Fair Rail Freight Service Act

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

This bill was last introduced in the 41st Parliament, 1st Session, which ended in September 2013.

Sponsor

Denis Lebel  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

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.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

May 30, 2013 Passed That the Bill be now read a third time and do pass.
May 29, 2013 Passed That, in relation to Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), not more than one further sitting day shall be allotted to the consideration of the third reading stage of the Bill; and that, 15 minutes before the expiry of the time provided for Government Orders on the day allotted to the consideration of the third reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and, in turn, every question necessary for the disposal of the said stage of the Bill shall be put forthwith and successively, without further debate or amendment.

Bill C-52—Time Allocation MotionFair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 5:20 p.m.
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NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

Mr. Speaker, are we to understand that the minister does not have the necessary influence in his cabinet to move this important legislation up sooner than it has been presented in the House, that he has to resort to a tool such as time allocation? Is he not showing the weakness of his influence in his own cabinet? This legislation has been waiting for seven years, and he cannot convince his own team to move it up on the legislative agenda.

Bill C-52—Time Allocation MotionFair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 5:20 p.m.
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Conservative

Denis Lebel Conservative Roberval—Lac-Saint-Jean, QC

Mr. Speaker, that is a little absurd given all the delays to the schedule mentioned earlier.

Today, I am proud of our team's work. I am proud of what has been achieved since the last election, and since our work began on the Standing Committee on Transport, Infrastructure and Communities. I am proud of everything that we have managed to achieve together.

What matters today is not what I think, but what Canadian shippers think. I could read many more pages to give members a sense of just how proud these folks are of what has been done to move this bill forward.

I will leave it up to Canadians to decide who has influence here. It is my firm intention to win my seat again at the next election. We shall see what fate befalls this member.

We are capable of working very hard to move things forward. The member is the one who spoke about influence. We shall see how things turn out, since I am not the one who made this point.

That being said, we will continue to make sure that the economy prospers in every region of the country, including in Quebec—after all, I am a proud fellow from the Saguenay—Lac-St-Jean region. I want to work towards that. I do not believe that anything is achieved by attacking other members on their alleged ability or inability to get things done.

I think we worked hard. In fact, this bill is now at third reading. To those who feel that things have moved too quickly, I would say that things can never move fast enough when it comes to job creation and Canada's economy.

Bill C-52—Time Allocation MotionFair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 5:20 p.m.
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NDP

Djaouida Sellah NDP Saint-Bruno—Saint-Hubert, QC

Mr. Speaker, as the member for Saint-Bruno—Saint-Hubert, I would like to tell Canadians listening to me now that this government's attitude is a source of great frustration for me.

In just four days, there have been four gag orders. This is the 40th gag order. This is unprecedented and will make the Guinness Book of Records. It has never happened before.

On top of that, the Conservatives are proud of what they are doing. They are proud to silence members who were democratically elected by their fellow citizens. They are proud to shut us up and to tout the effects that their decisions will have on Canadians' lives.

My question is for the Minister of Transport. Every time the opposition proposes amendments, the Conservatives refuse to take them into consideration. Why is that?

Bill C-52—Time Allocation MotionFair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 5:25 p.m.
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Conservative

Denis Lebel Conservative Roberval—Lac-Saint-Jean, QC

Mr. Speaker, as I said many times in committee, we talked about this bill with a number of committee members from both sides of the House. We had many discussions and I would remind the House that, at the request of the official opposition, we talked about the major environmental concerns surrounding greenhouse gas emissions from motor vehicles even though we were talking about the railway. We also talked about making passenger rail service more efficient when we were talking about transporting freight, and investing in public transit in Toronto when we were talking about rail transportation and developing a national public transit strategy.

I have a question for the member opposite. When we are dealing with something as important for our country's economy as allowing shippers to have agreements with Canadian railway companies—which they have been asking for for years—why do they not talk about that topic in particular? We could have made a lot of progress and the vote could have been held a long time ago.

That said, here we are today. We do not live on an island. The economy of our American partners seems to be rebounding. Nonetheless, between 70% and 75% of Canada's exports go to the U.S. and much of that is shipped by train. It is important to provide these companies the means to achieve their objectives and remain profitable.

Of course, we can meet in committee to talk for weeks and slow down the debate. However, at the end of the day, when we want to pass bills to help support the country's economy, we want to be efficient about it.

Bill C-52—Time Allocation MotionFair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 5:25 p.m.
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NDP

Dan Harris NDP Scarborough Southwest, ON

Mr. Speaker, the minister asked why we are not debating the bill. What we are left is debating this time allocation motion. Again, it is the 40th one.

We want to debate the bill in committee and bring forward amendments. The Conservatives do not want to do that. They accuse us of delaying the bill. The Conservatives have a majority in the committee. They decide the witnesses. They decide how long it is going to take. They control the agenda. They are the ones who have delayed for seven years.

Then, when we bring many reasoned amendments forward to the committee, the Conservatives ignore them because they do not want to hear from the opposition. They do not want to hear from Canadians. Of course they bring up a list of people who are supporting the bill. All the Conservatives have done is throw them a bone. At this point, after this long, they will take what they can get. What they could have had is far more, if the government had actually listened to the NDP, had taken our amendments into consideration and added them to the bill.

That would have certainly made for a better bill that we could be passing. It would have a greater economic impact that would help more Canadians than what the government is doing.

I want to ask the minister a question. Why did they not do that?

Bill C-52—Time Allocation MotionFair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 5:25 p.m.
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Conservative

Denis Lebel Conservative Roberval—Lac-Saint-Jean, QC

Mr. Speaker, let me quote some representatives of organizations on this bill.

Jim Facette, president and CEO, Canadian Propane Association said:

The new legislation respects the commercial nature of the relationship between the railway carrier and the propane shipper, but also addresses the recommendations of the Rail Freight Service Review Panel. It contains all of the measures that the propane industry requested – the right to a Service-Level Agreement, an arbitration process should commercial negotiations fail, and consequences for non-compliance. The propane industry is pleased to support the Fair Rail Freight Service Act. It is our hope that the Act, coupled with recent improvements we have seen from the railways, will enhance competition and promote positive relationships between the railways and the shippers.

Greg Cherewyk, executive director of Pulse Canada, said:

Every step in this process is just that, a single step towards the goal of a more predictable and reliable supply chain that makes Canadian businesses more competitive in the international marketplace.

This is what business men and women want. They want to create jobs. They want to have this discussion and this bill done. That is what we will deliver for them.

Fair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 7:10 p.m.
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Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, today I rise to speak in support of Bill C-52, the Fair Rail Freight Service Act. I will focus my remarks on how this bill will contribute to strengthening the shipper-railway relationship as it facilitates the commercial negotiation of service agreements.

Canada's freight rail network is a vital link to global markets and supply chains, because it facilitates the import and export of millions of dollars worth of commodities and manufactured goods each and every day. Our economy relies on the billions of dollars of revenue generated by Canadian manufactured goods and export commodities, such as grain, pulp and paper, coal and potash. Canadian consumers and businesses also depend on containerized goods, arriving daily from Asia and Europe, moving to cities across the country in an efficient manner.

Bill C-52 will help the thousands of companies that rely on rail to ship these goods and will help the Canadians who are employed by these sectors. Given the importance of rail to Canada's economy and trade, ultimately Bill C-52 will contribute to Canada's economic growth and job creation.

The goal of Bill C-52 is to support the adoption of service agreements between shippers and railways. Service agreements can help strengthen the shipper-railway relationship. They can make it easier for businesses to plan how they will transport their goods to market. In recent years, the railways and their supply chain partners, including shippers, ports and terminals, have signed many such agreements. These agreements have improved rail service, collaboration, communication, and ultimately, supply chain efficiency. In short, service agreements are a tool to bring greater certainty and reliability to rail freight service.

This bill supports best practice in the industry. To achieve this, Bill C-52 has two parts. It would provide shippers with the right to a service agreement, and it would offer service arbitration to establish the terms and conditions of service in the event that negotiations fail. Most importantly, the new provision would create a strong incentive for the parties to negotiate service agreements commercially.

A shipper who wanted a service agreement could approach a railway. In turn, the railway would be obligated to respond to the shipper within 30 days. This would ensure that shippers and railways would first try to reach commercial solutions to tailor their service relationships.

In the event negotiations failed, the shipper would then turn to service arbitration to receive an imposed service agreement. However, before arbitration could begin, the shipper would be required to provide advance notice of 15 days to the railway. This 15-day period would further support commercial negotiation, as it would allow both parties one last chance to reach a compromise before service arbitration started.

In the end, it is expected that the current use of service agreements would be expanded. Going forward, any shipper who needed a service agreement would be able to obtain one either commercially or through service arbitration.

Some may try to say that this proposed legislation would be adding red tape and would burden rail companies. To this I would like to respond, no. We are providing a solution in case of service failure. We expect railways and shippers to continue working together and building on the success of the proactive measures from the rail freight service review.

This proposed legislation is important, because it provides the framework to enhance the standard level of respect for service agreements. This has many benefits. By facilitating better collaboration between shippers and railways through negotiating service agreements, parties could then agree on clear service elements and performance standards. Shippers and railways would clearly know what was expected of each other and would be able to work better together to make their day-to-day interactions more efficient.

Service agreements could also strengthen the relationship between shippers and railways by determining what to do when there is a service failure. Communication protocols could be put in place and recovery plans could lay out how and when service could resume.

Canadian shippers and railways could also use service agreements to lay the foundation for how they could expand their businesses together. Negotiations on a service agreement could be an opportunity for a shipper to discuss traffic growth plans and see how railway service could be adapted to respond to growth. The legislative right to a service agreement, supported by an arbitration process if commercial negotiations fail, would therefore be quite powerful.

Across Canada, shippers, whether large or small, whether shipping intermodal containers or raw commodities, would be entitled to obtain service agreements establishing a road map with the railway to achieve the benefits I just explained.

However, do not take only my word for it. This is what Mr. Rick White, General Manager of the Canadian Canola Growers Association, had to say about Bill C-52. He said:

The Canadian Canola Growers Association is pleased to see the inclusion of a number of important elements in Bill C-52, including the right to negotiate a service level agreement if commercial negotiations fail. With over 85 percent of canola seed, oil and meal exported to more than 50 markets worldwide, effective and efficient rail service is critical to the success of farmers and our entire industry.

That brings me to Canadian trade and our gateway and corridor initiatives. The railways played a primordial role in Canada's settlement and economic expansion, and they continue to play a key role. Rail networks are a core part of Canada's transportation system.

Our Conservative government has worked to strengthen Canada's transportation system in various ways, including with strategic gateways and trade corridor initiatives. Through these initiatives, our Conservative government, along with its partners, has made significant investments to reduce congestion along key corridors and to build capacity to capitalize on growing trade opportunities. Our gateway initiatives also encourage stakeholder engagement and dialogue as a key means of improving how our gateways function. Evidence shows that this gets results. Through working together, stakeholders have been able to address operational issues and enhance the performance of our gateways.

The proposed new legislative measure on service agreements supports such partnerships. It is through such partnerships that we can achieve an efficient and reliable supply chain. This would allow us to meet demand in existing, expanding and new trade markets. In this sense, the legislation would support our government's economic agenda.

In my role as chair of the Standing Committee on Transport, Infrastructure and Communities, I had the opportunity, as the other members did, to hear first-hand from shippers and other stakeholders about the importance of this legislation. I was pleased to hear that there was an astounding amount of support for this bill, and the committee heard this testimony from the groups involved. Whether it was Port Metro Vancouver from British Columbia; the Manitoba Minister of Infrastructure and Transportation, Steve Ashton; or the Halifax Port Authority, Canadians from coast to coast to coast were supportive of this legislation.

That does not take away the fact that in agreements like this, not everyone gets everything he or she wants, but I think everyone would have to admit that we came out with a balanced bill. That is why I am here speaking in support of it.

Let me just take a few minutes to read some of the testimony we heard on this legislation:

Bill C-52 is extremely important to Port Metro Vancouver.... Past performance of the railways has made Bill C-52 necessary. I think the bill has appropriately walked the fine line of mandating action but allowing for the flexibility to tailor agreements to the needs of each shipper.... I would recommend proceeding with the approval of Bill C-52.

I think we need to accept the fact that in some circumstances it won't be possible for a party to actually, in good faith, negotiate an agreement. In that sense, Bill C-52 does suggest a mechanism for resolving that impasse.

The legislation includes the right to ask an arbitrator to establish an agreement. In that sense, Bill C-52 is an improvement and it needs to be passed.

I will not re-read the entire transcript of the meetings we held, but this gives the House an indication of the testimony we heard at our committee.

So far I have discussed the benefits of the bill in terms of the service agreements that are in place and how the bill expands Canadian trade. I have also gone over some of the testimony that was heard at the transport committee during the study of the bill.

I would now like to shift the focus to a sector that is very important to me, agriculture. I represent the rural riding of Bruce—Grey—Owen Sound, and while shipping by rail is not extremely common in my neck of the woods, I have certainly seen that farmers are very concerned about how their product is transported from the farm to the markets.

Having been a farmer myself, I know that the agriculture business is full of uncertainties. That is why I am very happy that we will be moving forward with Bill C-52 to ensure that Canadian farmers will be protected by these service agreements so that they know they will always have a viable option to ship their product.

As I said, agriculture is one of the main pillars of my riding and certainly one of the main pillars of the Canadian economy. Canada's agriculture, and indeed the entire agri-food industry, plays a vital role in creating jobs and keeping our economy strong. However, our farmers depend on efficient, effective and reliable rail service so that they are able to move crops off the farm to valued customers, not just in Canada but around the world.

That is exactly what Bill C-52 will do for our hardworking farmers. It will ensure their right to a service agreement with railways to enhance clarity, predictability and reliability when shipping their product.

Furthermore, I would like to expand on the nature of the bill and indicate that the bill is not only a benefit to the shipper but that the rail services will also benefit from the changes that will be brought forth in the bill. The bill does not pit shipper against rail service. The goal of this legislation is rather to encourage railways and shippers to work together.

The fair rail freight service act would help shippers to manage and expand their businesses while ensuring the railways can operate an efficient network for the benefit of all users. This will ensure a strong, competitive rail freight supply chain, which is critical to the success of the Canadian economy. In these challenging global economic times, all sectors of the economy must work together to drive growth, create jobs and ensure long-term prosperity.

Before I wrap up my comments, I would like to proactively answer some the questions that opposition members of the House may have with regard to the bill. I will begin with the possible question that may arise about why the bill had not been tabled earlier. The response to this is quite simple: it takes time to get things right.

On this piece of legislation, we took the time necessary to hold in-depth consultations with stakeholders on the matter. We carefully reviewed the submissions that we received so that we could advance with a framework that would benefit all parties involved. It was a long process, but as members can see by some of the quotes I presented earlier, it has worked, and we have a very useful bill before us in the House.

I would like to take this opportunity to thank all the members of the Standing Committee on Transport, Infrastructure and Communities. I see members of that committee from all sides of the House here. We did not always agree on everything, but at the end of the day we have a good bill, and I would be remiss if I did not mention the strong work and support by the Minister of Transport, Infrastructure and Communities. This is a bill that many people, including shippers, have asked for, for a number of years. The minister has done it, and we are here today discussing it in the House.

Another question that is brought up around the bill is the notion that new provisions in the bill will negatively affect the efficiency of Canada's rail system. This is not true. The arbitrator must consider the efficiency of the rail network and railways' obligation to provide service to all shippers when making decisions.

Finally, I will respond to the possible question of why there is not a list of elements that must be included in a service agreement under the bill. This is because there is not a one-size-fits-all solution to these agreements. Every situation between shippers and rail services will be different and will require different needs. Therefore, this approach will ensure that the arbitrator has the flexibility needed to make the appropriate decisions.

I think there will be few of these arbitration decisions, but there would be that flexibility for the two parties to sit down, and the arbitration process would occur only when a custom-made deal that works for both parties cannot be worked out.

To conclude, service agreements are an important commercial tool that supports the shipper-railway relationship because they bring clarity and predictability to rail service. As some associations put it after the tabling of the bill in December 2012, this will serve as a platform for continued collaboration with Canadian railways.

This bill would work wonders for shippers and rail services in Canada and would be of enormous benefit to all sectors, including the agriculture industry.

The government's objective is to facilitate the adoption of service agreements between shippers and railways for those shippers who want one, and Bill C-52 would accomplish this.

I urge members to join me in supporting this bill. I hope that my colleagues across the way will show their support for this bill and vote in favour of its passage.

We have heard from many members during the discussion on this bill, and while I mentioned agriculture quite a bit, because there are a lot of agriculture products that travel, the bill would affect everything from forestry to fertilizer to potash. Therefore, this bill is very important.

Saskatchewan is the largest producer of potash in the world, a lot of which is exported, and rail allows it to get moved. As well, the mining industry transports all kinds of products. There is even talk right now of more crude oil moving by rail. I think we all have to admit that pipelines would be the preferred route, but business will always look at every opportunity out there, and rail is one of them.

Fair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 7:25 p.m.
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NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

Mr. Speaker, farmers in my area have been waiting nearly two decades for the reform of service agreements. They have been waiting almost two decades for this legislation.

I have a precise question for the chair of the transport committee.

We have heard from the government side that this is very important legislation. My question concerns the timing of the bill in the 41st Parliament. When did the minister approach the House leader to table this legislation? I do not need a precise date, but I would like the month and the year.

Fair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 7:30 p.m.
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Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, the member mentioned the farmers in his area who, like many across this country, have been waiting a couple of decades. I do not know if that number is accurate, but this government was not here two decades ago. However, I would point out that we are here today. We got the job done on it, and we are here to debate it.

If this member is as concerned about his farmers and producers getting their product out to where it needs to go as much as he seems to imply that he is, at the end of the day I am certainly going to be thanking him for his support on this bill.

Fair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 7:30 p.m.
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Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, I think it is imperative that we give credit where credit is due, and actually it was the shippers, who come in many different forms, who took the approach of lobbying all three political parties half a dozen years ago. They indicated that we needed to enact legislation that would allow for things like service agreements.

It is fairly widely believed that the field is not level in terms of shipping products throughout North America, particularly in Canada, where the scale has been heavily in favour of the rail. This is one of the reasons we had to have service agreements.

I have known for many years, and particularly the last three or four years, that the member for Wascana has represented the Liberal Party exceptionally well by applying pressure on the government to act on this issue.

The Liberal Party will support Bill C-52 to go forward, but I have a specific question for the member on the amendments that were brought forward. Why was the government not prepared to accept some of those amendments? The amendments would would have made this legislation that much stronger, and the bill could have received that much more support from the different stakeholders.

Fair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 7:30 p.m.
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Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, I thank the member for his question, for his comments, for his indicated support for this bill and for the fact that he obviously understands this bill.

He talked about the service agreements, et cetera. Yes, there were some amendments that were put forth, but his party and all parties in this House were represented on the committee. There was great discussion and debate about the amendments and, at the end of the day, the committee's wisdom was to present the bill as it is.

The member did mention his colleague from Wascana, who was here for 13 years before we came to power. He is probably wondering the same question I am, which is why they did not get the job done in that 13 years.

Fair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 7:30 p.m.
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Conservative

Rob Merrifield Conservative Yellowhead, AB

Mr. Speaker, my colleague on the other side just asked about the introduction of this piece of legislation. It actually started in 2008, with the rail freight service review. It was a two-year process. It was quite extensive and exhaustive, and there was enough guilt on the railway side as well as on the shippers' side when it comes to numbers to make it clear that something had to be done.

This measure was first introduced—in fact, I introduced it—in March in 2012, prior to the election, and then was picked up after the election, in December. This is a piece of legislation that has come a long way and has had lots of consultation.

My question for my hon. colleague is this. When the railway companies looked at this legislation initially, they fought against it, said they did not need it and said they would arrive at their service arrangements themselves. They said that it would drive negotiation away from the table. What I believe will happen is that it will drive both parties to the table, and if they cannot negotiate, it would be an arbitrated settlement. I wonder if my colleague would agree with me.

Fair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 7:35 p.m.
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Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, my colleague from Yellowhead represents a very agricultural riding. I have passed through it, although not often enough. It is a beautiful agricultural part of the country where people use rail to get a lot of their product out.

As to his question, at the start of these negotiations it is fair to say that neither side was happy with the proposal. However, at the end of the day, my colleague is absolutely correct that this bill would encourage even more agreements between shippers and railways. As everybody knows from listening to the debate today and tonight, some agreements have already been voluntarily signed between them, but this measure would create more and bring them all to the table.

Nobody likes change, and that probably includes shippers and railways, but I think this bill will do what it is intended to do.

Fair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 7:35 p.m.
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NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

Mr. Speaker, I thank the member for Yellowhead for that clarification about when the legislation was tabled. We know the genesis of this bill was around 2006, when the conversation began with the government. My question prior to this was specific to the 41st Parliament, which the member for Yellowhead also clarified, saying that the bill was tabled in December 2011.

My supplementary question, a follow-up to my first question, is for the chair of the transport committee. Can he give us an overview of the history of this legislation's movement through the House and committee? We know that first reading took place in December 2011. When did second reading take place? When was it considered in committee, and how long was the time from when it was in committee to the time it arrived in the House? Can he give us the timelines, in months and years, of the different readings and the consideration in committee?

Fair Rail Freight Service ActGovernment Orders

May 29th, 2013 / 7:35 p.m.
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Conservative

Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, I cannot give him all the answers that he is looking for because I took over my role as chair of the transport, infrastructure and communities committee last September. Since that time, this bill came forth before us earlier this spring. We have been working on it, and I believe it would be the end of April or first part of May when the vote came through the first time at second reading. He is wanting dates, and if he calls me I can get those for him, but I just do not have them off the top of my head.