Bill C-58 (Historical)

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

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

Canada Transportation Act

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

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

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

[Ed Fast, Conservative, Abbotsford, BC]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Lawrence Cannon, Conservative, Minister of Transport]

moved that Bill C-58, An Act to amend the Canada Transportation Act (railway transportation), be read the second time and referred to a committee.

Business of the House

[Karen Redman, Liberal, Kitchener Centre, ON]

Mr. Speaker, I have no objection to the order put forward, I just would like to clarify that the two government bills that will be dealt with are Bill C-42 and Bill C-58, and when they are completed, or at 9 p.m., whichever comes first, we would go directly to the emergency debate.

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, I will be happy to address that in the affirmative in a moment but there is more that we should know about in terms of the business we are doing.

We will continue today with Bill C-42, the quarantine act, Bill C-58, the railway transportation bill and Bill C-21, An Act to amend the Criminal Code and the Firearms Act (non-registration of firearms that are neither prohibited nor restricted).

Tonight we have the emergency debate pursuant to Standing Order 52 that the Speaker has determined should proceed.

On Friday we will call Bill C-33, the income tax bill and Bill C-6, the aeronautics bill.

Next week is got the job done week when the House has completed the nation's business for this spring's session. During the got the job done week we will continue and hopefully complete the business from this week, as well as some new legislation and legislation that will be out of committee or the Senate.

The list of bills that are currently on the order paper, in addition to those I have identified for this week that I would like to see completed by the House before the summer recess are: Senate amendments to Bill C-31, An Act to amend the Canada Elections Act and the Public Service Employment Act.

There are also the following bills: Bill C-32, An Act to amend the Criminal Code (impaired driving) and to make consequential amendments to other Acts; Bill C-44, An Act to amend the Canadian Human Rights Act and Bill C-53, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention).

Another bill includes Bill C-54, An Act to amend the Canada Elections Act (accountability with respect to loans).

By the end of next week, Canadians expect that the Senate will have completed its consideration of budget Bill C-52 without any amendments so that they can relax for the summer with the knowledge that $4.3 billion in the 2006-07 year end measures will be in play.

If there are amendments, we will have to be here in the House to respond and protect measures that might otherwise be lost, such as a $1.5 billion for the Canada ecotrust for clean air and climate change; $600 million for patient wait times guarantees; $400 million for the Canada infoway; $100 million for the CANARIE project to maintain the research broadband network linking Canadian universities and research hospitals; $200 million for protection of endangered spaces; and much more.

Canada Transportation Act

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, even though my presentation will be split in half, with the time approaching 9 o'clock, I will try to get some NDP points across before we terminate this evening. I will come back tomorrow to talk more about Bill C-11. I am not sure that will interest the Conservatives in the room because I have to be critical about this one step forward and two steps back. This is the nature of the way Conservatives tackle transportation policy.

Bill C-11 makes some modest improvements in some areas, and I will come back in a moment to what the Senate has done to diminish those improvements.

At the same time as we are moving forward with C-11 and the Senate amendments, the government is now pushing Bill C-6, which will diminish airline safety in Canada, by handing over responsibility to the companies themselves. Some of these companies will handle it well, while other companies, as testimony very clearly showed, will not handle it in a responsible way. The government, unfortunately, is proceeding along the same path as the Liberals did by diminishing the type of air safety that Canadians want to see. I will have a chance to talk about that issue later.

I will come back to Bill C-11. The bill is disappointing because even though it does make some modest progress in a number of areas, it could have gone much further. The NDP offered up dozens of amendments to strengthen the bill, some of which we were able to get through and some of which were rejected by the Conservatives and Liberals on committee.

The bill provides more honesty around airfares, something for which Canadians have been calling. Canadians are sick and tired of the manipulation they see around airfares and incomplete airfares being advertised. Bill C-11 does provide some modest framework around how airfares can be advertised.

This is one of the elements that was attacked by the other House. It is deplorable to the NDP that even though the provisions were modest, they could have been improved, but we see a step backward as the Senate amendments come back to the House.

There are some provisions in the legislation for shippers. Hopefully, other provisions for shippers will be contained in Bill C-58, which will be coming forward in the House. It is, by no means, as far as the government could have gone, and it is disappointing. We have taken one step forward, yet we see steps back in other areas.

There is finally a process in place for railway noise, and this is very welcome. As we saw under 13 years of Liberal government, nothing was done to address important issues for Canadians. Railways make excessive noise in urban communities.

We heard testimony from Mayor Wayne Wright of my riding of Burnaby—New Westminster. Brian Allen, who is a resident of Westminster Key, is a very strong activist for diminishing railway noise. The citizens of Westminster Key are constantly subjected to excessive railway noise. They provided some valuable input to the committee.

The NDP put forward amendments that would have provided a strict framework for railway companies so they could not make excessive noise in the evening and overnight, particularly when there are shunting yards in the area of the Lower Mainland, away from urban areas, in Port Mann. We offered those amendments after that valuable input from some of the citizens of New Westminster. We were able to incorporate some but not all of those improvements.

We have a step back with the Senate amendments. The Senate wants to take us backward to a time when railway companies could essentially prove reasonableness in their level of noise in urban communities, as opposed to what the transport committee actually came up with, which required railway companies to cause as little noise and vibration as possible.

We had modest improvements. We at least had a process finally in place after many years of the Liberals ignoring the issue. The committee put forward modest improvements, and the NDP wanted to go much further. The modest improvements have been thrown away and now the bill is back in the House.

As parliamentarians, we have to take a stand against those Senate amendments. They water down what were modest improvements in Bill C-11 in necessary areas, areas that we had to attack, areas that Canadians looked for redress for some time, yet they were dealt with only partially.

I believe my time is up for this evening, but I look forward to coming back to this issue tomorrow.

[Lawrence Cannon, Conservative, Minister of Transport]

moved for leave to introduce Bill C-58, An Act to amend the Canada Transportation Act (railway transportation).

(Motions deemed adopted, bill read the first time and printed)