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.

Speaker's Ruling

[An hon. member]

Two steps.

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

Yes, two steps, and we might even be on our way toward a solution. It is in that frame of mind that we will be voting in favour of Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration). It is more a matter of railway transportation in this case. Arbitration is probably the most interesting thing about this amendment to the legislation. I will come back to that a little later.

For those who may not have heard much about this bill, let me briefly talk about what the problem is. In Canada—a vast country if ever there was one—it is advantageous to transport bulk commodities over long distances by train. It makes sense. It was meant to be. It is impossible for some shippers to even think about a mode of transportation other than rail transport.

If we had to use trucks to transport the goods shipped by a single train with several cars, first of all, it would be difficult to even get a fleet of trucks that could transport these goods. Second, this would clearly have a major impact on the environment, and third, the trucking company would become completely unproductive from an economic perspective. Rail transportation is therefore the most popular and preferred method of transportation for economic and environmental reasons.

However, as we all know, freight rail services in Canada are managed by the virtual monopoly of two companies: CN and CP. However, as I will explain later, although there appears to be competition between the two companies, that competition tends to disappear in many situations. It is difficult for shippers to negotiate contracts that meet their expectations and benefit from competition in a monopoly situation.

It is easy to say that at least Canada has two railway companies, CN and CP; however, the healthy competition that should lower prices is strangely absent. Instead, the territory, and therefore the market, is shared between these two companies. We have two companies holding a virtual monopoly rather than real competition.

In regions that have access to both CN and CP, unfortunately, one of the companies often demands prices that are too high, which once again leaves shippers with only one choice.

For several years, shippers have faced problems not only with fees, but also with delays, service interruptions and lack of available cars. There are also problems with outdated and broken cars that let part of the harvest spill out onto the tracks.

I put myself in the shoes of someone who produces grains, chemicals, natural resources or whatever watching money spill out onto the tracks as the train heads towards the port. Every time that happens, the individual's profit margin and overall profitability take a hit.

This immediately results in higher costs for shippers and a drop in profitability. Furthermore, in an economy in which the just-in-time strategy is very often the norm and is an obvious competitive advantage, shippers are caught in a David and Goliath struggle that is difficult to resolve without the government's help.

I will leave it up to my colleagues to figure out who is David and who is Goliath. I think it will be easy enough, except that in Canada, David never manages to prevail over Goliath.

Quality rail service is critical for shippers. These products are being exported, and I think it goes without saying that our exports suffer greatly in the fiercely competitive international markets as a result of numerous flaws in Canada's rail transportation system.

Businesses pay the price every time, because they lose a contract, or they have less room to manoeuvre or they make less profit. David was at least able to make the government aware of the problems he had with Goliath, but it took a lot of effort. I would say this is a marathon rather than a sprint. Efforts to raise awareness began in 2007, but it took until 2013, today, for the government to bring in a meagre bill.

I should also mention the work done previously by my colleague from Trinity—Spadina, who introduced Bill C-441, which members will certainly remember and which had loftier ambitions for dealing with this matter.

Nevertheless, there is a glimmer of hope. In 2015, we will replace this government that is plagued by scandals and poor management, and we will be able to do more about this.

I have to admit that I support this bill because of the shippers, as I mentioned earlier. This puts me in mind, appropriately enough, of the little engine that could, except that in this case, we are talking about a big engine that moves slowly indeed. It really needs a nudge.

What is in Bill C-52, an outstanding bill in the eyes of the Conservatives?

Obviously, the main point is that shippers will be able to use an arbitration process to settle their disputes with a railway company that, as we know, has a virtual monopoly.

To be eligible for arbitration, the shipper must demonstrate that attempts have been made to arrive at an agreement with the railway company, which is not easy to begin with. In its decision, the arbitrator establishes the level of services the railway company must provide and its obligations to the shipper. That would be part of the contract, I suppose. Contracts are confidential, which is why I said “I suppose” in the previous sentence.

In addition, Bill C-52 will only apply to new contracts between shippers and railway companies.

Furthermore, the maximum penalty is $100,000. I guess $100,000 for a company that made a profit of $2.7 million is not very scary. What is worse is that, if imposed, the fine will not go to the shipper to make up for the inconvenience, but into government coffers. Is this a new tax or a new fee? I have no idea. I will let the public decide whether this is appropriate or not.

Since I am quickly running out of time, I will move on to the conclusion right away.

I will support this bill, although it is a reflection of a tired government that is more concerned about image than substance. These days, even its image is taking a hit.

All shippers who work daily to provide Canadians and international clients with the best of their acquired expertise can count on the NDP, not only to allow this legislation to move forward in its early stages, but also to follow up and assess the effectiveness of the measures put in place by Bill C-52.

The solution is simple: in 2015, elect an NDP government that will once again make it possible for all Canadians to proudly believe that we can build a more just society where everyone's efforts will bear fruit.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, I thank my colleague who sits with me on the transportation committee and who would have noticed that even before the committee started its deliberations, it was clear that the Conservatives were not interested in any amendments to the bill, despite the well thought out and comprehensive amendments brought forward to us by the rail shippers themselves. They found serious flaws with the bill and serious ways of solving those flaws. We in the NDP, of course, supported many of those amendments as a way of making the David and Goliath relationship a little fairer. It would not be completely fair, but it would be a little fairer.

I wonder if the member could comment in particular on the right to an arbitration process that would include an ability for the shipper to be awarded damages or to receive some recompense from the carrier, before going to court, through the agreements that would be reached through arbitration.

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

Mr. Speaker, I would like to thank my hon. colleague for his question, which actually has several parts. I will try to briefly address each of his sub-questions.

First, with regard to the amendments, I fully agree with my colleague's comments. This is not the only parliamentary committee to consider this approach as highly partisan.

Is there a party anywhere on earth that can get every single thing right in the first draft? Apparently, yes: Canada's Conservatives. According to them, every bill tabled by the government needs no amendments and no changes because it is perfect at first writing.

As an example, I will discuss a proposed amendment that clearly shows what could have been done to improve things by going through a second, third and fourth step. The amendment proposed including detailed information on service agreements to help everyone understand the specific obligations. This would not be too difficult to do, yet even this was denied. I will stop there for now, but I may have the opportunity to come back with more examples. Even so, I think this is enough to make the point.

As for the shippers' ability to successfully manage a David and Goliath relationship during arbitration with such giants as railways, it is obvious that in the end, should David prevail, the monies should go to him rather than fattening up the Treasury Board's coffers.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I thank my colleague, the deputy critic for transport, infrastructure and communities, for his well-crafted speech. He has shown us yet again how eloquent he is and how he has a great command of the language of Molière.

He said that the Conservatives did not want to improve bills in committee. That is absolutely appalling. I would like the member to talk about the imbalance. He made reference to David and Goliath in talking about the relationship between carriers and shippers.

Could the member tell us a little bit more about the imbalance between freight train and passenger train companies?

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

Mr. Speaker, I thank my hon. colleague from LaSalle—Émard for her question.

I have been making a concerted effort these days to try to develop even half the talent I have in the language of Molière in the language of Shakespeare, but that will have to be for another day.

My colleague is particularly interested in public transit. Considering the time I have today, I will focus on that.

To begin I would like to remind everyone following the debate that Canada is the only G7 and OECD country that does not have a national public transit strategy. This sets us apart once again, but not in a good way. The Conservatives are to blame for this, but so are the Liberals, who also could have done something. It does not exist today because successive governments have failed to create a transit policy. In 2015, the NDP will have some solutions for Canadians.

As for the possibility of having passenger trains and freight trains travelling on the same rail lines at the same time, there are many examples in countries around the world where people agree on transportation schedules.

That is definitely not the case here, where priority is given to the transportation of goods. With an ever-growing population and urban areas that are exploding, we need to revisit this issue. It will most certainly be the subject of a future debate and another bill.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, we are here in the House to correct one of the failings of neo-liberalism that dates back to 1995, namely the ridiculous, ill-conceived privatization of Canadian National. A public service was dumped. It was privatized, without any consideration for the needs of those who used the rail lines.

We will be supporting this bill because it contains certain elements that are extremely beneficial. It corrects certain shortcomings. It does not correct them all, but it does correct some. Shippers will have the right to enter into service agreements with rail companies. The bill also creates an arbitration process, conducted by the Canadian Transportation Agency, for failed negotiations, and it imposes penalties for violating the results of arbitration. That is a start.

We would have liked to see financial remedies included in the bill. Also, we would have liked this bill to cover previously negotiated agreements, but that was not included. However, this is a first step. People came to us asking for more. We will not forget about them. That is important. Obviously, significant corrections will have to be made in 2015.

The government is making a lot of corrections with this law, but it is not fixing all the problems. Neo-liberalism continues to drive this government, meaning that the government gives the rights of companies priority over Canadians' right to a good public service. Regrettably, that way of thinking did not end with this law. The Liberal Party of Canada unfortunately adopted this neo-liberal ideology in 1995. CN was not the only crown corporation that was privatized at the time and that is now causing us problems, but that is how it is.

Allow me to provide a brief history of the problem. Before 1995, CN was a crown corporation that provided a public service. When people complained, they complained to the government, which took corrective measures. CN's priority was to give Canada a tool to promote economic growth. It was not to make as much of a profit as possible. That is a key difference. We had more services. We had a better service and it allowed us to increase our country's collective wealth. However, true to form, the Liberal government at the time privatized CN. The Liberal Party had debts to pay and friends to reward. It privatized crown corporations without any guarantees that would protect the interests of users, which were not taken into account. No protective provisions or regulations were put in place. The Liberals did not pay any attention to any of that.

This work was not done in 1995. Now, we have to do it. I find it somewhat odd that the representatives of the Liberal Party are blaming the government for failing to fix the situation when they are the ones who created the problem in 1995 and who never bothered trying to fix it the entire time that they were in office until 2006, yet in Canada, 70% of surface goods are shipped by rail. That is a huge amount. Basically, the railway is a structure that allows us to function economically.

Up to 80% of the service commitments for agriculture rail customers are not currently being met. This basically means that rural shippers are being taken to the cleaners. It seems that the priority is to help the company maximize its profits, not to support our agricultural industry. In this regard, the Liberals and the Conservatives are both on the same page. The Liberals privatized CN, a company that is essential to grain exports, while the Conservatives did away with the Canadian Wheat Board, simply because it was too Canadian for them.

Thank goodness it was the Conservatives. If the Liberals had done it, they would have sold CN to an American company. Some things never change. Once a Liberal, always a Liberal. It is obvious that people need lobotomies to join the party, and that goes double for people who want to become Liberal MPs.

The mining sector uses trains to export our resources. It accounts for half of all jobs in the first nations. This sector is the second-largest employer, after the public sector. Rail service is fundamentally important to all regions and all rural areas. This infrastructure is essential to them, but the government has forgotten them.

Since 1995, farmers and other businesses have been suffering as a result of the poor quality of freight rail service, yet they have not managed to get Ottawa's attention. Neither the Liberals nor the Conservatives have been able to deliver the goods. The goods have never been delivered.

Punctuality is important to rail transportation. If a shipper needs 50 train cars to transport iron ore, nickel, potash, wood, grain or wheat, the company cannot show up with 40 cars. That would be 10 cars too few. If a freight train from Thunder Bay or Montreal is supposed to roll into the port of Vancouver at 10 o'clock in the morning because the boat is leaving at 2 o'clock in the afternoon, but it shows up 16 hours late, the boat will not wait. That is a problem and it is hurting our economy.

Some people claim to be in favour of jobs and economic growth, but when they are faced with a key issue that is hurting the Canadian economy, they say that they will try to fix things, but that is all. There is a problem. They say private companies have rights, and we cannot interfere in their business.

We saw this recently with Air Canada. The government said that Air Canada was a private company that had the right to lay off 2,300 Canadians. It was not the government's concern, and it did not want to intervene. That is the problem. This is hurting our economy, and the government could not care less. This same government then turns around and says that it is championing economic growth. It is not delivering the goods, and that is an understatement.

There are currently 1.4 million unemployed workers. We hope this policy will help bring down the unemployment rate somewhat. In order to see the unemployment rate and the number of unemployed workers drop, Canadians will have to wait for a real Canadian government. Until then, this bill is a step in the right direction.

We cannot change the past, but we can ensure that the public services provided by private companies are offered in a responsible manner. That is non-negotiable. Although private companies say that they will replace the Crown, the Crown's main priority is not to make a profit and give the CEO a bonus, but rather to deliver the goods. In order for Canada's economy to grow, it is crucial that the goods be delivered quickly.

[Paul Calandra, Conservative, Parliamentary Secretary to the Minister of Canadian Heritage]

Mr. Speaker, let me say at the outset that I hope the translation came through wrong because if it was right what I got from it is that the hon. member said that anyone who believed in the Liberal Party, voted for it or took out a membership with it had to have had an intellectual lobotomy. We have seen this from both parties.

The member from Winnipeg, whose riding I do not remember, has said that anyone who voted for the Reform Party in the past was just not smart enough, that western Canadians did not know what they were talking about, and that the millions of people who voted for the Reform Party had to be wrong and were not sane Canadians.

The official opposition is now saying that anyone who is a member of the Liberal Party must have had an intellectual lobotomy. What is it about the opposition parties that they so disrespect the choices Canadians make? What is it about—

[The Acting Speaker, Barry Devolin]

Order, please. The hon. member for Kingston and the Islands is rising on a point of order.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I am curious, not about the subject with respect to what my colleague is saying but to the relevance to the bill that we are discussing today.

[The Acting Speaker, Barry Devolin]

Order. The hon. member for Kingston and the Islands raises an important issue--that is, relevance. I would just take the opportunity to remind all hon. members that what they say in their speeches ought to be relevant to the matter before the House. Obviously, there is some latitude in context there and when questions are asked sometimes it relates to the context rather than the bill itself. However, as a general rule I would remind all hon. colleagues to stick to the matter before the House.

If the hon. parliamentary secretary could quickly put his question.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Mr. Speaker, I hope the hon. member will apologize to those Canadians who might have a different opinion than he does.

Now that we have heard that both the NDP and the Liberals are supporting the bill, I would ask the member to reflect on this. We have had a broad level of consultation on it, have seen how many people across the country are supporting it and how important it is to industry, export and trade, which the opposition members do not support, including jobs and economic growth. In light of the fact they are supporting the bill, will they help us in passing it quickly?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, I thank the hon. member for giving me a chance to clarify this interesting position.

A member of the Liberal Party of Canada who blames the government for public transit problems has obviously forgotten that his party is the one that created those problems. Maybe their lobotomies caused some memory loss.

As for the government member's comments, he must understand that we support the bill because it will finally allow users, those who pay for this service, to obtain an essential service.

In 2013, it makes absolutely no sense that trains do not arrive on time, that there are not enough cars and that rail lines are in such a sorry state. If the Conservatives cannot understand that, what are they doing in power?

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I have a question about CN.

My NDP colleague spent a few minutes strongly criticizing the privatization of CN. Is he in favour of re-nationalizing CN?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, that is hypocritical neo-liberal talk.

They privatize without any regulations or obligation and then when it is time to correct the situation, they have no recourse. Nationalization is not the problem. Regulation is the problem. You cannot sell a crown corporation like a fool without protecting the consumers.

That is what should have happened in 1995, but they failed to do that. They still do not understand that it was important to do that. They have their neo-liberal blinders on and think that everything must be sold. They are just like the Conservatives, but at least the Conservatives are candid enough to tell us to our faces. The Liberals are not.