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

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, I am delighted to answer this question.

We are going to be supporting the legislation, which is not a surprise. As I said earlier, this is a baby step in the right direction and we believe in rewarding good behaviour, which is what we are going to do.

However, those same industries that he said were pleased this baby step was being taken, also advocated through amendments and suggestions that they wanted far more. The bill does not go far enough.

We are willing to work with the Conservative government even after the legislation is agreed to so we can improve it and address the needs of the shippers, growers and miners. We stand with industry.

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

Mr. Speaker, I thank my colleague for making such an informative speech based on facts and figures. It is unfortunate that, for the 37th time, the government is imposing time allocation on us, especially on such a flawed bill that does not take the six recommendations made by shippers into consideration.

As well, we know that it mainly affects people outside our urban areas, because farmers and the mining and forestry industries are located in remote regions for the most part. It affects local and regional economies, and it hurts many workers in those areas.

I would like her to talk to us about that and about our frustration at not being able to debate these issues.

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, I will reiterate that this is a baby step. There was far more that needed to be addressed in the bill.

It is a fact that there is no compensation for the shippers if their goods are spoiled or delayed. If they miss their port time, there is no compensation for the incredible fees they pay to the ports, or their staff, truck drivers and cranes. None of that is covered in the bill.

The bill does not cover the kind of monopoly that CP and CN have over Canadians. It does not in any way address the gouging that takes place or looks at the pricing.

Remember, we are talking about just one of these railway companies, CP, making a profit of $2.7 billion. A lot of that profit is made at the expense of shippers who are losing out. Also, this company has an 80% failure rate.

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

Mr. Speaker, I wanted to put on the record how important this bill would be for Saskatchewan and for our economy.

We are a major player in the world potash market. In fact, Saskatchewan potash producers generated $7.2 billion in gross revenue. Therefore, the movement of potash is important to our railways. Saskatchewan producers spent $311 million on potash transport in 2011 and their production filled more than 110,000 train cars, equivalent to more than three full trains everyday. In terms of volume, potash is the third most important commodity for Canada's railway after coal and wheat.

Could the member tell the House if this spirit is also to be shared on that side of the House. Could she do anything possible to pass the bill expeditiously, so we can get on with our priority of our economy, which is important, and potash—

[The Acting Speaker, Bruce Stanton]

Order, please. The hon. member for Newton—North Delta.

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, this legislation would only apply to new agreements negotiated. In fact, it does not apply at all to all the current agreements. For the potash, grain and legume shippers, all that will cause them some concern.

As I said, we will support the bill because it would go part way and that is better than nothing. However, it is very unfortunate that it this will not address all the issues for our farmers and for our resource industries when it comes to moving goods across our country.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I congratulate my hon. colleague from Newton—North Delta on her excellent speech, which I listened to carefully and appreciated.

I would like to commend the excellent work done by our transport critic, the member for Trinity—Spadina, which my colleague also mentioned. She clearly demonstrates the importance of the work she has to do when it comes to standing up for shippers. She is also aware of the importance of rail transport and its effects in the context of combating climate change.

Unfortunately, our colleagues opposite, the Conservatives, have very little interest in combating climate change. To them, that is a pointless expense, when it should be a priority. In fact, it will be the challenge faced by an entire generation.

The question I would like to ask my colleague concerns the excellent work our New Democrat colleagues are doing in committee. They proposed nine amendments that referred to the six proposals she spoke about so eloquently concerning industry, business and shippers. Those very reasonable amendments would have been very effective in improving the bill, which would have gone from being a baby step to being a giant leap in the right direction.

On that point, I would like to hear her comments about the excellent work we are doing in committee, as compared to the one-way-only work done by the Conservatives, who are prisoners of their ideology.

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, let me reiterate that the legume and grain growers associations, all the different organizations I mentioned earlier, came up with some very reasonable amendments that would have made the playing field in the shipping industry of goods across the country by rail a bit more level. Unfortunately, the government failed to grab that opportunity. However, I am glad that all parties in the House will support this.

I really need to mention this. It is the privatization of CN in 1995, under the Liberal watch, without any safeguard for shippers, that has led to our current virtual monopoly. That is one of our problems. Back then, if we had fought to keep the track system in the public hands, that would have made life so much easier, even for VIA Rail, et cetera.

I am glad the Liberals are on board, but when I look at this, a lot of the problems that have been created were created during their watch because they allowed this to happen.

[The Acting Speaker, Bruce Stanton]

We have had more than five hours of debate on this motion. All speakers who follow will therefore have 10 minutes for their speech and 5 minutes for questions and comments.

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, I am pleased to rise to speak in support of Bill C-52, the fair rail freight service act. My comments today will describe our extensive consultations with stakeholders from across the rail-based supply chain. These consultations helped shape Bill C-52 and helped to ensure that it would take a fair and balanced approach to enhance the effectiveness, efficiency and reliability of rail-based supply.

In 2008, the government initiated the rail freight service review to address ongoing concerns regarding rail service. As part of the review, the government appointed an independent panel of three eminent persons. The panel's mandate was to provide recommendations on how to address rail service issues, including both commercial and, if necessary, regulatory solutions.

In issuing its recommendations, the panel consulted extensively and broadly with stakeholders in the rail-based supply chain. Indeed, the panel held broad consultations with 85 shippers, railways and other stakeholders and received over 140 written submissions.

Taking full account of input provided by stakeholders, the panel submitted its final report to the government. The government carefully considered the panel's recommendations as well as stakeholder views presented during the review and announced a number of key commitments to enhance the efficiency, effectiveness and reliability of the rail-based supply chain.

A key commitment of our Conservative government was to develop legislation that would provide shippers the right to a service agreement and a process to establish one should commercial negotiations fail.

As part of our commitment for legislation, we launched a consultation process, inviting input from stakeholders. During the summer of 2012, we asked stakeholders for their views on the development of a new legislative provision to give shippers a right to a service agreement and on what process should be followed to establish one should commercial negotiations fail.

The response from stakeholders was robust and fulsome. Extensive consultations spanned a number of months, including meetings with shippers, shipper associations and railways that provided the opportunity to listen to a diverse range of views regarding rail service issues and a legislative provision to address those issues.

In addition, a variety of stakeholders provided extensive written input, including shippers, shipper associations, railways, provinces, municipal associations, ports and terminals. These stakeholders came from across the rail-based supply chain and had operations throughout various regions of the country.

I have described the formal processes of the review and our invitation to stakeholder input over the summer months of last year. I would also like to note that we have continued to hear the views of stakeholders on an ongoing and informal basis.

Throughout these consultations, we heard from a diverse range of stakeholders, including large, medium and small shippers, shippers of various products, including agriculture products, coal, potash and forest products, ports and terminals from east and west coasts of Canada, class 1 and short line railways and other levels of government. We listened carefully to stakeholder views and considered their input to develop a legislative provision that would ensure the best possible outcomes for the supply chain as a whole, as well as for the Canadian economy.

The fair rail freight service act responds to key points raised by stakeholders throughout the consultations, which I just described. For example, shippers reiterated that the legislation had to provide leverage in their negotiations with the railways to ensure they could get the rail service that met their needs. Shippers have also expressed that a process to establish agreements must be timely and efficient. Additionally, shippers have asked for a mechanism that would hold railways accountable for service failures.

We have heard these concerns. The bill provides every shipper with the right to a service agreement and a process to establish one where commercial negotiations fail. Service agreements would help give shippers more clarity on the rail service they can expect to receive. While we expect that most would be able to negotiate agreements commercially, the arbitration process ensures that shippers identify the elements to be addressed to ensure they can get the rail service that truly meets their needs. Furthermore, the arbitration process is 45 days and can be extended for up to another 20 days at the arbitrator's discretion. This timely process would allow shippers to focus their resources on growing their businesses.

In response to the request of the shippers for greater railway accountability, the bill provides for the Canada Transportation Agency to apply an administrative monetary penalty of up to $100,000 for each railway service failure. This is a strong mechanism to hold railways accountable.

The bill is a balanced approach, which is reflective of stakeholder views in several other respects as well. For example, both the shipper and the railway must first try to resolve the matter commercially. Should commercial negotiations fail, there is a process for an arbitrator to establish an agreement. The arbitrator would have sufficient flexibility to impose an agreement that is tailored to the given situation. In this flexibility, the bill recognizes that there is no one-size-fits-all solution and that railways have an obligation to provide service to all users on their network.

It is clear that the fair rail freight service act is the product of listening to input provided by stakeholders. The bill's approach is firmly grounded in the views and concerns expressed by stakeholders from across the rail-based supply chain. This bill provides shippers with leverage to ensure they can negotiate with the railways to get the rail service that truly meets their needs.

Shippers have expressed their support for the bill, indicating that it meets their fundamental request for more leverage in their negotiations with railways. Bill C-52 balances the requirements of the railways to provide adequate and suitable service to all other customers. The balanced approach responds to concerns raised by shippers and railways, but more importantly ensures that the Canadian economy is the ultimate winner. Efficient and reliable rail service is key to the long-term prosperity and growth of the Canadian economy.

To remain competitive in global markets, shippers have to get their products to market. Canadian shippers work hard to maintain their global reputation as reliable suppliers. To enhance Canada's international competitiveness, shippers need a fluid rail-based supply chain to move product from farms, mills and mines to market, in a predictable, reliable and efficient manner. The fair rail freight service act ensures shippers would get the rail service that meets their needs, allowing them to grow their businesses and take advantage of global market opportunities. Railways would be able to manage their networks in a manner that benefits all users, and the Canadian economy would be better positioned to take advantage of new opportunities, thereby supporting long-term economic growth and prosperity for all Canadians.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I want to thank my colleague for his speech.

Let us not forget that this speech is on the 37th time allocation motion. It is very important to remember that. Unfortunately, the Conservatives have often resorted to such anti-democratic measures to shut down debate.

This bill is very important. It implements long-awaited measures. Unfortunately, even though we have been waiting for this for many years, we are getting just a few measures to meet the needs of businesses, shippers, farmers and other sectors subject to this legislation.

It is important to note that the shippers and other stakeholders submitted six proposals in committee, which were summarized in nine NDP amendments. Unfortunately, the Conservatives rejected them out of hand.

Why did they reject these proposals?

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, I have studied the bill and listened to debate today. We have had some five hours of debate already on the bill, today alone. It has been at committee. It has been well discussed and well debated on various avenues throughout its process.

The key focus of the government is jobs and economic growth. We want to ensure that we provide a reliable vehicle for shippers to get their products to market and to ensure that they and the railways are able to work together.

Richard Paton, president and CEO of the Chemistry Industry Association of Canada said:

The level of service offered by Canada's railways can make the difference between companies investing here, or taking their business elsewhere.

He goes on to say:

...this legislation is critical—not only for our industry's competitiveness, but for Canada's overall productivity and prosperity.

I think that puts it in a nutshell.

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

Mr. Speaker, I want to talk a bit about how important this legislation is for the province of Saskatchewan, in particular, Canpotex, which ships potash.

The company's inland rail car network winds through more than 1,600 kilometres of rugged terrain and severe climate challenges to reach its export terminals on the west coast. To better accommodate this journey, the company has a fleet of almost 5,000 rail cars, customized to handle the bulk density. The company's specialized rail car design results in an increase in operating capacity. However, it wants to point out that it has a partnership with Canadian Pacific and Canadian National Rail in Canada, and with Union Pacific in the United States.

The company recently signed a 10-year agreement with CP, CN and UP, and the agreements have helped to secure needed transportation. That tells me that this shipping bill is a good balance because the company is already working very well with the rail.

The member spoke earlier about how important the bill was to have a good balance. I believe this is a good balance. Would the member like to elaborate on that?

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, that is exactly what the bill is about. It is about creating reliability and certainty for the shippers, and creating an environment where the railways will deliver on time and at the price contracted. The bill is fair and balanced in what it presents and certainly does exactly what it was intended to do.

I am delighted, incidentally, to note that we have support from the other side of the House to ensure that the bill will be successful.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I would like to begin my speech on Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), by pointing out that this is the 37th time that we have been faced with time allocation. It is the 37th time that we have been gagged and that we have been prevented from discussing, debating and proposing opposition arguments to improve the bills before us. This is the Conservative way, since their ideological blindness makes them think they can do whatever they like. They put on their blinders and refuse to listen to anyone who puts forward solutions and amendments to their problem.

In this regard, I would like to speak about the excellent work the NDP members have done on this bill in committee. I would like to name the NDP members of the committee, because it is important. First of all, there is the outstanding member for Trinity—Spadina, our transport critic, who has been doing a great job for a long, long time. There is our wonderful deputy critic, the member for Trois-Rivières, our exceptional colleague from Notre-Dame-de-Grâce—Lachine and the member for York South—Weston. Once again I would like to say that they are doing excellent work in committee.

It is now 11:10 p.m., and I am very proud to rise in the House, convinced as I am that it is important that we go on discussing this bill, that we go on arguing and explaining that, even though we are going to vote for the bill, it is only a first step. My colleague spoke very clearly on this point earlier, calling it a baby step.

It is a first step, a tiny baby step, even though shippers, farmers, mining companies and the various other companies that use the railways have been asking for this legislation to be reviewed for years now. Unfortunately, no one delivered on that, as the expression goes. The government has produced a bill that is very disappointing. We are going to accept it because it is a first step in the right direction, but considering the number of years that we have spent waiting for improvements, the government could have done better.

On that point, in committee, and I mentioned this earlier during question period to the other members, and I want to say it again, there were six proposals made by shippers and businesses. Those six proposals were not asking too much. They were very reasonable, and they had been studied and analyzed and brought forward by experts. They were then assembled into nine amendments by the New Democrats and tabled in committee. We submitted those proposals in a very professional manner. As people who do their job properly, we decided that even though it was a bill from the Conservatives, we could improve it.

Unfortunately, in their ideological blindness and their desire to get everything done fast and without consultation, thinking only of their own interests, the Conservatives brushed those proposals off. I am truly saddened to see that.

I would like to talk about the Conservatives’ short-sightedness for a minute. As I said when I was asking questions, the railway is important not only for shipping freight, but also for transporting people. We should invest a lot more in shipping freight, and we should invest a lot more in transporting people. If shippers can rely on an efficient railway, they will use it more, and even more businesses will use it too. In Drummond, some businesses use it, but if it were more efficient, more businesses would use it.

If we had a policy, a national public transit strategy, a national rail transportation strategy, as the New Democrats are calling for, and as the NDP’s excellent transport critic, the member for Trinity—Spadina, is calling for, we could reduce our greenhouse gas emissions and do a lot more to combat climate change.

The Conservatives do not think that combatting climate change should be a priority. I serve on the Standing Committee on Environment and Sustainable Development and, unfortunately, this is the message we get week after week.

In the two years that I have been in the House of Commons, we have been told that combatting climate change should be the Canadian government's top priority. We are told that climate change is currently the government's major challenge and that it will be for future generations as well. It should be a priority in committee.

However, unfortunately for them, the Conservatives favour studies that are less pressing, when they should be addressing climate change, and making it a priority.

The government should have a national public transit and rail transportation strategy to ensure on-time delivery. Currently, in 80% of cases, things go wrong, and 90% of shippers complain that they are dissatisfied with the service. Those are not passing grades. They do not encourage Canadians, shippers and big businesses to make more frequent use of rail transportation. Rail transportation should therefore be a part of a pan-Canadian strategy to combat climate change.

In the NDP, we are very proud to have this long-term vision, which is not just about the interests of big business, but also about the interests of all Canadians.

On that note, Canada is the only G8 country to not have federal funding and a national plan for transportation. This attests to just how far we lag behind other nations, when we should, in fact, be dynamic leaders. In the NDP, our vision is clear and progressive. It demonstrates why it is important to reform the Canada Transportation Act.

The NDP has three main demands regarding this bill. First, Canadian shippers deserve fair, reliable, bang-for-their-buck rail transportation. That is why it is important to strengthen the position of shippers vis-à-vis the CN and CP monopoly, which is something that Bill C-52 fails to address.

Shippers made six reasonable, practical, modest recommendations in committee. Unfortunately, the Conservators flatly rejected them all without giving them the time of day, while the New Democrats once again did all the work.

It is also important to remember that other improvements are necessary. For that reason, the NDP will continue to work very hard with shippers, forestry companies, mining companies and other businesses to improve the bill, which does not sufficiently address the issue of the lack of competition in this sector.

In closing, I repeat that we are going to support this bill. Unfortunately, it is only a baby step towards what should be accomplished, namely creating a national transportation strategy and a national strategy to fight climate change.

Those are the two greatest challenges for us to tackle on behalf of future generations, our children, our grandchildren and the people of Drummond, who come to see me often. They are worried about the environment and concerned about having a high-quality, efficient and reliable rail system.

The NDP is here and will continue to work very hard for a better rail system and a better public transit system.