Bill C-52 (Historical)

Fair Rail Freight Service Act

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

This enactment amends the Canada Transportation Act to require a railway company, on a shipper’s request, to make the shipper an offer to enter into a contract respecting the manner in which the railway company must fulfil its service obligations to the shipper. It also creates an arbitration process to establish the terms of such a contract if the shipper and the railway company are unable to agree on them. The enactment also amends provisions related to air transportation to streamline internal processes and certain administrative provisions of that Act.

Fair Rail Freight Service Act

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Mr. Speaker, I have a question for my Conservative colleague.

CN made $2.7 billion in profit last year. Do the Conservatives really think that a $100,000 penalty is going to change the way the company operates?

[Mark Adler, Conservative, York Centre, ON]

Good grief, Mr. Speaker, only the NDP would see profit as an evil. It is absolutely ridiculous.

We on this side of the House have imposed penalties in the range of $100,000, but we encourage the parties to work it out commercially together, not have something imposed from the top, which we know the NDP members love to do because they think that government knows better than individuals do, government knows better than the two parties who are negotiating in free and open agreement do.

We on this side are focused on what matters most to Canadians, and that is jobs, growth and long-term prosperity. We see profit on our side of the House as a good thing, not an evil, as does the NDP.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I would give the member credit. He sure does have those talking points from the Prime Minister's Office down pat. I will give him full credit for that.

My question is related to a lost opportunity. The government was in a wonderful position where it had substantial support outside of the House and inside the House to move forward. A number of amendments were brought forward that would have provided more strength to the legislation, that would have had a broader appeal, particularly to many of the stakeholders, the shippers, the people the hon. member says are generating the jobs.

We do recognize the valuable role in job creation and how they generate the jobs for our economy, there is no doubt about that.

My question to the member is, and he should put the speaking notes aside for now, why does he feel that his government put a pass on improving the legislation, which would have given more strength to the legislation and which would allow for an even fairer playing field for our shippers from coast to coast to coast?

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, our government consults more than any other government in Canadian history. There were extensive consultations, not on the economy, but on Bill C-52. In fact, on the bill itself, for example, Kevin Bender, president of the Western Canadian Wheat Growers Association said:

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

This goes on and on. I have, from the president of the Grain Growers of Canada, from the chemistry industry, from the Forest Products Association of Canada, quote after quote on how Bill C-52 would create a fair, open, accountable and legitimate form of commercial interaction between the shippers and the railways.

The member talks about a lost opportunity. I will tell him about a lost opportunity. 1993 to 2006 was a lost opportunity when the Liberals were in power in this country. They sat on their hands, did nothing and left the country in a mess. It is our government that is picking up the pieces and giving Canada back to the Canadians.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, as part of our natural resource committee, we have been studying market diversification in the energy sector. I note that Jim Facette, the president and CEO of the Canadian Propane Association said this about the bill:

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.

One of the things we did hear as part of that study and testimony was the propane industry's ability to potentially expand its markets to replace higher carbon fuels all across Canada.

As we know, rail is a good way to get into many of our rural areas.

I wonder if my colleague would comment on the possibilities of expanding existing businesses in Canada with strong, stable rail service?

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, I want to thank the member who has provided the first informed and educated question of this question period.

Let me say that it is our government that has made the economy the number one priority. It is our government that focuses on jobs, growth and long-term prosperity for Canadians. It is our government that has the lowest debt-to-GDP ratio of any G8 country. It is our government that has the strongest job creation record of any country in the G8.

Our government has created the conditions for business to thrive and to grow in this great country of Canada. In the interests of fairness and support for business, we have introduced Bill C-52, which the member has commented on, which would help small business. It would help big business. It would help the energy sector. It would help the mining sector. It would help all sectors of our economy, from one end of our country to the other.

Thank goodness that we have the best finance minister in the world and the best Prime Minister and leader that one could ask for to lead our economy as the number one economy in the G8.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, it is just unbelievable. They are all tooting their horn on the other side.

However, I do agree with the member that the big problem started in 1995 under the Liberals, when they decided that they were going to sell CN.

I had the opportunity to attend one of the committee hearings on this matter where the shippers indicated that they routinely suffer from service disruptions. Sometimes some of them would actually lose the freight they were shipping because it was going bad; it would not get there on time.

We see at committee after committee opportunities to strengthen the bill. We are not saying it is not a good bill. We believe it is a good bill. The only problem is that there have to be amendments. How could the Conservatives be so arrogant to believe that there should not be any amendments?

Let us look at this one, in particular. Nine amendments were put forward by the NDP and 10 by the Liberals. We did not pull these out of our hats. These amendments were brought forward by witnesses.

Why is that the Conservatives spend the money bringing witnesses here and they choose to ignore them all the time, no matter what? It is just unbelievable.

Why were all recommendations from the independent rail freight service review not incorporated into the bill? Why is it the Conservatives continue to ignore the requests of witnesses who would be directly impacted by the amendments they will not change?

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, I agree with the member on one specific point, which is that in 1995, under the Liberal government, it was an abomination, and we should have seen results back then. Typical of the Liberals, they just find it difficult to make priorities.

The member says that we did not listen at committee. We did listen at committee. We had a variety of witnesses from all sides. We had a thorough consultative process before the bill was even drafted.

I have a number of quotes. Let me just give the member one from Richard Paton, president and CEO of the Chemistry Industry Association, who said, on Bill C-52, “The level of service offered by Canada's railways can make the difference between companies investing here, or taking their business elsewhere”.

This government focuses on what matters most to Canadians—jobs, growth and long-term prosperity—and on creating an environment in which jobs can grow and we can maintain our position as the number one job creation economy in the G8.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I will be sharing my time with the member for Chicoutimi—Le Fjord. I also want to thank my colleague from Trinity—Spadina for her work as our transportation critic, for her tireless work with a community that is invested in seeing improvements to the Transportation Act and for her efforts to improve the bill.

Bill C-52 would amend the Canada Transportation Act. It is a bill that is long overdue.

Rail transportation is the backbone of the Canadian economy. It is in the DNA of our history, and it is something that touches a huge part of our economy. More than 70% of all surface goods in Canada are shipped by rail. We are a vast country and a country that is open to the world. It is very export oriented, and having good transportation networks is absolutely fundamental.

Many of us are familiar with the railway industry. I know that in my family, my grandfather, my husband and my mother all worked in the railway sector. It is part of our country, part of our history and part of our current economy. It touches so many Canadians.

What we have been finding through the study on the bill and leading up to the bill is that 80% of service commitments for agricultural rail customers, which means that they deal with food, feed and farm materials, are not met by the railway companies. There are serious delays, insufficient numbers of rail cars, et cetera. A rail freight service review found that 80% of shippers were not satisfied with the service they received.

What is the root of the problem? One would think that after a couple of centuries, we would be getting our rail service right, but sometimes when governments rush to fix one problem, they create other problems. Sometimes when governments have ideological blinders on, they are wilfully blind to the problems they are creating.

In 1995, the Liberals were in a rush to show that they were jumping on board the privatization bandwagon. They wanted to prove to the world that they could privatize with the best of them. One of the companies they rushed to privatize was CN. They privatized the company, CN. They privatized the tracks. What they forgot to do was put in any safeguards for Canadians, safeguards for shippers and safeguards for our passenger rail service in terms of access to the railway tracks. They basically turned it over to the private sector.

CN is doing very well. It made a profit of $2.7 billion. Bravo. It is doing well. It was just announced this week that the CEO made a salary of $48 million. I am sure he worked hard for every single penny of it.

The trouble is that these ideological decisions create problems. It was the Liberals in 1995 that unleashed this, and frankly, neither the Liberals nor the Conservatives after them, for almost 20 years, have done anything to fix the problems until this bill. It is with insufficient measures that they are trying to address the problems.

Let me say up front that this is a bill we will be supporting at report stage and third reading, but it is a weak bill. It is a bill that does not do the job Canadians really need it to do.

The bill would give rail freight customers or shippers the right to service agreements with rail companies. It is shocking that they have not had this before now, especially with the two majors, CN and CP. It also puts in place an arbitration process, led by the Canadian Transportation Agency, in cases of failed negotiations or where there are penalties for violating the results of arbitration.

This is positive. Canadians deserve fair and reliable freight services. This is obvious and logical.

Shippers pay good money, but they need a stronger position vis-à-vis the two main companies that form a duopoly. Together they have a kind of two-party monopoly. Their power is only partially addressed by Bill C-52.

There were recommendations by the shipping community at the committee stage that were sensible, practical and modest, yet the Conservatives ruled them out of hand with no serious consideration.

As the official opposition finance critic, I certainly know this. With every budget bill we have massive omnibus budget bills. We have been dealing with another one this week, Bill C-60, which again, is an amalgamation of all kinds of changes to different laws, many that have nothing to do with finance and budgets. We have seen that they never accept one amendment to any of their budget implementation legislation. Experts in their fields have testified at the finance committee that the government will have problems if it bullies ahead with certain changes, such as getting rid of the inspector general of CSIS. The expert who helped set up CSIS told us that this would cause problems, but it did not matter. The Conservatives are more expert than the experts, and they went ahead and made the changes anyway.

In this case, they heard expert testimony about why certain changes should be made. However, the Conservatives gave them no serious consideration. They rejected the changes out of hand, which is a bit sad, because this House ought to be about discussion, debate, learning, and ultimately, compromise to get the best laws possible for Canadians.

The bill needs further improvement. The NDP will continue to work with businesses and shippers across the country to improve this legislation and to tackle the issue of uncompetitive freight rates and gouging of the shippers. What we heard from businesses across the country was that they are getting poor customer service. They have had disruptions in rail service and unacceptable service costs. We heard about produce rotting, because it could not be shipped. We heard about lost contracts, because there was no guarantee that the goods could be shipped reliably, which made Canadian businesses unreliable suppliers. We heard about missed connections with ships for travel and shipping. This is a daily occurrence for industries across Canada.

Poor rail services are hurting Canadian exporters, damaging our global competitiveness and costing us jobs, which is a little ironic from a government that talks a lot about jobs. However, when the rubber hits the road, it often misses the train. That is what has been happening with this legislation.

There are a number of key amendments we put forward that the shipping community pushed for. They were championed by the NDP and defeated at committee. Without the rejected amendments, this bill remains only a partial success. Nevertheless, it is still worthy of our support. I want to stress that we are dissatisfied with the outcome. It is not what the shippers really wanted to see. Therefore, there is a need for future strengthening of this legislation.

Sadly, I see that my time is just about up. There is so much else to say. Thanks for the attention of this House. I look forward to the questions of my hon. colleagues.

[Lynne Yelich, Conservative, Minister of State (Western Economic Diversification)]

Mr. Speaker, I was pleased to hear the member talk about her support for the bill, because the bill is supported by Pulse Canada, the Grain Growers of Canada, the Forest Products Association of Canada, the Western Barley Growers Association, the Chemistry Industry Association of Canada, the Western Grain Elevator Association, the Canadian Fertilizer Institute, the Canadian Canola Growers Association and Western Canadian Wheat Growers.

I would like to ask my colleague if the NDP will support this bill and have it expedited as soon as possible.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, yes, of course, shippers across the country will want some progress. One step forward is better than nothing, especially after almost 20 years.

The hon. member knows full well that there was still tremendous frustration that the bill did not go further. For example, the penalties in the service agreements are very limited, a maximum of $100,000, and they do not compensate the shippers. The penalties go to the federal government. It can be costly to fight this arbitration process. There was concern about how all that would work. The arbitration process only applies in very limited situations and only to future agreements, not to existing ones.

There are still real problems, but, as the member heard me say from the outset, we will support the bill.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, a number of Conservatives have stood in their place and pointed out that X and Y support this legislation. There is no doubt there is a fairly long list of individuals or different stakeholders supporting the legislation. I would highly recommend to those listening or presenting this list that they also recognize the fact that just because they are supporting the legislation does not mean they would not like to see the legislation improved upon. In fact, I suspect if we were canvass a number of the groups that the most recent questioner put on the record, we would find a number of them would like to have seen some of the proposed amendments supported and passed by the government.

Is my colleague of the same opinion that many groups support the legislation because they see it as a step forward, but, in the same breath, it is a lost opportunity where we could have done so much more? The minister might have the support of all members in the House, but it does not necessarily mean the Conservatives should pat themselves on the back because they could have done a whole lot more. Would she agree with that synopsis?

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, after almost 20 years of dealing with the frustrations and tremendous power imbalance, I would call it, between the power of the railways to determine the level of service they will offer and the shippers who are desperate to get their products shipped within Canada, out of the country or perhaps to the U.S., certainly any step forward is better than nothing. I agree with that.

However, let me give one example of a shortfall. We have greater transborder trade and exchange with the U.S. than between any other two countries in the world, yet shipments from Canada to the U.S. are not covered by the legislation. It is another area where there is a shortfall. Does that mean this bill does nothing? No, of course not. It is a step forward, but it is a missed opportunity. It is not even half a loaf. It is a couple of slices of bread when perhaps we could have had the whole loaf. That is the point.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Mr. Speaker, I thank my colleague from Parkdale—High Park for her excellent speech and her responses to the people who asked her questions. I am always impressed by what a fine job she does as finance critic. I am convinced that Canada would be much better off if she were Minister of Finance today.

I rise in the House today to speak to Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), which comes to us from the office of the Minister of Transport, who is also one of my riding neighbours.

I want to say that, although the NDP and I are preparing to support this bill, which is a step in the right direction, we found the government's closed-mindedness during the study in committee unfortunate.

As opposition members, both Liberal and New Democrat, we put forward amendments that were supported by witnesses and experts in the field, and the Conservatives systematically voted against them.

I also want to congratulate my colleague from Trinity—Spadina on the incredible job she does as transport critic. Seriously, I would immediately substitute her for the minister from Roberval, who is the Minister of Transport, and transit in Canada would be much better for it.

To get to the heart of the matter, for those not familiar with this bill, I want to say that it partly addresses the problems of railway transportation service customers that do not have access to adequate service as result of the monopoly held by the major railway companies.

However, since the bill covers only new service agreements, current agreements and contract breaches, which are major causes of revenue losses for shippers, are not affected by Bill C-52. That is one of its deficiencies. We would have liked to remedy that in the Standing Committee on Transport, Infrastructure and Communities, but that was not done.

I will mainly address three points, given the time I have today.

First, Canada's shippers deserve fair, reliable railway transportation service that is worth what they pay. The need to strengthen the shippers' position against the monopoly of CN and CP is only partially addressed in Bill C-52, as I mentioned.

The six recommendations from shippers, in committee, were reasonable, practical and modest. That is why we proposed them, yet the Conservatives rejected them without even considering them. I will elaborate on this later.

There are other areas that need improving.

I would like to stress that the NDP, especially the member for Trinity—Spadina, the NDP transport critic, will continue to work with shippers. Shippers shared their concerns with us, and it is clear that despite the passage of this bill, this file will not be closed.

We are going to continue to work alongside shippers to improve Bill C–52 and address the problem of excessive prices caused by a lack of competition. This is a problem, for which the Conservatives are to blame, because we know that they are in bed with the lobbyists for the major rail companies.

Personally, I believe that the bill is biased. The Conservative government has acted shamelessly. It could have taken a closer look at the bill and what shippers wanted instead of systematically siding with the rail lobby.

Shippers are often SMEs. I stand up for SMEs. My riding is located in rural Quebec, in Saguenay—Lac-Saint-Jean. The main industries in the region, for those who are not aware, are forestry and aluminum production. The Niobec mine, not to mention agriculture, can also be found in my riding. All of these products can be shipped by rail.

This bill and the future of Canada's railways directly affect me. At the end of the day, the more that is done to improve the rail network, the stronger the economy that uses this mode of transportation will be. Rail transportation is far more environmentally friendly than transportation by truck.

Concerning my first point, many shippers are not satisfied with the services they receive given the price they pay for those services. They are especially critical of the rail transportation service interruptions and the hundreds of millions of dollars in costs to the Canadian economy year after year.

For Canadian industries, this may mean that harvests rot in the fields, that plants and mines are just marking time and they miss the ships meant to transport their products. It may also mean that inadequate rail freight services hurt Canadian exporters, jeopardize our competitive position internationally and cost jobs in Canada.

We cannot afford to suffer losses on the international marketplace just because the railways are unable to organize their services properly.

In addition, the clients of rail freight services, from farmers to mining companies, are penalized by the virtual monopoly in rail services. In most parts of the country, shippers cannot choose which rail carrier to use because they only have access to CN or CP. Such is the case in my riding. Even where both rail companies provide services, one of them usually sets its price too high, leaving the shipper with hardly any choice at all.

Shippers routinely defray the cost of service interruptions, delays and a range of performance shortcomings by CN and CP. Pickups and deliveries are made on time or not at all. The number of cars requested is often different from the number of cars provided, and the cars provided are sometimes damaged.

The situation affects many sectors, such as natural resources, manufacturing, agriculture, forestry products, mines, chemicals and the automotive sector.

For the most part, the products of these industries are intended for export. The poor quality of rail transport services undermines the ability of Canadian exporters to compete on the international marketplace.

As an example, soybeans from Argentina have a competitive advantage on, for instance, Japanese and Chinese markets because they are delivered more quickly and more punctually than soybeans from Canada, even though the distance covered by the Canadian products is substantially shorter. This clearly shows that there is a problem with our rail system.

Shippers have told the Conservative government about their dissatisfaction for years now, but the Conservatives have not taken any real measures. Since 2007, their approach has been to talk about it and wait. They started off by promising to ask a panel of experts to study the issue.

I know that the Conservative government likes to postpone the passage of good bills endlessly. However, at some point, you have to move from consultations to actually taking action.

What we want is clear. Farmers and other businesses have been footing the bill for years for the poor quality of rail freight services and have never really been able to get Ottawa’s attention. I am pleased that they have a listening ear in the member for Trinity—Spadina.

In order to truly remedy the situation, the NDP advocates strengthening the shippers’ position. We are on the side of businesses and exporters, and we are determined to get them the rail freight services they deserve.

Bill C-52 will cover only new service agreements, not existing ones, and that presents a problem. It means that many shippers will continue living with unreliable and unfair services with no access to the resolution process when existing service agreements are violated.

Arbitration is available only to shippers negotiating new agreements. Instead of offering all shippers speedy, reliable assistance through dispute resolution, Bill C-52 offers a limited arbitration process to a small group of shippers.

The arbitration process presented could be very expensive for shippers and place an unfair burden of proof on them by asking them to prove that they need the services of the rail transportation company.

One of the things we are calling for is the inclusion of penalties in service agreements, to compensate shippers for service interruptions, damage and lost productivity.

In its present version, the bill provides for maximum fines of $100,000 to be paid to the federal government, not the shipper. In order for fines to have a deterrent effect, they should be higher, given that CN made a profit of $2.7 billion in 2012.

The NDP will stand up for farming, mining and forestry communities, like the ones in my riding, and will fight to put an end to the unacceptable treatment and unreliable rail transportation services provided by the big rail companies.

We need a stronger bill to protect the customers. We will work with shippers to get them the fair and reliable rail transportation services they deserve.

The poor quality of rail transportation services causes Canadian shippers hundreds of millions of dollars in damage every year. Canadian jobs are at stake. We have to act now.

[Lynne Yelich, Conservative, Minister of State (Western Economic Diversification)]

Mr. Speaker, I want to put on the record what Richard Paton, the president and CEO of the Chemistry Industry Association of Canada, said:

The level of service offered by Canada’s railways can make the difference between companies investing here, or taking their business elsewhere...this legislation is critical — not only for our industry's competitiveness, but for Canada’s overall productivity and prosperity.

Would that encourage the member to help have this legislation be moved expeditiously?