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

[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.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, yes, it is a good bill, and the Liberal Party will be supporting it, but it could have been a better bill, and that is what we need to emphasize.

For example, I will make reference to one quick amendment moved by the deputy leader of the Liberal Party:

For greater certainty, nothing in this Act prevents the arbitrator from including in his or her decision terms providing for compensation payments to be made by the railway company to the shipper in the event of losses incurred by the shipper as a result of any failure by the rail company to fulfill its service obligations as provided under section 169.31.

The point is that the bill could have been made a whole lot better.

Would the member not agree that this amendment highlights a lost opportunity to make the bill a better piece of legislation to the benefit of everyone?

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, the member is right about a lost opportunity. Before 2006, the Liberal government had many years to improve this situation and provide efficient and cost-effective service to our farmers, the forestry industry, et cetera. The Liberals failed on that. However, now they have crocodile tears, saying they support this bill and would like to introduce more amendments.

They do one thing while in government, which is actually nothing, like the Conservatives who sat on this important bill for our farmers for five years, yet the Liberals will say exactly what we have been advocating for, efficient and cost-effective service, when they are in the opposition.

I have no sympathy for my friend the member for Winnipeg North

[Dan Harris, NDP, Scarborough Southwest, ON]

Mr. Speaker, it is a pleasure to rise again to speak to Bill C-52. When many people were going to bed last night, we thought we would be debating a different bill this morning. However, from time to time the government does like to make late-night changes to throw the opposition off and to play games.

I now find myself in a position of supporting a bill that is only a half measure. Once again, a bill has come back to the House from committee wherein the Conservative majority has shown complete disdain for the testimony and recommendations made by key stakeholders. Once again, the Conservatives had a chance to significantly improve a bill at committee, but as in all other committees, it used its majority to shut down sensible and considered amendments, which could have easily improved this essentially flawed legislation.

Canadians are watching and seeing quite clearly how the government lacks any of the accountability it once supposedly so lovingly cherished and promised to Canadians. The recent growing scandal in the Senate only acts to highlight the arrogant sense of Conservative entitlement that the members on this side of the House see every day during our work in committees. This arrogance will come back to bite the government in the rear. Sadly, it also means that Canadians end up paying the price for the government's bad decisions.

The Conservatives had a chance to get Bill C-52 right but instead chose to do only half a job. They could have chosen to help strengthen a very significant part of our economy. Instead, they once again caved in to powerful lobbyists and decided to protect their big rail buddies, leaving Canadian shippers holding the bag and the costs.

Poor rail freight service is hurting Canada's exporters, damaging our productivity and global competitiveness and costing us jobs. We cannot afford to lose international business because big rail cannot get its act together.

Disruptions to rail freight services, as well as poor, unacceptable services, are costing the Canadian economy hundreds of millions of dollars every year. Idle manufacturing plants and mines, rotting crops and missed deliveries to outgoing ships due to inefficient and dreadful rail services are a daily reality for Canadian industry.

It is important to note that rail transport is the backbone of the Canadian economy. More than 70% of all surface goods in Canada are shipped by rail. However, 80% of service commitments for agricultural rail customers are not being met by the rail companies due to such issues as delays and an insufficient number of railcars. The recent rail freight service review, which has been mentioned time and time again today, found that 80% of shippers are not satisfied with the services they receive. That means there is only a 20% satisfaction rate, which is abysmal. In any other industry, without this existing duopoly with CN and CP, businesses would be run into the ground for having such poor service records. Rail freight customers, from farmers to mining companies, are suffering from this virtual monopoly. In most parts of the country, shippers cannot choose between rail service providers because they only have access to either CN or CP, and that is if they still have rail service.

Rail line abandonment has been brought up more than once today. A couple of weeks ago I was driving through Arnprior, which is not far from here, expecting to cross the railway line, but it had been torn up. In the prairie provinces, the short lines that give access to the agricultural industry and farmers to reach the main line terminals and distribution centres are being ripped up. In the last 15 years, we have lost more than 10,000 kilometres of rail in Canada, which has been torn up because CN and CP have chosen to change the distribution methods. There is really no cost to them; they will not suffer, because there is no other game in town.

We have seen some real entrepreneurship in the prairie provinces where farmers, local municipalities and communities have banded together to bring rail service back into their communities. They are forming co-ops to save their short lines and bring their products to market in a more effective way, no thanks to the current government or the one before it.

Shippers are routinely suffering from service disruptions, delays and various forms of non-performance by CN and CP. Deliveries and pickups are done on time or are skipped altogether. Frequently, even the number of ordered railcars is not matched by delivered railcars, and sometimes cars are damaged. A broad range of industries is affected by the situation, from natural resources to manufacturing, including agriculture, forest products, mining, chemical, and the automotive businesses. A large portion of the goods in these industries is destined for export. Lacklustre rail service is thus hurting Canada's exporters' ability to compete in global marketplaces. For example, soybeans from Argentina enjoy a competitive advantage in markets like Japan and China because they are delivered faster and more punctually than soybeans from Canada, despite the fact that the total distance covered is significantly shorter for products coming from Canada.

For years now, shippers have been voicing their discontent, but no concrete action was taken by the Conservatives. Bill C-52 would be a half-hearted attempt to level the playing field for industries that are dependent on reliable, speedy rail freight services. Hundreds of millions of dollars in economic losses, decreased competitiveness in the global marketplace and lost jobs apparently do not interest the Conservatives.

Shippers are so desperate that any form of protection is welcome, which is why so many industry groups are supporting the spirit of this bill. However, the watered-down Conservative bill comes as a disappointment for many across those industries. Since 2007, a talk-it-out-and-wait tactic has been employed, starting with the promise of an expert panel review. The rail freight service review started in 2008. The independent panel tabled its final report in early 2011. Half a year later, the Conservatives initiated a mediation process that did not yield any results; it was more wasted time from the other side. Presumably, with the backing of the Conservative government, CN and CP management were unwilling to make any meaningful concessions. The mediation process, led by retired Conservative politician and university chancellor Jim Dinning, failed and his report was released in June 2012.

Parallel to the end of the mediation process, my colleague from Trinity—Spadina tabled a private member's bill, Bill C-441, the rail customer protection act. The private member's bill, coupled with advocacy work from the shipping community, put pressure on the government to follow up on the promise to actually table legislation.

It is also interesting to note that CN undertook a massive lobbying effort last year, first to prevent the bill and then to water it down. Dozens of documented visits to government offices and a media campaign showed its determination to keep the status quo. I would remind the House again that the status quo means that 80% of shippers are unsatisfied with the service that CN and CP are delivering.

Bill C-52 would focus squarely on commercial agreements between rail companies and shippers from a procedural point of view, having the rights to a service level agreement arbitration process in the case of failed negotiations, but not at any other time. Also, it would not address the other elephant in the room: pricing and cost. Certainly it would give an arbitration process, but any penalties garnered from that would not go back to the shippers to compensate them for their losses and their costs; they would go to the government.

The member for Elmwood—Transcona earlier today spoke about how they would have recourse to the courts. Yes, of course they would, but that would bring many costs and time and effort there, with no guarantees, of course. We should be designing bills that would not seek to actually draw people into the legal system. We should be avoiding having people unnecessarily go to court. As for the $100,000 limit on the fines, CN made $3 billion in profits last year, so a $100,000 fine could just be classified as the cost of doing business.

The consensus of the shipping community was to deal with pricing later and tackle service level agreement issues first. While Bill C-52 would fall short on a number of stakeholder demands, it is prudent to support the bill as the shipping community believes it would be a good first step. The task now is to address shortcomings and strengthen the bill to the benefit of the shippers and also to ensure that they get what they need in future rounds of negotiations.

The NDP proposed nine amendments at committee that were summarily rejected by the Conservatives. As my colleague, the member for Notre-Dame-de-Grâce—Lachine mentioned, there was only one Conservative question during all of those amendments, so they really were not interested in hearing about the suggestions we were making.

All those industry groups that the Parliamentary Secretary for the Minister of Heritage mentioned over and over again also submitted several recommendations to the committee, which the government also ignored. I would like to hear him answer why the government ignored those questions the next time he gets up to try to grill us on nationalization.

I am looking at the time, Mr. Speaker. I would definitely like to have some questions from my hon. colleagues before we hit question period, so I will wrap up now.

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

Mr. Speaker, I will set out a few dates in the context of this. In 1961 the NDP was founded. In 1962, it lost an election. In 1963, 1965, 1968, 1972, 1974, 1979, 1980, 1984, 1993, 1997, 2000, 2004, 2006, 2008 and 2011, it lost. One would think that after losing 16 elections, these guys would finally understand that what Canadians want are governments that put their needs first.

One would think that after the devastation in B.C., where New Democrats were supposed to win by massive amounts but lost when their leader turned his back on jobs and economic growth for the people of British Columbia, they would finally get it. Clearly they do not.

Here they are in this House arguing to nationalize CN Rail. At what cost would that be to taxpayers? At what cost would that be to shareholders who might actually be in the gallery petrified that their investments are going down the tube?

The New Democrats talk about the $3-billion that CN Rail made as if it were a curse, or a disease. My God, a company has made money in Canada and is creating jobs and economic growth—

[The Acting Speaker, Barry Devolin]

Order. The hon. member for Scarborough Southwest.

[Dan Harris, NDP, Scarborough Southwest, ON]

Mr. Speaker, what is a curse and a disease is a government that thinks it is okay to lose complete track of $3 billion and not have any shame about that fact.

What is a travesty is a government that thinks that the unelected, unaccountable and entitled Senate should be sitting in decision of the bills made by the duly elected people of Canada who represent Canadians. The Conservatives obfuscate and deny; they block and they talk about how honourable these people are, when they are milking the taxpayers for millions of dollars, when they are submitting improper claims and then saying they were confused by the difficult one-page form. Well, if they cannot fill in a one-page form, they should not be here.

[The Acting Speaker, Barry Devolin]

Before I go back to questions and comments, I will just remind all hon. members that their questions and answers ought to be related to the matter before the House.

The hon. member for Winnipeg North.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, we need to look at the reason the legislation is before us today. It is not because of the Conservative government. It is not because the NDP is having a tiff. The reality is that we have stakeholders, such as our industries—agriculture, forestry, minerals, chemicals, fertilizers, oil and gas—and of course our manufacturers. They provide the jobs that Canadians really and truly want. That group of people led to the pressure for the government to materialize Bill C-52. They worked in co-operation with opposition parties. They want a sense of co-operation coming from the House of Commons and they are not seeing that. The government turned a deaf ear to even a simple, effective amendment from the deputy leader of the Liberal Party.

My question for the member is this: would he not agree that this legislation could be improved if we had amendments that were accepted by the government?