard on that, but I'm pretty certain he said that.

There are a lot of problems with this particular approach. I'm just trying to recall, Mr. Chair, from being part of the Bill C-52 debate....

Let me just start with one of the aspects, shipper paramountcy as opposed to the rail network. That is a problematic approach. For one, if I recall, the Supreme Court has been very clear that railway common carrier obligation is not an absolute, but it is circumstantial. So to be court compliant, there has to be some degree of flexibility with respect to the network as a consideration.

I don't know. I could probably go into a few more of the arguments that were raised back then, but stepping back from that, the approach that the government is taking with Bill C-30 is that issues around operational terms would be a regulatory approach. I appreciate that Mr. Eyking would prefer a prescriptive, legislated approach to that. The witnesses were mixed on the preference for that. We think we can achieve it with respect to the regulatory environment.

We've now, in terms of the earlier amendment, G-1, provided the teeth that they were looking for with respect to entering into service-level agreements. So I think between what will be achieved in the regulation and what is achieved in the legislation itself will be sufficient, and it's what the witnesses were requesting.

I think this reopens the debate that was made at the table with Bill C-52 at the transport committee, and it was rejected for a lot of very good reasons. But we think we can do adequately within the regulatory framework, rather than this.

[The Chair, Conservative, Bev Shipley]

Mr. Eyking.

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

Thank you, Mr. Chair.

Just to follow up on that, I do have the statements here from the Western Grain Elevator Association. They state here, “While volume thresholds can work in addressing capacity issues from a macro perspective, they do not provide clarity in the relationship between an individual shipper and an individual rail carrier.”

They go on to say, “We presume this issue will be addressed by the new regulatory authority charged with establishing more specificity with respect to operational terms in a service-level agreement.”

I think this is what it's all about. It's all about service, service for the farmers, and the only way they're going to be properly served is if everybody within the chain is going to have to adhere to it. When you look at these amendments, they spell out pretty clearly those service-level agreements and what's expected from everybody else in the supply chain besides the farmer.

That's what it's all about, Mr. Chair. It's about service.

[The Chair, Conservative, Bev Shipley]

Are there comments?

[Jeff Watson, Conservative, Essex, ON]

Mr. Chair, just to back up what I said earlier, I have the quote in front of me now.

Mr. Sobkowich said, “I want to make the point that we're talking about providing a more specific definition in the regulatory process to the word 'operational'.” He went on to say, “If the committee believes that you can define 'operational' in a way that includes penalties and potentially liquidated damages, then great. We can address it through the regulatory process.”

So they were comfortable with the regulatory approach for the word “operational”.

Thank you, Mr. Chair.

[The Chair, Conservative, Bev Shipley]

Shall the amendment carry?

(Amendment negatived: 5 nays; 4 yeas)