An Act to amend the Canada Transportation Act (railway transportation)

This bill was last introduced in the 39th Parliament, 1st Session, which ended in October 2007.

Sponsor

Lawrence Cannon  Conservative

Status

Not active, as of June 14, 2007
(This bill did not become law.)

Summary

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

This enactment amends the Canada Transportation Act with respect to railway transportation.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Rail ServicePrivate Members' Business

April 20th, 2015 / 7:25 p.m.
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Liberal

Mark Eyking Liberal Sydney—Victoria, NS

Mr. Speaker, it is a great pleasure for me to rise today to finish the debate on Motion No. 550 at second reading.

I have to thank my colleagues, like the member for Welland, for bringing to our attention that most of the Cheerios eaten in the United States come from Canadian oats, and the member for Cumberland—Colchester—Musquodoboit Valley, where I went to agricultural college, who spoke in favour of my motion, and the NDP member for Berthier—Maskinongé because she does a lot of hard work with farmers at the agricultural committee, and the member for Yellowhead who also made comments tonight.

The motion is that in the opinion of the House the government should take steps to increase the rail service and capacity, to rebalance the system, to increase effectiveness and efficiency in our transportation system, and to address the imbalance of power along the logistics chain. Finally, it is to work together to build a world-class transportation system, which Canadians did many years ago. We have to continue to make this a great country and move our grains to the markets that are looking for them.

The bottom line is that the grain handling and transportation system remains inadequate and with little ability to cope with volume surges and adverse weather, as many of my colleagues said tonight.

Shippers remain captive with no competitive commercial alternatives and no legal recourse when the system fails. Threatened fines to be paid to the government have no real impact and are no substitute for the damages payable directly to affected shippers and farmers.

These systematic issues are putting Canada's reputation as a preferred trading partner at risk and threatening future investment in our country. We saw this when boats were sitting in the bay in Vancouver.

We know that the Minister of Agriculture and Agri-Food has recently returned from Japan where he was trying to do damage control and saying that we are back. We should have been there two years ago to make sure that Japanese boats were not leaving the harbour and going to the United States to pick up grain.

The most recent weekly performance update by the Agriculture Transportation Coalition showed that the total unfilled shipper demand remains at over 23,000 cars, with denied orders and railway cancellations being nearly 10,000 orders. More than 3,700 customer orders, approximately 41% of unfilled orders, have been outstanding for four weeks or longer. This is unacceptable.

These issues began in 2007, starting with former Bill C-58. After many reviews and other pieces of legislation, the problem was not solved. Farmers continue to lose money, estimated at $5 billion a year.

It has also been costly for the national economy and for Canada's reputation, as I mentioned, as a reliable grain supplier. Accountability can only be achieved if performance expectations are well-defined, balanced, measurable, and transparent. Having an efficient and effective logistics system is a critical part of the sector's ability—some have mentioned in the House this evening that the United States has a better system than we do—to maintain and grow high value demand both here at home and abroad.

This system has a unique duty as one of the bedrocks of the Canadian economy. The success of the railways, handlers, and farmers are interconnected. Shippers of all shapes and sizes need equal access if we are to protect Canada's reputation as an exporter and grow our markets.

The system needs to adapt to the increasing growing capacity of Canadian farmers because with global climate change we are growing more and better products with our innovation. The system needs to be able to accommodate small volume crops.

As we heard, we are not getting our oats down to the United States. There is more than just shipping to Vancouver or Thunder Bay. We have to go north and south. We are also shipping quite a bit to Mexico.

To avoid crises, the next version of the Canada Transportation Act needs to ensure more collaboration, clearer consequences, better rewards, more data sharing, and equitable distribution of car allocations.

Since the first reading of the motion in February, I, along with my colleagues from Wascana, Ottawa South, and the member for Winnipeg North have met many prairie farmer groups from across this country here in Ottawa. Also, there were round tables from all of the western provinces. We met with many of them, like the Canadian Agri-Food Trade Alliance, the Agricultural Producers Association of Saskatchewan, the Prairie Oat Growers Association and the Canadian Young Farmers' Forum.

We are consistently being told that there is no equity in the treatment of shipping corridors. Whether it is west, east, north or south, for producer cars or short-line rail operators, the grain handling and transportation system remains non-transparent. The Conservatives will not be renewing the requirements of the CN and CP Rail to transport minimum volumes, which just expired. Farmers will have to wait even longer for results.

Unfortunately, there are no substantial improvements to this bottleneck. However, I sense that we have an agreement here. I sense that all members of this House are in favour of my motion. This is for the grain farmers of Canada. This is for the people around the world who want our grain, and this is for the people and the economy of Canada.

I thank all for the support we have tonight and my colleagues who have joined with me this evening.

February 10th, 2014 / 5 p.m.
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General Manager, Canadian Canola Growers Association

Rick White

We made at least five recommendations under Bill C-58, when the Canada Transportation Act was last open, to accommodate the service level agreement clauses. One of the key ones was to have financial accountability built into it, i.e., contractual arrangements that had financial penalties for both parties, both the shipper and the railway. None of those amendments were made.

Canada Transportation ActGovernment Orders

January 28th, 2008 / 3:30 p.m.
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NDP

Charlie Angus NDP Timmins—James Bay, ON

Mr. Speaker, I am very pleased to rise today to speak on Bill C-8, which people will remember was previously Bill C-58 and which is an act to amend the Canada Transportation Act. We are dealing in this case specifically with railway transportation.

I have already regaled the House with the rich history of my family in that I come from a long line of railway magnates. My great-great-grandfather was John P. McNeil. The “P” did not stand for anything. It was just that every man in the village of Iona was named John so they had to distinguish him from his eight brothers whose first names were all John as well. There were John Roderick, John Francis, John Albert, John Alec and John P. They ran out of names because the Scottish only name people after dead people and there just were not that many dead people in the family.

The great John P. McNeil was a porter on the Sydney Flyer. My grandfather told me that the family did not eat at night until John P. came in. It did not matter how late. The kids would wait out in the hallway for John P. to come in. He would sit down and when he had finished eating, he would say, “McNeil has dined”. That meant the children could eat.

That is actually a tradition that goes back to the 1200s and even before that when the McNeils were on the island of Barra. It was a raiding base for the Vikings. The McNeil, who was the clan chieftain, claimed the right to eat before all the lords of the earth. That is an actual historical fact, not that any of my relatives ever lived in the castle. I think they pounded seaweed on the shore for a living and then were sort of unceremoniously removed from their land and sent to Cape Breton, where they had to find work. Some of them went to the coal mines, but John P. worked on the Sydney Flyer.

Mr. Speaker, I know you are waiting for me to get to the punchline, but I think it all adds to the story.

I do not know if John P. had many great skills, but one of his skills was that he could always tell that a bootlegger was coming into Sydney. When they were coming in on the train, he would say, “A man who has a bottle of whisky in his suitcase always puts that suitcase down with just a little more care than if it was just his long johns”.

Of course there was not enough work for all the McNeils, so they had to move to Ontario and work in the mines. The ones who did not want to work in the mines worked on the railway, the great Temiskaming and Northern Ontario Railway. Part of my long, illustrious history is that my uncles, Andy and John, were porters on the T and NO Railway.

My mother tells the story about their travel along that railway from Timmins to North Bay in the summer. They would load up on the car in Timmins with a ticket that would last them as far as Schumacher, which was about two miles down the road. They would have their sleeping bags and coats. Obviously they were going on a long trip. They were always terrified that someone was going to notice that their ticket was for only two miles, not for 250. My uncles knew everybody on the train and used to travel up and down the train line for free to go stay with the aunts.

I know, Mr. Speaker, that you are wondering what this is all leading to. It speaks to my passion and yours. I am very glad that you are in the chair because of your deep love of history and railway. I know that you will give me a little leeway to sort of draw out what exactly the point of this discourse is.

I would like to move forward now to the 1980s and my own interest in the railway. We are talking about the government and its vision for infrastructure. It is putting in all kinds of effort on the gateways and ports but if people ever travel across this country they have to understand that it is not just the gateways, the ports or the megaprojects that make infrastructure work in this country. It is actually being able to connect them to the various places that makes it work, which of course goes back to my family's history on the railway.

The railway plays an important role in connecting. We have seen over the last number of years how much of the railways have been left. In some parts of the country they are being torn up and there are other areas where we have not built the necessary infrastructure.

As I said, I would like to speak about the 1980s, when a famous Scottish band came to Canada. This is a true story, although I know it sounds like a joke. A Scottish band came to Canada. I think it was called Aztec Camera. The band members landed in Halifax at that great port and then flew to Montreal. They played in Montreal and then drove to Ottawa. They left Ottawa and drove along the great highway. When they got to Toronto they thought, “This is what we always thought North America was”. Then they were told, “Your next gig is in Winnipeg. There is the bus. Now drive to Winnipeg”.

About 16 hours up the highway on the way to Winnipeg, a highway consisting of two lanes of traffic, moose every 10 feet, trees and no lights, the road manager looked at the driver, who was Canadian, and asked him if he could not have picked the Trans-Canada Highway to travel across the country. The driver said they were on the Trans-Canada Highway.

Anyone who has driven across this country knows that long, terrible drive through northern Ontario. Northern Ontario is made up of some of the prettiest country in the world, but Highway 11, which I live on, is in a terrible state. It is the truck transportation route for this entire country. If goods have to be moved west to east, they have to be moved along that little strip of moose pasture that runs between the rocks. People in northern Ontario ask why so many trucks need to be on these two lanes of traffic when the rail line is sitting right there and half the time is empty. That is the issue in northern Ontario.

We need to connect the infrastructure of this country so we do not just have great port plans and great transportation links with our major trading partner, the United States. We need a forward looking plan to ensure that goods coming off container ships from the Far East can be transported across this country in an efficient, economical and environmentally friendly way. The train, of course, takes on an important light.

Our role in Parliament is to look at how to improve the transportation networks of this country. Bill C-8 addresses a number of concerns that have been raised by shippers dependent on railway transportation. Over the years shippers have raised many legitimate concerns about how pricing is done on railways and about access to goods.

They also have raised concerns about the duopoly that exists right now with Canadian Pacific and CN and their ability to basically call the shots for anything that is going to be shipped in certain areas of the country. This financial stranglehold has a major effect on competitiveness and trade.

Many people who ship goods, whether they are agricultural products or products being shipped out of a mine's large bulk operations, are very dependent on the prices they receive from CN or CP for the cost of bulk transportation. Under a duopolistic regime, these shippers have very few alternatives to get their products out.

We know that there are 30 federally regulated railways in Canada, but many rail shippers are still captive shippers who are still dealing with these two big players. We need to look at how we ensure fairness in a system that does not have major competition and a system where it is not practical to bring in competition on these lines.

One of the changes we are looking at is a change to ensure a little fairness in pricing and how pricing is done so shippers get a fair deal, whether they are shipping grain or copper concentrates to ports.

The amendments to the Canada Transportation Act in Bill C-8 would help address some of the shipper concerns about rail service and rates that have been raised time and time again while at the same time providing regulatory stability to the railways to encourage needed investments to keep our exporters and importers competitive in international markets. This is key. We really need to ensure that the railway system maintains a sense of strong commitment to invest.

As Canadians, of course, we want to invest in our railways because they do play such a vital role and they always have, the Brian Mulroney regime notwithstanding.

A number of the amendments brought forward in Bill C-8 were actually developed in concert with shippers who brought their concerns to Parliament.

We are looking at the regulatory impact of the bill. One amendment would remove the requirement for a shipper to prove substantial commercial harm before applying to the agency for certain competitive remedies. That is a fair amendment. It is unlikely to be abused because we are talking about long term customers of the railway.

We also need to allow shippers to jointly apply. Right now they can apply only individually for final offers of arbitration on a common matter. If there are disputes, they could be grouped together and thus would not be drawn out. A ruling could be received fairly quickly.

We need to give the agency the authority to establish charges or the associated terms and conditions that would apply to shippers for the movement of traffic or incidental services.

This also will allow for the suspension of any final offer arbitration process if both parties consent to pursue mediation.

Again, these are reasonable requests that are being brought forward to actually help address these longstanding concerns.

It would also permit the CTA upon the complaint of 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 establish new charges or terms and conditions if it finds those in the tariff to be unreasonable.

Once again, I think these are all fairly straightforward and reasonable.

This would increase the notice period for augmentation in rates for the movement of traffic from 20 to 30 days to ensure that the shippers receive adequate notice of rate increases. Once again, when we are dealing with large bulk transport we need to have some sense of security and some sense of stability in terms of pricing if we are dealing with products.

It would require the railways to publish a list of rail sidings available for the grain producer carloading and to give 60 days' notice before removing such sidings from operation. Once again, if we are going to take out some of that infrastructure that people are dependent on, we have to give the shippers some advance notice so they can begin to make other arrangements.

We also need to ensure that 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.

This is a fairly straightforward and fairly technical bill in which the government is trying to bring in these amendments. As I said, it is to give our shippers some sense of fairness in a market that does not allow very large scale competition. We all know that markets with more competition are generally ones that will favour larger investment and larger use, but certainly with railway, because of the incredible cost of infrastructure and also the history, we have the two big giants. We have always had the two big giants, augmented by many smaller lines and by provincial lines.

In my own region, the Ontario Northland is a provincial line that runs from Hearst. It used to be by rail but now it is by bus. From the Kapuskasing-Cochrane region and actually from Moose Factory the train line runs provincially down south to North Bay, and from North Bay south it becomes one of the CN lines. We are still moving provincial goods along that line. It is still a provincial railway.

It is of paramount importance in our region, because right now if we want to move out any of the goods from the mines, in particular the sulphuric acid cars that are coming out of the Horne smelter in Rouyn-Noranda and the Kidd Creek smelter in Timmins, it is superior by far to move it on the train lines.

These are massive bulk operations, so the shippers need to have some security. As well, we are moving out copper concentrates and zinc concentrates from the Horne smelter in Noranda and also from the Kidd smelter in Timmins. We need some stability in regard to knowing the pricing. As for what is being forwarded in this legislation, even though it is coming in on a provincial line, as I can see from my own region and our dependence on railway traffic, these changes are practical.

Certainly in western Canada the rail lines play an incredible role in the movement of goods and people. As we know, when we are driving across the country and we get to one of those rail sidings when the grain cars are coming along, we can pretty much read from one end of the newspaper to the other before the train has passed.

I am always thrilled to see those train cars come along. I see them coming to the port in Thunder Bay where they end the journey so the freight can then travel by boat. When we see how much can be transferred on those lines, it is truly impressive.

Certainly with the whole move we have seen to the container shipping system, which has actually revolutionized transportation and commercial dealings around the world, we in Canada need to make sure that our railways are in the game and are there with prices that shippers can actually trust so they choose the railway as opposed to simply putting their product onto our overstretched highways.

Whether it is provincial or federal, the investment in highways just has not kept up. In so much of our country, as I have said, we are dealing with two lanes of traffic, except on the busy 401 stretch. Having that massive amount of truck traffic has not been a bonus for our economy. It is costly to the taxpayer because of the impact on roads. We do have a railway system, but we need to ensure that system.

Before I close I will speak a little bit about the whole vision of a national infrastructure plan. As I said, the government is focused on the terminal ports and the gateways for trade, but in order to make trade work in this country we need a vision that says infrastructure and transportation go hand-in-hand. Whether it is the port or whether it is the highway, the two lanes of thin traffic that has to cut through the Canadian Shield carrying the goods, that has to be part of the equation as well.

Infrastructure also goes all the way down to a vision for our municipalities. They are increasingly having to carry the burden of maintaining infrastructure that used to be provincial or federal.

In my little community of Iroquois Falls over 30 kilometres of public highways has just been downloaded and called local roads. There is no base in the taxation to cover off the cost of those roads so they eventually start to deteriorate. It makes it very difficult to attract business to regions when the fundamental infrastructure, whether it is roads, bridges or sewage, begins to deteriorate because the ratepayers, average citizens, are having to pay for it on their water bill or municipal housing bill because there is no provincial or federal commitment to infrastructure.

We have to make infrastructure a priority in the House. The infrastructure deficit being felt across our municipalities right now is affecting regions of the country to maintain a competitive ability to attract business.

I had wanted to speak about infrastructure because railway is part of infrastructure and I will end on that and say that we are very interested in Bill C-8. We think it is a practical bill and the kind of bill that has been brought forward because there have been consultations with many of the shipping and trade associations, including the Canadian Wheat Board. I know that might upset some of my Conservative colleagues but the Canadian Wheat Board certainly felt that there were issues dealing with grain transportation and fairness of price.

We spoke with the Forest Products Association of Canada. We are hauling logs through northern Ontario. I know that in northern Canada rail plays a big part in hauling our wood, our finished products and our logs.

The Canadian Canola Growers Association is in support of this along with the Mining Association of Canada. If are going to do large scale mineral development in this country, at the end of the day we have to ship the products out and rail, by far, is the vehicle of choice to move concentrates or finished products out of mining operations to the ports, particularly the ports on the Pacific right now because the Chinese boom has certainly fuelled a major boom in base metals. We know that is a fact in my region of Sudbury as well as Rouyn-Noranda and Timmins. The railway plays an incredible role in the movement of base metals to serve the expansion in the Far East.

The Western Grain Elevator Association has shown its support for the bill along with Pulse Canada and the Inland Terminal Association of Canada.

At the end of the day, we are talking about some practical amendments to the Transportation Act to ensure fairness of price and that the overall dominance of the market by the two big giants does not come at the expense of the people who need to be able to ship products, who need certainty in price so that they can make long term planning decisions and investments in the economy that will help it continue to grow in the 21st century.

I look forward to seeing the hon. Speaker tonight at the Robbie Burns dinner. I know he apparently has some Scottish background. As one who also has a Scottish background, I wish him all the best, two days after Robbie Burns day.

Canada Transportation ActGovernment Orders

January 28th, 2008 / 1:25 p.m.
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NDP

Pat Martin NDP Winnipeg Centre, MB

Thank you, Mr. Speaker, for the opportunity, on behalf of the NDP caucus, to enter into the debate on Bill C-8, An Act to amend the Canada Transportation Act as it pertains to railways. We should note that it was known as Bill C-58 in the previous Parliament.

On behalf of my colleague from Windsor West, I would like to announce today that we are in support of Bill C-8. We will be supporting it at this stage of debate because we feel that it addresses many of the valid concerns that railway shippers have over the current conditions of the Canada Transportation Act which allow for the potential abuse of market powers by the railways.

We should point out that it is the view of the NDP at least that at the present time the Canadian Pacific Railway and the Canadian National Railway have a virtual duopoly on shipping prices. It is a new word to me. It is not a monopoly but a duopoly. Their financial stranglehold, as it were, is choking Canadian shippers who rely on the rail system to transfer their products from the farm or the mine to the market. Currently, for those producers, transportation costs are their second or third largest cost for these bulk shippers. Under this duopolistic regime, these shippers have no alternative way to transport their products.

Our point is, even though there are more than 30 federally regulated railways in Canada, something I did not know until today, many rail shippers are in fact captive shippers. That is, only a single railway company offers direct service to their area. For these shippers, the rail transportation environment is not naturally competitive and in the absence of adequate legislative measures, a railway company could take advantage of its position as a monopolist in the region. That is why we are welcoming these legislative measures that will afford some protection to these captive shippers.

A monopolist railway would have the incentive to offer lower levels of service at higher prices, we believe, than it would under more competitive market conditions. We welcome this attention to the rail transportation system, if I might, because it brings to light perhaps a larger issue facing Canadians in that Canada as a nation made a strategic mistake 20 or perhaps 30 years ago when it chose to start dismantling our rail transportation system and putting the emphasis of freight on trucks.

If there is anything I have heard you, personally, Mr. Speaker, speak about in the House of Commons, it is the fact that for all kinds of good reasons, for the environment, for the cost factor, to save on fuel, we should all be trying to get the freight off the trucks and put it back on the rails to the largest extent possible so that most of its transportation, most of the distance that is shipped is shipped by rail. That will take a shift in mindset for Canadians. It will take an analysis of our whole transportation infrastructure in this country.

I welcome the opportunity to debate Bill C-8 today on the rail transportation system as it pertains to the Canada Transportation Act, but I also welcome and invite other members of Parliament to join in what could be a very exciting period and opportunity as we revisit the whole transportation infrastructure as an integrated network of transportation that will meet the needs of the 21st century.

In that light, in that context, I draw the attention of members of the House to a report that was very quietly released just a couple of days ago without much fanfare. Hardly anybody noticed, it would seem, and certainly the media did not notice. It is called the “Asia-Pacific Gateway and Corridor Initiative”, put out on behalf of or commissioned by the current Minister of International Trade and Minister for the Pacific Gateway.

In terms of transportation, this is the most important piece of work that I have come across in my 11 years as a member of Parliament because it finally comes to grips with the notion that we made a policy mistake a number of years ago when we got away from railroads and started tearing up the tracks to smaller communities.

God knows that with the experience in western Canada, we have not been nation building. We have been tearing up the tracks. We have been abandoning communities in terms of access to rail transportation.

I should recognize and again credit the authors of this brief 40 page report, one of whom, Mr. Arthur Defehr, is from Winnipeg and the owner of Palliser Furniture, which I believe is in your riding, Mr. Speaker, Mr. Jeff Burghardt and Mr. Richard Turner. This blue chip panel travelled the world and looked at efficient transportation networks, with an emphasis on Asia and on the revolution that occurred in transportation, shipping and freight, with the shipping containers and the new urgent need for Canada to get on board with handling these containers in a more effective, integrated approach.

The Asia-Pacific gateway is obviously looking at the ports and the terminals, but this report reminds us of the need and the potential for inland ports, for distribution terminals far away from the congestion of Vancouver and Prince Rupert. Perhaps, and I put this to the House as a member of Parliament from Winnipeg, a place like Winnipeg would be the ideal location for a great inland port.

Canada Transportation ActGovernment Orders

December 10th, 2007 / 6:20 p.m.
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Bloc

Robert Carrier Bloc Alfred-Pellan, QC

Mr. Speaker, I am pleased to speak to Bill C-8, which has been considered and is at third reading. I must point out, this was formerly Bill C-58, before Parliament was prorogued and the bill was at second reading. Committee work has continued during this session and we are now at the third reading stage.

The main purpose of this bill is to clarify the Canada 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's grain producers and shippers.

In order to make it clear for those who are currently watching us debate this bill, I think it is important to list the main aspects of it.

First, one of the purposes of the bill is to remove the requirement for the Canadian Transportation Agency to be satisfied that a shipper would suffer substantial commercial harm before it grants a remedy, as it is an unwanted barrier to regulatory remedies.

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

Third, the bill allows for the suspension of any final offer arbitration process, if both parties consent to pursue mediation.

Fourth, the bill permits the Agency, upon 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 to be unreasonable.

Fifth, the bill increases 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.

Sixth, the bill requires railways to publish a list of rail sidings available for grain producer car loadings and to give 60 days notice before removing such sidings from operation.

And finally, the bill ensures—

Canada Transportation ActGovernment Orders

December 10th, 2007 / 5:55 p.m.
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Liberal

Joe Volpe Liberal Eglinton—Lawrence, ON

Mr. Speaker, I thank the House for giving me the opportunity to voice the position of the Liberal Party, the former Government of Canada, on this bill.

I want to thank the parliamentary secretary for having had the elegance of thought to acknowledge that this bill was presented by the government of which I was a member and which saw another reincarnation as Bill C-58.

I think other members of both parties are probably equally thankful that the bill has seen its way not only through this House but also through committee. Witness, of course, the fact that report stage went through without comment and that we received, to all intents and purposes, the unanimous consent of all members of this House so that the bill could receive its third and final reading, be voted upon, be sent to the Senate, and be proclaimed.

Why would something like that happen? All members of Parliament have a special interest in ensuring that there is a rebalancing of the relationship between the railway companies and the shippers, be they large or small. More than anything else, I think that members of Parliament, at least from my party, the Liberal Party, the official opposition, has always looked for a balance in the relationship between those who need a particular service and those who provide that service.

The parliamentary secretary used the words “to reintroduce balance”. I thank him for thinking in terms of what needed to be done, and that is to restructure the relationship that had started to develop in a counterproductive way between the railway companies and the shippers. He noted in establishing that interest of balance that all the shippers want this and he is probably right.

Those who came before committee, those who lobbied him, that lobbied me, and that lobbied the Bloc, all said exactly the same thing. They all said that it was time that the relationship that has evolved between them needs to have the Government of Canada, through the agency, establish a relationship that would regenerate the competitiveness of the shipping industry and all those who buy our products.

What he really meant, I guess, is that without this bill we could see the competitiveness of many of our producing companies and those industries, be they agricultural, lumber, or mining, suffer at the hands of the negative impacts of the monopoly behaviour that had been established by the two monopolies in the railway industry that essentially put the shippers at their mercy.

It was not always this way. Obviously, there have been difficulties between the supplier of the service, the railway companies, and the shippers who need that service in order to get their product to the emerging markets that require Canadian produce and commodities.

What has happened over the passage of time is that the railways, as the parliamentary secretary has indicated, have established their position of predominance over the shippers that they serve. What is the result?

First of all, there has been an inconsistency in the predictability of the service required by the shippers, so that they in turn can provide for their own marketplace, a guarantee that their product will be delivered on time as prescribed by the contractual arrangement between the buyer of that commodity, usually abroad in the Pacific emerging markets, or even in the United States.

Second, that the price that was agreed to initially would suffer as a result of the delay, the ancillary services, and the other penalties that occur as a result of the railways not providing, as agreed, the kinds of services that had been contracted.

We have heard many stories in committee, many anecdotes, that have angered the shippers and, in turn, the small producers that feed into the shipping companies. As I say, whether they are farmers or lumber companies, all of them have faced great difficulties. They could not guarantee a price because they could not guarantee a time of delivery to the markets that they wanted to penetrate or they had in fact already developed.

The kind of relationship that the railways had established and imposed, in fact, upon the very people they purported to serve, proposed to serve and for whom they had made investments to serve had turned out to be counterproductive. It is counterproductive from a Canadian point of view, from a macro Canadian interest point of view, from the point of view of a Canadian economy that needs to grow and provide assurances for all of its markets that it is capable of producing a timely product with timely delivery, and a price that is competitive worldwide.

They have been unable to do that and so the parliamentary secretary calls this the shippers bill. It is more important than that. It is not just a bill that is important for shippers. It is important for the competitiveness of the Canadian economy.

As a result, we see that there are provisions in this bill to ensure that the monopolistic behaviour of the railway companies is moderated to the point that it is capable of delivery and what Canadians, through them, must have. They must have a guarantee of service at a predetermined price and in a timely fashion that will allow for a revenue stream to come back to the shippers and producers, so that they can then access the financing they, in turn, require in order to make investments in the production of said products.

It does not take much in terms of rocket science to appreciate that the bill is not a shippers bill. It is a bill for you, Mr. Speaker, it is a bill for all of us to ensure that which produces great wealth for Canada, that contributes to the positive side of the ledger in international trade is guaranteed.

We cannot put in jeopardy either our producers or shippers, the very people, the very production systems, the very industries that ensure that we will be able to generate wealth. We cannot put them in a precarious position and at the mercy of those who deliver their product from point A to point B.

That is absolutely crucial because now we are entering into the area of the viability of Canada's infrastructure. Given the great distances between not only our people but the source of those products and commodities and the markets, we need to be able to have an infrastructure that is reliable.

That does not mean simply having a road that is paved. It does not simply mean having a railway track that functions without incidents or accidents on as frequent a basis as we have seen. No, it means that we need to have that type of infrastructure function in an efficient and economic fashion that continues to regenerate the business which makes its existence mandatory.

What do we do with a bill like this one? As I said earlier, it received the support of all members of Parliament in committee and, I dare say, will receive the support of all members of Parliament in the House, unless, of course, some in the NDP decide that they want to filibuster.

They will receive the support of Canadians everywhere because, in effect, what will transpire is a new infrastructure of legislation to govern the mandates given to the railway companies and to the shippers as stewards of Canada's natural resource wealth, a wealth that needs to be materialized, realized and brought to fruition in foreign markets, so that Canadians can say, yes, this wealth will be distributed for the good of all citizens, one and all.

Mr. Speaker, the bill, as you already noted at second reading, was examined by members of the committee on your behalf very thoroughly, and I might add that, subsequent to the debate such as it was, there was no need to amend the bill.

Imagine, no need to amend the bill that saw its genesis in 2005 with the then Liberal administration, saw its regeneration again as Bill C-58 last May, and is now again before the House as Bill C-8 with not a change, not a comma, not a semicolon, not a capital at the beginning of a sentence, nothing.

Why? Because it has been a bill that has been thoroughly researched. The consultation has taken place with all of the stakeholders and even the railways have not objected as strenuously as one might expect from those who are compelled to do something with which they are, at least in the recent past, not familiar and that is equitable behaviour. But they see the wisdom of the legislation.

We will see that certain mechanisms in this bill, those clauses that ensure the balance is regenerated back between the shippers and the railway companies, are at the core of everything. When things are balanced out, everyone realizes that fairness is the basis for any relationship that develops as a result. What is fair? What is fair, of course, is that shippers contract to have their product taken from point A to a port where the railway companies will deliver the cars required or that product to be picked up at a time contracted so that everybody's expenses are diminished. That is fair.

Therefore, this bill says we are not going to dictate at which time, which day and under what circumstances said number of cars are going to be delivered, but if shippers contract to deliver said number of cars on said day at such and such a time, then railways must deliver and if they do not, there are commercial consequences in the appropriate court.

One might say, well one might say we would go to court anyway. Well, no, not when David is facing Goliath. The government has accepted the will of Parliament and we have decided no more David and Goliath relationship. We are going to ensure that the shippers are adequately protected in this unbalanced relationship.

If there is a price agreed, there shall be no changes to those prices unless companies have given at least a 30 day notice of same. We have seen this: prices subject to change without notice. That is good for those who benefit from that, but it is not good for those who project their business plan on the basis of a guaranteed price down the road. The railways have to give at least a 30 day notice that prices are going to be changed while still delivering the service which they have contracted to deliver.

It sound fair. The parliamentary secretary says that it is reintroducing balance. That is a backhanded way of saying the other guys have been taking an unfair advantage of a situation. Is that being critical? It should be. What else does it say?

My colleagues from the Bloc will recall that we had some discussion about ancillary services. What are they? In one instance, the railroad said that it had six points to consider. Another one, a shipper, pointed out that there are something like 30 to 60 items that are added on to a price.

One of our colleagues on committee said that it sounded a little bit like going in to buy a car, but after we have contracted the price the dealer says, by the way, if we want a motor it costs this much more, and if we want tires on every wheel, it costs this much more and so on. By the time we are finished, we might well be paying twice as much for the car as what we initially contracted.

Therefore, there is transparency of cost. There is transparency of the final price for the product that is being delivered, not necessarily by the shippers, because they already have to do that with their producers and the people over at the ports where they are going to deliver the material. It is something that the railways must be able to guarantee their shippers.

I think the minister agrees, because he put that into the bill. However, we need to make sure people understand that this is what balancing the relationship between railways and shippers is really all about. It is ensuring that no one takes undue advantage of a relationship of power that has developed over time.

As I said, the ultimate beneficiaries of course will be the Canadian public and the Canadian marketplace. If nothing else, it will mean that producers will get their product to market at a time when the market thinks it is appropriate to receive it.

It was not that long ago that in another capacity I was dealing with business people from China. We talked about buying Canadian product,and in particular, agricultural product. Their complaint was not so much that the Canadian product was not of exceptional quality. They really do enjoy Canadian quality. It was not so much that the price was not right, because of course it was.

However, they said, “What is the use of us buying good quality at the right price if we cannot get it to our market?” If our railways cannot deliver their product to the port of Vancouver or Prince Rupert in a timely fashion, what is the purpose of them putting their ships out off the port, wasting time, costing them money and redoubling the expectation of the price they needed to pay in the first place?

Under those circumstances, it does not do them any good to buy Canadian product. They might as well look for it some place else, they said, not because the product is not any good, not because it does not get delivered to port, but because it does not get delivered when they need it.

Therefore, if there is one criticism about all this, it is not that the bill itself will not be capable of delivering what it purports to deliver, but it highlights the importance of having an infrastructure program that includes this relationship as well as the physical infrastructure that must be put in place and which guarantees that the fruition we expect from this bill will be brought to bear and materialize down the road.

Whether it is in the Pacific gateway, as we have come to know the development of an infrastructure for delivery outside of Canadian borders out west, whether it is an Atlantic gateway, in the event that we have minerals and other products that need to go through the Great Lakes and out through the Maritimes, or whether it is in fact the gateway at the central part of the continent through Ontario, Quebec and the Great Lakes, we need to have an extension of the bill and the principles which it tries to address through the physical infrastructure that can only result in the continued growth of the Canadian economy.

As I said earlier, the bill does not punish anybody. The bill is designed to bring parties together so that the wealth of Canada, which contributes to the positive side of the foreign relations ledger in foreign trade, is an opportunity to be realized to its maximum.

I know that all members of this party, the official opposition, will vote in support of this bill at third reading for all of those principles that I have so humbly put forward. I know that the government is going to be supportive of this. I think even my good colleagues from the Bloc are going to be delighted to support it. All other good members may, but I urge all Canadians to get behind this bill.

Canada Transportation ActGovernment Orders

December 10th, 2007 / 5:40 p.m.
See context

Fort McMurray—Athabasca Alberta

Conservative

Brian Jean ConservativeParliamentary Secretary to the Minister of Transport

Mr. Speaker, Bill C-8 is the third and final bill amending the Canada Transportation Act. Two previous bills, one on international bridges and tunnels and other provisions of the act, were passed in the previous session.

The Canada Transportation Act is the legislative framework that, among other things, regulates the economic activities of the railways, in particular services and rates. While the act generally relies on market forces, there are a number of shipper protection provisions to address the potential abuse of market power by the railways.

I remind all members that Bill C-8 is extremely important to shippers. I am sure that many of us in the House today have heard how important the bill is.

Many members have undoubtedly heard many complaints from coast to coast about railway service and rates over the last few years. Bill C-8 strengthens the shippers' provisions in the act. By doing so, it improves shippers' leverage when they negotiate with railways, which contribute to better service and lower rates.

Bill C-8 is great news for Canada. Over time it is hoped that this will also improve the relationships between shippers and railways.

I also wish to remind members that Bill C-8 is the result of extensive consultations, dating back to the statutory review of the Canada Transportation Act that took place in 2000-01. This provided an opportunity for shippers to develop a very strong consensus in support of the bill. In fact, a couple of the members of the Standing Committee on Transport, Infrastructure and Communities, on which I sit, commented on how unique it was to see such a strong, solid consensus from an industry sector such as the shippers in this case.

I ask members to keep this in mind during third reading debate. Shippers like the bill. They want it to be passed as soon as possible. Let us not disappoint them.

The bill is also important to railways and their investors because it gives them certainty. It gives them regulatory stability and they know this. Providing regulatory stability will improve the investment climate and facilitate investments by the railways and their networks, equipment and crews so they can maintain and even expand their operations.

Canada is a trading nation and railways are important to our future growth in our economy. This in turn will help shippers compete in domestic, continental and international markets. It will also facilitate the achievement of government objectives to improve the transportation gateways in corridors in western, central and eastern Canada.

What the government is doing is making this an even stronger trading nation, ensuring we have all the inventory and assets necessary to become that strong nation.

When asked at committee stage whether Bill C-8 would cause the railways to cancel any investment plans, Mr. Cliff Mackay, president of the Railway Association of Canada, replied:

The short answer is no, we will invest. We need to invest. It's part of our business. It's very important.

I believe Bill C-8 re-balances the regulatory framework in an appropriate manner. Shippers are clearly looking forward to the new provisions. At the same time, however, there should not be a significant impact on railway investments. The bill is necessary for our future, and the government is going to pass it.

During the consultative process in the summer of 2006, the minister encouraged the railways to look at potential commercial solutions to address the concerns of shippers. The intention was that improved commercial mechanisms would complement amendments to the shipper provisions.

The railways discussed a commercial dispute resolution proposal with shippers. For some period of time, we heard at committee that they discussed this. Good progress was made, but discussions eventually broke down as both sides could not find a solution that was satisfactory to both sides.

The government is hopeful that the discussions will resume once the bill is passed and sets a framework for those. An effective commercial dispute resolution process is preferable to regulated remedies. A commercial approach would be more expeditious, less costly and less confrontational and better for long term relations.

I will briefly discuss the main provisions in the bill that have been endorsed by the committee.

Under the existing section 27 of the act, the agency must be satisfied that a shipper would suffer “substantial commercial harm” before granting a remedy.

Shippers have long objected to this test. As members can imagine, it can be quite onerous. The railways argue that this test is consistent with the commercial approach reflected throughout the act and have pointed out that based on agency decisions to date, the provision has not prevented shippers from accessing remedies. The government concurs with shippers that the substantial harm test is not required.

It is a serious matter for a shipper to seek a remedy under the Canada Transportation Act.

First, it can have an adverse impact on a shipper's relationship with a carrier. Many shippers across the country only have one carrier, one railroad to deal with, and this relationship is very important to them.

Second, pursuing a regulatory remedy can often be extremely expensive. For small farmers, independent operators, it is almost impossible in some instances to afford or even to launch such a discussion.

The test itself is unwarranted and is being dropped under Bill C-8, great news for shippers.

The bill also contains a new provision that would allow shippers to complain to the agency if they were not satisfied with railway charges or the conditions associated with such charges, other than freight rates. The principal remedy for freight rates will continue to be final offer arbitration. The charges I refer to include what are often referred to as ancillary charges such as fees levied for cleaning or storing cars.

The new provision would also deal with such charges as well as some other charges related to the movement of traffic, such as demurrage. Demurrage is a payment incurred when a shipper takes too long to unload or load a car. Sometimes these circumstances happen as a result of something beyond their control.

The agency will have the authority to review complaints about such charges and to order a railway to revise the charge or so stated conditions if the agency finds them to be unreasonable. These charges have become an issue with shippers over the past few years and shippers are very pleased that the Conservative government has introduced an effective measure to address them.

The last major element of Bill C-8 is the introduction of group final offer arbitration, commonly referred to as group FOA. The existing final offer arbitration provision is one of the more popular remedies with shippers. A shipper can apply for final offer arbitration if the shipper is not satisfied with the railway's freight rates or associated conditions.

Under the process, the shipper and railway each submit their final offer to the arbitrator. The arbitrator must select either one or the other and is not allowed to change or modify either of the final offers. Imagine what that would lead to. It encourages the two parties to be fair and reasonable, which is most important, or else they lose the arbitration itself. The process often leads to a negotiated settlement and that would be good news as well.

Bill C-8 would allow a group of shippers to apply for final offer arbitration subject to three main conditions.

First, the agency must be satisfied that the group attempted to mediate the matter with the railway first. This is to encourage a commercial solution if at all possible, and would be in the best interests of the Canadian shipping industry.

Second, in addition, the matter must be common to all the shippers.

Third, they must make a joint offer, the terms of which apply to all of them.

The concept of commonality in terms of both the matter and the offer is essential to group final offer arbitration. Otherwise it simply would not work and we would all be wasting our time. In this case it will be and it is again great news for shippers around the country.

The former Bill C-58, which was reinstated as Bill C-8, was tabled on May 30 of this year. At that time, the minister announced there would be a review of railway service. This would commence within 30 days after the bill itself has passed.

It is important to note that shippers strongly endorse the proposed review and look forward to it. The review will focus on solutions to railway service issues, including commercial solutions. Transport Canada officials have had some preliminary discussions with shippers on the terms of reference for this study. More consultations will take place before recommendations are submitted to the minister and before any final decision is made, again, great news for Canadians.

There is a widespread support for Bill CC-8 among all political parties. As I mentioned, the former Bill C-58 was tabled in the House on May 30 of this year. Second reading debate was concluded in one day, on June 14. It moved very quickly, with all party support for the most part of all clauses of the bill, before the session was prorogued.

The Standing Committee on Transport, Infrastructure and Communities heard witnesses at three meetings last month. The witnesses included the minister, the railways and the shippers. We have heard from stakeholders.

The committee heard a clear desire for the bill to be passed expeditiously without amendments. I have seen many emails and have had many phone calls from shippers across the country. They want the bill passed as quickly as possible.

The standing committee was able to conclude clause-by-clause review in less than 30 minutes. The committee approved one technical amendment to clarify that the new power being given to the agency to address complaints about railway charges would not apply to freight rates. In essence, it was simply an amendment to ensure and to clarify that we would have less litigation.

The bill is extremely important to shippers from coast to coast to coast from all types of industry. They have been waiting for results since 2001. The statutory review of the act was completed in 2001.

The bill would also provide regulatory stability sought by the railways. This is good news for Canadians because we are a trading nation. The economy of Canadians is tightly woven with the success of our shipping from coast to coast.

The standing committee dealt with the bill very quickly. I want to personally thank all members of the standing committee for their efficient review of the bill.

I now urge the House and all members to get behind the bill and to pass it as quickly as possible so Canadian shippers and manufacturers can rely on the great work of the House.

November 29th, 2007 / 9:35 a.m.
See context

Chairman, Canadian Industrial Transportation Association, Coalition of Rail Shippers

Robert Ballantyne

I can't remember how many people there were. There must have been about 80 or 90 people in this meeting, from both the government side and the shippers.

We came to a consensus in the dialogue with Transport Canada and a representative from the minister's staff as well. As a result of that, the government brought forth a proposal that was largely something that the shippers liked.

They did their consultation in series, I guess, rather than in parallel, with the railways. After they talked to the shippers, they discussed it with the railways, who were very unhappy with what they saw.

The CEOs of the two big railways organized a meeting with the minister, and they attempted to stall any further legislative action by offering a commercial dispute resolution process. That was kind of interesting, because the only time they'd ever done that, as far as I know, was when they were faced with legislation they didn't like. So that delayed the whole process through the summer of 2006.

Their first offer on CDR was only if the shippers decided that they would forgo any change in the legislation. The shippers basically said “No, that's not a condition we'll live with, but we're certainly prepared to talk to you about CDR.”

We spent the better part of the year talking to them about that, and as the minister said to you last week, I guess it was, those negotiations weren't successful.

CN and CP have subsequently put up their own versions of their commercial dispute resolution on their websites. To the best of my knowledge, no shipper has taken that up. I noticed that, in the discussion with the railways on Tuesday, they were very careful not to indicate whether any shipper had or hadn't taken them up on that.

Anyway, that went on. There was dialogue, and so on, with the minister's office and with Transport Canada. It finally led to Bill C-58, which, as I said earlier, didn't give the shipper community everything they wanted, but it's a good start, and we support the bill as written.

November 27th, 2007 / 9:35 a.m.
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Bloc

Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC

Mr. Shannon, in fact, my colleague asked the minister's representative if there have been fewer disputes between the shippers and yourselves since Bills C-58 and C-8 have come to us for consideration. We are told no, there are the same number of disputes and unresolved situations.

This means that, even with a bill, you still cannot come to a friendly understanding on independent cases. That was our question. Are there fewer disputes brought to arbitration? No. There are just as many.

The fact that a bill has been tabled does not prevent you from keeping your monopoly. It is difficult for us to believe you. You tell us that there will be a meeting this afternoon in order to settle the dispute. But it is five past noon. It is too late. We are going to pass the bill. Your monopoly and your short-term profit-driven vision is going to mean that you are going to have to live with this bill.

In the past, I have not seen you trying to come to terms with your clients in any kind of open way.

The products from our regions must be delivered. The opposite is something that we want to avoid. In the last two or three years, we have not felt the will on your part to settle differences in the quickest way. Transport Canada tells us that things remain the same, and that there has been no move forward. You have not tried to settle differences as quickly as possible. Quite the opposite, you have dug in your heels. It is difficult for us to believe you today.

November 27th, 2007 / 9:25 a.m.
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Liberal

Joe Volpe Liberal Eglinton—Lawrence, ON

A lot of things seem to be fairly obvious until I start talking to people on an individual basis. Then they put forward a position that has a certain amount of coherence and would appear to be unassailable, from their perspective, and then along came Bill C-58.

I asked the minister last week, because he used some rather specific language.... When a minister says it's time for us to reintroduce balance into the system, and understanding a little bit of where the government would be coming from—and I don't mean to be partisan here, from my colleagues opposite, but this government is seen to be generally, philosophically speaking, much more favourable to a deregulated system than not—for a minister of a government from that persuasion to say that the balance has to be brought back toward more regulation, would suggest, even to the most cynical person, that maybe some of the issues are a little bit more egregious than people would normally give them credit for being.

November 22nd, 2007 / 10:30 a.m.
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Bloc

Robert Carrier Bloc Alfred-Pellan, QC

You mentioned in your presentation that you prefer commercial resolutions to complaints being made to the Canada Transportation Agency. Since Bill C-58 and this one have been tabled, have you noticed a reduction in the number of complaints registered?

November 22nd, 2007 / 9:15 a.m.
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Pontiac Québec

Conservative

Lawrence Cannon ConservativeMinister of Transport

Thank you very much, Mr. Chairman.

Before I begin my formal remarks, I would like to say that of course I'm happy to be here early in this new session, and I want to congratulate you, as well as the two vice-chairs of the committee, for your election. And to the new members and the veterans, I look forward to working with you all.

I'm pleased to appear before the SCOTIC committee today to discuss Bill C-8, which improves the shipper protection provisions of the Canada Transportation Act. These are the provisions that deal with the potential abuse of market power by the railways.

I have with me today Helena Borges, director general of surface transportation policy, and Alain Langlois,

our legal counsel.

Bill C-8 is the reinstated version of the former Bill C-58, which had been referred to this committee before the previous session of Parliament was dissolved. It is the third and final bill amending the Canada Transportation Act. These bills have all been based on extensive consultations dating back to the statutory review of the CTA that took place in 2000 and 2001.

Bill C-3, the International Bridges and Tunnels Act, received royal assent in February of 2007. As well, Bill C-11, which amended provisions related to the Canadian Transportation Agency, air travel, mergers and acquisitions, rail passenger services, railway noise and the grain revenue cap, received royal assent in June of this year.

Bill C-8, by far, is the shortest of the three bills. However, it is extremely important to rail shippers, the hundreds of companies that use railways to ship their goods. This bill is also important for the growth of international trade and the competitiveness of our economy as we experience unprecedented levels of trade with the Asia Pacific region. The bill will provide the regulatory stability that the railways have been seeking, which will, in turn, ensure that much-needed capacity investments are made on the key trade corridors. Improved capacity will help our railway industry and shippers to remain competitive with their counterparts in the United States.

I am sure that most of you have heard many complaints from shippers about railway service and rates. Shippers are looking for stronger statutory remedies to improve their leverage in negotiations with railways. I had very positive feedback from shippers on the former BillC-58. Shippers expressed strong support for it to be reinstated and passed as quickly as possible.

The railways feel that Bill C-8 reintroduces too much unnecessary regulation. I believe that it establishes a better balance between shippers and railways. Passage of the bill will put an end to the extensive debates that have taken place and will provide both sides with regulatory stability.

When I announced tabling of the former BillC-58 on May 30, 2007, I also indicated that the government would conduct a review of railway service to commence within 30 days after the bill is passed. I will speak more on this later.

These two initiatives, BillC-8plus a review of railway service, fulfill an important commitment I made to shippers: that I would address their concerns about railway service and rates.

The CTA is the legislative framework that regulates the economic activities of the railways. The act generally relies on market forces to govern the relationship between shippers and railways. However, as I noted earlier, there are a number of sections that protect shippers from the potential abuse of market power by the railways.

I want to note that the legislative and policy framework for railways in Canada has worked quite well. CP and CN are among the most efficient railways in the world. They both operate networks in the United States and compete quite successfully against their U.S. counterparts. They don't require any operating subsidies from government. Their financial success means they have the capital funds necessary to maintain and expand their infrastructure and to acquire new equipment.

While the framework has worked well, it's not perfect. Transport Canada officials have heard increasing complaints over the last few years about poor railway service and high freight rates. I have heard many similar complaints in my capacity as minister. Also, I know that many members of the previous committee heard from shippers and others, even when the former Bill C-11 was being reviewed by the committee and the House.

These complaints may stem from the strong performance of the Canadian economy and the fact that the supply of transportation services, including rail freight services, has been quite tight relative to demand throughout North America. Railways are of critical importance to many Canadian shippers in domestic, continental, and international markets, especially to shippers of bulk commodities, who often don't have any practical alternatives. Shippers need reasonable access to efficient and reliable service at fair rates.

I believe the time has come to rebalance the legislative framework in favour of shippers.

During the consultative process in the summer of 2006, I encouraged the railways to develop a commercial solution that would complement amendments to the shipper protection provisions. The railways developed a commercial dispute resolution proposal for discussion with shippers. Significant progress was made. Unfortunately, the two sides were unable to reach agreement. I still support a commercial approach, since it would be more expeditious, less costly, and less confrontational than regulatory remedies.

With your permission, I would like to briefly describe the provisions in the bill.

The existing section 27 of the act requires the agency to be satisfied that the shipper would suffer substantial commercial harm before granting a remedy. Shippers have long objected to this test. It is being dropped under BillC-8.

The bill amends the notice that a railway must give for increasing freight rates from 20 days to 30 days. This will provide more time for shippers to make the necessary adjustments to their shipping plans.

There are two new provisions that deal with shippers' concerns about railway freight rates and ancillary charges. I want to clarify the difference between these two terms, since different remedies apply to each.

I'll deal with freight rates first, since it is the easier concept to understand. Freight rates are simple rates applied to the movement of traffic from point A to point B, for example, for moving wheat from Moose Jaw to Vancouver.

When you look at the various rates and charges levied by railways, the payment for freight rates are the big-ticket item. Now, I want to point out that the intended remedy for freight rates is final offer arbitration.

Aside from the rate application applicable to the movement of traffic, railways levy various other charges. These charges can either be levied in relation to the movement of traffic or in relation to the provision of non-typical railway services provided by the railways.

Now, the best example of a charge that may be imposed by a railway in relation to the movement of traffic is demurrage, which is the amount paid when cars are not loaded or unloaded within the free time provided by the railways. Examples of charges that may be imposed in relation to non-typical railway services provided by a railway include car cleaning, weighing, or storing of the cars.

The amounts paid by shippers for the various charges imposed by a railway are less significant than that amount stemming from the applicable rate for the movement of traffic. However these charges have become an issue with shippers over the last few years. Amongst the concern frequently heard is the fact that these charges, or their associated terms and conditions, are unilaterally established by railways and are often unreasonable in light of their purpose.

With respect to these charges, a new provision is being added that will give the agency the authority, upon complaint by one or more shippers, to review such charges and associated terms and conditions that are contained in a tariff of general application. Now, the agency is also given the authority to order the railway to amend the tariff if it finds the charges or associated terms and conditions to be unreasonable.

The bill contains a number of factors to guide the agency. The agency will determine the period of time any revised tariff will be in effect, provided that such a period does not exceed one year.

Shippers were hoping that the issue of charges could be addressed through changes to the final offer arbitration (FOA) provisions. In our view, the agency review approach is more effective. It provides for a “one-stop shop“ to address complaints. The FOA approach could require a number of FOA applications to accomplish the same thing, because FOA decisions are normally limited to the applicants.

The FOA provision is one of the more popular shipper remedies. A shipper can apply to the agency for FOA if the shipper is not satisfied with the railway's freight rates for the movement of traffic or any of the associated terms and conditions. Under FOA, the railway and shipper each make their final offer, and the arbitrator selects one of them without modification. This encourages the two sides to narrow their differences.

Bill C-8 expands the availability of the FOA remedy to a group of shippers. In order to qualify for group FOA...

Editorial Note: technical difficulties

Canada Transportation ActGovernment Orders

June 14th, 2007 / 6:55 p.m.
See context

NDP

Libby Davies NDP 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.

Canada Transportation ActGovernment Orders

June 14th, 2007 / 6:45 p.m.
See context

Bloc

Mario Laframboise Bloc 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.

Canada Transportation ActGovernment Orders

June 14th, 2007 / 6:40 p.m.
See context

Liberal

Blair Wilson Liberal 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?