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

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I rise today to speak to Bill C-52, An Act to amend the Canada Transportation Act.

The NDP thinks this is a very important issue, and it is no secret that we will be supporting the bill, essentially because it is a step in the right direction. I will explain. However, much more could have been done. Unfortunately, the government missed the opportunity to do more. Before getting into the bill specifically, I would like to talk about why railway transportation is so important in Canada.

It comes as no great surprise that railway transportation is important in Canada when you consider that 70% of surface transportation of goods is done by rail. Railway transportation is an effective way of fighting greenhouse gases. My colleague mentioned that as well. We must encourage train use as much as possible.

I am glad to be able to travel by VIA Rail this afternoon to get to my riding. We must promote train use. Here we are talking about shipping merchandise. I am not merchandise, so I will get back to talking specifically about the bill.

The bill is a step in the right direction, since it tries to solve the problem of the existing monopolies. When we talk about rail service, we are fully aware that the two major companies, CN and CP, have a virtual monopoly.

The virtual monopoly is a problem. It is one outcome of the actions that the Liberal government took in 1995, which included the privatization of CN. In addition to privatizing CN, the government did not implement the appropriate regulations. That is why we are surprised to see the reaction of the Liberals when they complain about the Conservative government's failure to act. It is true and we agree that the Conservative government waited a very long time before introducing a bill. Actually it was 2007 or so. That is when studies were carried out. A report was also released in 2011. That means that we have waited for more than five or six years for this bill, which provides a partial solution to one of the existing problems.

The Liberal government at the time identified a problem. In 1995, when the Liberal government privatized CN, it had the option to look at what could be done to avoid a monopoly over rail transportation.

What regulations can we put in place to ensure that services are better designed and distributed? The lack of regulations is a problem. Take VIA Rail for example. In some cases, this company needs to rent the railway tracks from CN or CP.

That also has to do with the virtual monopoly. As a result, shippers using rail services must pay more. In addition, they are experiencing some problems with the services provided. We hear a lot about the impact on consumers, among others. Higher costs and delays are among the problems linked to the virtual monopoly.

Bill C-52 addresses some of those problems. It creates an arbitration process. That arbitration process will allow for better discussion and a better way of solving problems with certain distributors. As my colleague mentioned, penalties will be imposed in some cases. The problem is that the money from those penalties will go into government coffers, not to the shippers. The NDP is trying to protect shippers in that respect.

Studies were done and reports were released. Unfortunately, the Conservatives did not take advantage of all of that information.

I would like to thank our transport critic, the member for Trinity—Spadina. She introduced a private member's bill outlining a better system that would give greater protection to shippers.

In response to that bill, the Conservatives introduced a bill that is quite flawed. I have already pointed out a few of those flaws. For example, the government could have done more when it came to arbitration. Unfortunately, it did not.

I am thinking of light rail transit on the new Champlain Bridge. It is the right way to go considering that we are moving towards an economy of the future. However, seeing how the government is managing this file, it makes us wonder whether it will act openly and transparently, particularly regarding construction of the Champlain Bridge. This corridor between Montreal and the south shore, as well as between Canada and the United States, is very important.

The government's actions worry us. It makes decisions behind closed doors and ignores what is said during consultations. We see that here. Even though the government brags about having consulted a number of people and says it stands behind shippers, at the end of the day, it introduced a bill that does not reflect all the suggestions that were made. None of the amendments, NDP or Liberal, were accepted by the Standing Committee on Transport, Infrastructure and Communities. Here again, the government is not open to suggestions.

It is unfortunate because we said that we support the bill. However, today, we are pointing out certain flaws. The government seems to be digging in its heels once again. Of course, this is a majority government that can do as it pleases. When it comes to protecting shippers, we are told that it is part of our economy. However, that is no longer the case when it comes to protecting consumers. It is difficult to understand why the Conservative government is not listening to what the opposition has to say and, in particular, to what the shippers and the witnesses told the committee.

A lot of work remains to be done. We are used to having a government that does not listen very well. We are supporting this bill because it is a first step and we are headed in the right direction. However, the government has not taken advantage of this opportunity.

As for the Liberals, they knew when they decided to privatize CN in 1995 that a virtual monopoly would be created. Why did they not introduce this type of bill? Why did they not do more and include what they are asking for today? When the Liberals were in power between 1995 and 2006, why did they do nothing about this? Why did they wait so long, and why are they getting all worked up today and saying that they are the defenders of the system and they want to protect shippers?

We have been saying from the very beginning that there was much to be done at the time. We lament the fact that it took the Conservatives so long to act and that the Liberals' failed to make progress on this file when they were in government.

I mentioned some amendments in the report that should have been included. A 2008 study, which was released in 2011, was a starting point. The NDP is not simply voicing its opposition to the bill, but is also making suggestions. We suggested including details about the service agreements. At this point, there really are none because there is a monopoly. We want a better system that better protects shippers.

There is a problem with the dispute resolution mechanism in service agreements in the event of breach of contract. With this bill, shippers must pay the fees for the arbitration process that will be put in place. Why not make the big corporations, CN and CP, pay these fees and solve these problems since they are the reason for bringing in these agreements?

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

Mr. Speaker, as I have said a number of times, we spent a good number of years speaking to people before we brought the bill forward, consulting with Canadians and with people within the industry. We have now a very broad cross-section of people in industry who support the bill, and they want us to get on with it.

The member was quite right that the Liberals, when they had their opportunity, did nothing with this. As I said earlier, we are very grateful that the NDP joined with us to get rid of the Liberal Party and bring in an accountable government back in 2006.

I want to focus on one part of the his speech and what we have heard constantly from some of the members opposite with respect to the NDP future policy of nationalizing CN Rail.

In the context of this debate, has the NDP costed out how much it would be to nationalize Canadian National Railway, what the cost would be to the shareholders of that company and how that would improve freight rail service in Canada? Would it increase taxes to cover the cost of that nationalization? Would it make other cuts to cover the cost of that? Has the NDP costed that out, or is that all just part of the—

[The Acting Speaker, Barry Devolin]

The hon. member for Brossard—La Prairie.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I am not sure I want to thank the member for that question, but I will do so anyway, because I am polite.

First of all, let me say that we are not in favour of nationalizing CN. What we said, and I will repeat it again, is that the problem was created in 1995, when the Liberals were in power and they decided to privatize CN without putting any regulations in place to protect shippers. My colleague should agree with us on that.

I think he will agree that the Liberals are to blame for their inaction, but then he also needs to look in the mirror and ask himself why the Conservatives did nothing about this when they came to power. Why did they wait so long? When they finally decided to do something, they introduced a bill that does not go far enough and does not do enough to protect the rights of shippers. That is the problem we have with this bill.

Instead of making up ridiculous stories, the Conservatives should really focus on what is going on here and on the bill, which unfortunately still has flaws. It is a step in the right direction, but it needs improvement.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, at times the New Democrats lose their focus and want to take shots, whenever they can, at the previous Liberal government.

It is important for us to note that the shippers, the industries—agriculture, forestry, minerals, chemicals, fertilizer, the oil and gas industry, our very important manufacturing industry and others—collectively, back in 2006-2007, then came to the opposition and the government of the day saying that they needed this type of legislation brought in. That is where the issue originated.

We could be very critical and agree that the government took quite a while to respond, but we do have legislation before us today. We in the Liberal Party will be supporting the legislation through third reading, but we want to see amendments to the legislation.

The deputy leader of the Liberal Party proposed three amendments at the third reading stage. Had the amendments of the member for Wascana been allowed, would the NDP have supported them, which would have been of great benefit for us?

[Hoang Mai, NDP, Brossard—La Prairie, QC]

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

First of all, we do not mean to bash anyone, but I am simply explaining why we now have this problem. With regard to the privatization in 1995, one cannot help but wonder why no one looked at the possibility of not privatizing the tracks. That issue could have been debated and we could have avoided our current situation, with a virtual monopoly, poor service, and so on.

As for amendments, we proposed some at the Standing Committee on Transport, Infrastructure and Communities. They essentially supported what the shippers coalition was calling for. We proposed some things, but unfortunately, the Conservative government did not accept any of our very well thought-out amendments.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, first I want to say that I will be splitting my time with the member for Surrey North.

I want to thank my colleague from Trinity—Spadina for all of her hard work and passion in this field. I will start with a short resumé of what happened and why we are here today.

Essentially, the bill gives rail freight customers and shippers the right to enter into service agreements with railway companies. It also establishes an arbitration process, led by the Canadian Transportation Agency, to resolve disputes in the event negotiations fail and sets penalties for violations of arbitration decisions.

I would like to give everyone some background. In 1995 the Liberals, who were in power at the time, decided to sell CN. The problem was that they neglected to put in place an effective regulatory framework for rail transportation. As a result, railway companies held a virtual monopoly. The Liberals were in power until 2006 but did nothing to address this problem. There was nothing in place. The problems likely to arise in these situations usually affect prices. Indeed, since railways had a virtual monopoly, users sometimes had to pay very dearly.

In committee, witnesses told us that sometimes the trains arrived without enough cars. In other cases, trains failed to come in on time. Finally, in 2006, when the Conservatives rose to power, they came under a lot of pressure. Seven years later, the bill is before us. We will support the bill, but I would still like to add something.

I had the chance to speak to Bill C-52 at the last reading stage. Since then, this bill has been studied in the transport committee, of which I am a member. This bill is a first step in the right direction and I support that, so I will vote in favour of this bill. However, it is important to note that several witnesses who came before the transport committee to speak about this bill wanted amendments. With the suggested amendments, this bill would become a robust tool and industry standard for Canada.

The committee received a list of six amendments that were the bare minimum of what the Coalition of Rail Shippers and other witnesses would like to see in this bill. The Coalition of Rail Shippers is the main rail freight customer stakeholder organization in Canada. These witnesses are experts in their field and key actors in their industry. It is important that the House acknowledge the amendments suggested by this organization. It is also important for us to consider the expert testimony that the transport committee received.

The following six key amendments were suggested by the shipping community: first, include details on service agreement components; second, delete the term “operational” as it would limit the ability to negotiate and arbitrate service agreements; third, include a dispute resolution mechanism in service agreements for breach of contract; fourth, limit the ability of railway companies to levy penalties and charges that are not in service agreements; fifth, limit arbitration for failed service agreement negotiations to matters raised by the shipper; and, sixth, limit railway companies' ability to raise network issues in arbitration, i.e., finding convenient excuses for not agreeing to shippers' demands in contract negotiations and arbitration.

These amendments are sensible, practical and, might I add, modest. Unfortunately, all six amendments were defeated at committee by my colleagues opposite. My NDP colleagues and I moved nine amendments at committee. The committee is there to provide space and time for parliamentarians to consider bills of law in depth. How can we uphold the value and ethics of this democratic place when already during witness testimony it is clear that the Conservatives are unwilling to make any changes to the bill? Why are the Conservatives blocking parliamentary work at the committee stage?

Here, I would like to point out that the Conservatives asked only one question about the nine amendments that my three colleagues and I proposed. I am somewhat annoyed by that approach. Committee work is meant to foster discussion.

I remember when I was elected two years ago, members from all sides told me that there were too many attacks in the House. I was also told that at times there are more monologues than discussions. However, I was also told that it is different in committee, and that it is in committee that the real group work happens because everyone wants to move this country forward. That is what I was expecting.

I found myself serving on a committee where the Conservatives did not ask any questions. We proposed amendments to move things forward, but they did not want to discuss them. We talked about our amendments and we explained them. We explained why we wanted to amend the bill and which expert testimony we based our amendments on. They had absolutely no interest, however, because their minds were made up before they even heard the witnesses.

As I said earlier, I will support the bill because it is a first step in the right direction. Without the rejected amendments, the bill remains a partial success for the shippers. I look forward to participating in strengthening the bill in the future by working with the Canadian shipping community and fighting the issue of price gouging and uncompetitive rail freight rates.

The NDP has participated in efforts to provide the shipping community with better legislation and regulations for quite some time, and we will continue to be involved in this process to benefit shippers by addressing the shortcomings of Bill C-52.

Earlier I mentioned that several witnesses at committee honoured the amendments brought forward by the Coalition of Rail Shippers. These included Pulse Canada, the Mining Association of Canada, the Forest Products Association of Canada and the Grain Growers of Canada. All those groups wanted those six amendments to be adopted.

In February I raised some concerns that I had with the bill, including pricing discrepancies between CN and CP; the lack of market competition, innovation and regulation, because CN and CP operate as a duopoly; and the poor quality of rail freight transportation services.

The parliamentary secretary just asked my colleague a question about the fact that we have one of the nicest systems in the world, but I have some statistics.

According to the Rail Freight Service Review, 80% of shippers are unhappy.

I am not so sure that it is the nicest system in the world. I hope not, according the statistics.

At the last reading, I stated that the rail freight service review found that 80% of shippers are not satisfied with the services that they receive. This poor quality of services is affecting Canadian exporters, damaging our reputation in the global market and costing us jobs. We cannot afford to be left out of competitive business deals because the CN and CP cannot guarantee satisfactory service.

I will finish by saying that we must make rail freight services work again for shippers across Canada. We can accomplish this with strong legislation, a strong Bill C-52. I will support it even if I still believe that some amendments should have been adopted by the government.

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

Mr. Speaker, I am interested to hear how the NDP now is in such favour of working together at committee because I was here when our government was a minority and the NDP, the Liberals and the Bloc would turn down every single amendment that government members brought forward. They would turn down witnesses. They would turn down reports. They would force committee studies, but now, all of a sudden, the Canadian people have spoken and they have given this government a majority mandate to get the job done across this country. All of a sudden we have heard time and time again that opposition members do not agree with the Canadian people. We know that.

I keep hearing this and I am wondering if the hon. member at committee asked about the nationalization of CN Rail, because the opposition members constantly talk about it in their speeches. I am wondering if the member asked questions about how much that would cost, whether the people who use the rail service are in favour of nationalizing CN Rail, how much it would cost Canadian taxpayers, how much it would cost shareholders of CN Rail to nationalize it and how nationalizing CN Rail would actually help freight services.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, I am not sure if my colleague opposite was listening to my speech, because I was not talking about nationalization. However, I did mention that the Liberals sold CN in 1996.

Since the member asked me how things are working in my committee, I am happy to tell him that we have problems.

Since I was elected, 99.3% of the amendments we have proposed over the past two years have not been accepted by the Conservatives. That is not what I call teamwork. I will not talk about how things were before I arrived, because I was not here. I am talking about what I have seen so far.

We had another problem in committee, and I actually moved a motion on that. The committee chair decided that the meetings will be one hour and forty-five minutes long instead of two hours. In my view, that affects my participation in the committee, because I am often the one who has less time to speak. Given the sequence of speakers, I get less floor time.

The Conservatives do not ask us questions and do not want to talk with us. That is another problem facing the committee right now.

I did not ask specific questions about nationalizing CN. Rather, I am interested in what we can do with Bill C-52 to improve Canada's rail system.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the NDP has found itself in an interesting position. Some speakers stand up and take their shots at the Liberal Party by saying the Liberals privatized CN back in 1995, implying that it was the wrong thing to do, yet very few of those members have the courage to stand in their place and say that as a political entity they will re-nationalize it. The NDP is scared to say exactly where it is today on that issue. Does that party want to nationalize it? If so, there is a significant cost. That party has an obligation to indicate whether or not that is what it wants to do. Do you want to nationalize it, or did the Liberal Party do a good thing back in 1995?

With regard to dealing with our rail lines, rail freight rates have always been a primary concern of the Liberal Party. If we deal with the shippers properly, all Canadians will benefit.

[The Acting Speaker, Barry Devolin]

The hon. member for Winnipeg North asked the Chair for an opinion. I would just remind the hon. member not to speak directly to his colleagues but to direct all comments through the Chair.

The hon. member for Notre-Dame-de-Grâce—Lachine.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, that is rather strange.

I just stated the facts in my speech: the Liberals sold and privatized CN. I am not saying that it was either a good or a bad decision; what I am saying is that the government should have implemented regulations before selling, privatizing and denationalizing CN. The government should have come up with some rules to make it work. Simply privatizing a company and leaving the rest to the market is not okay.

We saw prices that made no sense, and people came to tell us that the service was not good. When 80% of those who use a service say that it is not good, it is no longer a question of nationalization or denationalization. We must not forget that it is an essential service, as the member said. If it is an essential service, there must be regulations to ensure that it is a good service.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, it is an honour to speak to this bill, which is very important to my constituency of Surrey North. I have a number of port facilities and a major rail yard in my constituency.

The railway had an important role in the history and development of our country and in bringing people together from east and west. Even today, the rail lines play a very important part in the economic development of our country. Over 70% of surface goods are transferred by railroads in our country, and that is a very significant part of our economy, which depends on the movement of goods, whether from one part of Canada to the other or as exports.

The problem right now, which the Conservatives have been sitting on for the last five years, is that small business, farmers, miners and other industries in western Canada have been asking the government to help them get their products to ports and various markets and to provide some sort of guidelines or agreement with the railway companies so that they can move their products there.

I want Canadians to know that we have a dual monopoly in the country. CN and CP control railway traffic throughout Canada. The problem has been inefficiencies in getting railway companies to provide on-time service or to guarantee that they are actually going to pick up products to deliver to various ports or markets.

The Conservatives are very keen on signing trade agreements. However, we have seen what the trade deficit is even now. Under the Conservatives, we have the biggest trade deficit in the history of the country. We have a trade deficit of over $50 billion. When they took over, we had a surplus of $18 billion, but now we have a trade deficit of over $50 billion.

The Conservative government has no clue how it is going to improve the well-being of our farmers, miners or forestry towns or how it will create well-paying jobs for Canadians in the western part of Canada. It is bent on signing paper trade agreements, but what it needs to focus on is the needs of our community, the needs of our farmers, our miners and our western producers so that they can get their products out to the ports and the markets on time. The government has failed to invest in the infrastructure needed for this country to progress into a greater trading and export nation so that we can generate these jobs.

Under the Conservative government, we have seen a lack of infrastructure funding for moving our products out to the ports. It is hurting our jobs and communities. It is hurting our ports in that they do not know when the products are going to come. It is hurting our trucking industry. It has a ripple effect if the products do not reach their destinations on time because of the inaction by the government over the last five years at least.

I was listening to the previous member from the Liberal Party, the member for Winnipeg North. Liberals will have crocodile tears as they say they will support this idea and provide Canadians with a proper rail service. I am sorry to say it, but where were they? Prior to 2006, they had a chance to provide help for our forest communities, mining towns, pulse growers and farmers in the prairies, but they will say one thing when they are not in government and do exactly what the Conservatives do when they are in government. That is their record.

The Conservative record is also one of inaction. They have failed to provide support for our businesses and for our farmers to help them get their products to the market on time.

I sit on the international trade committee, where I have heard many times from pulse organizations, farmers, beef producers and all sorts of other industries in western Canada. They have been complaining and have been lobbying government for a number of years to let the government know that they have issues in getting their product to the market. Part of the reason is that rail companies fail to deliver on the commitment to have their products shipped out to the ports or to other parts of North America. Time and time again we have seen this delay, this foot-dragging, from the Conservatives for the last many years.

This is a small step in the right direction. A number of amendments were introduced at the committee stage. As with other bills that have been introduced in this House that go to committee, 99.3% of the amendments that the NDP has introduced have been rejected. One would think maybe 5% or 10% would be approved to improve the bill and help our communities, businesses and farmers by improving the effectiveness and efficiency of our rail system. However, even if the bill is poorly drafted or has spelling mistakes, the Conservatives believe that whatever they have is it. No amendments will be approved at the committee stage. That has been the Conservative record.

What we need to do to provide help for our businesses, our farmers, and our forestry industry is help them get their products out. We introduced a number of amendments; not only that, the industry provided at least six amendments that could help improve the bill and could help the farmers, miners and forestry towns. However, the Conservatives stonewalled those amendments from being incorporated into the bill.

This is one small step. As with other bills I have seen in this House, we as parliamentarians can do a lot more than what is being done by the government. I think we can help our businesses. We can improve our forestry towns. We can help our farmers.

Farmers put in a lot of hours. Some of them put in 14 or 16 hours a day and 80 or 90 hours a week. Farmers work hard to bring their crops to fruition; it is our job to help them get their products to market. Clearly the Conservatives have failed miserably at investing in the infrastructure that would allow our farm products, our industry products and our forestry products to be exported. That is the Conservative record.

As I have said previously, under the current government we have the largest trade deficit ever. That should be a concern to all Canadians. When the Conservatives took over, we had a trade surplus. Now we have a trade deficit of over $50 billion. That is a concern to me and a concern to my community, because jobs are dependent on trade exports.

Conservatives have failed miserably on this agenda of providing infrastructure, not only to move our goods in general but to move goods within cities. We have seen the gridlock. I have seen the gridlock in the Lower Mainland in greater Vancouver. I have seen the gridlock in my own city. I have seen gridlock in ports. Conservatives need to invest locally, in communities, so that we can move our products overseas.

Again, I will be supporting this bill. It is a small step in the right direction. However, the Conservatives can do more to help our farmers, our miners and our forestry industry.

[Dean Del Mastro, Conservative, Parliamentary Secretary to the Prime Minister and to the Minister of Intergovernmental Affairs]

Mr. Speaker, one thing the opposition has given no recognition to is the significant improvement in grain shipments from Canada's west.

When we became the government in 2006, we were effectively overrun with complaints from western Canadian farmers who were having problems unloading their grain at various elevators and having that grain picked up by the railways. However, since 2006 on-time delivery and on-time shipments have improved significantly, to the point where we hear very few complaints. The system is working well. As I indicated, there are record grain shipments out of Canada's west today. There are record grain shipments out of Canada as a whole. This had been a real strain for grains and oilseed producers.

In fact, the softwood lumber industry in British Columbia, where the member is from, is booming. It came back in a significant way. They found ways to innovate, and the railways are playing a big part in B.C. ports.

The member mentioned the railway and Canada's history. The railway was the national dream. It is what brought B.C. into Confederation. Today, it is a huge part of B.C.'s strength, with both shippers and the railways combining for a successful story.

This is a good bill that the member should support.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, in fact one of the port facilities, Fraser Surrey Docks, is my riding.

I do not know who this member has been talking to, but I have talked to wheat farmers, forestry officials, the pulse industry and beef producers. They have been complaining over the last number of years about the ineffective, inefficient rail freight service in this country.

The Conservative government has failed for five years to provide infrastructure for an efficient rail service for our farmers. The government has failed to invest in the infrastructure funding needed to move the goods that our farmers produce.