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

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, because of a lack of investment in this infrastructure, there are sections of track that have been abandoned and can no longer be restored, unless millions of dollars are invested.

We must therefore continue to maintain the tracks we have left, and especially not make the provinces and municipalities, some of which have populations of only 500, bear the burden alone. They cannot carry the economic burden of restoring railway tracks.

[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.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I thank my hon. colleague for her speech.

She mentioned that it is sometimes difficult to provide adequate service to small communities. She mentioned Saint-Basile. People often confuse the names because there is municipality called Saint-Basile-le-Grand in my riding. It is important to note the name of the municipality. Otherwise one would be talking about her region, the Quebec City region.

A similar situation exists in ridings like mine and hers, where we are close to a large city, but not really part of it. We try to co-operate with CN and act as an intermediary to help these businesses. In my experience, as I said in my speech on this bill, it can be difficult to work with CN or CP. These companies are sometimes indifferent, since they have their monopoly, and they can be a bit stubborn. We are quite willing to work with them to improve the lives of the people affected by rail services.

I wonder if she could tell us a bit about her own experience and if she has found the same thing. Or perhaps she could use this opportunity to remind the House why it is important to encourage CN to have agreements like the ones proposed in this bill.

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

Mr. Speaker, I would like to thank the hon. member for his question and his anecdote about Saint-Basile. I agree that this can cause problems. However, to give hon. members a better idea of where to find Saint-Basile, it is located in Portneuf, not in Quebec City. Perhaps that will help a little the next time.

It is of the utmost importance that we continue to try to work with CN and CP to improve rail service across the country. I cannot stress this enough. In my speech, I mentioned that there are several large companies in my riding that depend on the rail system in the region to ship and receive the materials they need for production.

I am thinking about Alcoa, among others. The manufacturing of aluminum requires the transportation of a huge amount of raw and other materials. Every shipment that arrives late or not at all harms our companies' productivity and Canada's competitiveness on world markets.

This problem must be resolved quickly so that our rural communities, such as those in my riding and in the ridings of many of my colleagues from all parties, can continue to grow, develop and retain jobs. These jobs are extremely important for our rural regions.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, I would like to commend my dear colleague on her speech and on the work she does to represent the people of her riding. I know that she is very active and that she does excellent work.

In my riding, a little investment in the rail system is vital because I represent a rural riding. I find it upsetting that people cannot get into town. This would be a wonderful solution to ensure affordable and environmentally-friendly public transportation.

I am wondering whether the situation is somewhat similar in my colleague's riding.

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

Mr. Speaker, I thank my colleague and would like to return the compliment. I know that he works hard in his riding and it is very much appreciated by his constituents.

Indeed, investment in passenger transportation in rural regions is one aspect of this issue that is unfortunately too often ignored and that should be put at the forefront. As for access to public transportation, my region is comparable to Pontiac. The only public transportation that exists is the bus. The people in this region set it up themselves. They arranged for access to these services, which they did not have before.

There used to be passenger rail service, but that was many years ago. The train goes to one community, which is at least an hour from Quebec City by car. The train is the only way to get to Saguenay. We really need a plan so we can ensure that our rural regions will have access to the same public transportation services available in other areas of the country.

It is similar to the commuter train principle in Montreal. It could be developed in the regions. This would benefit everyone and would revitalize our rural communities, where this is desperately needed. We need to provide this access to the major urban centres. It is environmentally friendly and will help reduce greenhouse gas emissions.

Families will be able to move back to the regions, communities will be rejuvenated and there will be economic growth and development. This measure would benefit the ridings of Pontiac, Portneuf—Jacques-Cartier and others across the country.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, I am very pleased to speak today about a bill to improve the rail transportation system.

On this beautiful snowy day, we are getting back to rail transportation. It is probably the means of transportation that is least affected by the bad weather we are having today.

As I said, I am pleased to speak today about a bill to improve our rail transportation system. I will be clear from the outset: we will support this bill in order to send it to committee.

We will also support it because the majority of shippers are mostly or partially satisfied with it. We are going to respect their position and support this bill.

There is something that sets us apart from the other parties recognized in this House: we listen carefully to the opinions and needs of Canadians and our country's businesses.

We consult them because we want to know what their needs are. That way, we can develop good public policies. We are not jamming measures down the throats of Canadians and businesses. At times, the party in power takes steps and imposes measures that no one wants.

However, my colleagues and I strongly believe that this bill must be amended since it does not fully meet its objective. The best that can be said for this bill is that it is only a half measure.

Many of the demands of shippers were not included in the bill. What is more, the wording is very ambiguous. Some provisions must be examined more thoroughly in committee because they could potentially create loopholes.

The scope of Bill C-52 is also limited since it will cover only new agreements and, unfortunately, will not apply to existing agreements. That is a bit ridiculous. The bill is supposed to help shippers but, in reality, it applies to only a small number of them. Those who already have an agreement will be left to fend for themselves and will be at the mercy of the large CP and CN rail companies.

Shippers will have to make do with low quality services until their contract ends.

How can the Minister of Transport believe that this is a good bill that meets the needs of all shippers if it targets only a small fraction of existing agreements?

Certain shippers wanted to tackle the issue of tariffs during the legislative process, but the Conservatives made it clear that they would not address that issue until the next legislative review of the Canada Transportation Act in 2014-15.

In most regions of the country, shippers have no other choice than to use CN and CP. Canada's rail transportation market is basically a quasi-monopoly. Having the dominant position in the market allows the rail companies to charge often exorbitant prices, and shippers are put in a position where they have no choice but to accept the price charged by the rail company. That is what happens when this type of market is not regulated enough.

The goal in committee will be to seek amendments that prevent potential abuse of power by requiring service level agreements between shippers and rail companies.

We also need to establish dispute resolution processes. This bill offers only a limited arbitration process. It is available only for shippers who are in the midst of negotiating new contracts. It will not apply to existing agreements.

Instead of offering fast, reliable dispute resolution for all shippers, as we are asking for, the bill is limited to a small group of shippers. The proposed arbitration process may be too costly for many shippers. The burden of proof may be unfair if they have to prove that they are in need of services from the railway.

We would also like to see tougher penalties included in the agreements in relation to service levels, in order to compensate shippers for service disruptions, damage and loss of productivity.

As it stands now, the bill provides for penalties of up to $100,000, which would be paid to the federal government rather than to shippers. Since shippers must cover their losses, this would obviously impact the price they charge consumers. We lose on two fronts, because it hurts consumer prices, and it makes Canadian businesses less competitive and less productive in international markets. Considering that CN made about $2.7 billion in profit in 2012, penalties need to be higher to really act as a deterrent.

Let us be very clear: 80% of rail freight customers are currently unhappy with the rail service. They are victims of the near monopoly held by railway companies.

That near monopoly impacts sectors like agriculture, mining, forestry and auto manufacturing. Missing rail cars and other disruptive events result in rotting crops, service disruptions and delays. There is no compensation for all the forest, mining and manufacturing products that are wasted this way, many of which are actually intended for export.

A number of factors disrupt economic activity in these sectors and impede Canada's economic prosperity. These resources and products are largely intended for export. Unfortunately for these industries, those who cause disruptions pay no compensation.

I will continue...

[The Speaker, Conservative, Andrew Scheer]

Order.

I have to interrupt the hon. member, as we must now proceed to statements by members.

After question period, the hon. member will have three minutes left for his remarks.

The House resumed 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.

[The Acting Speaker, Conservative, Barry Devolin]

The hon. member for Châteauguay—Saint-Constant has three minutes left.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, before being interrupted by question period, I was talking about elements that destabilize economic activity in certain industries.

Unfortunately for the industries, they are not compensated by the parties responsible for these disturbances. We are talking here about hundreds of millions of dollars every year. Seventy per cent of our goods are shipped by rail. Considering the $2 billion trade deficit and fierce international competition, we cannot afford to opt for the status quo or for a half measure like the one proposed in Bill C-52. This situation, unfortunately, gives a trade advantage to our competitors around the world. They have the capacity to deliver their goods more rapidly and more punctually, despite the fact that our Canadian products often have a shorter distance to cover.

Unfortunately, for too long now, the government has not wanted to act. The Conservatives have been waiting since 2007 to introduce this bill, and when we take a look at their inaction and the cutbacks they have made over the past few years, we may conclude that they do not understand how important our railway system is.

On our side of the House, through the bill introduced by my colleague from Trinity—Spadina, we have conveyed the shippers’ demands in an attempt to restore the balance in their relationship with the railways. Canada needs a national transportation strategy.

Greater use of rail transportation would have a positive impact on the quality of our environment and would help reduce greenhouse gas emissions significantly. Unfortunately, when shippers cannot obtain services from our only two rail service providers, they will rely even more heavily on trucking, which will have a negative effect on our economic activity from an environmental point of view. We sense a lack of commitment by the Conservatives to our railway network, as evidenced by the lack of investment in railway infrastructures.

We must therefore restore the balance between the railway companies and shippers. Our position is a simple one: we are on the side of businesses and exporters, and we are determined that they should receive the railway services they deserve and that they need. As usual, this government is on the side of big businesses that have a near-monopoly and is not interested in protecting SMEs through a bill that would have given them a leg up in international markets. If the government ultimately gives in, it will be attributable primarily to co-operation among the various industrial associations that banded together to advocate for legislative changes to the Canada Transportation Act.

Therefore, I would ask the government to work with us when the bill is being considered in committee. The competitiveness of our companies and our SMEs depends on an efficient rail transportation system. Canada’s economic vitality also depends on it. Our businesses need good services in order to make investments and create jobs. We will therefore support this bill. We ask that the government co-operate with opposition MPs to improve the bill and contribute to Canada’s solid economic growth.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I thank my colleague from Châteauguay—Saint-Constant for his speech. He showed empathy for the groups who are faced with these difficulties and will feel the impact of the bill tabled in this House.

We will support the bill, despite its serious flaws. For example, I am very concerned to note that, in the arbitration process, the burden of proof will rest solely on the clients and not on railway companies.

Does my colleague share my deep concerns regarding the impact of that approach?

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, I would like to thank my colleague for his excellent question.

Indeed, it is one of our concerns on this side of the House. Small businesses are penalized, because they have to prove that they were adversely affected by the lack of service. That provision needs to be reviewed in committee and improved. My colleague is absolutely right.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Mr. Speaker, I would like to emphasize the all-encompassing scope of my colleague's speech. Could he expand more on his remarks about the environmental impact associated with road transportation, as compared to rail transportation?

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, I thank my hon. colleague for the question.

Indeed, rail transportation has a much smaller impact on the environment than trucking.

Someone said that rail freight transportation was not adapted to the reality of remote places in Canada. Since they are often not adequately served by railways, all too often they have to rely on trucking as an alternative. But using that method of transport has a much greater environmental cost.

Rail and train services offer more benefits to businesses and leave a smaller carbon footprint.