House of Commons Hansard #171 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was water.

Topics

Canada Transportation Act
Government Orders

6:20 p.m.

Conservative

Ed Fast Abbotsford, BC

Mr. Speaker, I appreciate the opportunity to engage in the debate on Bill C-58, amendments to the Canada Transportation Act.

This is really one of a trilogy of bills. This is the third of the three bills which address various issues within transportation. The first bill, Bill C-3, actually addressed the whole issue of bridges and tunnels, making sure government was able to protect the interests of Canadians in ensuring that our bridges and tunnels on our international borders are protected and maintained properly. The second one, Bill C-11, addressed the whole issue of railway noise, making sure that we had grain caps in place, making sure that communities had a say in what happens when there are disputes with railways. This bill, Bill C-58, addresses the issue of freight across our country.

The railways are what Canada was built around. The railways were a driving force in making sure that Canada became the country it is today. Railway freight is really the object of Bill C-58.

Canadians rely on our railways for their livelihood. Our economy depends on the timely delivery of freight across our country. Not only is freight delivered to the various areas and communities of our country by rail, but our railways are also used to deliver freight to the gateways of our country, the Pacific gateway, the Atlantic gateway, even our border with the United States, a critical gateway to make sure that we protect the ongoing prosperity of our country.

This bill addresses a number of concerns that have been raised over the last five to ten years. The existing Canada Transportation Act is some 10 years old. Shippers in particular have been raising a number of issues with how our railways are administered. They have had beefs with some of the pricing of the services that are delivered. They have had beefs about how railway siding abandonment has been addressed. They have been worried about advance notice for a number of the issues that are dealt with under the Canada Transportation Act. They are also concerned about how disputes with the railway companies are addressed.

This bill is addressing the concern that shippers have with respect to the relatively tightly concentrated ownership of railways in Canada. We know from experience that in industries that have relatively few players, such as the railway industry in Canada, there is always a risk that the players within that industry will engage in predatory behaviour. I am not for a moment suggesting that is what is happening in Canada, but it is one of the concerns the shippers in Canada have raised.

The shippers want to make sure they are treated fairly. Shippers have concerns. They want to make sure they can get their products from point A to point B in a cost effective and timely manner. When there are disputes about the level of service, or a dispute over the prices charged for transporting freight from point A to point B, they want to know that there is an effective and efficient mechanism in place to achieve that.

Bill C-58 actually provides a solution. It is called final offer arbitration. Final offer arbitration already exists under the Canada Transportation Act, but it applies in limited circumstances. Unfortunately, it is an expensive process. It is one that many of the shippers, especially the small shippers, cannot afford.

Typically we would want to make sure that our shippers and railways resolve their disputes in a commercial manner, for example, by negotiating with each other. That is the ideal. If there is a beef about the pricing for getting the freight from one point to another, the shipper wants to be able to sit down with the railway and negotiate something that is fair. Sometimes negotiating does not work and the parties move on to something called mediation where a third party is brought in to review the issues, to review the pricing and perhaps the level of service.

Sometimes a mediator can come up with a solution that the other two parties are not able to arrive at on their own. If that does not work, shippers are left with a problem. They are left with arbitration. As a result of arbitration being expensive, sometimes it can cost up to half a million dollars to arbitrate a dispute. Many of the shippers cannot afford the current arbitration process.

This bill implements final offer arbitration within a broader context. Let me explain to the House how final offer arbitration works.

In those provisions, the shipper and the carrier each make their best offer. They have a dispute, they come to the table, and each comes forward with their best offer and presents that offer to the arbitrator. The shipper is not going to bring in an offer that is totally out to lunch because he or she knows that the arbitrator is not going to take that offer. The arbitrator is probably going to take the railway proposal. The railway is going to be in the same boat. It is going to bring forward an offer that is as close to where it probably should be to make sure that the other party's offer is not taken. This effectively drives the parties closer in their negotiations and closer in terms of the offers that they present.

The arbitrator can only make one choice. He chooses one offer or the other. He cannot amend the one offer or the other offer. He cannot combine them. He cannot come up with a compromise. He picks one or the other. The purpose is to make sure the parties, when they make their offers, are as close as possible. It certainly drives the parties to negotiate these disputes if there is any way of resolving them outside of the arbitration process. There is an incentive for the parties to put forward reasonable offers.

Final offer arbitration is one of the more popular remedies under the Canada Transportation Act, certainly with shippers. One of the reasons is because shippers have considerable control over the process and are not dependent on other parties. In essence, the shippers determine the rates and conditions that are contained in the final offer, so they have some control over that process. This forces the railway to respond in kind.

The decisions that the arbitrator makes are, of course, confidential. On the whole, shippers are satisfied with final offer arbitration under the Canada Transportation Act. However, they complained again because of the costs. Individual shippers really cannot avail themselves of this process because it is just too expensive. Our amendments to Bill C-58 address that problem.

Bill C-58 proposes two main amendments. First and foremost, Bill C-58 extends the final offer arbitration to a group of shippers who are disputing a railway's proposed freight rates or conditions for the movement of traffic across Canada. This allows a group of shippers to come together and share the costs of final offer arbitration. It will generally give shippers more leverage during their negotiations with the railways because now the railways know the costs of this final offer arbitration are going to be spread over a large number of shippers rather than one or two.

To be eligible for this, the shippers have to have issues in common. This ensures that they are not dealing with a scattergun approach and that the arbitrator has a specific issue to address. It would be unfair to expect an arbitrator to consider a group application that lacks sufficient commonality. This legislation clearly addresses that.

The second part of this amendment requires that the arbitrator and the agency must be satisfied that the members of this group of shippers have attempted to mediate the matter. In the ideal world, we want to make sure that the parties try to negotiate first, keep it out of a formal system, and subsequently maybe use a mediator to try to come to a common resolution. Once the Canadian Transportation Agency is satisfied that mediation has been attempted, it will then move to allow an arbitration process to take place. Shippers have strongly endorsed this concept of group final offer arbitration.

Bill C-58 also provides a provision that permits parties to a final offer arbitration to suspend the arbitration halfway through the process to try to engage in negotiation or further mediation.

Again, that makes sense because the parties know the arbitration process is going to end up with one offer or the other being chosen and it is binding on both parties. There is still an incentive for them to consider going back to negotiation and mediation to try to resolve the dispute without having the final decision made by the arbitrator.

It gives an opportunity for the shippers and the railways to take a time out and a deep breath. They can say they are getting close and resolve it among themselves rather than going to the arbitrator. All those options are available under our amendments.

These changes to the arbitration process are going to assist the shippers in getting their problems resolved with the railways. It is also a faster way of bringing resolution to these problems.

The government has heard the shippers. It believes it has addressed these concerns. I have addressed one of the concerns in Bill C-58. My colleagues are going to address a number of other amendments within Bill C-58.

I would encourage all members in the House to support this legislation because it is good for our communities. It is certainly good for the city of Abbotsford which relies heavily on the railways to get grain to the feed mills that provide feed to our poultry growers. We also have a strong manufacturing sector in Abbotsford that needs the railways to provide cost-effective pricing and timely service.

This bill will achieve all of those ends. It is a huge step forward in bringing Canada into the 21st century when it comes to transportation. I encourage members in the House to support Bill C-58.

Canada Transportation Act
Government Orders

June 14th, 2007 / 6:30 p.m.

Liberal

Sukh Dhaliwal Newton—North Delta, BC

Mr. Speaker, I am happy to speak to Bill C-58, An Act to amend the Canada Transportation Act (railway transportation).

This bill seeks to address the concerns from shippers about rail service and rates, among others. I along with the Liberal Party support this initiative. In fact, this is a Liberal initiative. It is in fact a reintroduction of a Liberal bill—

Canada Transportation Act
Government Orders

6:30 p.m.

Conservative

John Baird Ottawa West—Nepean, ON

Then let's pass it now.

Canada Transportation Act
Government Orders

6:30 p.m.

Liberal

Sukh Dhaliwal Newton—North Delta, BC

Mr. Speaker, I would appreciate it if the environment minister would give me an opportunity to speak. Actually, he had a lot of fun with the transportation critic yesterday. He is not here today. I am sure he will give me due consideration to address the House. When the environment minister speaks here, I never interrupt. I listen to him. When it is my opportunity, I expect the same.

In fact, the environment minister and the chief government whip of the governing party, if they really want to yell, they should be yelling at the members who are leaving their desks, rather than yelling at me. I appreciate the members giving me an opportunity to address the House.

I already mentioned that the bill is in fact a reintroduction of the Liberal Bill C-44 from the last Parliament which contained a number of provisions in Division IV entitled “Rates, Tariffs and Services”.

We are used to this government's reintroduction of our bills and funding whether we talk about the Pacific gateway or whether we talk about bills on immigration and industry, or even the EnerGuide program that the government cancelled and reintroduced later on.

We are supporting this bill because of the proposed amendments. The proposed amendments remove the barriers on the Canadian Transportation Agency. Before, there had to be proof of commercial harm before remedies would be provided. This is too much red tape.

We know the Conservatives love red tape. If they were to change their website from red to blue, I could call it blue tape. There is as well the Federal Accountability Act, but I am very happy when I see that this bill removes that blue tape that we are talking about.

The second amendment to the bill would extend the final arbitration to shippers on matters relating to rates. Again, we are putting the private sector back in the driver's seat. It knows best, given all things considered.

I come from a private business background and I know how important it is to have input into the everyday governing of a business.

The other amendment that was made to the bill would allow the suspension of the final arbitration process if both parties agree. Again, let us get rid of that blue tape. Let us allow businesses to come to the table in good faith. Transportation needs to be a priority.

If we are to have goods moving, the first and foremost priority has to be infrastructure. That is why if we look at the previous Liberal government's initiative to bring in the Pacific gateway project, that project had environmental sustainability for the quality of life of my neighbours and my constituents.

The next amendment that this bill provides would permit the agency, upon complaint, to investigate charges related to the movement of traffic contained in a tariff. We want to make sure the agency is more effective and give it the real power that it needs and deserves.

We believe the government can actually be a force of good. Less government only means more when it is effective. This government does not understand that but this is exactly what the private sector is looking for.

The next amendment that we made to this bill is that the shippers have to receive a real notice of rate increases. This bill provides for that. We have to help businesses out. We have to be a real partner, not a blue tape provider when it comes to businesses. As I have mentioned, in my riding of Newton--North Delta, 95% of the people who contribute to this economy own small businesses and many of them are affected by this bill because they count on the transportation sector to move their goods.

The next amendment we made requires the railway to publish a list of rail sidings. In today's competitive business environment, information is key. Let us give the stakeholders a hand rather than put roadblocks in their way.

The next and final amendment would ensure that the abandonment of provisions apply to lines that are called provincial short lines. We want to revert them to a federal railway line because we want to ensure the regions in this country are not shortchanged by downsizing.

The Atlantic accord is a perfect example. We know there might be other provinces that might not have a big enough voice but we need to ensure those reasons are taken care of, whether it is Saskatchewan, British Columbia or the Atlantic provinces.

We believe that the federal government has a leadership role to play and we do not think it can refuse time and time again to listen to the economic concerns of our less populated regions, as I mentioned earlier.

The good thing is that when we look at this legislation, the stakeholders provided real input. I would like to thank them and congratulate them for their input into this project. Some of them included the Animal Nutrition Association of Canada, the Canadian Canola Growers Association, the Canadian Dehydrators Association, the Canadian Wheat Board, the Forest Products Association, the Grain Growers of Canada, Pulse Canada and many more.

When we look at the importance of stakeholders, it is similar to the Pacific Gateway project. When we brought in that project, we put in a Gateway council to deal with the local stakeholders and get their input. When the government came in, it abolished that.

That is how the real world works. If we are to be successful in this globalization, we need input from the real stakeholders who deal with the situation day in and day out.

The bill has two main parts. The bill works to make stakeholders a real partner with the Canadian Transportation Agency. The bill wants the agency to be more effective, to give it power and to give the federal government a leadership role.

The second part to this is that transportation is too important of an issue for us to drop the ball and leave it to the regional differences and interests get more fractious, as this government has done with the Atlantic accord and with Saskatchewan. I know it comes to my province of British Columbia as well, when we are getting $300 million less this year with this new equalization formula.

I thank the Minister of the Environment who has listened to me when I was speaking. That is very kind of him, and if we could all follow the example of the environment minister, then we could have a sense of real professionalism in this House.

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6:40 p.m.

Liberal

Blair Wilson West Vancouver—Sunshine Coast—Sea to Sky Country, BC

Mr. Speaker, I listened intently to my colleague's speech and I have a number of questions and perhaps a comment or two before my questions.

As we are both colleagues who represent the beautiful province of British Columbia, could the member elaborate on how Bill C-58 would specifically impact the economy of British Columbia and how the details of the bill would affect rail safety?

I represent the riding of West Vancouver—Sunshine Coast—Sea to Sky Country and a few years back we had a very bad derailment of a CN rail train near the Cheakamus Canyon. It dumped close to 40,000 litres of caustic soda into the Cheakamus River which virtually killed all the salmon in the river, from steelhead, to pink, to chinook. Therefore, rail safety is an important issue for the residents of my riding as it is with the citizens of Canada.

I have two questions for my colleague. First, how does the bill affect rail safety and, second, how does the bill affect British Columbians and specifically the economy of British Columbia?

Canada Transportation Act
Government Orders

6:40 p.m.

Liberal

Sukh Dhaliwal Newton—North Delta, BC

Mr. Speaker, I congratulate the member from British Columbia for doing all the good work, being the B.C. caucus chair for our side of the House.

British Columbia is the hub for future business with the Pacific Rim. We are the closest port when it comes to the Pacific Rim in North America. If we look at my riding of Newton--North Delta, it is the closest riding to Delta Port and Fraser Port.

In fact, we look at the overall scheme of things. Prince Rupert is one of the biggest ports in the province and therefore all the goods that are moving with globalization will be in British Columbia. This is as important as any other issue because we need to have goods moving at a good rate and the shippers need to have certainty and clear direction, which is where the agency comes in.

When we talk about stakeholders, some of them are the Canadian Canola Growers, the Canadian Wheat Board and the Forest Products Association because B.C. has a lot to do with grain and forest products. To move those forest products in an economical and efficient manner, this bill would be helping those in British Columbia.

When it comes to railway safety, I am sure every member in the House feels the same way as my colleague from British Columbia. Even in my riding there has been a concern about the safety of the people. The rail trains were going through the neighbourhood with uncontrolled signals. In fact, the stakeholders, the West Panorama Ridge Ratepayers Association, which is in my neighbourhood, and Mr. Campbell, who is a past president of that association, played a key role in putting that into the system. These stakeholders who are involved are esnuring that when it comes to the safety of moving the trains, the people and property, Bill C-11 deals with that as well.

Canada Transportation Act
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6:45 p.m.

Bloc

Mario Laframboise Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, I am pleased to speak to Bill C-58 on behalf of the Bloc Québécois.

I will summarize this briefly for the benefit of our constituents who are listening. The main purpose of this bill is to clarify the Transportation Act and strengthen the existing provisions that protect shippers against any abuse of the commercial power of the railways. It relates mainly to western Canada and has to do with grain producers and grain transport. Although this has less to do with what goes on in Quebec, the Bloc Québécois stays informed about various situations across Canada. We are always interested in participating in the debate so that we can stand up for anyone who is oppressed by the commercial power of the railways, as an example.

Today, we have two fine examples of this. Earlier, the representative of the government who gave a speech about Bill C-58 said that the bill was one of three pieces of legislation to modernize the Transportation Act. Today, we discussed Bill C-11. The idea was to modernize the Transportation Act in relation to the noise pollution and vibration produced by the railway companies. The Conservative government has caved in to the power of the railway lobby. The lobby had its standard bearer, the Senate, which decided to carry the torch for the interests of the poor little railway companies.

And the end result is that the government supported an amendment to the bill that had been passed unanimously, Bill C-11. In committee, the noise pollution provisions and the bill had been supported unanimously, clause by clause, by all parties.

Today, the Conservatives have caved in to the Liberal position adopted in the Senate. I hope that we will not see the same thing happen with Bill C-58, that we will not see the Conservatives caving in to the Liberal majority in the Senate if the Senate decides to amend the bill.

Bill C-58 is an attempt to strike a better balance between the power of the railway companies and the people who produce and ship products, including grain producers, who do not own the rails and who have to get their hopper cars to destinations all over Canada. They feel oppressed by the railway companies.

The purpose of this bill is to strike a balance. The proposed amendments respond to the concerns of shippers, and particularly western Canadian grain producers, about prices and railway service, while also providing the railways with regulatory stability. The amendments to Bill C-58 will deal with arbitration, charges for incidental services, notices of changes of tariff, sidings for producers' railway cars, leased railway lines and obligations in respect of the level of service. It is time we had some balance, in the interests of those who use the railway system, including grain producers, to get the railway cars that belong to them to their destinations.

The Conservative government and the Liberals have this strong tendency to let the free market do as it wishes. In such conditions producers are over-exploited. That is what this bill seeks to correct. When we refer to the various amendments, we refer, among others, to arbitration. The objectives of the Transportation Act, prior to these amendments, require that the Agency take into account the matter of substantial commercial harm. Bill C-58 proposes that the reference to substantial commercial harm be removed because whenever we hear from the railway companies there is always some substantial commercial harm. In the end, those who do not own the rails lose every time. The railway companies always succeed in proving substantial commercial harm where there is none. That will now be subject to arbitration, which will be a means of settling disputes between a shipper and the railways involving the rates and conditions of transportation service.

If merchandise is shipped by railway under a confidential contract, the matters subject to confidentiality cannot be submitted to arbitration without the consent of all parties. Still, there are some safeguards. It will be possible to make a joint submission for arbitration to settle a dispute concerning the rates and conditions for movement of goods, where the matter submitted to arbitration is common to all the shippers.

Finally, all those who are experiencing the same problem will have recourse to arbitration. They can join in a class action and the Transportation Agency can hear the case and render a decision.

The bill also provides for suspension of any arbitration proceedings if the two parties agree to accept mediation. In fact, this will also encourage use of mediation. That is one reason the Bloc Québécois is in favour of these amendments.

The rates charged for incidental services will be discussed. The railways earn most of their income from the rates charged for transporting goods, such as the carloads of grain from the Prairies to Vancouver, but charges also have to be paid for services that are incidental to the conveyance of goods or that are not directly related. These are known as incidental or associated charges; the cost of parking, additional charges to a shipper who requires more than the scheduled time, the cost of cleaning and or stocking cars and weighing the goods are examples of incidental costs.

In recent years, the rates charged by the railways have become a burden to shippers. However, the means of dealing with this problem are limited, since arbitration does not apply as a distinct remedy for incidental charges or associated conditions. The act will be amended to permit the agency to investigate a complaint from any shipper who is subject to a general application tariff that provides for rates and conditions. Finally, incidental charges invoiced by the railways could be subject to arbitration.

There is also the notice of change of tariff. The act defines the tariff as being a schedule of rates, charges, terms and conditions. At present it requires that the railway publish any changes to this tariff at least 20 days before raising rates. Such notice is not required for rates pertaining to incidental services or related conditions in the section on tariffs. This will be amended. The act will be amended so as to extend the period of notice from 20 to 30 days so that shippers can receive sufficient notice of any increase in the rates for transportation. Notice is therefore extended and incidental charges will be included.

There are also the sidings for producer cars. During the consultations, some parties asked for tighter regulation on abandonment of sidings used for loading grain or loading producer cars on the Prairies. Sidings are not subject to the provisions of the act on discontinuing a line. Complaints about the closing of sidings used for loading cars arise in part from the fact that shippers do not know which sidings are in service, since at present the railways are not required to inform those concerned.

The act will be amended so as to require the railways to publish the list of sidings available for loading grain producer cars and to give 60 days’ notice before putting a siding out of service.

All this means that, on their own lines, the railway companies used to operate as though they were the only ones using them. That was the problem. As far as I am concerned, the federal government failed in its original mission. Over the past 20 years, it has got rid of all the railway tracks that belonged to it and transferred them to private companies: to Canadian Pacific and Canadian National. Today we realize that that has created a problem. The people to whom they were transferred, often for paltry sums, are today making incredible profits. In the end they regard this asset as their own. When the time comes to make the rails available to other users, they know that tracks cannot be laid just anywhere. There needs to be a corridor across Canada and such a thing cannot be created on a whim. The government, as far as I am concerned, made a mistake in this regard. It should have kept them.

There is also the example of the bridge at Quebec City that we are having so much difficulty getting painted. The Quebec bridge belongs to Canadian National and it says it does not have the money to get it painted. That does not matter very much. The Liberals tried legal proceedings to force CN to paint the Quebec bridge, especially in view of the 400th anniversary. It will be great to show visitors Quebec, the oldest city in America, with a rusty bridge. But that is how it is.

When the Liberals were in power, they fell flat on their faces. They could not get anything done and instituted legal proceedings. The Conservatives, thinking themselves more intelligent, said that they would set the legal proceedings aside and change the legislation. But no, the minister had to do the same thing six months ago. He too launched legal proceedings to try to force CN to paint the Quebec bridge. I predict that it still will not be painted in 2008. They will not get it done, unless they pay what CN has been asking since the very beginning. If they want it painted, they should get out their money and pay for it. That is the hard truth.

Today, once again, the federal government has given up. The free flow of goods and services between the provinces is a federal responsibility. This always makes me laugh because we have been trying for decades to get a new bridge built right here between the Quebec Ontario banks of the river. I have always wondered what use a Minister of Transport, Infrastructure and Communities is if we cannot get goods, services and people moving freely between provinces. No new bridge or new infrastructure is being built to join the two banks.

The federal Minister of Transport, Infrastructure and Communities cannot serve as an referee or as anything at all. He dare not get involved because he is powerless. The problem today is that they are trying to give some powers by means of the Canada Transportation Act. It is good that we are here because one day they got rid of the railways and now they are forced to regulate a bit or else the railway owners are going to decide to operate their way and, often, raise rates without warning. That is what we are telling the House now.

In all these regards, it is evident that the Bloc Québécois is very sensitive to the problems of farmers, including western grain growers on the prairies.

We have always been very sensitive to the problems of Quebec farmers. That is why we always defend supply management so staunchly. If the Conservative government defended the supply management interests of Quebec farmers as fiercely as it defends the transportation of grain in hopper cars, they would probably be doing pretty well. The problem is that there is always a double standard in this country. There is one standard now for western farmers and another for eastern farmers, especially those in Quebec.

We in the Bloc Québécois do not make such distinctions and when we feel that our constituents are being exploited by private enterprise, we do not hesitate to take action. That is why the Bloc Québécois will support Bill C-58 in order to help the western grain producers and shippers.

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6:55 p.m.

NDP

Libby Davies Vancouver East, BC

Mr. Speaker, I am pleased to have this opportunity to rise in the House to speak the a bill that has just come to the House for second reading. Therefore, we are debating the bill in principle. It is an act to amend the Canada Transportation Act, railway transportation. I know the NDP transportation critic, the member from Burnaby—New Westminster, has already given a lot of thought to the bill.

In looking over the bill, the NDP is prepared to support Bill C-58 in principle. We will very carefully examine it when it goes to committee. Obviously witnesses need to be heard and we will look at moving amendments that stage of the review. At this point we feel the bill deserves support in principle. It seems to address some of the valid concerns shippers have had for many years over the current conditions of the Canada Transportation Act, which allow for the potential of use of market power by railways.

We believe the intent of the bill is to lower the shipping costs for farmers, and that is very important. Farming in the country has so much Canadian history, culture and heritage. It is increasingly difficult to carry out, in part because of the shipping costs farmers face. It is very important the committee have the opportunity to examine the bill and amend it to deal with the concerns of farmers and shippers.

There is no question that the Canadian Pacific Railway, CP, and the Canadian National Railway, CN, have a virtual duopoly on shipping prices, which is an interesting term. We often talk about a monopoly, but in this context we have a duopoly. There is also no question their financial stranglehold is choking Canadian shippers that rely on the rail system to transfer their products from the farm to the marketplace. Under the current environment, transportation costs are the second or third highest cost of business for bulk shippers. Under this duopolistic regime, these shippers do not have an alternate way to transport their products. This is the reason for the bill.

This is a very serious situation for shippers and the goods they ship from our farming communities. They rely on these railways to get their products across the country or to international market, yet there has been this monopoly stranglehold that has produced a very difficult financial situation.

Although there are over 30 federally regulated railways in Canada, many freight rail customers are captive shippers. That is, only a single railway company offers direct service to their area. For these shippers the railway transportation is not naturally competitive and in the absence of adequate legislative measures, there is a tendency for the railway company to take advantage of its position as a monopolist in a region. Again, that is a very serious situation where local producers and shippers have no competition. They have to rely on a single server, a single railway company, and are held completely captive. I cannot imagine anyone would consider that to be a healthy business environment.

A monopolistic railway would have an incentive to offer lower levels of service at higher prices than it would under competitive market conditions.

Shippers believe this problem must be alleviated with modifications to the Canada Transportation Act that can facilitate real competition.

We heard from the member opposite a while ago. We know that in 2005 the previous government brought in Bill C-26, which allegedly sought to amend the Canada Transportation Act to deal with some of these problems. It needs to be said on the record, that bill was denounced by the Western Canadian Shippers’ Coalition and by other interest groups because they saw it as a half measure. It was not, in any substantive, way dealing with the very real problems these shippers had. In fact, ultimately that bill failed and did not become law.

Now we have a new bill that was introduced by the transport minister on May 30. We believe that this bill has had a more favourable response than the previous bill put forward by the Liberal government. That does not mean it is a perfect bill, but as we are debating it here in principle, we think it merits support and should go to committee.

One of the positive impacts of this bill is that it will remove the requirement for the Canadian Transportation Agency to be satisfied that a shipper would suffer substantial commercial harm before it grants a remedy. I think this is a very key point. The current requirements are so onerous that it becomes very difficult for any mechanism that would grant a relief to any shipper to kick in, so that effect of this bill is very important.

The bill will also extend final offer arbitration to groups of shippers on matters relating to rates or conditions for the movement of goods, provided that the matter submitted for arbitration is common to all and the shippers make a joint offer that applies to them all.

Again, we see that as a positive measure that will allow groups of shippers to act together to take advantage of final offer arbitration in a more flexible way than before. They can have a reasonable expectation there is going to be a settlement when a conflict has occurred.

The bill also allows for the suspension of any final offer arbitration process if both parties consent to pursue mediation. Again, it provides a flexibility, which we think is important.

It also permits the Canadian Transportation Agency, upon receiving a complaint by a shipper, to investigate charges and conditions for incidental services and those related to the movement of traffic contained in a tariff that are of general application, and to establish new charges or terms and conditions if it finds those in the tariff unreasonable.

I am certainly not an expert in this area. The New Democratic Party's agricultural and transport critics are both very well versed in this. Our general opinion is that these provisions will provide a greater sense of certainty and an ability to resolve problems when they arise by ensuring that where there are complaints made they will be investigated. The CTA would have the ability to establish new charges or terms if it finds the current situation is unreasonable.

The bill will also increase the notice period for augmentations in rates for the movement of traffic from 20 to 30 days to ensure that shippers receive adequate notice of rate increases. This is obviously very important. It will require railways to publish a list of rail sidings available for grain producer car loading and give 60 days' notice before removing such sidings from operation.

Again, we believe this is very important. It has been a longstanding problem for the shippers. They do not get adequate notice. One operates a business and understands a certain set of conditions, but then suddenly things change. The list of rail sidings may change and may not be available to the shipper any more. Obviously that would have a very dramatic and unnecessary impact on a local shipper.

This bill also ensures the abandonment and transfer provisions apply to lines that are transferred to provincial short lines and subsequently revert to a federal railway, including the obligation to honour contracts with public passenger service providers.

We do know that at this point the bill has been supported by the Canadian Wheat Board and the Western Canadian Wheat Growers Association. It is important that we note their support.

When this issue was before the agriculture committee just about a month ago in April, Mr. Martin VanderLoo, the president of Huron Commodities Inc., spoke before the committee. His testimony reflected and highlighted very well the current problems for these shippers and producers in dealing with the present environment under the Canadian Transportation Agency.

I will quote for members some of his testimony before the committee:

Huron Commodities moves oats from western Canada to Ontario for processing and further export to the United States. We ship oats from Ontario and Quebec to the U.S. via rail. We ship rye from Ontario and western Canada to major distillers and flour millers in the United States via rail. We ship food-grade soybeans to Japan and Southeast Asia via rail to the west coast and ocean freight further on.

Over the years, we've seen increasing rail transportation costs with severely declining rail service. All the while, Canadian railroads are posting consistent record profits. Although we're not opposed to supporting a profitable railroad, we don't agree that it should be done at the expense of the farmer. For example, as mentioned earlier, we ship oats from western Canada to Ontario for further export to the United States. Unless we are a mainline shipper in western Canada, willing to ship 100-car-unit trains to the west coast, we are just denied service. The same situation is the case with our rye shipments out of western Canada. Unless we can provide 100-car shipments to the railroads for export to the U.S., they are simply not interested.

The railroads have consistently refused to spot cars for any of our shipments, jeopardizing our reliability as a shipper to our customers.

Mr. VanderLoo said to the committee:

We ask you to push for immediate regulatory reform to the Canada Transportation Act before we lose further markets we currently hold.

I wanted to read that into the record because to me it is a very good example of what is at stake here. Here we have companies that are doing their best to operate within the existing system, but they are held captive by these two rail companies. They do not get adequate notice. Provisions can change. They do not get notice of the rail sidings that are changing. It makes their business operations insecure and it makes their operations difficult, with these rail companies racking up huge profits all the while.

Earlier in the debate the member from the Liberal Party was asked a question about whether this bill would deal with rail safety. I do not believe it does. I think it is a bill that deals more with the mechanism of the movement of goods and with ensuring that there is better accessibility for producers and shippers, which is a good thing.

However, I do want to say that certainly from our point of view the issue of rail safety is absolutely huge. We have had horrendous situations just in my province of British Columbia alone. I do not have the list in front of me. I know that our NDP transportation critic in British Columbia, David Chudnovsky, who appeared before the transport committee about six weeks ago, gave a whole list of the derailments and talked about the lack of safety and the increasingly poor environment in operation in our railway system. We are talking about dangerous situations. We are talking about workers whose lives are in jeopardy.

Let us not forget that it was this House, by a majority, that legislated the workers of CN back to work. The NDP was in opposition to that and I believe the Bloc was as well. In case people have forgotten, the issue has not gone away, and the reason why CN workers were out on a legal strike in the first place was their very serious and ongoing concerns about the safety of our railways.

We think of our railways as part of the Canadian dream and Canadian history. Of course they are, but I do not think people understand how seriously diminished these operations have become and how these monopolies have taken over now. There are issues around access, certainty and reliability for the shippers and producers. These things are now at risk.

There is the issue of health and safety conditions for the people who work on the railways and who are very much in jeopardy and at risk. We have seen a recent labour conflict with the CPR workers that involves the same issue. I wanted to bring this forward because it came up in debate. Although this bill does not deal specifically with railway safety, it is a very important matter that should be addressed.

In fact, earlier today we debated another bill that dealt with railways, Bill C-11, which has been approved. We were dealing with a Senate amendment that dealt with the impact of railway noise from the point of view of local residents. It is very interesting that these issues are coming up. It tells us as members of Parliament that these issues have not been addressed adequately in the past. While the previous bill that was brought in by the prior government in 2005 fell far short of what needed to be done, today we are hopeful that this bill, Bill C-58, will do the job.

The NDP will support this bill in principle and we will examine it thoroughly when it goes to committee. We will ensure that witnesses are heard so that we can make sure we really are addressing the legitimate concerns of producers and shippers. I hope there also will be an opportunity to address the equally important issue of safety on the railways. Again, it is not going to disappear. In fact, things are going to get worse.

We will be supporting this bill at second reading and then working in committee to look at what amendments are necessary before it comes back to the House.

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7:15 p.m.

NDP

Alex Atamanenko British Columbia Southern Interior, BC

Mr. Speaker, recently I met with some people from the Zellstoff Celgar pulp mill in my community of Castlegar. This pulp mill is probably one of the most efficient in our country. It is working in a highly competitive market and not only in Canada. In a climate where we see other mills being shut down, it is doing very well. It is in a highly competitive market and is one of the best.

It requires a railway system that is as efficient as possible, yet the feedback I am getting from representatives of the company is that there is no customer service in CP Rail, that the company itself has to do the work to line up cars somehow. It is almost as if the major railways are forgetting about secondary lines and are concentrating only on the main lines.

Being on the agriculture committee, I am getting the same feedback from the farming community and the Canadian Wheat Board. They are worried about our competitiveness in the international market. If we cannot deliver, we lose credibility. The agriculture committee heard this as it toured the country.

I have a question for my colleague. These concerns are very real and have existed for a while. They transcend all party lines. How can we get our government working on behalf of those people, especially in rural Canada, and what leading role should the federal government play to ensure that we have a first class railway system in Canada?

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7:15 p.m.

NDP

Libby Davies Vancouver East, BC

Mr. Speaker, I would like to thank the NDP member or British Columbia Southern Interior whom I mentioned earlier in my speech. He is our agriculture critic on that committee. He is a relatively new member of Parliament, but he has done an incredible job of connecting with farmers and producers across this country and bringing forward their concerns in Parliament. I am very glad to have his question today because he has been a very strong advocate for the farming community.

He raises a very good question. He used the example of the pulp mill in Castlegar. It seems incredible that a successful business feels it is not getting the service from the provider, in this case CPR, and that it has to line up its own cars. I would think businesses would have enough to do in just taking care of business, but they have to keep knocking on the door of the service provider and asking whether anybody cares about them or is it that only the biggest customers get the attention.

This gets to the very heart of the matter that our railway system and the operation of it have so incredibly diminished. We had this dream of the railway linking all parts of Canada and yet it has shrunk to this monopoly situation where local businesses, producers and farmers feel that they cannot rely on the infrastructure that is there to do the very basic job.

The member's question is very relevant. What is it that we should be doing? We should be looking at this in a holistic way. We should be looking at it from the point of view of the capacity of the infrastructure. Why are we not increasing our rail service? Why are we allowing a lot of the smaller lines to be closed down? We should be increasing the competition.

This bill, while I believe it is an important step, it is certainly not the whole picture. It is certainly not the solution that the farmers, the producers and the shippers are looking for. I have already mentioned the safety issue. If we had a railway system that operated efficiently and in a safe way, we would see a vastly improved situation. I could cite those two things that need immediate attention by the government if we are to actually address these long-standing concerns that are being put forward by the member for British Columbia Southern Interior.

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7:20 p.m.

Conservative

Blaine Calkins Wetaskiwin, AB

Mr. Speaker, I noticed in her speech that the member talked about the rail system being a monopoly. I would like to ask her if she believes it is a monopoly or an oligopoly which is actually a consortium. I believe the term she is looking for is oligopoly, but when she said monopoly, in going after this monopoly and all the power that it has, it made me think of the hypocrisy of the NDP in supporting the Canadian Wheat Board which of course is a true monopoly, not an oligopoly. I would ask her to reconcile that.

If the member and her colleague from British Columbia Southern Interior are so concerned about the shipping of goods from western Canada, why is it the NDP did not support the budget which has billions of dollars in infrastructure for the Asia-Pacific gateway? The hypocrisy of the discussion in the speech and the actions that the NDP show in the House makes me wonder if the member has any credibility at all in discussing this issue.

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7:20 p.m.

NDP

Libby Davies Vancouver East, BC

Mr. Speaker, maybe the member was not here at the beginning of my remarks, but I think I did point out that the railway transportation environment in Canada is a duopoly. There is a new term for him to consider and add to his vocabulary.

Obviously the issue here is that we do not have competition. We have a highly restrictive system that is hurting local producers, farmers and shippers. Supposedly this bill is an attempt to help alleviate the result of that kind of monopoly hold. Those are some of the reasons we would support the bill.

I would love to spend another day, and maybe we will be here another few days, debating the gateway. I am from British Columbia and that is something I have looked at a lot, the B.C. government's gateway proposal as well as the federal government's gateway proposal. There might be a line here or there in the federal budget that is supportable, but I can say that in the NDP, we felt not a shadow of a doubt in casting our negative vote on that budget, because that budget failed Canadians on so many levels, whether they are farmers, producers, the homeless, students trying to get into post-secondary education or families seeking child care. I could go on with a very long list.

However, on the gateway proposal, one of the things that really bothered me in the budget is that any new infrastructure money has to be subject to a P3. We are talking about the privatization of this country's infrastructure. I could go on and on.

We do have credibility here. We do know what we are talking about. We actually look at legislation on its merits. That is actually why we are supporting this bill. There is enough here for us to say we support this in principle. We will look to improve it at committee.

I will say that the budget got a failing grade not only from us, but from all the provinces, from British Columbia right across the country because of the Atlantic accord and the failure of the equalization payments.

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7:25 p.m.

Conservative

The Acting Speaker Royal Galipeau

The hon. member for Sault Ste. Marie has the floor, with the understanding that there are two minutes left for both the question and the answer.

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7:25 p.m.

NDP

Tony Martin Sault Ste. Marie, ON

Mr. Speaker, I noted that my colleague from British Columbia spoke to that particular area. In my area of the province of Ontario, we have a challenge where our economy is concerned, where travel is concerned, for all kinds of things. Rail would make a huge difference and yet what we have is so limited.

We have a short line between Sault Ste. Marie and Hearst that is owned by CN, that has had its schedule reduced this summer. There are tourist operators up and down that line. There are cottagers and communities that are served by that service. They are really upset.

There is no passenger service at all for a 300 kilometre stretch between Sault Ste. Marie and Sudbury, and yet hundreds of people every year, seniors in particular, and we have a high population of seniors in Sault Ste. Marie, travel from my community to Sudbury for health care services.

I am wondering if there is anything in this bill that would give my constituents any satisfaction that this bill will be in any way helpful.

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7:25 p.m.

Conservative

The Acting Speaker Royal Galipeau

The hon. member for Vancouver East should know that her colleague has left her 40 seconds.