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

[Chris Warkentin, Conservative, Peace River, AB]

Mr. Speaker, the NDP members have a funny way of demonstrating their support. On one hand, they are supportive; on the other hand, they are not supportive. One of these days they will get it together. I am less interested in whether the NDP members are supporting it and more interested in whether the shippers are supportive of the bill.

We have support for the bill, not only from folks who live in my constituency, but from Pulse Canada, the Grain Growers of Canada, the Forest Products Association of Canada, the Western Barley Growers Association, the Chemistry Industry Association of Canada, the Western Grain Elevator Association, the Fertilizer Institute, the Canola Growers Association, and Western Canadian Wheat Growers. I could go on and on. I could go all night. Folks across this country are supportive of this legislation.

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

Mr. Speaker, part of the reason my friend is going all night is that, once again, we have a government that has difficulty approaching the opposition to work collectively and co-operatively on legislation.

We heard testimony, and my friend knows this, that led to amendments on this piece of legislation. As for cases, we asked the Library of Parliament to look at how the Conservatives approach amendments from the opposition, and 99.3% of all amendments moved by the opposition on a variety of bills have been rejected by the government out of hand. The basis of the amendments in this particular case came from those very shippers.

New Democrats will not sacrifice the mediocre seeking out the perfect, and in this case, we have a bill that moves us further down the road. The challenge is that governments only look at something like our rail system every so often, sometimes only once in a generation. To do only half measures and not listen to the testimony of those people my friend quoted seems a disappointment, because the rest of the quotes say there were improvements that they sought but were unable to achieve in this round of negotiations. They were about the arbitration and about the fines that will be levied on these major rail shippers who will not really feel the pinch.

The reason there is time allocation on the bill is not because we did not support it. It is because the government decided to shut down debate for no purpose at all. That kind of obstinance does not lead to good legislation. It does not lead to good governance.

[Chris Warkentin, Conservative, Peace River, AB]

Mr. Speaker, the hon. member may not take my word for it, but why do we not take the word of folks who know what they are talking about? I will quote some of them.

These measures will create the conditions for improved railway performance and accountability. It will help ensure all shippers can gain access to an adequate level of service.

That was the president of the Western Canadian Wheat Growers Association.

We especially thank [the] Agriculture Minister...[the] Transportation Minister...and the federal government for listening to farmers and moving this legislation ahead.

That was from the president of the Grain Growers of Canada.

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

That was from the CEO of the Chemistry Industry Association of Canada.

We will support opposition amendments when they make sense, and that is exactly what we have done 0.7% of the time.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, it is great to be here tonight, even at this hour. I guess it is great to be here this morning, now. I appreciate the opportunity to discuss Bill C-52.

The Conservative government has proposed new legislation to improve Canada's freight rail service—

[Scott Andrews, Liberal, Avalon, NL]

How are you going to improve that in Newfoundland?

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, those are great comments from the Liberals, but I do not know what they are saying.

I am going to tell them a little story about town called St. Thomas in southern Ontario, where the railways ran for many years in our country. Sometimes as many as 13 railways ran through the city of St. Thomas, as it happened to be in a straight line between Chicago and New York City and Detroit and Buffalo. It cut through the Canada Southern and a number of other railways. It was in a day when the railway was the way we transported all of the goods in Canada. We transported people, goods and the resources that Canada was known for in those days.

I will tell another little story about St. Thomas in Ontario and a rail incident. P.T. Barnum brought the circus to town in 1886. I am sorry, but Jumbo the elephant was walking down the train line on the day it was moving the circus into town and was struck by a locomotive and killed--

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

Is it in the bill?

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, that is right, my hometown killed an elephant. It was back in a day when rail was king. It was a day when everything moved on the rails and some things, I guess, had to move out of the way.

This bill would bring Canada and the rail system in Canada back to those days of service by our railways. They were days when goods and resources were moved by rail.

There is no question that rail transportation plays a central role in the success of our resource companies and our resources in this economy. In fact, Canada's natural resources industries are the largest users of rail freight services in the country, even to this day. Taken together, Canada's forest, mining and energy industries account for two thirds of all carload rail traffic in Canada. We know that the manufacturers and suppliers to these vital industries and many other vital industries, which provide everything from trucks to pipelines, also depend on railroads to transport their products and materials to market.

Our goal is to provide Canadian shippers and railways with a means of agreeing on service levels and ensuring a more effective supply chain. That is exactly what this proposed legislation will do. With this new legislation, we are highlighting the important role that railways play in supporting our economic prosperity. The goal of the legislation is to encourage railways and shippers to work together and it creates a strong incentive for them to do so.

Bill C-52 is designed to provide shippers with greater reliability and predictability in rail service. It is essential to the success of our natural resources industries. It recognizes the needs of shippers in doing their business and the needs of railways to manage their rail assets effectively. The relationship between railways and shippers is vital to Canada's economy as a whole. We know that when shippers can move more volume, it means more exports, revenue and jobs in Canada.

Here is the bottom line. Improving rail service in Canada will help to unlock the potential of our great natural resources. As most Canadians realize, there is a great deal at stake.

Here are some statistics. In the mining industry last year, more than half a million carloads of coal, sulphur and fertilizer were transported by CP Rail. In 2012, CP Rail alone moved 67,000 carloads of forest products. Many of those in urban ridings may have only sat at a crossing and watched that economy move by them as they impatiently waited for the gate to go back up. However, in rural and resource Canada, that is money going by. In fact, it is about $20 million worth of goods a day.

Additionally, Canadian Pacific recently indicated in its 2013 outlook that its crude oil by rail prospects continue to strengthen as the company expects to move to double the movement of crude oil to 140,000 carloads annually by 2015. That is from today's current volume of 70,000 carloads. That is a doubling of carloads of oil being moved by train.

It would be a lot more efficient to move it by pipeline, I suppose.

Right now, natural resources are directly and indirectly driving almost 20% of the nation's economy and supporting over 10% of all the jobs in Canada. Natural resources are poised to play an even greater role in the future. Our opportunities for growth in Canada's resource sector, arising from the rapid economic ascent of some of the world's most populous countries, are unlike anything we have seen in our history. We have estimated that there are some 600 major resource projects currently under way in Canada or planned in the next 10 years, worth approximately $650 billion in investments.

While global economic conditions may be a factor in investor decisions to move forward, the size and number of the projects is substantial. Whatever the short-term obstacles, the longer-term outlook is one of increased value and a demand for Canadian resources.

We can point to tremendous opportunities that are happening right now across the country, from oil and gas in Alberta, to liquid natural gas in British Columbia, to offshore gas in Newfoundland and Labrador, to new discoveries of minerals and metals in the Ring of Fire in Ontario and in northern Quebec. These opportunities will continue for many years to come.

For generations, agriculture and natural resources have brought employment, growth and opportunity to every region of Canada. We must continue to harness this potential. Long-term growth and development in many of these sectors depend upon our railways and their ability to get the products to market.

In a recent report, the International Energy Agency emphasized that global energy demand will continue to grow by more than one third by 2035, being led by emerging economies like China and India. These trends represent opportunities for Canada's energy exports in helping to meet growing global energy needs. Because one thing that we know for sure is that these growing economies will need resources, resources that are abundant here in Canada, such as minerals and metals, lumber, oil and gas. This trend underscores the urgent need for Canada to diversify our energy export markets, such as that of Asia-Pacific.

Growing and emerging economies highlight the urgent need for Canada to develop infrastructure to export our resources to new markets and to ensure that our railways run smoothly.

Simply put, we know that developing an efficient transportation system is crucial to ensuring that our resource industries can compete globally.

The fair rail freight service act would provide the tools to build a strong and efficient rail network in Canada. This important legislation would support Canada's resource sectors as they continue to create jobs and prosperity right across this country. In these challenging economic times, it is good news for our natural resources sector and good news for all Canadians. With this new legislation, we would build on our country's legacy of railway and natural resources. We would be setting the stage for a brand new era of growth and prosperity in Canada.

Just as we mentioned at the beginning, the country started with a growth in railways and a use of railways to transport those resources from coast to coast and to build this country.

The resource industry today, in Canada, requires this act and railways to ensure that the resource industry can supply the world.

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

Mr. Speaker, there are two points that my friend across the way and I can agree on. I am going to leave the tragic case of the circus elephant behind because I am not sure that this bill directly speaks to that particular provision. I do not see it in the legislation. There are two things that we can agree on. One is the importance of rail. Eighty per cent of all of our freight moves on rail.

The second is that we have a particular challenge posed to us in Canada in that we have two large rail companies that almost entirely dominate every sector of the market. In the U.S. and in other circumstances there are other options for those shipping products. Canada has a duopoly. These companies have been shown by the Competition Bureau at various times to collaborate and coordinate, to raise prices, to offer less service without retribution because they know they are the only options people can go to.

We only get to address the rail system every once in a while. Does my colleague believe that any steps in Bill C-52 would do much to go after the service fees that have been talked about by many shippers in this country? They have had problems and real concerns that the pricing may be non-competitive. When there is a market with only two players in it, non-competitive pricing can pose a real problem to such a fundamental industry as the shipping industry in Canada.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I assure my colleague that the fair rail freight service act looks at ways to allow those shippers who must move product in order to get the resources that I spoke about in my speech to market, to move agriculture products across this country, and do it using the existing rail system in Canada, whether it is the two major ones or some very small short lines. This legislation would allow those shippers to have some negotiating power with those railways.

Unlike perhaps my colleague across the way, I believe that a great capitalist way of paying for goods as they are being moved is a far better way to do it.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I would like to thank my colleague from Elgin—Middlesex—London for his history lesson on St. Thomas.

I would like him to address the real elephant in the room, which is the fact that our friends in the NDP are telling us that they are going to support the bill, yet they are challenging it tonight and suggesting our government should interfere more in the commercial marketplace. Could the hon. member please comment on the elephant in the room?

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I thank my colleague for the question, and what a great way to put it.

I will finish a bit of my history lesson. There still is a life-size statue of Jumbo at the far end of Talbot Street in St. Thomas. As one comes up the hill, there is Jumbo.

The member is absolutely right about the elephant in the room. It is a late hour and I have sat here for most of the night, five or six hours, listening to all the parties in the House suggest how much they like our bill. There is a saying back home in rural southern Ontario: my momma taught me how to say “thank you”.

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

Mr. Speaker, I am rising in the House to speak to Bill C-52, concerning rail freight. This is another bill we are debating under a gag order, which has been imposed for the 37th time.

[An hon. member]

Unbelievable!

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

This is actually quite insulting, and most of all, undemocratic. The Conservatives are forcing us to sit until midnight from Monday to Thursday, and yet this makes the 37th time we have a time allocation motion. Talk about mixed messages.

We want to discuss the issues, but the government limits the time for debate again and again. In addition, these are badly thought-out bills riddled with flaws. I will list them a little later in my speech.

This has been an ongoing trend with the Conservatives since they came into office. I am specifically thinking of omnibus Bills C-38, C-45 and C-60.

I speak of the Conservatives' incompetence because they are bringing forward bills full of flaws and weaknesses. They are not holding proper consultations. In committee, recommendations from many of the witnesses are rejected out of hand, as are the amendments proposed by the NDP, or anyone else for that matter.

They realized that Bill C-38 was flawed. Then they made hasty additions to Bill C-45 to rectify the other bill they had just introduced.

This makes no sense at all. It lacks credibility. It shows a lack of respect for the democratic process, for the people who were consulted and for those who were not. It shows contempt for the elected officials who serve the people who rely on them to make decisions. We cannot make good decisions because we cannot have a debate and carefully examine everything that should be considered. So yes, it is insulting and an outrage.

The official opposition will support Bill C-52 because it is, finally, a first attempt at establishing the right to service agreements between rail companies and shippers.

This is the first step that shippers have been waiting for for decades. It also establishes an arbitration process, led by the Canadian Transportation Agency, to impose penalties in the event negotiations fail and for violations of arbitration decisions. There are therefore constructive, positive elements, but there are also a number of elements that shippers and the official opposition were calling for but that were rejected.

Four NDP members proposed amendments, based on recommendations from shippers. Those members were the transport critic, the member for Trinity—Spadina; the deputy critic, the member for Trois-Rivières; the member for Notre-Dame-de-Grâce—Lachine and the member for York South—Weston.

What were those amendments and recommendations? I will explain them. They were not that complicated, and they would have really helped shippers.

We recommended including details about the service agreements. It seems to me that service agreements should, at the very least, be signed and contain details. I do not understand why that was rejected. We asked that the term “operational” be deleted because it would limit the ability to negotiate and arbitrate service agreements. Again, that seems to go without saying. It does not make much sense to limit the measure we are trying to implement. We wanted to include a dispute resolution mechanism in service agreements for breach of contract. We also asked to limit the ability of railway companies to levy penalties and charges that are not in the service agreement.

The rates are already exorbitant and the railway companies are abusing their power. Since there are only two main companies, there is a quasi-monopoly when it comes to shipping freight. The rates being charged to the shippers are too high. They prevent the entrepreneurs and the shippers from being competitive on the international market. We cannot even limit the capacity of the rail carriers to charge penalties that are not included in the service agreement. Nothing good will come of that either.

We proposed limiting arbitration when service agreement negotiations break off and issues are raised by the shipper. The last amendment sought to limit the capacity of rail carriers to raise network-related problems during arbitration.

All these amendments could have improved Bill C-52, but they were not considered. They were completely rejected.

Again, we are here to let the House know that people are not happy about this.The bill has other flaws. What about lost revenue. The Conservatives claim they want to strengthen the economy, but they are diminishing the capacity of the regions to prop up their regional economy, given that the affected sectors are the farming, forestry, mining, manufacturing and natural resources sectors. Most of these sectors are in remote regions.

The Conservatives are contradicting themselves again. They would have us believe that their position and their bills are best, but then they sabotage everything they are trying to do by not taking the time to do proper research. They do not take the time to consult the experts in the areas affected by their bills. That is part of the incompetence that we are talking about here.

Shippers are currently paying the price of service disruptions, damage to their crops and service delays by railways. What is more, they have no other option. As many of my colleagues have said, 70% of surface goods are moved by rail in Canada, and 80% of these shippers are not satisfied with the service they received. That is serious. That means that service is considered to be poor in four out of five cases.

That is why these types of agreements needed to be made after all these years. However, now that they are finally being made, they are more negative than positive. The money from the $100,000 penalties imposed on railway companies under this bill is not used to compensate shippers. Instead, it goes to the federal government. It really should be given to shippers who create jobs and who have to pay late fees and fees for services that the railways failed to provide.

This money is being sent to the wrong place. What is more, these penalties do not really act as a deterrent since we know that companies such as CN are making $2.7 billion in profit a year.

In short, we are going to allow this bill to move forward, but it has many shortcomings. We must listen to experts on this.