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

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

Mr. Speaker, I am pleased to have the opportunity to join my colleagues in speaking to Bill C-52.

Because I represent a rural region, this issue is very important to me and my constituents. I thank my colleagues who spoke before me and who have done a good job of highlighting these very important aspects.

If the bill is enacted as it now stands, it will 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 fulfill its service obligations to the shipper.

Bill C-52 also provides for the creation of an arbitration process to establish the terms of such a contract, if the railway company and the shipper are unable to agree on a fair and equitable agreement after lengthy negotiation.

The bill comes in response to numerous pleas from shippers all over Canada and the hard work and unflagging efforts of my colleague from Trinity—Spadina, whom I would also like to congratulate.

After years of discussion, through both the panel of experts and consultations with stakeholders, and after my colleague’s bill was introduced last year, the Conservatives realized they had a duty to present this bill, at last. It is an attempt to respond to the complaints from rail shipping services customers who are being offered poor service by the biggest companies, which have a virtual monopoly over the market.

It is really high time that this government examined the problems in this situation, because the difficulties experienced by shippers everywhere in Canada are quite real and have a direct impact on the economy, particularly in rural regions.

In Canada, as several of my colleagues have said already, over 70% of freight is shipped by rail. However, a study of rail shipping services shows that 80% of shippers are dissatisfied with the services they receive. This is probably because 80% of the commitments the big companies made to them were not honoured. Clearly there is a problem and it is time for the government to take action.

Here we have the rough outline of a bill; there is still much to be done.

At present, the situation is hard on the shippers. Rail freight customers have trouble obtaining fair and reliable service. Some customers cannot even obtain contracts with a major railway. Some with contracts have other difficulties, such as serious delays, the insufficient number of railcars available to transport all the goods their industry requires, or the countless interruptions in service that decrease their profits and may eventually result in lost jobs.

The fact that shippers often do not have a choice of carrier is also a serious problem. They have access to CN or CP, but not always to both. Those who have a choice between the two companies still have to pay too much, especially small businesses in rural ridings. Such small businesses often are just getting by and then have to pay these fees. That makes it very hard for them.

The situation I have described affects many sectors of the economy, including natural resources, agriculture and forestry. To a large extent, these industries produce goods for export, but they are at a great disadvantage because of the poor quality of the rail services they depend on.

The cost of services, the major gaps in the rail network and the way the system operates are all detrimental to Canada's overall competitive position on the world's markets, in addition to causing job losses and costing our economy hundreds of millions of dollars.

The most seriously affected industries are found mainly in the rural areas of the Canadian west, and in British Columbia, Quebec and Ontario. It is a widespread problem and will affect thousands of people across the country. They need the government to act quickly and they need legislation that goes further than Bill C-52 does currently.

I think of my riding, Portneuf—Jacques-Cartier, where a number of large businesses employ thousands of people all over the area. Although they are located far from the major urban centres, they are served by rail lines—for freight, at least.

I think of the many small and medium-sized businesses all across my riding, and some large firms as well, such as Alcoa in Deschambault-Grondines, Ciment Québec in Saint-Basile or Graymont in Saint-Marc-des-Carrières.

At one time, the Bowater plant in Donnacona was served by a rail freight line. Now, unfortunately, the business has shut down. It has declared bankruptcy and limited the former workers' access to pensions. That is another matter we can debate at another time, I hope.

As I said, these businesses represent a large part of my riding's economic activity. They need good-quality, reliable rail services in order to plan their freight shipments, to be efficient, to grow and to contribute to economic growth and development in the region.

I also think about the farmers who depend on railways to ship their produce all across the country. I think about the forestry industry. which has been such an important part of the economy throughout the region, particularly in Saint-Raymond de Portneuf, Sainte-Brigitte-de-Laval, Lac Beauport and Stoneham-et-Tewkesbury. This industry has been neglected by the government and, on top of that, suffers from the problems affecting the railway network.

As I mentioned, Bill C-52 is a step in the right direction. It has some good elements in it. This is why I will be supporting it at second reading, so it will be sent to committee where it can be considered and improved.

Among other things, some consideration must be given to the safeguards that Bill C-52 sets out. These safeguards will not cover existing contracts between shippers and railways, which will leave many clients with no recourse. A few shippers will be able to benefit from certain safeguards when they negotiate their new contracts, but all the others that have already signed contracts with the big companies will have to endure the unfair treatment that already exists. They will have very few options, just the very limited ones available now.

In addition, the arbitration process set out in Bill C-52 must also be given further consideration. The process is very limited and is likely to be prohibitively expensive for the shippers. They will not necessarily be able to go all the way to the end of the process and defend themselves against big corporations, which often have many more resources. This aspect of the bill must therefore be re-examined.

Another troubling element is the fact that Bill C-52 totally ignores the issue of the high rates that shippers are charged by transportation companies. This has been one of the most important demands by shippers for years now. As I mentioned, they have to deal with a virtual monopoly, and sometimes even with a real monopoly because they have no options, aside from one of the two main railway companies in their area. Small shippers and small companies that need railway services have practically no bargaining power. They have to accept the rates they are charged without being able to fight back against the railways. This issue has been ignored by this government for many years now. It is still ignored in the bill that is before us today at second reading. I hope the Conservatives will support the amendments that the NDP will be putting forward, because it is high time that action was taken.

Canada’s trade deficit is increasing. If I am not mistaken, it was $2 billion in November. We are losing ground on international markets, but the Conservatives continue to drag their feet when it comes to rail transportation. We need to go beyond Bill C-52. We need to protect our shippers, and we must also provide our country with a genuine nation-wide strategy for rail transportation, both for passenger and for freight transportation.

In my riding, only one municipality has rail service: the municipality of Rivière-à-Pierre. It is located in the northwestern corner of the riding, on the rail line that goes to Saguenay–Lac-Saint-Jean. These trains provide services primarily to hunters who go out into the wild and enjoy nature up there. There are very few passengers. The government must take action.

Let us start with Bill C-52, but let us go further and develop a real strategy for the railways.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, I have mixed feelings about Bill C-52. This is difficult because I want to encourage our rail services and I support the bill. However, there are significant gaps not addressed by the legislation that absolutely need to be brought forward. In committee we will try to make some needed improvements to the bill.

My colleague from Trinity—Spadina consulted several experts, including exporters, and many of them brought up the issue of price. Absent from Bill C-52 is the important and unregulated discrepancy in rail fees, for example, between CP and CN. Why are existing discrepancies not addressed in the bill? Rail freight transportation must be more efficient and effective. It needs to provide reliable and sustainable services. Unregulated rail fees are another aspect to look into and this can be done at committee.

Trains move goods and people. Trains are a key mode of transportation for Canadians in the 21st century. I myself try to travel between my riding of Notre-Dame-de-Grâce—Lachine and Ottawa by train as much as possible.

Rail freight transportation provides a service to our Canadian farmers and producers who ship their goods to market by train. This mode of transportation is essential to Canada's economic development, but does it currently benefit our farmers, producers and our Canadian shippers' associations as much as it benefits CN and CP? Does it benefit public transportation as much as it supports commercial interests?

A look at balance sheets and recent decisions at CP and CN show that these companies are run for their shareholders, not for the users of public transportation or small family businesses that rely on rail freight transportation. This decision was a choice, a choice made to serve shareholders and profits over customers. We have seen this before and we know this leads to poor quality services.

The Coalition of Rail Shippers has been stating for years that it receives poor quality services from CN and CP because of this pricing issue, and they are priority clients. Listen to the private shippers. They tell us that CN dictates the market. CN is the largest player in Canadian rail freight transportation. According to a report by the Coalition of Rail Shippers presented at the Canadian maritime conference in 2010, “CN and CPR together control 94% of the market by revenue”.

This market lacks competition, innovation and regulation. This is not the way to support Canada's economy or to encourage Canadian success. It is important that Bill C-52 gives freight shippers the right to enter into service agreements with railway companies and establish an arbitration process in the event of a dispute. This is what freight shippers told us they needed.

Rail shipping is the backbone of the Canadian economy. Transport Canada estimates that over 70% of all goods shipped over land go by train. The reason is easy to understand. In our very big country, rail shipping is often in bulk and it would be difficult to ship these large quantities by truck. Shipping by boat, which is sometimes more economical, is not available everywhere for obvious reasons.

Canada was built by train and the railway is a vital link between faraway communities on a vast land.

I would like to talk about an activity that I did in my riding. I organized a screening of a movie called Rocky Mountain Express. Its filmmaker is based in my riding. About 100 of us watched this wonderful movie, which talks about the history of the train in Canada and how it built the west of Canada. It was amazing. It really showed us how our country was based on rail.

We might be surprised by the poor quality of rail shipping services in Canada right now. The Conservative government is not the only one responsible for this situation, but it is guilty of inaction on this file. Day in and day out the Conservative government claims to work for the Canadian economy, but Canadian businesses are suffering from this unreliable service, the result of which is hundreds of millions of dollars in economic losses every year. This affects a broad range of industries, especially agriculture, forestry and mining.

The rail freight service review found that 80% of rail shippers are dissatisfied with the services provided by rail carriers. This is 80% of loyal customers. Unreliable service and high prices continue to hurt rail customers. This issue is not addressed in Bill C-52. We, the official opposition, will continue to push for fair pricing for all shippers, prices that are in line with the services received from carriers.

That is something we do not see in Bill C-52, which says that agreements governed by the new law would be made only with new customers and new contracts. Therefore, anyone who has been using the services for years, and who is a long-standing loyal customer, would not have access to the rules that Bill C-52 seeks to put in place. Clearly, there is room for improvement. We could make these improvements in committee if the government would be open enough to come to the table and participate in meaningful discussions and listen to the best suggestions to get the best bill possible.

I would like to come back to the fact that 80% of customers are dissatisfied. Something had to be done and something still urgently needs to be done, but the Conservatives' inaction has been going on for years. Why have the Conservatives taken so long to do something?

Here is what I think may be happening. First, rail freight customers are often farmers or mining companies. These customers have to deal with large railways that have a virtual monopoly over rail transport. In most regions of the country, shippers cannot choose a rail transportation company because they have access to only one or the other. Even in cases where the two railway companies are present, the competition struggles to play the role it should and to influence the basic economic principle of supply and demand.

Why do we need to intervene now and legislate? Why can the parties involved not come to an agreement themselves? In all likelihood, CN and CP benefit from the tacit support of the Conservative government and, in that context, they are not at all prepared to make real concessions. The result is that rail freight customers, the shippers, are not satisfied with rail freight services. Therefore, they have asked the government to take action and to introduce legislation that would require CN and CP to reach agreements on the level of service provided to shippers. After years of empty words, the Conservatives are now being forced to act as a result of pressure from the shipping community and the NDP.

Under duress, the Conservatives finally introduced a bill designed to solve some of these problems after the NDP critic's bill was introduced last spring. That bill, which was entitled the rail customer protection act, was much clearer and covered all customers.

The government is using half measures and here are some examples. The protective measures do not cover existing contracts between shippers and rail transport companies. The bill offers only a limited arbitration process for unsuccessful negotiations of new contracts. The arbitration is available only for shippers who are negotiating new contracts, instead of providing fast and reliable help for all shippers. Bill C-52 would cover only new service level agreements, not those that already exist. Furthermore, the fines mentioned in Bill C-52 would go to the government and not to the shippers.

We could talk all day about the amount of these fines, which seem a bit weak to me for such big companies. The ability to interact, discuss and negotiate is undermined when the fines go into the government's pocket, which supports what I said earlier, that CN and CP probably feel as if the Conservative government is in their corner. The Conservatives simply do not give Canada's rail network the attention it deserves.

The House resumed from February 4 consideration of the motion that Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), be read the second time and referred to a committee.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Yes, I have a plan, Mr. Speaker.

This afternoon, we will continue today's NDP opposition day.

Tomorrow, we should finish the second reading debate on Bill C-52, Fair Rail Freight Service Act. Then, we will resume the second reading debate on Bill C-48, Technical Tax Amendments Act, 2012.

Before question period on Monday and Tuesday, the House will debate third reading of Bill C-42, Enhancing Royal Canadian Mounted Police Accountability Act. After question period those days, we will turn to second reading of Bill C-51, Safer Witnesses Act.

On Wednesday, we will debate second reading of Bill S-12, the incorporation by reference in regulations act. I do not expect that this bill, which responds to views of the Standing Joint Committee for the Scrutiny of Regulations, would need a lot of House time. I hope we can deal with it quickly. We could then turn to report stage and possible third reading of Bill S-7, the combating terrorism act.

Next Thursday shall be the fourth allotted day, which I understand will see the Liberals choosing our topic of debate.

On Friday, we will resume any unfinished debates on the bills we just mentioned, or we could also consider dealing with any of the many bills dealing with aboriginal issues. That being raised as a concern, we have Bill S-2 dealing with matrimonial property; we have another bill dealing with safe water for first nations; and we have another bill dealing with fair elections for first nations. On all of these bills we would welcome the support of the official opposition. We have not had that to date, but if we do, we can deal with them very quickly on that day. I would be delighted to do that. I will await with interest the response from the NDP.

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

Mr. Wells, do you have any comments on C-52?

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

I'd like to thank you all for making your presentations and sharing your experience with us at the committee. I think it's really important to talk with people who have different points of views, and it's nice to talk with you.

It seems to be a common thread. It was mentioned a few times that the farm is getting to be a weak link in the chain. I know when I've met with farmers and hung out in their kitchens, they talked about the changes to AgriStability and how they were worried that there was no consultation. It's something I hear a lot in my riding and when I visit farmers elsewhere too. It's something we hear more and more often. It's something that kind of makes me nervous.

We're here, and in a few years, 40 years, we're going to have a massive population to feed, and we have to be very responsible in how we do it. I think this conversation is very pertinent.

I have a question. Transport is something we're studying and debating now in the House. I was wondering if you can comment on Bill C-52. Do you have any comments or suggestions on that, Mr. Rosaasen?

Fair Rail Freight Service Act

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, rail freight customers, from farmers to mining companies, are suffering because railway companies have a virtual monopoly when it comes to the vital rail lines that Canadians need to get goods to market.

In most parts of the country shippers cannot choose between rail services because they only have access to either CN or CP. Even in the few places where both rail companies provide access, one is usually priced out of the market, leaving the shipper with no real choice.

Shippers routinely suffer from service disruptions, delays and experience all kinds of examples of non-reliable performance by CN and CP. Deliveries and pickups are not done on time or are skipped completely. Frequently the number of ordered railcars is not matched by the delivered number of railcars and sometimes cars are badly damaged.

When a shipper contracts a specific number of railcars, that shipper needs to know those cars will be available. Anything other than this kind of reliability is bad business and bad management. Unfortunately, we know that 80% of the service commitments for agricultural rail customers are not met by rail companies.

After years of talking, the Conservatives have finally tabled legislation to address a number of key rail freight customer grievances after years of inferior service by the big rail companies. Bill C-52 is a step forward, but is far from a perfect solution.

Key demands from the shipping community have, quite simply, not been addressed. Bill C-52 would also create loopholes because of its ambiguous language. The Conservative language is weak. Its protective measures do not cover existing contracts between shippers and rail companies and offers only a narrow, costly arbitration process for failed negotiations for new contracts. Key demands like the shippers' call to include penalties for rail companies in service agreements, performance standards and an easily accessible conflict resolution process were ignored.

While NDP members will support this legislation, we will also push for amendments at the committee stage to protect shippers from the abuse of market power through the right to comprehensive service agreements and conflict resolution processes.

Rail transport is the backbone of Canada's economy, with 70% of all surface goods shipped by rail. It is crucial to make rail freight services work for both rail companies and shippers. We cannot take the importance of the railroad for granted.

It is also critical to note that current pricing for rail freight services is also damaging Canada's shippers. Bill C-52 explicitly excludes pricing, despite the calls from all parts of the shipping community to address the pricing regime. This has a significant impact on Canada's trade deficit, which is, by the way, ballooning. It reached almost $2 billion in November alone. We cannot afford to lose even more ground when it comes to global competitiveness for Canada's products.

A broad range of industries are affected by the situation created by the virtual monopoly of current rail service providers. I have already mentioned agriculture, but we must not forget other key industries like forestry and mining as well as chemical and automotive businesses. Many of the goods produced by these industries are destined for export.

Lacklustre rail services are hurting Canada's exporters' ability to compete in global markets. For example, soybeans from Argentina enjoy a competitive advantage in markets like Japan and China because they are delivered faster and more punctually than soybeans from Canada, despite the fact that the total distance that needs to be covered is significantly shorter for products from Canada.

Rail freight is not only central to Canada's economy; we also need strong rail freight services to take trucks off the road and tackle greenhouse gas emissions. While the overall share of surface transport for goods remains high for rail, frustrated companies switch to trucking where possible and the environment loses.

Rail freight is only one aspect where the Conservatives are slow to act. From new rail safety measures to cuts at VIA Rail and blocking the introduction of high-speed rail in Canada, Conservatives do not give Canada's rail network the attention it deserves.

The bill has taken a long time to come to the House. For years, shippers have been unhappy but no concrete action was taken by the Conservatives. Since 2007 they employed a talk it out and wait tactic, starting with the promise of an expert panel review.

The rail freight service review started in 2008. The independent panel tabled its final report in early 2011. Half a year later in the fall of 2011, the Conservatives initiated a mediation process that did not yield any results. Presumably with the tacit backing from the Conservative government, CN and CP were unwilling to make any meaningful concessions. The mediation process, led by retired Conservative politician and University of Calgary chancellor Jim Dinning, failed. Dinning released his report in June 2012 and the Minister of Transport promised government legislation on the topic to be tabled in the fall.

Parallel to the end of the mediation process, fortunately, the member for Trinity—Spadina tabled private member's Bill C-441, the rail customer protection act, in June 2012. The private member's bill by the member for Trinity—Spadina, coupled with advocacy work from the shipping community, put pressure on the minister to follow up on his promise to actually table legislation. However, CN undertook a massive lobbying effort last year, first to prevent any effective bill, then to have it watered down. Dozens of documented visits to government offices and a media campaign show the determination of CN to keep the status quo.

Rail customers have banded together now and are organized in the Coalition of Rail Shippers. The coalition is a loose and informal entity, but it wants something positive for its industry. It wants something positive for the people who produce the goods, who create the wealth in this country, the men and women who do the work to make this country tick and be productive.

Shippers are having a hard time getting fair and reliable freight service, and that is simply unacceptable. We can and should do better for those that rely on our rail system. Our manufacturers, farmers and resource industries depend on our rail system. If rail were made more fair and affordable, consumers would also see an advantage.

This is a country that emerged as a strong, independent nation because of the accessibility of our railways. Let us not abandon those who would continue to build our Canada.

[Alexandrine Latendresse, NDP, Louis-Saint-Laurent, QC]

Mr. Speaker, I would like to thank the hon. member for Winnipeg North for his question. That is the reason we decided to support this bill. Despite it all, we think that we have to go in that direction.

Like him, we agree that many amendments should be adopted in committee. We therefore want Bill C-52 to go to committee and for the amendments proposed by his party and ours to be seriously considered and possibly adopted.

I am fully prepared to be hopeful and optimistic. However, statistically speaking, if we look at the number of bills that have been amended in committee since the Conservatives got a majority, chances are not in our favour. Still, we think it is important to continue in that direction.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I appreciate the comments, but not all of them, especially at the tail end. I like to think that the Liberal Party has done exceptionally well in supporting our rail line industry.

To highlight that particular fact, I would go to the member for Wascana, who has been a long-time advocate, as I indicated earlier, someone who has been raising this issue for the last couple of years in particular, since 2007: the stakeholders.

Many of the stakeholders came forward and said we needed to bring in some sort of legislation that would enable a fair playing field between the shippers and the rail providers, CP and CN. That is what we are focusing our attention on, because there is an imbalance of power.

Having said that, we recognize that Bill C-52 is but a small step forward. I argued earlier, and will repeat it now, that we are hoping the government will be receptive to a number of amendments to the legislation once it gets to committee stage, thereby allowing a fair playing field so our shippers can feel comfortable knowing that their car will be there when it is supposed to be, that the quality of the car will not take away from the product once it gets to the market. Those are the type of assurances they want.

I wonder if the member might want to focus some of her response on the fact that it is absolutely, critically important that the government amend this legislation when it goes to committee. Does she not agree with that?

[Alexandrine Latendresse, NDP, Louis-Saint-Laurent, QC]

Mr. Speaker, I am here today to speak to Bill C-52, which would amend rail transportation legislation.

It really surprised me that I could find something to be angry about in a rail transportation bill. Perhaps "angry" is a bit strong. Exasperated may be a better word.

What could I find so exasperating in an attempt to provide recourse for unsatisfied users of rail shipping services? It is very simple. It is as though the government is pretending to fix the problem to give the illusion that it is taking action. Members will notice that I said "exasperating" and not "surprising", since this is becoming a trend.

Bill C-52 is another example of the Conservative government's chronic mismanagement. Rail transportation fuels Canada's economy. Of all the countries in the world, Canada is one that was built by the railway. The railway was behind every aspect of our growth.

The quality of rail infrastructure still has a direct impact on Canada's entire economy today. This is not news to the government; it knows that.

Usually, the Conservative government—as patriotic as ever—would defend our businesses' access to the rail system. Nearly 150 years ago, at the start of our Confederation's growth, it was the country's lifeblood. It was an almost heroic era when Canada dreamt of defying the world.

That was the 19th century. While the situation is quite different today, it is easy to explain. Rail companies are extremely prosperous and make ridiculous profits. And that is understandable because without them, Canada would be paralyzed and would have almost no economy.

A crucial detail that I should point out, even though it may be useless to do so, is that there are only two rail companies in Canada. The minister spoke of a “duopoly” when describing the situation, and that was fine in the first hour of discussion. But I do not like that term because “duo” means “together”, not just “two”. And that is the crux of the issue.

The ridiculous profits I mentioned keep piling up. Let us face it, there really is no competition. These two companies share all of Canada's rail transportation business and more, and they always have. These are two major, historic Canadian companies, if we can still call them Canadian now that they have been privatized.

That is the government's only motivation: do not upset the large corporations that are raking in huge profits. If any disputes arise between those companies and the small shippers, let us give the companies the power to shut them up quickly. Some would even say with nickels and dimes.

One might speak out and say that it is counter productive, that it is irrational to do that. Yes, that is true, but this would be forgetting that, first and foremost, these people, the government and the railway companies, know each other and talk to one another. These people are perhaps not exactly in collusion, but they definitely share certain sympathies. Yes, they are sympathetic to one another.

In addition, in the intellectual shackles of puritanism, which is the basis of the entire Conservative approach, it is clear that the fittest gets his power directly from God and must not be opposed. Success comes from God almighty. Put that all together and there you have the inspiration for Bill C-52 and for everything else, of course.

Here is what bothers me about the result, Bill C-52. I already know how the Conservatives will respond: “The economic recovery is too fragile. We must not make any waves. We have to ensure that we have everything going for us. We cannot do anything to compromise the railways' efficiency, not for the measly crumbs, not for a company worth, at worst, $100,000.”

After all, we are not reinventing ourselves. These people are not likely to engage in such deep reflection now in the middle of February.

This is the same old story. After dragging its feet for so long, now the government is stubbornly defending a characteristically weak and contemptuous bill. Let us rename it: Bill C-52, an act that says that railway companies can break any contract they like for $100,000, and be done with it. What a bargain.

Rail lines are real structures that result in exchanges and economic benefits that are just as real. There is a direct impact at all levels of economic life. If remote shippers can no longer rely on the two national companies, they might not exist at all. If shippers are neglected, they and their communities are not being allowed to participate in the country's development.

All paths starting on the margins lead to the centre. Coming from a government that claims it will leave no stone unturned to achieve prosperity, it is rather strange. For people who take every opportunity to proclaim to the world that supporting the right is the best way to ensure the well-being of business, it is more than revealing.

Is that the Conservative government's great recovery plan for outlying regions? Yes, undoubtedly. Bill C-52 is striking proof. Develop resources, process them, but do not try to sell them because all the railway cars are taken. This is more proof that there is no plan and that this will have to wait, again. However, be happy, there are a lot of people lined up to talk to the government and you can chat with them. There is the manufacturing sector, my entire generation and all aboriginal peoples of Canada. You will surely find something to talk about to pass the time.

I would like to acknowledge the work my colleague from Trinity—Spadina has done on the issue before us today. I say "colleague" because that is how we refer to each other here, even though I would prefer to use a word that better represents the respect I have for her. She not only wants to do everything, she can do everything. If the official opposition transport critic says that she has met with all of the stakeholders, it means that she has met with all of the stakeholders, even the ones who were hiding. And if she says that a clear majority does not like anything in this bill, it means that there is damning and incontrovertible evidence.

The government can pull all kinds of adjectives out of the Oxford English Dictionary to defend itself, evade the issue and have us believe it worked very hard to restore balance, but no one is listening. That is what I find so exasperating. I hope I am being clear. I find the gaps in logic between what this government claims it is doing and what it is actually doing appalling. The urgent need to fix the problems with the rail companies was a perfect opportunity for the overconfident Conservative government to show that it could do its job. And what happens? It is the first to jump into bed with the rail companies. Nothing gets in the way of love, not even having the lights out.

When Canada has a problem, it would make sense to look elsewhere to see if other countries have found solutions, not to copy them, but to at least draw some inspiration from them. We do not live in a vacuum. And I mean that in a geographic sense, because intellectually speaking, it is obvious that the other side has sucked people in with their empty rhetoric.

Over the past 50 or so years in Canada, the concern that we used to have for our rail system has all but faded. When passenger rail travel became less common, trains and the incredible rail system that stretches like fingers across the country no longer captured our imagination as they once did. The superhuman effort that rallied half a continent quickly died. Yet trains in Europe are flourishing. How often have I heard Quebeckers talk about travelling in Europe and how astounded they were by the quality of rail infrastructure in the European Union?

The pride that you feel is overwhelming when you arrive at Berlin's central station and see “Bombardier” in huge, white letters in the middle of the large window. But you quickly see the unbelievable difference between the European trains that Bombardier builds and the antiquated trains we have here because there is no political will.

The European Union will stop at nothing to ensure that its rail system, which is a huge tangled web of railways that it inherited from the national systems of 27—soon to be 28—countries, is the most competitive in the world. Europe understands our own historical example better than we do ourselves. Without an outstanding, competitive rail system, our country would almost not exist. Bill C-52 may look like a simple legal adjustment concerning a situation that the public can quietly neglect. In fact, quite the opposite is true: it is the government that is neglecting it. When blood flow is cut off to an organ, it dries up and dies. And nolens volens, the rest of the organism will die along with it. That may be a somewhat silly and dramatic image, but it is fair to a certain extent.

In closing, a country is like a house and Canada is like a house built on a beautiful, huge plot of land. It is a land of dreams. We can build little out buildings, create gardens and build a chicken coop. The house itself, which is already huge, could easily be improved, since we have the wood and the carpenters needed to do so. When the NDP has the last word in the affairs of the house, we will work hard to make this house, which we all share, more comfortable, more manageable and even more beautiful. We will add new rooms for children and grandparents, as well as a library and bicycle storage.

For years the Liberals spent their time changing the carpets and arguing about what to call the house, and the Conservatives boarded up the windows because it was too drafty and heating is too expensive. You have to spend money to make money. The right-wing faction should understand that.

The Conservatives need to create jobs in rail transportation instead of allowing themselves to be wooed by the rail companies who have everything to gain by seducing them. In any case, that has already happened, and here is the result of their six years of efforts: Bill C-52.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I must say, I have rather mixed feelings as I begin my speech, because I feel like I have become an expert in the moonwalk, that dance move that makes you look like you are going forward when in fact you are going backwards.

When I first learned of the problems in the area of rail freight transportation, I had the impression, given the response and the private member's bill introduced by my colleague from Trinity—Spadina, that we were moving in the right direction. Today, however, when I see what is in Bill C-52, I really feel like we are taking a step backwards. Nevertheless, there are enough things in this bill that we do agree with for us to support it at second reading. In committee, we will try to make some changes and some significant improvements.

It is important to note that in 1995, there was a re-engineering and modernization movement that led to the privatization of CN and CP. That is no secret. A neo-liberal ideology prevailed over an objective analysis of the facts demonstrating the importance of this service, which is crucial to Canada's economic development. Although railways remain publicly owned in many countries, here in Canada, it was decided to go for broke, and since then, we have seen the privatization of profits and the socialization of costs.

Balance sheets and recent decisions relating to public transportation show beyond a doubt that the return paid to shareholders takes precedence over developing business services and moving goods and people. The reason I refer to moving goods and people is that a choice was made to prioritize shipping goods over carrying people, something else that is uniquely Canadian. Canada is one of the rare countries to have made that kind of choice.

I will leave it to my colleagues to imagine the passenger transportation challenges that await us in the years to come given that the coalition of private shippers has been complaining for years about the poor quality of the services they receive, and they are the priority clients.

Rail shipping is the backbone of the Canadian economy. Over 70% of all goods shipped by land go by train. The reason is relatively easy to understand: you do not need a university degree in geography to see that in our country, rail shipping is often bulk, and it would be difficult to replace it with shipping by truck. And shipping by boat, which is sometimes more economical than by train, is not available everywhere, for fairly obvious reasons.

Canada was built by the train, and the railway is a vital link between communities in an enormous country. So we might be surprised at the present state and poor quality of rail shipping services. The Conservative government is not the only one responsible for this situation, but it is guilty of not tackling the problem head on in time to rectify this situation.

Day in and day out, the Conservative government claims to be working for the Canadian economy, but everywhere in the country, businesses are suffering from unreliable service, the result of which is hundreds of millions of dollars in economic losses every year. In addition, poor service leads to higher prices for some goods, chemical fertilizers being one example.

To put it more simply, over 80% of rail shipping services customers are not satisfied with the services provided by rail carriers—in other words, nearly everyone. This is 80% of loyal customers. MPs may have experienced this themselves, as customers of a store or a business. They may have started by getting excellent offers so they would become customers, but as soon as they became regular customers, they were taken for granted. And then their relationship gradually deteriorated and all the benefits were offered to new customers to expand the customer base.

That is something we see in Bill C-52, when it says that agreements governed by the new law will be made only with new customers, new contracts. And so anyone who has been using the services for years, and who is a long-standing loyal customer—if we can talk about loyalty in the case of a virtual monopoly—will not have access to the same rules that Bill C-52 seeks to put in place.

Clearly, there is room for improvement. We could make these improvements in committee if the government would be open enough to come to the table and participate in meaningful discussions and listen to the best suggestions to get the best bill possible.

I would like to come back to the fact that 80% of customers are dissatisfied. Something had to be done and something still urgently needs to be done, but the Conservatives clearly have not done anything because this matter has been dragging on not just for weeks and months but for years.

Why have the Conservatives taken so long to do something? Here is what I think may be happening.

First, rail freight customers are often farmers or mining companies. These customers have to deal with large railways that have a virtual monopoly over rail transport. I spoke about this earlier.

In most regions of the country, shippers cannot choose a rail transportation company because they have access to only one or the other. Even in cases where the two railway companies are present, the competition struggles to play the role it should and to influence the basic economic principle of supply and demand.

Why do we now have to legislate? Why can the stakeholders not come to an agreement among themselves? In all likelihood, CN and CP benefit from the tacit support of the Conservative government and, in that context, they are not at all prepared to make real concessions.

The result, as has been mentioned, is that 80% of rail freight customers—shippers—are not satisfied with rail freight service. So, of course, they have asked the government to take action and to introduce legislation that would require CN and CP to reach agreements on the level of service provided to shippers. After years of empty words, the Conservatives are now being forced to act as a result of pressure from the shipping community and the NDP.

Under duress, the Conservatives finally introduced a bill designed to solve some of these problems after the NDP critic's bill was introduced last spring. That bill, which was entitled the Rail Customer Protection Act, was much clearer and covered all customers.

The government is using half-measures. Quite frankly, although the Conservatives' bill is a step forward, it is a weak step. Here are some reasons: the protective measures do not cover existing contracts between shippers and rail transport companies; the bill offers only a limited arbitration process for unsuccessful negotiations of new contracts; the arbitration is available only for shippers who are negotiating new contracts instead of providing fast and reliable help for all shippers; Bill C-52 will cover only new service level agreements, not those that already exist.

Furthermore, the fines mentioned in Bill C-52 would go to the government and not the shippers. We could talk all night about the amount of these fines, which seem a bit weak to me for such big companies. The ability to interact, discuss and negotiate is undermined when the fines go into the government's pocket, which supports what I was saying earlier that, rightly or wrongly, CN and CP probably feel like the Conservative government is in their corner.

I will move on from what is missing from the bill, since I am running out of time. I will no doubt have an opportunity to speak more to this in committee. I have a short conclusion.

Rail transport is not the only file on which the Conservatives have been dragging their feet. They implemented new railway safety measures. They made cuts to VIA Rail Canada and prevented the introduction of high-speed rail in Canada.

The Conservatives simply do not give Canada's rail network the attention it deserves.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, Bill C-52 is there primarily because of concerns expressed by those individuals and stakeholders in the shipping industry, whether they are in agriculture, forestry, minerals, chemicals, fertilizers, oil and gas or industrial and other types of manufacturing. It is a fairly extensive list of individuals. Small and large businesses have seen this great imbalance that does not favour the shippers. This became apparent to the Liberal Party in 2007, when the stakeholders came forward saying that they needed to see some form of legislation. They came to the table and asked the government to do something.

One could argue that the bill before us today is a very small step, but it is a very important step. The issue is the degree to which the government is going to be prepared to accept amendments to improve the bill so that all members of the House enthusiastically support it. Would the member provide comment on the importance of the government listening to the stakeholders once the bill gets to committee so that we can improve it?

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

Mr. Speaker, I rise today not only as the member for New Westminster—Coquitlam and Port Moody but in my capacity as western economic diversification critic for the NDP.

Like my NDP colleagues, I will also be supporting Bill C-52, an act to amend the Canada Transportation Act, to send the bill to committee for further discussion. We do, however, have serious concerns with the bill as my hon. colleagues before me have pointed out, including the member for Trinity—Spadina, who is the NDP transportation critic. She outlined some of those concerns in her speech earlier.

Rail transport is the backbone of the Canadian economy. More than 70% of all surface goods in Canada are shipped by rail, so we can see how critically important it is to get this right. Eighty per cent of service commitments for agricultural rail customers are not met by rail companies because of issues such as delays, insufficient number of rail cars, inefficiencies and unreliable service. The rail freight service review found that 80% of shippers are not satisfied with the services they receive. Eighty per cent is a significant amount. Over three-quarters of all customers have a concern.

I just want to talk about the importance of rail to my riding of New Westminster—Coquitlam. Specifically I am talking about Port Moody where we are celebrating 100 years of history. Just this weekend I was at a book launch hosted by the Port Moody Heritage Society for Tracks in Time. Obviously the title is in reference to trains and the influence that trains have had on the development of our community and on the west coast, and in fact, of all Canada. The rail system is of critical importance to our community. We celebrate the Golden Spike festival in Port Moody every Canada Day. This just points to how important trains are to our community.

Talking about the importance of trains not only to the community but to the rest of my riding, it is important to focus on the efficiency and the service that trains provide to Coquitlam, Port Moody and of course New Westminster. It is important for the economy not only in my riding but in western Canada and indeed all of the country. It is critical that we look at ways to improve train service in this country.

I want to provide a bit of background. I know other colleagues have commented specifically about what the bill would do and would not do and some of its shortcomings.

Rail freight customers from farmers to mining companies are suffering from the virtual monopoly of power of the railway companies. In most parts of the country shippers cannot choose between rail service providers because they only have access to either CN or CP. Even in a few places where both rail companies provide access, one is virtually priced out of the market, leaving the shipper with no real choice. Shippers routinely suffer from service disruptions, delays and various forms of non-performance by CP and CN. Deliveries and pickups are not done on time or skipped completely. Frequently the number of ordered rail cars is not matched by the delivered rail cars and sometimes cars are damaged.

A broad range of industries are affected by the situation, especially agriculture, forestry and mining. In western Canada these industries play a significant part in the economy. Chemical and automotive businesses in the rest of Canada are also affected.

A large portion of these goods are destined for export. Lacklustre rail services are thus hurting Canadian exporters' abilities to compete in global markets. For example, soybeans from Argentina enjoy a competitive advantage in markets such as Japan and China because they are delivered faster and more punctual than soybeans from Canada, despite the fact that the total distance covered is significantly shorter for products from Canada. For years shippers have been unhappy but no concrete action was taken by the Conservatives. Since 2007 a “talk it out and wait” tactic was employed, starting with the promise of an expert review panel.

The rail freight service review started in 2008. The independent panel tabled its final report in early 2011. Half a year later, in the fall of 2011, the Conservatives initiated a mediation process that did not yield any results. Presumably, with the tacit backing from the Conservative government, CN and CP were unwilling to make any meaningful concessions. The mediation process, led by retired Conservative politician, University of Calgary Chancellor Jim Dinning, failed. Dinning released a report in June 2012.

The Minister of Transport promised government legislation on the topic to be tabled in the fall. Parallel to the end of the mediation process, the member for Trinity—Spadina tabled a private member's bill, Bill C-441, the rail customer protection act, in June 2012. The private member's bill, coupled with advocacy work from the shipping community, put pressure on the minister to follow up on his promise and actually table legislation.

The shipping community is organized in a coalition of rail shippers. The coalition is a loose and rather informal entity. Organizationally this group is attached to the Canadian Industrial Transport Association. The coalition consists of 17 members that represent mining, forestry, agriculture, chemical and manufacturing industries. One of the original 18 members repeatedly has been brought up in the U.S. Senate, both on the floor and in committee without decisive legislation as of yet.

The surface transportation board, a federal body, is working on regulations to address pricing and service issues, while judges have repeatedly supported shippers in court cases. I just wanted to point that out.

What is the NDP are looking for? What can be specific about?

We know farmers and the mining and forestry companies have been hurting for years due to unreliable freight services, without getting any help from Ottawa. To truly address the issue and also to give the NDP leverage in rural areas, the member for Trinity—Spadina has become an advocate for strengthening the shippers' position. She has been very active on this file.

The NDP position is quite simple. We are standing with business and exporters and we are committed to getting them the fair and reliable freight services they deserve. That will have an impact on not only western Canada but on the entire Canadian economy.

The member for Trinity—Spadina has worked on this issue, including forging ties with key industry associations and tabling an NDP bill. One of the goals is to continue to grow those ties with the NDP as the party that stands up for legitimate business interests and pushes back against market power abuses.

While Bill C-52 falls short on a number of stakeholder demands, it is prudent to support the bill as the shipping community is largely content with the legislation. They are also quite desperate to see some legislation address their issues.

The task is now to address the shortcomings and strengthen the bill to the benefit of the shippers and also to promote our involvement with the entire process. That is what we are doing here. We are trying to highlight some of those key issues that need to be worked on at the committee stage.

Bill C-52 will only cover new service agreements, not existing ones. Many shippers will be stuck with unreliable and unfair services, without any conflict resolution process in the case of violations to existing service agreements. Arbitration is only available for shippers that are negotiating new contracts.

Instead of offering quick and reliable help through conflict resolution to shippers, Bill C-52 would give arbitration a narrow scope for a small group of shippers and the outlined arbitration process could end up being too costly for companies like the Canadian Propane Association and others.

I want to finish by letting the House know there are others that support the position we are bringing forward. They are key stakeholders, like agriculture, mining and forestry industry associations, that have been calling for freight legislation for years, for example, Pulse Canada, Grain Growers of Canada, the Forest Product Association of Canada and the Mining Association of Canada.

In conclusion, I want to say that we are in support of it at second reading. The NDP will push for amendments at committee stage to protect shippers from the abuse of market powers through the right to comprehensive service agreements and conflict resolution processes.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

I am influential, as my colleague opposite stated. I will start again from the very beginning because I lost my concentration somewhat.

As I was saying, transportation is an issue I am interested in and something that is also important in my riding. I will talk about agriculture a little later. I talk about it often because it is important to me and it plays a large role in my riding.

First, it is important to state that my party and I support the bill at second reading. We know that 80% of railway users are dissatisfied with the service provided.

It is important to say that some amendments will have to be made in committee. The bill must be improved so that rail transportation really improves in Canada.

After years of discussions, the Conservatives finally introduced a bill in response to a number of complaints from rail customers that received inferior service from the major railway companies for a very long time.

I would like to go back to the speech by my colleague, the member for Chambly—Borduas. Earlier he referred to the railway as part of Canada's heritage and to the sense of belonging that people attach to the railway in Canada. In my opinion and that of the member for Chambly—Borduas, that makes it more important to invest properly in this mode of transport, a fundamentally important one in a country such as Canada, which is very large and sparsely populated.

It is also important to say that everyone must come out a winner: the railways but also rail transport service customers, such as farmers and mining companies, which are often victims of the railways' virtual monopolies. We are talking about service disruptions, delays and disturbances that hurt the agriculture, forest products, mining and manufacturing sectors, which are not compensated for the losses.

A large portion of those goods is intended for export, which is very important for Canada's economy. Those sectors must be able to rely on effective transport in order to export their goods, not to mention the fact that many goods, as in the agricultural sector, are perishable. Producers therefore cannot afford major delays or service disruptions. Their products must be exported immediately.

Shippers have difficulty obtaining fair, reliable rail transport services. Some are not even able to secure contracts with major railway companies, and those that have contracts often suffer long delays or simply do not have enough cars at their disposal.

This entire situation undermines the ability of Canadian exporters to remain competitive in international markets, particularly agricultural products markets, as I said earlier. Farmers already face numerous uncontrollable challenges. Consider weather issues, for example, such as early frosts, excessive rain or too much sun. Farmers already deal with situations that are not easy to handle. That is the case with all farmers in my riding: we never know what will happen with the harvests, whether we will manage to make it to the end or whether everything will go well. The government thus has some responsibility toward these people, who feed Canada's population, and it must assist them, in particular by guaranteeing that their goods are efficiently transported. That is already a first step.

Following years of discussion, expert panels, an attempt at mediation and consultations with stakeholders, the Conservatives ultimately had no choice but to introduce a bill in late 2012, not very long ago.

One reason this bill was introduced was pressure from the official opposition NDP transportation critic, the member for Trinity—Spadina, who does an excellent job on the transportation file. My colleague presented a private member's bill, the Rail Customer Protection Act. The government then finally moved forward with Bill C-52.

For too many years now, farmers and other business owners have been subjected to bad rail service, and Ottawa has not taken action. Bill C-52 is a step in the right direction, but it is far from being perfect, since it does not include some major demands from shippers. I think that its wording is a bit ambiguous, which could create some loopholes. That will have to be considered in committee.

The committee will also have to consider the stakeholders affected by the problems, so it will have to consult farmers, for example, as well as stakeholders from the forestry and mining industries. That would be worthwhile. As I said earlier, 80% of customers are not satisfied with the services. That is a big number. If I had a business and 80% of my customers were not satisfied, I would be on the brink of bankruptcy.

Canadian shippers deserve fair and reliable service. They also deserve to be protected.

Every year, this situation costs the Canadian economy millions of dollars. We are talking about jobs and about goods that are lost or do not make it to the right place. Every day, many industries have to deal with rotting crops, work interruptions in plants and mines, and missing cargo. This is a real problem. Clearly, it hurts shippers and, as I was saying earlier, it hurts our global competitiveness. It costs us jobs.

The current bill is a bit weak.

I have only one minute left. I always get carried away and I did not even get to half of what I wanted to say. That is okay. I will continue quickly.

I find that the bill is a bit weak. It does not necessarily cover existing contracts. That could be something to look at in committee.

I would like to close by saying that 70% of our goods are shipped by rail. That is a good reason to invest properly in this means of transportation and to protect the shippers who use this service so that they have a fair and reliable way of transporting their goods.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I am pleased to speak to Bill C-52. I will be sharing my time with the member for New Westminster—Coquitlam.

Rail transportation is of particular interest in my riding. First of all, I would like to say that my party and I support this bill at second reading.