Bill C-52 (Historical)

Fair Rail Freight Service Act

An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration)

This enactment amends the Canada Transportation Act to require a railway company, on a shipper’s request, to make the shipper an offer to enter into a contract respecting the manner in which the railway company must fulfil its service obligations to the shipper. It also creates an arbitration process to establish the terms of such a contract if the shipper and the railway company are unable to agree on them. The enactment also amends provisions related to air transportation to streamline internal processes and certain administrative provisions of that Act.

Fair Rail Freight Service Act

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Mr. Speaker, first, I would like to tell my Conservative colleague that the NDP and I want to have this bill passed, even though it is not perfect.

I consider it a privilege to have spoken today, because it is not often possible to speak, when we are gagged with time allocation motions.

I am grateful that my colleagues and I have been able to speak. It is very important to hear what people have to say. In Ottawa, I like to talk about my riding and about agriculture and forestry and mining companies.

I would therefore like the others to be allowed to speak.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I congratulate my colleague from Chicoutimi—Le Fjord on his excellent speech and for standing up not only for Chicoutimi—Le Fjord, but all of the Saguenay. He does a very good job at representing the greater Saguenay region.

Moreover, unless I am mistaken, the greater Saguenay region will soon be celebrating its 175th anniversary. We can therefore be proud of our member of Parliament. I am very proud of him.

Like him, other colleagues have done an excellent job on the Standing Committee on Transport, Infrastructure and Communities. Unfortunately, the Conservatives chose not to adopt the excellent motions moved by the NDP. Nevertheless, we did a remarkable job in committee. We always bring forward amendments to improve bills.

Unfortunately, the Conservatives are blinded by their ideology, and they do not listen to the experts.

Would my colleague like to share his comments regarding the excellent job the NDP did on the Standing Committee on Transport, Infrastructure and Communities?

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Mr. Speaker, my NDP colleague from Drummond stole my thunder.

The NDP team is doing an excellent job on every committee of the House of Commons.

Indeed, in my speech, I did not have the time to mention all my New Democratic colleagues who are doing an excellent job and are doing their utmost to convince the Conservatives on the other side of the table to adopt good amendments, even though they are not always successful.

I would therefore like to thank the members of the Standing Committee on Transport, Infrastructure and Communities: the member for Trinity—Spadina, the member for Trois-Rivières, the member for Notre-Dame-de-Grâce—Lachine and the member for York South—Weston. They made a valiant attempt to have nine amendments passed to improve the bill.

This evening, Canadians realize that in 2015, they will be able to vote either for the status quo or for a proactive team that wants to improve Canada's rail system.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, earlier, my hon. colleague from Chicoutimi—Le Fjord spoke about how important it is to have legislation that will convince the big rail companies to respect the people who use them: forestry workers, miners, farmers and so on.

He went on to say that the fine was not steep enough to convince the major corporations, CN and CP, which make billions of dollars a year, to respect their clients. Of course, this ruffled the Conservatives’ feathers.

It is important to have good managers, yet on the other side of the House, the Conservatives are very bad managers. They lost track of $3.1 billion earmarked for the fight against terrorism, and they have no record of a $90,000 cheque from their chief of staff, which was used to pay off the debts of senators who are not able to pay their own debts.

I would therefore like to hear why my colleague thinks that it is important to have credible, solid legislation to ensure that rail companies respect their clients.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Mr. Speaker, under the current bill, the fines imposed on CN would only amount to $100,000, which is really too little for a company that makes $2.7 billion.

The CN president even did some lobbying of the Conservatives, and he managed to influence them so they would not increase the fines. We can see that the Conservatives are not on the side of shippers, but are on the side of the rail lobby instead.

[Merv Tweed, Conservative, Brandon—Souris, MB]

Mr. Speaker, I am pleased to rise and put some comments on the record in regard to this bill. I had the opportunity to serve as the chair of the transport committee that listened to most of the presentations, and we certainly listened to the concerns expressed.

Before I begin my comments, I would like to give congratulations to the Minister of Agriculture and Agri-Food and the Minister of Transport. This has not been an easy file. It has been a file where if they do not get it right, they will not get a lot of second chances. They have spent a lot of time working together. They have listened to stakeholders and they have listened to the people who have vested interests in producing a fair deal at the end of the day. This particular bill we are putting forward would address many of the issues that were proposed and put forward by the stakeholders in the negotiations.

I do want to start right off by saying that I support this bill. Particularly in my new role as chair of the agriculture committee, it is one that will benefit the agricultural sector, and also the people I represent in the communities of Brandon and Souris.

The decision to move to a fair rail freight service act was discussed in 2011. It was an act to provide shippers with the right to a service level agreement and a process to establish such agreements when commercial negotiations fail. Many people would ask why this new bill is important. Why it is important to agriculture and to farmers? Like any business, it is one thing to have a great product, which I believe our farmers in Canada have, but it is another to be able to get it to market in a timely and efficient way.

Across Canada, producers and processors export 50% to 85% of their production, and they rely on an efficient and effective rail service to get their products to their customers. Farmers today ship 65% of their soybeans, 70% of their wheat and over 83% of their pulses beyond our borders. Last year alone, Canada reached a new record of exporting $47.7 billion in agricultural food and seafood, with significant increases in key markets, such as China, Hong Kong and Russia.

We are not done. We are on track to increase those export dollars and expand our markets. A full one-third of those exports are driven by Canada's world-class grain industry, which is also a powerful engine of our jobs and our economy and what our government has been all about for the last several years. It brings $15 billion to the farm gate. Jobs and growth depend on exports. An efficient rail service upholds the reputation of our agricultural exporters in foreign markets, and if our buyers are happy with delivery they will come back for more Canadian products rather than moving on to other sources of supply.

Our government remains very focused on trade because it drives one in five jobs across our great country. As part of our government's strategy for economic growth and prosperity, we have been pursuing a very ambitious trade agenda. I suggest to the members opposite that regrettably they were not able to participate in approving the trade agendas we have put forward, but they continue to move Canada forward, particularly our agricultural producers.

In fact, a key part of our economic action plan is the most ambitious trade agenda in Canadian history. Since taking office, we have concluded trade agreements with nine countries and have many more in the hoppers. We recently released the Agriculture and Agri-Food Market Access Report, documenting some of the keys wins we have had on the trade front over the last few years. Those wins include restoring beef access to South Korea, a potential market of $30 million by 2015; expanding access for canola to China, a market worth $1.6 billion; and, just recently, expanding access for our beef to Japan, which will double our market there.

I understand that numbers being put out there sometimes confuse people, but the bottom line is this: our Manitoba producers, our Canadian farmers, our food processors and our economies depend on trade to prosper.

What would the bill do to ensure a more efficient and reliable rail system for farmers? Most importantly, the fair rail freight service act would give shippers new tools to level the playing field in their relationship with the railways. The fundamental change would help to ensure the smooth and uninterrupted delivery of Canadian products to our customers. Agriculture and Agri-Food Canada is backing this commitment with the crop logistics working group, which provides a forum for transportation-related issues. On November 20, 2012, the Minister of Agriculture announced a new mandate for this working group to continue finding efficiencies and driving costs out of the entire food value chain.

We all know that the potential for growth lies beyond our borders in this great country, and our Conservative government continues to work closely with industry to open up new markets while strengthening and expanding our existing trade relationships. We cannot afford to put that business at risk. Canadian grain farmers and grain marketers have sales orders to fill around the world and are heavily dependent on the railways to move their product to market.

I am pleased to note the strong support from industry for this new bill. Stephen Vandervalk, president of the Grain Growers of Canada, said:

This new legislation will go a long way to address our farmers’ shipping needs. We are thrilled to see this legislation moving through Parliament. A lot of hard work has gone into this.

Pulse Canada also stands behind this new legislation. Gord Bacon said:

We're very pleased to see the government taking some action, because we have a long history of wanting to see improvements in the predictability and reliability of rail traffic.

The Keystone Agricultural Producers have expressed their support by stating:

The ability for shippers to acquire service level agreements is something we’ve been requesting for a long time. Reliable rail service is a major concern when we market our grain, so the sooner this passes, the better.

This legislation is a no-brainer. We have both sides at the table. We have both sides in agreement. Rail service disruption damages our entire reputation for exporting into foreign markets. If our buyers are concerned about delivery disruptions, they will soon move on to other sources of supply. We do not want our customers to think twice about buying from Canada. The livelihood of Canadian farm families depends on uninterrupted, timely and efficient rail service. I ask that we act now. I ask that we move forward on the bill as quickly as possible.

I would also like to add a couple more comments from people who have passed them on to me.

Richard Paton, president and CEO of the chemistry association said “...this legislation is critical — not only for our industry’s competitiveness, but for Canada’s overall productivity and prosperity”.

I want to congratulate all parties involved in this. It was a difficult challenge laid before parliamentarians, but also for members of the committees who met to try to hammer out this deal. Mr. Jim Dinning was very effective in creating the groundwork that we needed to come to this. At the end of the day, I believe with the ability to create service agreements, the people who have had issues with rail delivery and rail service in the past will have a way of resolving this.

I want to congratulate the rail companies, the short-lines and all people involved in that transportation industry. They have worked very hard to create an atmosphere where we can grow, where our opportunities will continue to grow, and where service will become the mainstay of western Canada and Canadian deliveries, not only to our markets to the south but to markets around the world.

I encourage all members to support this legislation.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, we have noticed in the northwest of B.C. that because of the system we have established, where there is often a monopoly of service to some of the shippers, that CN, in the case of the people I represent, has been less than forthcoming about getting cars, especially on any of the spur lines. Lumber mills or grain shippers who happen to be slightly off the main line have an incredibly hard time finding a company that is willing to deal with them. There have been a lot of complaints lodged with the Competition Bureau, et cetera, and so on down.

I wonder if my colleague is satisfied that the changes being made here would provide some of those sawmills with service. I am talking about Burns Lake and Fort St. James, and places that are keeping their mills going but just hanging on. The idea that cars do not show up is unacceptable. They are willing shippers. They are willing consumers. They have the money and they have the product to move but they are too small sometimes, it would seem, for CN and these large players. We have afforded them this monopoly in a lot of cases. They do not have access to another way of getting their product to market.

Would this legislation satisfy what these shippers, sawmills and grain shippers are going to need? As he said at the beginning of his remarks, we only get a few chances to get this thing right. We do not look at reforming our rail too often, and it has been wrong for a while, particularly for these types of producers.

I wonder if he has anything in this legislation that would offer those good people a solid sense that they will be able to be viable in today's competitive market.

[Merv Tweed, Conservative, Brandon—Souris, MB]

Mr. Speaker, it is important to note that no matter how big or how small we are in this industry, it is individual producers who ship grain cars. They are reliant on not only agreements but on working arrangements with the rail line companies.

For the shippers and the people who use that service, with the ability to have service agreements and contracts, a commercial deal will always stand up. Lack of service has always been the challenge and the question the shippers have put out there. What do they do when they are shorted? They have no alternative.

Having it in the agreements and having commercial agreements will go a long way toward resolving a lot of those issues, and not only for people in the hon. member's community. I respect that, but we have the same issues and the same situation, and we are trying to resolve them. I think this measure will help.

[Vic Toews, Conservative, Minister of Public Safety]

Mr. Speaker, I want to congratulate the member for Brandon—Souris for the very good work he is doing as the chair of the committee that is examining the bill. He has done a lot of great work over the years. He has worked with both shippers and the railway companies to find a suitable legislative resolution for what are sometimes very difficult problems.

With the demise of the Wheat Board monopoly, which has been quite good for western Canada, producers now have the opportunity to grow more wheat and send out more product.

We are seeing a tremendous resurgence in some of the crops that were not being grown because of the stifling effect of the Wheat Board monopoly, but I am concerned about the smaller shippers mentioned by the member across the way, small grain farmers and others who want to ship their products around the world.

Does the member see a solution for some of the concerns people have raised when it comes to smaller producers and smaller shippers against larger rail companies?

[Merv Tweed, Conservative, Brandon—Souris, MB]

Mr. Speaker, it is important to note that recently producers from western Canada were before the agriculture committee. One of the questions raised was whether they had seen a service level improvement, even without the agreement but with the idea that it is in place and looks to be moving forward. To a person they suggested to us that the shipping, through the west coast particularly, had become better than ever before. We have obviously seen an increase in wheat grown this year, and I think it is because of the freedom of choice that people have.

The fact that agreements can be struck with any individual, any organization or any business suggests that the companies, particularly the rail companies, are very serious about doing business. They got the message loud and clear, and other than a few glitches this winter with weather and other conditions, we have seen the ability to provide service. We have seen them making great efforts to satisfy their market. They know very well that their success depends on getting that product to market in a timely fashion.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Mr. Speaker, I thank the hon. member.

Bill C-52 is a step in the right direction. Nevertheless, the shippers made six recommendations to the committee that were not considered by the Conservatives; none of them were accepted. Yet we know very well that these new agreements will not address contract breaches.

Since there are two main railway companies providing these services, if there is an interruption of service the shippers cannot count on another railway company to transport the goods. That affects their ability to compete on the world market.

How does the hon. member propose to improve this bill, which is really a mess at present?

[Merv Tweed, Conservative, Brandon—Souris, MB]

Mr. Speaker, I have read most of the transcripts of the debate and the discussions that went on in moving this bill forward. A number of organizations, particularly the shippers, came forward and expressed discontent that they did not get it all and that there were other things.

Negotiation is that way. Whenever I go to negotiate, I always want to get more, but at the end of the day, when both sides are a little bit happy and a little bit unhappy, they have probably reached a fairly good compromise.

When we have comments by the leaders in the industry saying that this is a good thing for their suppliers and their people, I suggest that it is a good thing for all Canadians.

[Lynne Yelich, Conservative, Minister of State (Western Economic Diversification)]

Mr. Speaker, I appreciate the opportunity to congratulate the chair of the committee on making sure this legislation is going through smoothly. I would like to remind him how important it is, and I know he knows this, to our own agriculture industry.

I am surprised that there were shippers who were not happy. I read that the president of the Grain Growers of Canada said:

This new legislation will go a long way to address our farmers’ shipping needs. We are thrilled to see this legislation moving through Parliament. A lot of hard work has gone into this.

He added:

We were also happy to see performance standards included in the arbitration process.

I just wondered if the member would like to elaborate a little on what this is doing for our agriculture, especially in landlocked areas such as Saskatchewan and Manitoba, and how important it is to have this for our farmers.

[Merv Tweed, Conservative, Brandon—Souris, MB]

Mr. Speaker, I thank my colleague for the question, but I would suggest that sometimes Manitoba and Saskatchewan are not always landlocked, since they are surrounded by water.

It is interesting, because the whole debate about this rail service agreement was to find a way to satisfy both the shipper and the rail companies. We understand that choices are limited, so the rail companies have to understand that they have to provide good service, while the shippers have to understand that they have obligations to make and commitments to keep in a deal. If either one makes a mistake or creates an impasse, there are legal ways of resolving it and coming to the solution and ways of moving forward without being tied up. Previously they were tied up in courts forever, and it was just a waiting game. Now we have a direct resolution.

I think producers like it. I think shippers like it. I think the rail companies will grow to like it as we move forward. Canadians will benefit from it.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, it is a pleasure to participate in this debate on Bill C-52. During the course of this debate, all sides in the House have said they are glad to see this piece of legislation before the House. At the end of the day, it will probably garner pretty general support.

However, there is indeed disappointment, not just in the House but among a very significant number of those in the shipping community, who had been hoping and working for years—