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

[Steven Fletcher, Conservative, Minister of State (Transport)]

moved that Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), be read the second time and referred to a committee.

Mr. Speaker, I am pleased to rise today to support Bill C-52, the fair rail freight service act. I would also like to take a moment, since it is the first time this year that I have spoken in the House, to say that I wish everyone a great 2013 and look forward to passing great legislation, such as the act I am about to speak to.

First, I congratulate the Minister of Transport, Infrastructure and Communities for his tremendous work on this important file. I would also like to thank my colleagues, the former Minister of State for Transport, the hon. member for Yellowhead; the Minister of Agriculture and Agri-Food; and the Minister of Natural Resources for their contributions and support. In addition, there were many more people who contributed to the legislation in order to make it the best legislation possible.

Our Conservative government remains focused on jobs, growth and long-term prosperity. The bill advances these priorities. It will help shippers maintain and grow their businesses, while ensuring that railways manage an efficient shipping network for everyone.

Canadian businesses count on a reliable rail transportation system.

With 70% of Canada's surface freight moving by train, railways are extremely important to the competitiveness of our economy. In 2010, Canada's major freight rail companies, Canadian National and Canadian Pacific, served approximately 5,000 shippers and transported products to more than 10,000 destinations in North America and around the world.

As my hon. colleagues know, our government launched the rail freight service review in 2008. Its objective was to address ongoing issues raised by shippers concerning the reliability and consistency of rail freight service. We appointed an independent three-member panel to conduct a comprehensive review of service issues and problems related to the rail system in Canada. The panel was asked to submit recommendations to improve the efficiency, effectiveness and reliability of rail shipping in order to support trade and economic growth. The panel held broad consultations across the country, hearing from both shippers' representatives and railways.

Their recommendations proposed the use of service agreements to increase the clarity and predictability of rail service. These agreements would clarify and clearly define the services that railways would provide and how shippers and railways interact. This proposal is based on the idea that by working together to develop these agreements, shippers and railways can improve the efficiency of the supply train rail freight system and in doing so enhance their contribution to Canada's competitiveness in the world economy.

It is worth nothing that service agreements are a commercial tool, which our government believes is the best approach to improve the relationship between railways and shippers. We base this view on the fact that shippers and railways have always worked together commercially to define their private business dealings. Sometimes, however, shippers have been unable to negotiate contracts with railways to address service issues. Many shippers would like these agreements to know what service they can expect from the railways in order to manage their businesses and plan for the future.

On March 18, 2011, our government announced that it accepted the panel's commercial approach. In fact, we went beyond the recommendations. We put in place four key measures to improve the performance of the entire rail supply chain. First, we launched a facilitation process to bring together shippers and railways to negotiate a template service agreement and develop a process to resolve commercial disputes. This process focused on improving the private commercial relationship. This six-month facilitation, which was led by Mr. Jim Dinning, took place in 2012.

Second, we committed to table legislation to give shippers the right to service agreements with railways and to establish a process for obtaining an agreement if commercial negotiations fail. The fair rail freight service act would fulfill this commitment and give shippers the certainty that they would be able to obtain service contracts from the railways.

Third, we committed to establish a body of rail shippers to address logistics and develop standards to improve competitiveness. This group, known as a commodity supply chain table, will soon be established. Finally, we determined the need for an in-depth analysis of the grain supply chain to focus on issues that affect that sector and help identify potential solutions. This study is under way and should be completed soon.

Together, these measures deliver on our Conservative government's commitment to ensure Canada has the rail system it needs, one that supports strong economic growth and long-term prosperity.

It is worth noting why the legislation is needed. Canadians and Canadian businesses depend on rail to transport products to markets, both here in Canada and around the world, and it has to be done efficiently. We drafted the fair rail freight service act by working closely with and listening to the stakeholders involved. Shippers from a wide range of commodities and manufacturing sectors have told us what is important to them and what they need. Rail companies also explained the obligations they have to serve all shippers and the constraints they may face in carrying out their business.

This consultation helped us develop reasonable and intelligent legislation that would reflect the interests of both shippers and railways to meet the needs of the Canadian economy. This consultation also helped us develop reasonable and intelligent legislative proposals that reflect the interests of all the various stakeholders throughout our economy. The fair rail freight service act would create a strong incentive for issues around rail shipping to be settled through commercial means.

By requiring railways to offer agreements to shippers that requests them, the legislation would give the shipper the legal right to ask for a service level agreement. When a shipper requests an agreement, railways would have 30 days to offer one. The agreement would cover the terms of service that the railway and the customers would follow to move the shipper's goods. It could also include communication protocols and performance indicators, such as frequency of service, transit times and the number and type of cars, as elements that the rail companies would provide for their customers. This right to a service agreement would provide an effective tool for shippers to use in their discussions with railways.

In the event that negotiations for such an agreement fail, Bill C-52 proposes a fair, speedy and inexpensive process to establish the service contract. The shipper would be able to go to the Canadian Transportation Agency to ask an arbiter to impose an agreement. To make such a request, the shipper would have to demonstrate that an effort had been made to reach an agreement commercially and that a 15-day notice had been served to the railway prior to the request for arbitration. The shipper would trigger the arbitration and frame the service issues to be addressed. The shipper and the railway would then each have the opportunity to provide submissions to the arbiter with their views in respect to the contract.

This process, however, would be an interest-based arbitration. This means the arbiter must consider the interests of both the shipper and the railway in establishing the service contract. The legislation would provide guidance to the arbiter on factors to consider when establishing a service contract, including the shipper's transportation requirements and the overall obligations of the railway to provide service to all shippers. The arbiter would have the flexibility to determine the right service contract for each individual case. Every shipper is different. There is no one-size-fits-all approach. In establishing a contract, the arbiter must consider the unique circumstances in each case. As a result, arbitration decisions would be fair and reasonable for both parties.

Finally, the fair rail freight service act would provide a strong enforcement mechanism to ensure compliance with arbitrated service contracts. It proposes the use of administrative monetary penalties to hold railways accountable for their service obligations, as defined in the arbitrated contracts. If a railway breaches its service obligations, the shipper would be able to complain to the Canadian Transportation Agency. If the agency confirms the violation, it could apply a penalty of up to $100,000 for each violation by the railway.

Taken together, these measures of the right to service agreements, an efficient and speedy process when commercial negotiations fail and strong enforcement for arbitrated agreements would provide shippers with clarity, predictability and reliability when they need to grow their businesses and plan for the future.

Our primary objective is to encourage better commercial relationships between railways and shippers. This legislation creates a very strong incentive for parties to settle agreements privately. In most cases, shippers and rail companies should be able to negotiate terms and agreements on their own. Second, over the last number of years rail companies have improved their service. Shippers themselves acknowledge that service has improved, and I would like to take a moment to congratulate the rail companies for this progress. Despite this fact, we must pass Bill C-52 to solidify and improve upon these gains to ensure that Canada's rail system is well positioned for the future. We must ensure the entire rail system in Canada will be able to support the expected increases in shipping, which is bound to occur due to our government's robust trade agenda.

As demonstrated by several new and developing free trade agreements, Canada is turning increasingly towards global trade to generate economic growth. This means we need efficient and effective transportation networks to give Canadian businesses a competitive advantage in the world markets.

Before I conclude, I would also like to note that this legislation supports our government's responsible resource development agenda. In our efforts to modernize the grain sector, as we expand Canada's international exports, we need a rail transportation system that can move our resources to global markets efficiently and reliably.This legislation will make an enormous difference for our shippers in the resource sector. It will give grain farmers more predictable service as they work to sell their grain on the international market. It will give lumber mills more reliable service as they expand sales to Asia, and it will improve service to exporters of minerals, such as potash and coal. By improving the reliability and predictability of rail service, we help to strengthen Canada. We help strengthen Canadian companies and help increase Canadian companies' overseas sales.This legislation will create jobs, make Canada more competitive in the world economy and will make Canada a more attractive place to invest.

This proposed legislation offers a strong new tool to enhance the relationship between shippers and railways. Our Conservative government is proud to be taking this strong action to enhance efficiency, effectiveness and reliability of the Canadian rail freight system. I am convinced that these proposed measures will help build an even stronger freight rail system and contribute to Canada's success in international trade.

Bill C-52 will promote growth, create jobs and build prosperity for all Canadians. I encourage all members in this House to vote in favour of this legislation and refer it to the Standing Committee on Transport, Infrastructure and Communities without delay.

I would like to thank the many stakeholders, parliamentarians, and the shippers and rail companies, for their input in this process. We have come forward with legislation that I think has very broad support and will, as I have said many times already, make our country stronger. We live in the best country in the world, at the best time in history to be alive, and now we can ship our products more easily.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I thank my friend from across the way for his work on this bill.

The government is trying to establish some balance between the shippers and those who provide the products that drive our economy. Of all the goods that we move in this country, 70% go by rail. When looking at the details of what has been presented, the challenge for us is striking a balance when there is a problem. As the member well knows, there have been many years of problems with shippers not being able to get reliable service from the two large rail companies. One challenge is the way in which to resolve that dispute. I am curious as to the specific measures that the government has proposed to resolve disputes between the two. There is a bit of a power imbalance. When railcars do not show up as they have been promised, what recourse does the shipper actually have?

The Coalition of Rail Shippers asked for a clear conflict or dispute resolution model. I do not see anything nearly as strong as what the shippers have asked for in this legislation.

My second question is very specific with regard to penalties. Last year CN alone turned a $2.7 billion profit. The maximum fine that the government has suggested under this legislation for a rail company to break a contract, such as promising to deliver a number of cars and simply not delivering them, is $100,000. Would that be incentive enough? Is the stick strong enough to change the behaviour of some of these rail companies that simply abuse the smaller shippers particularly in the country?

[Steven Fletcher, Conservative, Charleswood—St. James—Assiniboia, MB]

Mr. Speaker, it is correct that historically there have been challenges between railways and shippers. However, we also have to recognize that railways have improved in the last few years. This legislation is designed to ensure that shippers and railways respect each other and that we have a continuous chain of supply.

If there is a problem there is a dispute mechanism, which would not be expensive. It would be done quickly and efficiently. I spoke to that in my remarks. The $100,000 a day fine is substantial with respect to the worth of CN or CP. They would not be in business long if they were to incur $100,000 a day, or per violation, too often.

It is still a competitive marketplace, and whomever provides the best service often wins in the end. This is a carrot and a stick approach. We look forward to railways and shippers working together. We are empowering shippers to be able to deal with the railways when they do not act appropriately.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I thank the Minister of State for Transport, the minister, the stakeholders and all of the people who were involved in putting this fair rail service agreement together.

I want to follow up on the member for Skeena—Bulkley Valley's question. The minister pretty much answered it, but I would like the Minister of State for Transport to reply.

As has been the case in the past, there have been 20 or 30 shippers who have had an issue with either CN or CP. If there were 20 at one time, it is my understanding that the fine would be $100,000 per day per complaint, which would be about $2 million a day. Could it be assumed that the shareholders of the two railways would be the most encouraging people to get that resolved sooner rather than later?

[Steven Fletcher, Conservative, Charleswood—St. James—Assiniboia, MB]

Mr. Speaker, I thank the member for the question and for pointing out that the fine is per violation. It could add up very quickly and would damage any business. Therefore, it is not in anyone's interest, especially the railways', not to fulfill the service agreements.

I know the member comes from a resource-rich area. He may be interested to know that David Lindsay, the president and CEO of Forest Products Association of Canada, is very supportive. The wheat growers, the barley growers, the canola industry, people who use the railway for shipping, are supportive. I have dozens of quotes from stakeholders who are supportive of the legislation. The legislation will help the economies of Prince George and communities like it.

[Françoise Boivin, NDP, Gatineau, QC]

Mr. Speaker, why did it take them five years to table this bill? Why did they wait, given all the work that has been done by the member for Trinity—Spadina, who introduced a private member's bill?

What was the motivating factor? Why did they take so long to partially correct the problem? Changes will need to be made. It seems to me that five years is a long time to finally table this sort of bill.

[Steven Fletcher, Conservative, Charleswood—St. James—Assiniboia, MB]

Mr. Speaker, I suppose it depends on how we judge time. There is geologic time; there is Ottawa time, and then there is real time. Given that this is a serious piece of legislation that affects the economy of the country, we do not want to rush it. We want to make sure it is balanced and that we take stakeholders into consideration. We are trying to be as fair as possible to everyone involved, so in Ottawa time the legislation has been done in the equivalent of a nanosecond in real time.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, in an earlier answer to the member for Skeena—Bulkley Valley, if I heard him correctly, the minister used a phrase to express that the transportation sector is a competitive sector, that there is competition in the transportation industry, presumably between the railways. I would ask the minister, is that not exactly the problem here, that there is no competition? The shippers are captive and it is because of that captive shipper situation that legislation like this is in fact necessary.

[Steven Fletcher, Conservative, Charleswood—St. James—Assiniboia, MB]

Mr. Speaker, the member for Wascana says there is no competition. Well, there is competition because there are at least two. It is a duopoly, for the most part. In that framework the railways have had a lot of power, absolutely, and the shippers have not had a lot of recourse. This fixes that problem and does it in a very collaborative manner. Shippers appreciate it, and if the railways do not appreciate it now, they soon will.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I seek unanimous consent to split my time with the member for Gatineau.

[The Deputy Speaker, NDP, Joe Comartin]

Does the hon. member have the unanimous consent of the House to share his time with the member for Gatineau?

[Some hon. members]

Agreed.

[The Deputy Speaker, NDP, Joe Comartin]

It appears, objectively, that the member does have consent to share his time.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, it is with some pleasure that I rise today to address Bill C-52, which is perhaps not the best named act I have ever seen.

The naming suggests that the problems shippers face across this country will now be solved. For those of us who come from the resource regions of this country, for years we have sat with shippers in forestry, farming, chemical and manufacturing industries as they have petitioned us, as members of Parliament, to do something about the situation. Recently the Coalition of Rail Shippers was asked and polled as to what its satisfaction was with the service they were receiving from the competitive duopoly, as described by the minister. Eighty per cent of those polled described serious and significant problems with their access to rail. That is not great.

While Bill C-52 is an improvement over the status quo, it has been five to six years promised and in the waiting. We see today what I can at best describe as a half measure. As the minister pointed out, as critical as rail service is to the Canadian economy, I think we could emphasize it even more. Seventy per cent of all the goods Canadians manufacture and sell in this country go by rail. An efficient economy, which we see with some of our European partners, would have an even higher percentage. It is the most efficient way to move things across borders and large tracts of land, which are two things we contend with here in Canada.

The minister described the near monopoly as a duopoly. I will take a moment on this, because I think it is important for Canadians to realize that if, for the Conservative government, the definition of a competitive marketplace is what we have in the rail shipping industry, we have a problem. Not only are there only two significant shippers available to those who are looking to move their product, but in many regions of the country there is only one. The line going to their freight yard, farm or lumber yard is controlled and wholly owned by one shipper. If one has a problem with that company, the status quo is terrible.

Members have seen it time and again. I can think of one particular mill in my riding in northwestern B.C., in Fort St. James, that has crawled through perhaps one of the toughest times the lumber market has ever seen since B.C. started shipping wood. It has managed to have a partnership with the union, get concessions on wages and have a great partnership with the community. It finally got to a viable place after years of struggle and against all odds. This is one of those communities for which it would be an understatement to say it relies on this industry.

At the end of the day it cannot get cars to move its products to market. It has product. It has someone willing to purchase that product. In between stands a rail company that does not seem to care that it made a contractual promise to deliver so many cars on such and such a date. The mill is waiting days and weeks for the cars to show up. The wood is stacked up in the yard and they cannot sell it.

The mill has turned to me as the member of Parliament. We approached the government with appeals and have said we need two things. One, we need both the carrot and the stick. We need a way for companies to deal with the shippers in a timely and cost-effective manner so that the conflict resolution model is not onerous and expensive. Again, smaller companies get penalized under this system.

CN and CP have had many years now of extraordinary profit. Since it was privatized under the Liberal government in the late 1990s, CN has gone on to see record profits and is now run primarily out of Texas. Most Canadians do not realize that, just because the cars have a Canadian flag on the side, where the cars actually go and to whom and when is not necessarily decided under Canadian interest.

This legislation would allow the government to look to a company and say that even though it received $2.5 billion profit last year, we are going to really hit it hard by charging a $100,000 fine only if we find a serious and significant problem, only if the company looking to move its product is willing to pursue this all the way through the quasi-judicial process. At the end of the day maybe it will get fined.

To CN and CP, these very large companies, it may be an easy equation to let them go through that dispute resolution, pursue it all the way through. It is more efficient and cost-saving for CN and CP to just ignore it. At the end of the day the worst case scenario is they would get a $100,000 fine.

That might just be the cost of doing business, because these companies could turn more profit in sending those cars somewhere else even though they have a signed contract.

What is frustrating for a lot of these farmers is that they have contracts and they assume that those contracts mean something and then at the end of the day they do not, because they are beholden. The power imbalance is too great.

The Minister of State for Transport is attempting to readjust the power equation a bit. He mentioned as much in his answer to one of the questions. It has to be recognized that, in that key and critical relationship between those who make the goods and those who ship the goods, there is a disparity of power. We need to rebalance the tables a bit.

Often New Democrats talk about the underdogs, or people who have lost their jobs, or people who have fallen through the social safety net that the government continues to tear up. The underdogs we are talking about here are often major manufacturing outfits in Canada, very significant large farming interests. One would think they would have a lot of sway and power with the government, but for some reason the major rail companies that exist in this country, the duopoly, seem to be able to pull the string on the government and essentially get what they want.

We waited six years. I know the minister said it was a nanosecond in Ottawa time or in geological time. I am not sure which, but five or six years is not a priority for a government. There have probably been 90 or 100 bills on crime and punishment from the current government. This is the first one on rail, and yet rail moves 70% of the product that we sell around the world. For the government to call it a priority, I would hate to see what the government thinks is not a priority because this legislation has been a while in the waiting.

Some people listening might think this is one of those rural-urban issues that only really affects those living in the resource sections of our country, those places that grow the trees and mine the rock and produce the energy and whatnot. Nothing could be more further from the fact. This is one of those issues that crosses over the interests of all Canadians, because if we are unable to move our products in a reasonable time to market either within a province, between provinces, across borders, to those international ports in Prince Rupert, Montreal, Halifax and beyond, it hurts everybody. When things are not reasonable and we cannot find a way to solve the problems of this power imbalance between these two companies centrally and all of the shippers involved, it hurts everybody. It hurts people right across the board.

The government is seeking to get a balance. While this legislation is worthy of consideration at committee, we hope and pray that the government is open and interested in amendments to achieve the balance that the minister talked about in his comments. I come from communities that rely on that line. It is our connection to the world. It is our connection to a viable and secure economic future. When that line is disrupted for whatever reason—either through contracts that are not fulfilled by the rail companies or some geological disruption, to take some of the minister's line—it is absolutely critical to us because in today's economy, as competitive as it is, getting products to market in a timely and efficient manner is absolutely essential. We are competing with the world, and we can, but we need a good infrastructure system.

We used to have governments in Canada, of either more progressive or more conservative persuasions, that believed in the necessity to have that strong infrastructure. That was a role of government to pursue and enable the growth of the country. It was a Conservative government at the beginning that initiated the dream of a rail line across this country and drove that last spike. However since those times the present version of the Conservatives believes that the role of government is slightly different.

Here obviously what government must do is play referee on what we would argue is an unbalanced playing field. To this point, looking at a $100,000 fine for companies that are turning billions in profit perhaps suggests to the companies that the incentive is not there. When cars do not show up, when cars show up damaged and not useful and late and unable to ship the product that they are contracted for, most reasonable Canadians would say there is a dispute that would have to be filed through court. If it is the only company they can ship with, then how often are these companies going to go hard at it? Therefore they come through us. They come through MPs who represent these various constituencies and implore us to do something about it.

This legislation is the government's attempt to do something about it. It has taken us a few steps. We insist that the government be open to taking us the rest of the way, so that at the end of the day we get it right this time, because we do not take on this issue very often in Parliament. Even though it may be a nanosecond for the government, this is years of frustration for industry; this is millions if not billions of dollars lost to the Canadian economy.

[Steven Fletcher, Conservative, Minister of State (Transport)]

Mr. Speaker, the member referred to an individual in his riding who has had frustration with the railways. That is fair enough.

The best thing to do then is to support this legislation, because this legislation does even out the power disparity to which he referred. It also does it in a way that will hurt. It is up to $100,000 per violation, and it can go up day by day. The process through the quasi-judicial method that we have suggested is not an expensive method. It is designed to be quick, efficient and cost-effective.

If the member is very concerned about it taking six years, may I ask if his party would delay this legislation another six years, or will the New Democrats pass it with unanimous consent?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, according to his own math, another six years would be another nanosecond of time. However he overestimates the power of the official opposition, just in terms of our ability to stand against legislation. As I said in my comments, we think the bill is worthy to go to committee and be seen through the amendment stage.

We are trying to imagine, and I hope the committee is actually able to get this, that the Coalition of Rail Shippers could be brought to the table to go through actual scenarios and see if, under this new regime, it would be any better.

We do not want to see this legislation passed and have those same phone calls from those same farmers, same lumber companies and same mining companies saying that we passed this legislation, that the rails are not showing up, that they do not have their cars again and the dispute resolution system is going to cost them x, that it will take this long and it is not worth it and they are back to square one. We want to get this right, because again, we do not do it very often.

In terms of sending it to committee for that study, we think that is worthy. We hope the government will be open to all witnesses right across the spectrum and will actually listen to what is being said, so that if we need to strengthen this legislation, which we believe we do, then the government is actually open to that, which has not been past practice in this place with the government. Maybe there is a change of heart in the air.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, in light of this last exchange between the minister and the House leader for the NDP, I wonder if there is the beginning of a consensus on the floor of the House, that we could agree to a fairly short debate at second reading on the bill on the understanding that when the bill does get to the transport committee for hearings, we all agree that every single shipper who wants to be heard on this matter would have the opportunity to present to the committee and get a fair hearing about whether shippers think this legislation is good enough or not.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, something I forgot to mention in my comments, and I know my colleague from Saskatchewan would share this, is that the member for Trinity—Spadina has been going around, community by community and coast to coast, talking to those very shippers that he mentioned, and has an incredible catalogue of who, under the current situation, is suffering under the regime and what kinds of improvements may be there.

Regarding openness from the government, that is not necessarily for me to say, as the government has the majority on that committee in terms of the breadth of our study and whether we actually allow people both agreeing and not. It seems to me that we would be interested in that process being open. That has not been our experience with the government. If that is what it is looking for in Bill C-52, then clearly the official opposition is willing to work with the government on this issue.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, as a previous transport critic, I faced many, many interest groups over the years from 2008 to 2011 wanting to see this in place, as well as the absolute intransigence of the government at that time to put it forward. The nanosecond was stretched out quite long over that time.

What has changed? The Canadian Wheat Board has now gone. We are probably dealing with a situation where there is more pressure on the government to act for the small concerns on the Prairies, and I think that is good, but if we are taking this to committee, we really need to take a look at what has happened to the wheat and grain industry across this country since the demise of the Wheat Board and that single desk, which had allowed more pressure on the rail industry.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, it was incredible to watch time and again the ideological battle by the government against grain farmers who voted consistently to keep the Wheat Board. Somehow the Conservatives had a mandate to get rid of it even though farmers, consistently in 13 consecutive votes, said that they wanted to keep it.

The realities facing farmers, particularly now that the government does not feel it has to have this pitted battle with the Wheat Board on those ideological grounds, maybe has finally opened up the flood gates. The reality now of bringing Bill C-52 to the table was also the reality three or four years ago. It is somewhat better according to the minister, but according to the people moving the product, 80% of them think things are still intolerable and not acceptable.

[Françoise Boivin, NDP, Gatineau, QC]

Mr. Speaker, I would like to thank my colleagues the House who gave me the opportunity to participate, along with my colleague, the House Leader of the Official Opposition, in the debate on a bill that is extremely important for the country. In my opinion, Canada was built on the railway.

If there is something that MPs, aside from the hon. member for Trinity—Spadina, do not talk about in this House very often, it is rail service, which is not necessarily seen as a priority. It is sad to see that, since the rise of the automobile, we talk less and less about the railway, on which Canada was built. It is a subject that is overlooked. From a transportation perspective, it is a big mistake to have allowed the railway to slowly be forgotten over the past 50 years.

In Gatineau, our infrastructure takes a beating. Temperatures between -40^oC in the winter and +40^oC in the summer and a large number of heavy trucks and other vehicles damage our infrastructure. Our bridges and roads are constantly in need of repair, if they do not need to be replaced completely. This creates urban sprawl. It is difficult to deliver goods.

I was shocked to see the statistics related to Bill C-52, given the tireless efforts of the NDP member for Trinity—Spadina, who even introduced a private member's bill in this regard. People may not be aware that 70% of our goods are transported by rail. Of course, this is a whole sector of trade.

We have a government that prides itself on always being there for the economy and on having action plans. However, the government needs to take action rather than just talking about its action plan.

I asked the Minister of State for Transport a question about the fact that this has taken five years. I would like to believe him and I find it quite amusing that the government refers to time in terms of what is happening here. Five years may go by quickly, as though it is only nanoseconds, but at some point, we should not be satisfied with this type of situation.

One thing that frustrates me about this House is how long everything takes. When we know that the stakeholders are in agreement, when we know what the problem is, we have to stop playing petty politics and simply resolve the matter. That is why we were elected in the first place and why we are here in this House. Our job is to get these things done.

The leader of the second opposition party wants us to speed up the process. No one opposes the idea of speeding up the process as long as we know that everyone is willing to really listen to the complaints and suggestions. When we complain or make suggestions, it is not to play petty politics, but to ensure that, at the end of the process, we have legislation that makes sense and meets the needs of small businesses. It should be noted that this bill affects small and medium-sized businesses.

Let us move away from the duopoly for a moment. I like the expression the minister of state used. This is a great idea for a new Parker Brothers game, but this game will not necessarily be fun for small and medium-sized businesses. It verges on what I would call forced negotiations. It is hard to negotiate when you have a sword hanging over your head.

Considering that rail service is the driving force of our economy, there is a serious problem here. As parliamentarians, we must try to solve this problem regarding the balance of power. Indeed, this will serve small and medium-sized businesses, but at the end of the day, who will it really benefit? It will benefit our constituents, all Canadians who need these products and services, who need them to get to the right place safely and quickly.

Speeding up the process will save money. So we have a big job ahead of us. Yes, we are always looking for ways to speed things up.

As the House Leader of the Official Opposition pointed out—and as justice critic I see this quite often—it is all well and good to show up with non-partisan proposals guided by the common good and respect for legislation and charters, but we always seem to hit a brick wall. The government does not even bother to find out whether the proposals have merit, which is seriously undemocratic.

For some members of the House, these are extremely important issues because they affect their constituents who have small and medium-sized businesses and who use rail services. These people have a few things to say about this issue. If we listen carefully we will see that they may have something worthwhile and important to say, which can benefit the debate. It does not help to always be so paranoid and think that people only ever speak to take down their opponent. On the contrary, sometimes they speak to enlighten the debate and improve the situation.

As the House Leader of the Official Opposition so eloquently explained before me, the NDP plans on supporting the bill at second reading so that it can be sent to committee. I truly hope that the government will pay close attention and that enough expert witnesses will be invited to guide parliamentarians from all parties, so that they can draft a report on the committee's deliberations. Then, when we return to the House, the official opposition will be reasonably satisfied that this was taken seriously, that we were listened to and that the people who have a vested interest in this bill were heard. If that is the case, we will have the best bill possible to help the rail service, an industry that is fundamental to this great, beautiful country we call Canada.

[The Deputy Speaker, NDP, Joe Comartin]

As it is time to move to statements by members, the hon. member will have a period of questions and comments when we resume debate on the bill.

The hon. member for Don Valley East.

The House resumed consideration of the motion that Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), be read the second time and referred to a committee.

[The Deputy Speaker, NDP, Joe Comartin]

There remain five minutes of questions and comments for the member for Gatineau.

Are there any questions or comments?

The hon. member for Skeena—Bulkley Valley.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, a question that has been raised in this debate—we listened to the minister speak earlier, just to remind people because we have had a bit of a break in the debate—is that this is an attempt to have some sort of balance of power between the shippers in Canada, which are seeking to move their products, of which 70% in Canada are moved by rail, and the railway companies, of which there are predominantly two. As the minister himself said, it is a competitive duopoly. In many parts of the country, it is not even a duopoly; it is a monopoly because there is only one service available.

So, in achieving some sort of balance of power between these two groups, the minister has suggested that there would be a tribunal of sorts, a way for dispute resolutions to be worked out.

However, when we look into details of the bill, we are now discovering that the dispute resolution mechanism, that way of solving those problems when the rail cars do not show up and the contracts are broken, will only be available to new contracts that are signed, as opposed to existing contracts.

I do not know how the minister can feel so confident that his bill would allow the Canadian economy, which relies on that freight being shipped, to progress in a better way if all those problems that have been existing for many years cannot get solved because the resolution is not offered to any contract that is already in existence.

I wonder if my friend could illuminate where that might be a problem in solving the real challenges we face.

[Françoise Boivin, NDP, Gatineau, QC]

Mr. Speaker, I would like to thank the hon. member for his question.

As the English would say, he is right on the nail, direct. That is one of the major problems with the bill.

I repeat, for those who did not hear the speech either from my colleague or myself, that we will be supporting the bill at second reading to be sent to committee; hopefully, to solve those types of problems, because this is a major issue.

I was saying in my speech that it is a matter of carefully balancing everyone's interests. The hon. member mentioned it. In some places, there is basically a monopoly. The use of a dispute resolution mechanism that involves a tribunal is not necessarily a good idea when the balance of power favours one side.

That is not necessarily most conducive to solving the problem.

I do again hope that the other side of the House will be able to listen for once, because it does not happen too often. We do bring up those issues in order to ameliorate the situation.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, as chair of the Conservative forestry caucus, I have been following this rail service issue for quite some time and talking to the various sectors that use the rail line.

When we came up with the package to introduce this legislation, it seems to me that we had unanimous support for the bill and its contents from the shipper coalition across Canada and almost every, if not every, sector. To listen to the member for Skeena—Bulkley Valley and the member for Gatineau speak, it would appear that they do not agree with the shippers, the very ones the bill would affect. The shippers support it wholeheartedly and want us to get it through. However, the two opposition speakers appear to be saying that this is not what the shippers want. To whom are they listening? Are they listening to the shippers or to some secret voice in their caucus?

[Françoise Boivin, NDP, Gatineau, QC]

Mr. Speaker, I appreciate all the work the hon. member has done.

I think we have been talking to the same people. When they talk to the government or government officials, everyone agrees that this is a step in the right direction. However, let us not pretend that the bill is perfect and does not need some slight adjustments.

The message that the official opposition is sending to the government is that it supports the bill. The bill will be examined in committee, but that is just for show. We want to ensure that the stakeholders support the bill. However, they too would like to see some changes made to it.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, I am happy to participate in the debate this afternoon on the second reading of Bill C-52, dealing with the issue of the level of railway services across the country. The House has been waiting for this legislation for several years. More importantly, shippers across the country have been waiting for this legislation for a very long time. I am sure we are all very happy that it is finally here.

The Liberal caucus intends to support Bill C-52 in principle at second reading because the shipper community is anxious to get the bill into the standing committee for detailed examination of the precise meaning, from a legal and a practical point of view, of all of the provisions in the bill. Shippers want to ensure, and we need to ensure, that their needs would actually be satisfied by the legislation.

The shippers coalition supporting level-of-service legislation, as it has become known, is a very broad and comprehensive coalition. It obviously involves agriculture, and that is a big and important part of the shipper community, but it goes far beyond agriculture. It also includes the forest products sector, minerals and chemicals, potash and fertilizer, manufactured goods and much more. They have all had common issues and a common problem, which is substandard service from the railways in shipping their products and commodities to market.

The intense debate about railway service levels has been raging across the country since about 2006. In 2007, specific requests were made by the shipper community for a legislated solution. They asked for a legislated solution because a commercial solution did not appear to be available. In 2008, the Government of Canada promised a formal review of railway services. It was not until a year later though, 2009, when the government finally appointed a panel to conduct that review of railway services. The panel worked for about a year, and by October of 2010 it had finished its work and had written its report. In that report the panel confirmed that service levels provided by the railways were seriously deficient.

To give just one example, and there are dozens referred to in the panel's report, farmers could typically count on getting the service from the railways that they needed, that they ordered and that they paid for, only about 50% of the time. That is obviously not an adequate level of performance by the railways. Similar troubles affected most other shippers right across the broad spectrum of the coalition. The details differed from one industry to another, but the bottom line was the same: the shipper community was being badly served. That is what the panel concluded in the report it wrote in the fall of 2010.

The review panel said that the problem was a serious imbalance in clout and power in the marketplace, an imbalance between the railways on one side and the shippers on the other. The shippers are mostly captive, as I said in the House earlier today. They do not have competitive options for moving their products. They are captive to one particular shipper at any given moment in time. That is what the panel concluded. It said there was little genuine competition, that shippers have no realistic commercial alternatives and that they also have no legal recourse to address the problem.

For the most part, they do not even have access to enforceable contracts that set out both their obligations and the railways' obligations, which are then binding and enforceable on both sides. That would be one's normal commercial expectation. The parties doing business would write up a contract and they would fulfill the terms of the contract or there would be consequences one way or the other. That practice seems to be missing in the relationship between the railways and the shipper community.

According to the panel that was appointed by the government and which reported in the fall of 2010, the playing field is totally tilted in the railways' favour. The panel said that if that imbalance is to be remedied it would be preferable to do it by commercial means. However, if a commercial solution is not readily available, and that is obviously the case by this long process that has gone on since 2006, then the review panel said that there should be legislation and regulations to fix the problem. That is, there should be legislation to require the railways to provide their shipping customers with service level agreements that are readily enforceable.

The railways have said, “That was then and this is now” and claim that things have improved. I think objectively a number of shippers would say that indeed there have been some service improvements over the course of the last three or four years, especially service improvements by CN. Even CN notes that the controversy about bad service and the suggestion of some new legislation or new regulations coming down the pike have, at least in part, brought about that improvement. In other words, there has been a threat hanging in the air that there may be legislation or regulations and the railways have pulled up their socks a bit. It was in response to that threat of legislation, the speculation in the community that there would be legislation, that has in fact contributed to the level of service improvements.

The review panel's report was done in October of 2010. The government then waited six months before committing to implement its recommendations. That commitment finally came forward in the spring of 2011, ironically just on the eve of the calling of an election.

After the election, action was once again postponed. Instead of bringing the legislation forward in the late spring or early summer of 2011, which was an imminent possibility, the government waited another six months. Then it launched a second review process, this one to be conducted by Mr. Jim Dinning of Alberta. That process started in the fall of 2011 and ran until the spring of 2012, again trying to find this elusive commercial solution to the problem. Unfortunately, Mr. Dinning's efforts were largely for naught and there were no significant results from that process, except for another six month delay. The government then waited another six months, until this past December, to finally table the legislation that we have before us today, Bill C-52.

This has been a painfully long wait. The discussion began back in 2006 and we are now in 2013, so it has been a seven-year process. The shippers are anxious now for action, at long last, to become promptly tangible. I think the House owes them that. We should have a sound debate at second reading on Bill C-52, but it does not need to be a protracted debate. We should discuss it properly and efficiently in the House and then move Bill C-52 as quickly as we can to committee so that we can hear from shippers and others and, on the basis of their evidence and testimony, determine if Bill C-52 is in fact good enough to get the job done.

I hope the government would ensure that there are no restrictions put on the transportation committee in hearing the witnesses that will want to be heard on this very important matter. The shipper community has been waiting a long time. Now that the bill will soon be at committee, the very least that Parliament can do is to give the shippers the opportunity to be heard fully so that all of their comments, recommendations and advice can be taken into account.

The preliminary reviews of Bill C-52 have been reasonably positive. That is encouraging. It would appear that the legislation does provide all shippers the right to have an enforceable service level agreement with the railways without discrimination among different tiers or categories of shippers. If that proves to be the case when we have the opportunity to legally and comprehensively review the legislation, then that would indeed be progress.

The legislation also appears to specify at least some of the mandatory content that each service level agreement must cover. It also appears that it would provide robust penalties if the railways fail to perform up to an acceptable standard.

The shipper community has been quite explicit about the kinds of things they want to see in these proposed service level agreements. It readily admits that with each particular shipper or sector within the shipper community there would be variations from agreement to agreement. Each one would not be an exact cookie-cutter copy of the others. There are logical differences that would need to be taken into account and there is a commercial negotiation process that would need to take place here. However, shippers have specified six subject areas that they think every service level agreement should deal with. It is important to put these on the record so that when we get to the committee we can examine the legislation to see if these six areas would be adequately covered.

The shippers say that each service level agreement that the railways would be required to provide in negotiation to their shippers should include the following. First, it should include a section covering the services and the obligations. They should spell out what each side is supposed to do to have a successful contract between the carrier and the shipper.

Second, it should include communications protocols so that when they are trying to work out their commercial relationship, or if things go wrong in the relationship, they would all know exactly what they are supposed to do to communicate with one another in an effective way, rather than two ships passing in the night that never quite get around to connecting with each other.

Third, there would need to be performance standards specified in the agreements. What is the acceptable performance to be expected in the circumstances? Fourth, there would have to be performance metrics. In other words, how do you measure the performance against the standards laid out in the agreements?

Five, there would need to be consequences for non-performance. There are obviously penalties provided in the legislation. We will have to examine as to whether they would be appropriate and sufficient to achieve the kind of behaviours that the shippers want to see. Finally, there would need to be dispute settlement mechanisms included in the agreement.

Those are the six areas that the shipper community mentioned. It is important for the committee to examine in detail whether Bill C-52 would cover those areas adequately from the point of view of the shippers.

Finally, I will mention four or five other areas, beyond the nature of the contract that I have just described, where the shippers have said they are not clear about what the legislation seeks to accomplish and whether it would get to the result that the shippers want.

First is the issue of train movement into the United States. To what extent would a service level agreement in Canada also affect the kind of service that is provided across the border by the carrier, in some cases the same railway, when that carrier is operating in the territory of the United States? What would be the impact of service level agreements on cross-border shipments of product? Of course, between Canada and the United States, that is a huge volume.

Second, what would be the relationship between the service level agreements that apply to the main line rail carriers, basically CN and CP, when the product being shipped may originate on a short-line branch railway? Would the service level agreements have any implications for short-line rail operators and their relationship with the main railway operations?

Third, there is already a section in the Canada Transportation Act, section 113, that provides some description of service requirements imposed upon the carriers. Is there anything in Bill C-52 that diminishes the value or the effect of what is already in the act in section 113? The shippers are very anxious to have that clarified. Obviously they, and we, would not want to see the beneficial impact of section 113 diminished.

The fourth question that shippers have asked is on the matter of practical access to the process. The way the legislation is set up it basically says that the parties should go out and negotiate a contract. If they cannot, then the shipper can go to the CTA and get an arbitrated solution that will then be imposed by regulation. The question from the shippers is whether there will be practical access to that process or whether the process will be so complex, costly and slow that only the biggest shippers will be able to participate in the proposed arbitration proceedings. As a result, the smaller shippers will just find it too complicated, expensive or time-consuming to be able to avail themselves of an arbitration procedure. We will need to examine the practicality of how Bill C-52 will apply to make it accessible to all.

Finally, there appears to be a section in the act that says that if a shipper already has some kind of existing contract with a railway, if they have gone out and tried to negotiate something and put it in place, then the shippers do not have access to the provisions of Bill C-52 unless and until that existing contract expires. That needs to be clarified as well. To what extent are shippers impeded from having any benefit of Bill C-52 because they have already tried in some way to have a contract and have negotiated something, whether or not it lives up the standards of Bill C-52? Would they be prohibited from trying to get a Bill C-52 solution if they already have a contract in place?

Those are some of the questions that I have heard from the shipping community. By and large they are anxious to see the legislation proceed. They are looking forward to the committee hearings because they want to be heard and they have a number of questions to ask. I think it is incumbent upon the government and upon the House to make sure that we get into those hearings as quickly as possible and that we ensure that every shipper across the country that wants to be heard can have the opportunity to present their questions and their observations to the standing committee.

I welcome the debate this afternoon. I am anxious to see progress on this subject. Everybody has already been waiting far too long. Let us get on with it and try to make a tangible difference in the level of service that is provided to the shipping community, and therefore make a tangible contribution to the well-being and success of the Canadian economy.

[Steven Fletcher, Conservative, Minister of State (Transport)]

Mr. Speaker, I would like to thank the member for Wascana for his remarks, although I am curious why he feels the challenge between railways and suppliers started in 2006.

I believe it started around 1783 when Liberal Alexander Mackenzie was elected. Things got better with John A. Macdonald. Then they got worse when Sir Wilfrid Laurier was elected. It got better under Diefenbaker. It got worse with Pearson and Trudeau. It got a little better with Mulroney. It got bad again with Prime Minister Chrétien. If the member wants to talk about the speed of the process, why did his government not do anything in their 13 years, or basically anything in the 20th century, to fix this problem?

Having said that, I am pleased that the member is positive about the bill. I can assure him that all the stakeholders were consulted. I wonder if the member would say, if he is satisfied, that his party will not put up any unnecessary filibustering at committee. This is the best possible bill. I would hate for the opposition parties to try to change it just for the sake of change.

[Ralph Goodale, Liberal, Wascana, SK]

With all due respect, Mr. Speaker, I do have to suggest that the hon. gentleman's recollection of history is just a little faulty. Alexander Mackenzie was not the prime minister in 1783. It was 1873 that he was the prime minister and he discovered on his desk the first day he walked into the office the Pacific scandal about the railway that was handed to him by Sir John A. Macdonald.

It is a bit of a waste of time to debate those ancient Conservative scandals. It was about the time that Louis Riel was becoming the member of Parliament for my district of the country. In any event, those historical references are fascinating, but it is more important for us to get on with the task of actually dealing with the circumstance today.

The major debate, as the hon. gentleman will recall, before 2006, was not about level of service agreements; it was about a costing review and whether railways were overcharging. There were in fact legal actions going on during the 1990s and the early part of the last decade that resulted in some major refunds to farmers because the railways had been caught overcharging for the freight rates they imposed for the services they were delivering, as substandard as those services were.

Until the middle part of this last decade, the issue was a costing review. In the latter part of the last decade, the issue shifted to this whole discussion about level of service, which brought about the seven year process that I talked about.

The hon. gentleman can be assured that we have no intention of delaying the legislation, either in the House or in committee, with this one caveat. We want to hear what the shippers say. If the shippers' expectations are properly and adequately addressed when we hear the testimony going through the committee, then we will be most anxious to see the legislation passed with whatever subsequent modifications the shippers might recommend.

[Steven Fletcher, Conservative, Charleswood—St. James—Assiniboia, MB]

Mr. Speaker, on a point of order, I misspoke and the member for Wascana is correct. I should have stated the date as 1873. I hope the member understands I am relatively new here and as far as I know, the member for Wascana was part of Alexander Mackenzie's government. I appreciate the correction.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

On a more serious note, Mr. Speaker, my Liberal colleague briefly mentioned penalties. This bill would enable the federal government to collect fines of up to $100,000. Does he think this would deter a company like CN, which made a profit of $2.7 billion in 2012? Is this kind of measure one of the amendments he would like to make to the bill?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, on that question and many others, we need to hear what the shippers have to say, because they are the ones who have paid the penalty for bad service up to now.

It is clearly important for any penalties in this kind of legislation to be adequate so they can actually change the behaviour about which the shippers are complaining.

In some of the provisions of Bill C-52, the penalty provisions appear to be significant. In others, they do not. Quite frankly, the question the hon. member raised should be looked at very carefully in committee. Will the enforcement mechanisms, including those penalties, be adequate to solve the problem?

The best solution for all concerned would be for the legislation never to have to be used, that it was there setting the legislative framework, but that the parties were able to find commercial results and not need to have recourse to the legislation. However, the legislation needs to be strong and robust enough to ensure that if it has to be used, it actually does achieve the result the shippers want.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I am sure the hon. member for Wascana already knows this, but I would like to assure him that Bill C-52 was crafted based on mountains of consultations with shippers all across the country. That is how the bill was formed. I am sure the member will appreciate hearing the shippers' applause for the bill as their input helped to put the bill together. The member and his party will be able to support it wholeheartedly.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, I am glad to hear the hon. gentleman's confidence. I have had the pleasure of consulting with many of those shippers myself over the course of the last five or six years. They have been very frustrated by the length of time this has taken, but they are hopeful that it will now come to a successful conclusion. They do though have a number of technical questions, partly for clarification reasons, to understand exactly what the legal and practical consequences will be of some of the wording that is included in the bill. They also have at least some suggestions for improvements where they think some of the areas need to be strengthened.

Bill C-52 is important legislation that should be intended, and I think is intended, to level up the imbalance in the playing field that was described by the review panel that reported in the fall of 2010. We all now need to be focused on ensuring it does accomplish that objective. We will know that when we allow shippers who want to be heard the opportunity to come before the committee, give their testimony, give their approval or criticism whichever it may be. If they have specific recommendations for making the bill better, then I hope the committee will be open to receiving those recommendations for improvements.

[Pierre Poilievre, Conservative, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, I will be splitting my time with the hon. member for Cariboo—Prince George.

As I said earlier today, I got into politics to, in my own small way, expand freedom so people could take responsibility for their own lives, earn success and own their destiny. To make space for this freedom, I believe governments should only do the things that people cannot do for themselves. It is therefore with great skepticism that I always approach any proposal that legislates government action within the economy. The question is this. Does this legislation represent an action that is needed but that people cannot do on their own? In analyzing the industry of which we speak, I believe it does.

Canada is the second largest with the eighth least dense population of any country on earth. There are 5,500 kilometres separating Cape Spear, Newfoundland from the Yukon-Alaska border. On these vast lands, with much of them thinly populated, the prospect of ubiquitous railway competition is almost impossible. It is not the result of human error. It is the result of physical geography and math. As a result, we have only two class A railways in the country and many communities that require for their economic lifeblood the export of products to far away markets often have only one choice to ship those products.

Seventy per cent of Canada's goods and services are moved by surface freight. However, as I have said, we have only two class A railways to move them and in many places there is only one option. This creates immense economic imbalances between the buyer and the seller of the service. As such, there is a consensus that some redress of this economic imbalance is justified in this rare circumstance. As a result, we have proposed Bill C-52, the fair rail freight service act, which is designed to do as I just described. Allow me to describe the practices that this law would codify.

The legislation would give shippers the right to a service level agreement with a railway. A shipper would now be able to ask their railway for an agreement and the railway would be obligated to provide one within 30 days. This statutory right to an agreement would be an important gain for all shippers, including small and medium-sized shippers. This right would allow shippers to initiate bilateral commercial negotiations with the railway and clarify in writing the service agreement the railway would provide.

These agreements could identify performance standards such as frequency of service, transit times and the number and type of cars that the railway would provide to the shipper. These agreements could also include recovery plans that identified the actions the railway would undertake to recover from service failure or the communication protocols for monitoring service performance and dealing with any service issues that might arise.

In most cases, shippers should be able to reach an agreement with their railway commercially, but when they cannot, the shipper should be able to go to the Canadian Transportation Agency and ask an independent arbitrator to establish service agreements for them. Furthermore, the shipper should now be able to trigger a fast and efficient arbitration process, thanks to the bill. All he or she has to do is demonstrate that an effort has been made to reach an agreement commercially and give advance notice to the railway before commencing or requesting arbitration.

Shippers get to control the timing of launching an arbitration process. The legislation allows shippers to frame the issues to be addressed in the arbitration process by identifying the services they need. This gives the shipper the ability and the flexibility to ask for what is important to them. Every shipper operates in unique circumstances and has unique needs, and that is why these agreements will take many different forms. Tailoring service agreements to suit circumstances of both shipper and railway will allow for the diverse nature of Canada's transportation economy to continue to flourish.

Let me be clear. The bill is not about forcing our railways into an agreement, but ensuring that their obligations are met. We want railways to continue to manage an efficient, low-cost network to meet the needs of all of their customers in their network. The arbitration will follow a very efficient process to make these decisions. In a market where time means money, shippers have repeatedly asked for a process that is quick and timely so they can focus on growing their businesses.

The bill stipulates that the shipper can get an arbitrated service agreement within 45 days, although this could be extended in unique circumstances by an additional 20 days. In very complex service agreements with the shipper and the railways, the extension would be applied. The point remains that this is a fast process, to ensure we continue the operation of our rail network and get our supplies to where they are most needed.

I should note that the government acted with a great deal of meticulous care in setting up this process. We realize that in the last three decades the federal government has largely gone out of the rail business, through reduced regulation and obviously reduced ownership. This experience with a private sector railway system has been an unmitigated success. We should celebrate every day the success that our railways and their workers have created through this free enterprise system. We should congratulate them for the enormous improvements they have achieved in service standards, particularly when compared to their international peers. At the same time, without reintroducing excessive government intervention into the system, we are redressing a natural market imbalance that is inherent in most rail sectors around the world, and particularly so in a country with our geography and population.

We on this side of the House of Commons understand that a commodity-based economy, spread across vast distances, will require an efficient, effective rail system to move the commodities to their marketplace. That is why we have acted in this bill to provide a system by which our free market rail industry can continue to prosper and connect businesses with customers, and customers with the goods and services they need.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I would like to congratulate my colleague for giving such an informative, accurate and superlative presentation on Bill C-52. As proof of that, Mr. Speaker, you saw that everyone clearly understood the value of the bill. They clearly understood my friend's message. Of course, there would be no questions or comments given that situation, so he is to be congratulated.

Let us look at the genesis of the bill and understand that Bill C-52 would not be in the House were there not some disparities in the rail service that has been provided to shippers across Canada by Canada's two railways. The Minister of State for Transport this morning described that as a duopoly, which is just a hair's breadth away from a monopoly. The bill would not be in the House if the relationship between the railways and the shippers was a perfect one.

The relationship has been far from perfect. The shippers could be appropriately called “captive shippers”; there is little or no alternative for shipping their products. These are primarily bulk products from the agriculture, mining, oil and gas and propane sectors. Rail is the most economical and most profitable way to ship bulk shipments across Canada. I am sure that is a point that will not be debated.

I am happy to support Bill C-52 because I have spent some time working with a particular sector that is prominent in my riding, the forest sector. While that sector reaches all across the country, my riding of Cariboo—Prince George, which I am sure my colleague from Prince George—Peace River would agree, could be appropriately called the forest capital of the world. In my riding, and the Peace River, Okanagan—Shuswap, Kelowna—Lake Country, Kamloops—Thompson—Cariboo, Kootenay—Columbia and Okanagan—Coquihalla ridings, we all have sawmills, pulp mills, fibre mills and pellet mills. I can honestly say that those ridings combined probably ship the bulk of forest products from their locations to the U.S., Asia and abroad.

I serve as the chair of the Conservative forest caucus, and the members I just mentioned are part of that. I can remember, going back six years ago when I took on that position, that we were talking with the CEOs and the leaders in the forest industry across the country. They were telling us about some of the challenges they have; one of them was the rail service they were getting.

There were a number of other things, which our government has successfully addressed. One that we can be very proud of is the green transformation fund, which was a real winner in the forest industry across the country. It helped us to stay in tight competition with our U.S. counterparts. That is good because the U.S. is still our biggest market for forest products. We send the bulk of our products into the U.S. by rail, as we send to the coast for shipments overseas.

I remember this meeting from about four years ago. We had solved most of the problems and challenges and we asked what was left. They said we still need to deal with the service we are getting from the railways.

My colleagues and I made a promise to the leaders of the industry. We said that it was number one on our bucket list, that we would see this fixed. We said that we would get this solved one way or another and we began to work on it.

I will not say we did not have encouragement from colleagues across the way. It is a common interest. I thank them for their assistance.

We pushed that forward. There were a multitude of meetings where we got a very clear understanding of the problems with which the forest product shippers were faced. Also, it became evident that they did not have any means to seek remedy to get those problems fixed. There were problems such as were mentioned today, where an individual was expecting to have 65 railcars on site for the week of July 5, had a promise they would be there, only to find that after the shipper had geared all the production to be shipped that week, there were 37 cars, not 65. When the shipper called up the rail lines to ask where the rest of the cars were the answer was that they had not been able to get them, that they would give them to the shipper as soon as they got them.

That is not good enough. When railways make a promise to shippers that they will have 65 or 75 cars in that particular week, they have to keep that promise because an agreement, honesty and a good working relationship is all about that.

When shippers have cars show up to the pulp mills, where they are shipping rolls and bales of pulp and paper out of their mills and lo and behold there are holes in the roof and it is raining, they know there will be damage to the cargo inside. That is unacceptable. They need to have a way to seek remedy to that.

Shippers can be in production and all of a sudden 27 cars show up that were not ordered. When they phone the rail line, they are told that they probably will need them. If they say they do not need them for two weeks, they are told they already have them. They are then paying demurrage on them every day they are sitting on the site while they are trying to gear production to get them full. They did not ask for them, but they have them and they are paying rent on them until they use them.

The way it has been in the past is if the captive shippers, as I will call them again, were to bring their complaints to the rail lines, they could not seek a remedy that would be lasting. That is why they looked for help from the government. They tried to have a commercial arrangement that would solve things, but that was just simply not possible.

They looked to the government. We were pleased to step in and get this service agreement done so it would satisfy the shippers across the country, while at the same time it would make it something that the rail lines could work with. We know how important they are to moving goods back and forth across the country. It has to be an agreement that works for both sides. I think we have that.

It has been applauded by the shippers' coalition and major shippers across the country, since we put it all together after continuous discussions with them, trying to figure out how we could solve the problem. What would the remedy time be? How long would we give to get the agreement to work, to get the thing fixed? We have fines in there for not having remedies.

I am proud to stand here with my colleagues who have forest industries in their ridings, who were there to make that promise to the forest industry that we would get this fixed. These folks are from all across the country.

Our government has now done it. I want to thank the minister and the minister of state for their hard work in putting this together. I thank the forest industry for giving us the opportunity to put this together for it, to work with it. We thank it for their input.

Let us hope the bill will pass through the House and committee quickly. Maybe it can be approved. It is pretty good right now. At the end of the line, we will bring out the best product that these shippers can possibly expect.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, I thank the member for his comments. He has acknowledged some points. I think everyone would agree that there is a requirement for action, that there is a concern. I am glad to see he had a more balanced assessment than the previous speaker, his colleague, the parliamentary secretary. The parliamentary secretary seemed to suggest that we do not need really government involved at all. His mindset is to just let the market decide. However, the member did lay out where he thinks government has a role. I want to get from him the concerns, though, we have had about this process. If we go back to 2007, I think it was—the member might correct me—his government talked about a wait and see approach, that we would try to kind of work things out.

We now have a bill in front of us acknowledging that it did not work.

Would he comment not only on what he thinks should be in the bill but also on the oversight in the bill—that is, to make sure that all the parties involved are going to live up to their commitment? Would he explain to us a bit more about the enforcement of the legislation and how we could actually ensure that products get to where they need to be, for everyone's benefit?

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I am sure the member for Ottawa Centre agrees that government regulations should be a last resort. That is why we gave the two parties, the shippers and the rail lines, a period of time to try to work this out in a private commercial agreement.

Unfortunately, they were not able to do that.

Based upon that, we knew it had to be done. We have had many talks with the stakeholders. We listened to all sides of the story and looked at the challenges they have and tried to put a bill together based upon the input from the stakeholders on both sides. We think Bill C-52 contains the substance we need, including the period of time from when the complaint is first brought, the time allowed to resolve it and, if not resolved, a brief arbitration period, which can be extended for a short time. At that time, if the railways, for whatever reason, fail to rectify the situation they are subject to fines of $100,000 per day per complaint. If one single shipper has five complaints about bad rail cars, that would be $500,000 a day. If we multiply that by the number of forest outfits across the country, it could be significant.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, the member across the way and I share a common city and we share a common region in northern British Columbia.

He talked about the fact that this legislation is coming, has not been passed yet. He spoke to the importance of the issue and the importance of the issue in the riding, especially to grain farmers and to forestry producers who actually want to ship out product. My brother worked in a mill that literally could not ship out product. It had to shut down its pulp mill, waiting for cars.

Again, because the bill has not been passed yet, I would like the member to emphasize how important it is to get it done.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, to my colleague across the way, whether shipping is within North America, south of the border to our biggest market, the U.S., to either coast or across oceans, continuity and reliability in the shipping of our products is so important to our producers. That is what we are trying to accomplish, so that when producers want a specific number of cars in a specific time period, they can count on it. Their whole business and Canada's international trade reputation demands that those cars be there when they need them and that the product be shipped when it is supposed to be.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, I will share my time with my hon. colleague from Saint-Bruno—Saint-Hubert.

I would like to begin by wishing all of my constituents and colleagues a happy new year since this is my first speech in the House this year. I would also like to congratulate my colleague from Trinity—Spadina for her tremendous and brilliant work on this issue. I am sure that we have her to thank for the fact that the Conservative government decided to do something about this issue.

I would like to go over some facts and talk about why this bill came into being.

Rail transportation is the backbone of Canada's economy because 70% of our goods are shipped by rail. That is why it is critical that rail transportation services benefit both rail transportation companies and shippers.

The cost of rail transportation is also hurting Canadian shippers. Unfortunately, Bill C-52 is silent on the issue of rates because the government ignored the demands of a number of groups of shippers.

Canada's trade deficit continues to grow. It hit $2 billion in November. We cannot allow Canada's products to lose more ground competing on the world markets.

Rail transportation is essential not only to competitiveness, but also to the domestic economy. We also need rail transportation services to help keep trucks off the roads and to curb our greenhouse gas emissions. Although railways still make up a considerable proportion of surface transportation, frustrated businesses are turning to trucks when possible, and that is devastating to our environment. That is important to note.

We must also look at the economy as a whole, since Canada's trade deficit is increasing. As I mentioned, it reached nearly $2 billion in November, and our economy cannot afford to lose even more ground in light of the global situation.

The Conservatives' reluctance in the past to do anything for Canada's rail shippers shows their overall attitude towards rail transportation. Whether it is their inaction on new railway safety measures, cuts to VIA Rail Canada or their opposition to bringing high-speed rail service to Canada, the Conservatives refuse to give Canada's railway network the attention it deserves.

The Conservatives are taking a piecemeal approach to this country's transportation infrastructure that shows a lack of interest and a lack of investment. This is the case in my riding, which used to be a railway riding. It no longer is and we have to wonder why. One answer is the clear lack of investment to keep these railways running. Railways and their tracks are increasingly being sold off, when they could be used for other purposes, such as public transportation.

Instead of letting things go and making only occasional investments here and there, Canada needs a comprehensive approach to transportation that is based on a national public transportation and railway strategy. For years, farmers and other businesses have been paying the price for the poor quality of rail freight services, and have not managed to get Ottawa's attention.

The NDP's position is simple. We support businesses and exporters. We are determined to get them the transportation services they need and deserve.

Even though Bill C-52 does not follow through on certain demands from stakeholders, it should receive our support. I am rising in the House today because shippers are happy with it, more or less.

Now it is up to us to fill in the gaps, strengthen this bill for shippers and underscore the NDP's participation throughout the process. As I mentioned earlier, the member for Trinity—Spadina has done some excellent work on this issue.

We will keep working to ensure that we improve our country's rail transportation system and use it for what it was intended: to meet economic and environmental needs.

Unfortunately, Bill C-52 will cover only new service level agreements, and not those that already exist. Many shippers will have to continue to cope with unreliable and unfair service without any access to dispute resolution if their existing service agreements are violated.

Arbitration is available only for shippers who are in the midst of negotiating new contracts. Instead of offering fast, reliable conflict resolution for all shippers, as the NDP is asking for, Bill C-52 is offering a limited arbitration process for a small group of shippers.

The proposed arbitration process may be too costly for shippers. The burden of proof may be unfair if they have to prove that they are in need of services from the railway.

Certain shippers also wanted to tackle the issue of tariffs during the legislative process, but unfortunately the Conservatives made it clear that they would not address that issue until the next legislative review of the Canada Transportation Act in 2014-15.

Obviously, shippers agreed to look at tariffs at a later date and to focus on problems with service level agreements.

It is worth repeating that the mining sector is the second-largest employer in aboriginal communities, after the public service.

Improving rail freight transportation services for mining companies could also be of economic benefit to aboriginal people in certain areas of the country.

The whole question of rail freight is particularly important to rural areas. I come from a rural area. The industries that will be most affected by this are in western Canada, in British Columbia, as well as in Quebec and, to a lesser degree, Ontario. This represents both a challenge and an opportunity for everyone and for parliamentarians to really effect positive change for people in rural areas.

The Prairies are very sparsely populated, for instance. However, this matter is important to the small towns and rural communities of the Prairies, and those are the main groups we should be reaching out to.

Nearly 100 communities depend on the forest industry for their survival. That is the case in my riding, where most forestry-related transportation is done by truck. Why not invest in the railways that exist in my riding to transport lumber?

My colleagues and I would like to see penalties included in the agreements in relation to service levels, in order to compensate shippers for service disruptions, damages and loss of productivity.

Shippers are also afraid, and I agree with them, that this bill will not apply to rail shipments from Canada to the U.S. Why not?

In closing, this is an important piece of legislation. It needs improvements. Of course we hope this government will keep an open mind and accept many of our recommendations.

[Françoise Boivin, NDP, Gatineau, QC]

Mr. Speaker, I thank my colleague from Pontiac, who works very hard representing the people in his part of the country, which is a very large riding. Sometimes we feel better when we take a look around us. I feel good looking at my colleague's riding from my beautiful Outaouais region.

I liked his speech for a number of reasons. The message we have been sending the government this morning is extremely important: the NDP will support the bill at second reading to get it to committee.

Having said that, this bill is not perfect. In my opinion, nothing is perfect. In this context, we would hope that our friends opposite are prepared to listen to the different viewpoints of the various stakeholders.

The government presents us with its bills as though they were perfect, necessary and very important. I am always surprised to see how long it takes them to introduce their bills. In fact, we have been waiting for this bill for five years.

Can my colleague explain why it has taken five years? Why has the government taken so long to introduce this bill, which various stakeholders have been asking for?

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, I thank my colleague from Gatineau for his very important question. I must also point out that she does an excellent job representing her constituents. It is great to have neighbours who are so active in their community.

Railways used to cross the Pontiac. As the member pointed out, the crisis in the railway industry has been around for a long time. I truly believe that the only reason the Conservatives are moving on this issue is because of the pressure exerted by the official opposition and the work of my colleague from Trinity—Spadina. They have been confronted by the facts and forced to take action. They have put forward something good, but it obviously does not take into consideration all of the industry's needs.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I live on Vancouver Island and we have been in pretty desperate straits with regard to rail service. Our passenger rail service has not been in operation for a number of years because of the state of the tracks and the other infrastructure. Our freight service is in jeopardy as well, although it is still operating. However, on Vancouver Island it is an important part of our transportation infrastructure.

In some of our rural communities rail infrastructure is critical for our economy and the environment as well because it helps keep some of those trucks off the road. In Nanaimo—Cowichan we have something called the Malahat and several times a year that road is regularly shut down, either due to accidents or due to weather conditions. The rail service then is even more critical for moving freight. I wonder if the member could comment on that.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, the Pontiac has very similar conditions. We have two roads and in the winter they are often extremely dangerous. Automobiles and large trucks are competing on two-lane roads. Forestry products or wood is being brought far north and mining products are coming from the west. Next to these two roads are tracks that are no longer used. One would think that the safety of my constituents would be well served if the government were to invest in renewing those tracks and making sure that shipping could occur along them.

[The Deputy Speaker, NDP, Joe Comartin]

It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The House resumed from February 1 consideration of the motion that Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), be read the second time and referred to a committee.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, I am very pleased to stand in the House today to speak to Bill C-52 and to kick off today's debate on an act to amend the Canada Transportation Act.

Here is a word about the rail industry in Canada to set some context for this discussion of Bill C-52. First, rail transport is critical to Canada's economy, and 70% of all surface goods in Canada are shipped by rail.

The rail industry has to work for Canada. Under the current government, our trade deficit is ballooning, reaching nearly $2 billion in November alone. There can be no tolerance, because there is no room in our economy for the kinds of inefficiencies, excess costs and performance woes that characterize our rail system presently.

The problem is that rail freight customers are struggling to get fair and reliable services from the virtual monopoly of CP and CN that control Canada's rail system. Many rail freight customers cannot even get a contract for service from one of these companies. Those who do get them have to contract for unreliable services that are costing the Canadian economy hundreds of millions of dollars every year.

Rotting crops, idled plants and mines, missed connections to other forms of transportation, all of this is hurting Canada's exporters, damaging our global competitiveness and costing us jobs.

These issues affect a broad range of economic activity, from agriculture, forestry, mining and the chemical industry to the automotive industry.

This set of circumstances is not new. It has defined the industry for a number of years, frustrating rail freight customers so that 80% of them are now unhappy with their rail service. They have been demanding change: action from the federal government, legislation that would compel CN and CP to provide service agreements to shippers.

Change has been slow in coming, however. The rail freight service review began in 2008. We had the panel, its report, a mediation exercise, another report and then the promise of legislation from the minister.

However, it seems that it was the private member's bill, Bill C-441, of my colleague, the NDP member for Trinity—Spadina, that pushed the government at last to release the government bill we have before us.

This is a tepid response to a real economic problem. It does not cover existing contracts. It offers only a narrow, costly arbitration process for failed negotiations for new contracts. Freight customers' demands to include penalties in service agreements, performance standards and accessible conflict resolution were ignored.

It is a start, but much more needs to be done and we will support the bill through to committee for amendments to redress the weaknesses and omissions in the bill.

Before it gets to committee, I think it is useful to think through more carefully and thoroughly what opportunities are lost to our economy, to us, with our rail system structured and regulated as it is presently.

The current issues confronting freight customers stem from the fact that the rail industry in this country is a virtual monopoly. It was made that way in 1995 with the sale of Canadian National Railway, along with the tracks, to private interests.

What was made with the sale was a virtual monopoly of a $10 billion industry that sits at the heart of the Canadian economy. Quoting from a Transport Canada document on rail transport:

Of total Canadian rail transport industry revenues, CN accounts for over 50% and CPR for approximately 35%. Together, CN and CPR represent more than 95% of Canada's annual rail tonne-kilometres, more than 75% of the industry's tracks, and three-quarters of overall tonnage carried by the rail sector.

It is important for both our economy and our environment that our rail system run with full efficiency. The alternative to rail freight is on-road transportation by way of trucks.

According to the latest Environment Canada national inventory report, 1990-2010, most transportation emissions in Canada are related to road transport. Emissions from road transport rose by 37 megatonnes, or 38%, between 1990 and 2010. Of those 37 megatonnes, emissions from heavy duty diesel vehicles or large freight trucks rose by 20 megatonnes. That is a 101% increase.

It is worth noting here that the GHG emission intensity of freight rail improved by 24% between 1990 and 2008. It should also be noted that there remains plenty of room for improving the emission intensity for both freight and passenger rail travel.

We know that not all truck freight is replaceable by rail freight and vice versa, but this is a worrying trend. It is worrying not just from an environmental perspective, but it also speaks to the broader issue of congestion on our roads and the environmental and economic costs of that congestion. Clearly, the more freight we can move by rail, the fewer trucks are unnecessarily using our road network for freight transport.

The same obviously holds true for passenger travel. It is notable that while passenger kilometres—that is, passenger travel by motor vehicle in Canada—have been on a long upward trend, passenger kilometres by train have remained virtually steady since plummeting in 1990. Of course, it was in 1990 that VIA Rail lost over 45% of its ridership in the aftermath of the federal government ordering VIA to abandon certain corridors and branch lines. As a result, passenger travel on VIA fell from its peak of about eight million passengers per year in the 1980s to a ridership that has bounced around the four million mark since.

Efforts to increase rail service for passengers have been stifled by the virtual monopoly of CN and CP. VIA operates its trains on 12,500 kilometres of track, but it owns a mere 2% of that. Eighty-three per cent is owned by CN and CP, with CN owning the majority of that track. The remaining track VIA uses is short line infrastructure, which is owned and maintained to reflect the freight market that these tracks serve. Therefore, with virtually no ownership of track and no priority access to track, VIA Rail must negotiate train service agreements with these major freight carriers in order to provide its passenger service, and it finds itself in the unenviable position of sitting between a virtual monopoly and the succession of Liberal and Conservative governments that failed to recognize the enduring value and incredible economic and environmental potential of rail travel to the country.

This indifference of our government to the economic and environmental potential of rail extends well beyond freight-related issues and intercity passenger travel, right into our cities. This is certainly the case in my city of Toronto. Investment in transit infrastructure, particularly in the form of rail transit, is critical to unleashing the economic potential of Toronto's city region. Infrastructure, and transit infrastructure in particular, is a key component of a competitive business environment.

This is most certainly the view of members of the Toronto Board of Trade. They identified transit infrastructure as their top priority. The Board of Trade's 2011 annual global benchmarking study shows why it requires urgent attention and investment. Toronto finished 19th out of 24 global cities on transportation issues, including last place in commute time and, significantly, 16th for kilometres travelled by rail. There is near consensus that the absence of adequate transit infrastructure in Toronto and the Toronto city region is the biggest impediment to Toronto's global competitiveness. It has been estimated that the annual cost of congestion to Toronto's regional economy is $6 billion. That cost is projected to rise to $15 billion if no significant action is taken.

It is time to take significant action. The cost of the status quo is too great and unnecessary. It is one of the great mysteries of the current government. It continues to contradict its own marketing materials and brochures every day. It is emphatically not a sound economic manager. It stands idly while opportunities for economic growth pass it by.

Bill C-52 is just the latest example of any easy fix but also of a government that responds only when pushed, and only then half-heartedly, to opportunities to improve the economy of the country and the lives of Canadians.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, we acknowledge and recognize the importance of this legislation, particularly to our shipping industries. Over the last number of years, since 2007, they have been calling for legislation of this nature.

Could the member indicate what the NDP's position is in regard to the nationalization of the rail line, or CN or CP? He stated that he seemed to be in opposition of what took place in the 90s.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, today's issue is not about nationalization of rail lines. My speech is about lamenting lost opportunities and the sale of Canadian National under the Liberal government in 1995. It undermined great opportunities that we had to increase the competitiveness and efficiency of our rail services in this country both in terms of freight rail and passenger rail. We are stuck in these circumstances with passenger rail in particular, with VIA Rail not being able to establish priority schedules for passenger travel in this country. I note too that throughout the 1990s the funding was consistently undermined by the Liberal government of the time.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, this legislation proposes small measures when what we really need are comprehensive steps toward a national transportation strategy, within which rail is key.

I want to raise one issue with my colleague that has troubled me for a long time as an advocate for passenger rail. The member pointed out quite rightly that VIA Rail does not own its own tracks. It must get permission and lease them from freight. The increasing problem is that freight trains are getting increasingly longer, which means they can no longer use the sidings that are available. That means that passenger rail always has to go to a siding, because of shorter trains, and wait there while freight goes by. That is undermining the efficiency of passenger rail through freight.

I wonder if my colleague would have any comments.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, the future of transit in this country should be focused on making passenger transit more efficient. The environmental impact of that would be tremendous for Canadians. I would note too that the emission intensity of passenger rail over the last 20 years or so has improved by about 26% and there is lots of room for greater improvement for passenger rail.

It would be wonderful if there were a way to give passenger rail greater priority on the tracks, to work out some system, so that freight travel could also continue in a competitive and efficient way as well.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I thank the member for his speech.

I have noticed that my Conservative colleagues often turn up in big numbers for cocktail parties. It is easier for large groups to organize these kind of events, but that is not the case for a nurse from Saskatchewan or a small manufacturer.

The government has been dragging its feet on this, and I wonder what my colleague thinks about the way the government has been listening to small-business owners compared to big groups?

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, the evidence before us suggests that the government has not listened at all well to the customers of these major freight companies. Eighty per cent of them are unhappy with the service they are receiving.

Bill C-52 only goes part way in redressing the concerns and complaints of the customers of CN and CP. The major freight rail companies seem to have had the government's ear in the drafting of the bill.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, every day Canadian shippers suffer from the consequences of getting unreliable freight services.

Farmers cannot get their grain, soybeans and canola delivered to the port on time, resulting in missed ships, upset overseas customers and rotting crops. Lumber and paper companies in more than 500 forestry dependent communities cannot get their products shipped or supplies delivered because of patchy rail freight services, affecting the livelihoods of hundreds of thousands of Canadians. Mining operations, the largest employer for aboriginal people, have to idle productions because they cannot get their coal and other minerals picked up on time.

The effects are real: hundreds of millions of dollars in lost productivity; and countless lost jobs and lower competitiveness for Canadian businesses in the global marketplace. Canada's farming, natural resources and manufacturing companies are innovative and hard-working, but they lose out against global competitors when they cannot connect with their export partners and disrupted supply chains.

Why is this? Why are our farmers frustrated about delayed pickups of their crops? Why are mining companies frustrated about promised rail cars that are never delivered? Why are paper factories frustrated about damaged rail cars on which they cannot put their products? It is because we have a classic case of market power abuse. The small lentil farmer in Manitoba simply cannot get reliable and affordable freight services from a rail company like CN, even though CN made an annual profit last year of $2.7 billion. Those lucky enough to get a contract with CN and CP have to put up with service disruptions, while many smaller companies cannot even get a contract in the first place.

Eight out of ten rail customers are unhappy with the freight services they get from the big rail companies. Around 80% of rail commitments between the rail companies and farmers and grain elevators are not fulfilled. The future picture is even more dramatic. Forty-five per cent of shippers say that their rail freight services have become worse over the past three years.

Why is the situation so bad? Healthy competition in a marketplace brings prices down and creates a balance between supply and demand. However, that is not the case with rail freight services. Rail freight customers are faced with the entrenched dual monopoly. Together CN and CP dominate with a market share of close to 95%. CN alone accounts for 57% of the market based on revenues and CP accounts for 38%. The remaining 5% is 49 short-line operators that haul freight to the 2 main lines.

Around 80% of rural shippers are captive, meaning they have no choice but to go with the one big rail company that operates in their area, a textbook case of a monopoly. They have no choice but to pay higher prices, no choice but to suffer the consequence of unreliable services and no choice but to endure scheduling changes without advance notice.

Canadians have no choice but to get a black eye on the international stage for unreliable export delivery. It is a marketplace that is broken, where legitimate demand is not countered by adequate supply of services. In the words of the Canadian Industrial Transportation Association:

Railway Freight is not a normally functioning competitive market....This is the fundamental issue underlying all the price and service problems encountered by rail shippers....It is dominated by the sellers.

By that, it meant CN and CP.

What about other modes of transportation? Why can rail freight customers not ditch the rail companies and go with delivery by truck or ship?

The Canadian Industrial Transportation Association said:

—the reality of moving to other modes in most cases is not practical in any reasonable scenario. Truck equipment may not be available in the short to medium term and volumes may be too great to transfer to truck....Over the past seven decades, the railways have lost significant market share to trucking and it is likely that most traffic that could take advantage of the trucking option, has moved to truck.

In other words, trucking only works for certain distances, depending upon the value and the volume of the freight. Just to illustrate this point, a train hauling potash carries an average cargo of 10,000 tonnes. That is the equivalent 385 semi-trucks.

Leaving aside considerations like pricing and delivery time, just getting such a fleet of trucks is simply unrealistic, in most case, when the rail company decides not to show up on time.

It is not just the shippers that are captive. Many of Canada's ports are as well.

East of Montreal to the Port of Halifax, CN is the only major railway. A similar situation exists in northern B.C., with CN being the only railway serving the port of Prince Rupert. Likewise, southeastern B.C. and southern Alberta are served only by CP. In parts of northern Ontario, the CN and CP main lines are enough separated that they are monopoly rail carriers in those areas as well.

Given this situation, any efforts from the industry and the government must focus on improving rail freight services, while making the pricing competitive so rail freight customers are not left completely vulnerable.

One of the core issues is that shippers have no effective way to get the contracts fulfilled, if they are even among the lucky ones who are able to sign an agreement.

In the words of the Western Grain Elevator Association, rail companies continue to deliver unreliable services, “because they can—there are no effective legal or financial consequences”.

When it comes to consequences for non-performance we, again, have a completely lopsided situation.

By contrast, shippers have to pay penalty fees to CN and CP if they do not have the promised volumes ready for shipping or if they fail to load the rail cars on time. However, it does work the other way around. If rail cars do not show up on time or if goods are delivered late, there is no problem for CN and CP. They get away with all the unreliable behaviour, or bad behaviour, without paying a penny, or should I say a nickel today? The shipper has no choice but to suffer the economic consequences caused by the rail companies. Therefore, we have a pretty desperate picture of Canada's rail customers.

What has the government done to protect them?

For years, it kept itself busy with talking and making promises. In 2007 the government promised an independent investigation of the situation. The much-heralded rail freight service review finally started in 2008. For almost three years, its experts gathered information, talked to shippers and rail companies, commissioned a much revealing survey and came up with eight key recommendations. The final report was tabled in early 2011.

The minister of transport at that time promised legislation. Then what happened? There was an election. After the election, there was more talking.

More than half a year after the final report, the Minister of Agriculture and Agri-Food decided it was not time for action yet, so he started the crop logistics working group.

Of course, the Minister of Transport did not want to be outdone, so he kicked off a mediation process between shippers and rail companies in late 2011.

However, as predicated, the mediation was ultimately fruitless because there was a complete imbalance of power. CN and CP were unwilling to make meaningful concessions during the several rounds of negotiations. Without yielding any concrete results, the chair, Jim Dinning, released a report in June 2012.

New Democrats have stood with the shippers along the way. I tabled my own bill, the rail customer protection act, using the recommendations of these various reports. I have repeatedly called on the minister to give rail customers fair, reliable and affordable services they need to be successful and to make Canada's economy stronger.

The shipping community has consistently been asking the federal government to fix major issues. They have been talking about this for at least over 10 years. One would assume, after all those deliberations and investigations, the government would present a rock solid bill that would protect rail customers, would level the playing field and would bring a balance of power to shipping customers. Unfortunately, while Bill C-52 is a step forward, it falls short of what should be accomplished.

How? While shippers would have the right to a service agreement in the bill, there is no model, guideline or template to back up that right. Shipping customers want a model service agreement that gives shippers and rail companies flexibility to negotiate, while starting with certain elements already on the table, like performance measurements and consequences for non-performance. They did not get one in the bill.

Instead, the bill has said nothing about what should be in the service agreements. Many shippers are already afraid they have won a hollow victory. They will sit down with a rail company, knowing they have the right to an agreement, but ever component would have to be a concession of CN and CP, which is a very tough place from which to start.

It comes as a disappointment for many shippers that penalties for non-performance are not included in the bill. Rail customers desperately need to include such penalty fees in service agreements to get compensation for service disruption and the resulting damages and productivity losses. The current bill only includes fines of up to $100,000 in the case of arbitration outcome being ignored by either party. That arbitration process is only available to shippers that negotiate a service agreement for the first time.

The other problem is that such a fine would be paid to the federal government, not to the customer. To act as a real deterrent, fines would have to be significantly higher. Keep in mind unreliable rail services are costing customers millions of dollars, while CN made $2.7 billion last year.

Another shortcoming of Bill C-52 is the brand new arbitration process is only available for shippers that are negotiating new contracts. Instead of offering quick and reliable help through conflict resolution to all shippers, Bill C-52 offers arbitration to a small group of shippers. The other problem is that the outlined arbitration process could end up being too costly for smaller shippers. To place the burden of proof on the shippers to demonstrate that they need rail customer services, that they are indeed captives, is indeed unfair and one-sided.

Bill C-52 applies only to new service agreements, not existing ones. That means many shippers will continue to be stuck with unreliable, unfair and unaffordable services. They will continue to be without any conflict resolution process in the case of violations to existing service agreements.

The bill does not even tackle the elephant in the room, which is pricing. For years shippers have been complaining about uncompetitive freight rates. It is common that shippers pay prices that are three times as high as the rail companies' variable or direct costs for services, just because shipping companies can get away with it. There is no choice for customers.

The government is wasting the opportunity to get rail customers not only fair, reliable, but also affordable and competitively priced freight services to give rail customers real protection from unreliable services, price gouging and a monopoly that costs the farm, logging and mining industries millions of dollars.

In conclusion, it is clear that federal action is needed to create a level playing field for Canada's rail customers and shippers, many exporters among them. They deserve fair, reliable and affordable rail freight services to compete and survive.

Bill C-52 is a step in the right direction, but it falls short of the hopes of many shippers. The bill would not cover all rate freight customers. Many would be left behind. It would not provide a model agreement, and customers would have to start from scratch. The bill would not compensate for bad service. What would be the consequence for unreliable service? There would not be much. The bill would not curb the monopoly power of the rail company giants, and it would not end price gouging.

In committee, I will work hard to improve the bill, in line with key customer demands. I look forward to working with the government and the shipping community to address the shortcomings of Bill C-52. I am optimistic that a stronger and more useful bill is possible. It is within reach to finally make rail freight services reliable and affordable for Canadian businesses.

This country was built on railways, and we owe it to the farmers in the Prairies, the paper mill workers in Quebec and the miners in British Columbia that we make Canada's rail system work again for all.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I would like to thank my hon. colleague for an excellent presentation on the things that are missing from the bill. I wonder if I can turn attention from the pricing, which she quite rightly pointed out is the elephant in the room, and ask about a concern I have that the private freight controllers, the companies running our freight, have been cutting back in a dangerous way on the personnel on board.

We no longer have people on board in the last car, the caboose, which used to be required under regulation, to monitor safety. I believe that the spill at Wabamun Lake, which the hon. member for Edmonton—Strathcona knows about very well, occurred largely due to the cutbacks of key safety positions of personnel on board freight.

It needs to be reliable and safe. We are having far too many derailments.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, the Transportation Safety Board of Canada has made a series of recommendations, some of which are on staffing. Others are on the need for advanced technology to be installed in rail cars. For example, voice recording in the locomotive cab has not been done yet, even though the recommendation is eight years old.

There has been a recommendation for a positive train control system that would provide an automatic braking system. If the conductor happened to miss a light, a track or a red light stop sign, the train would stop automatically based on GPS technology. Unfortunately, that recommendation is again being ignored by the minister. The United States made it mandatory that all trains have automatic braking devices for safety, but we do not have such legislation in Canada.

Therefore, both staffing and technologies should be in place to keep train services safe.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, following up on the previous question, I would appreciate more elaboration from the hon. member.

Clearly, the legislation brought forward deals with, to a small extent, the concerns of the sector that needs and wants to ship equipment, supplies and products by rail, including for export. Properly maintained and inspected rail lines are important also to those who are shipping their goods, because if there is a series of derailments, communities get very nervous about the shipping. As was mentioned, in the case of the spill at Lake Wabamun, which was the largest freshwater spill of bunker C seen in the history of North America, a number of things became very evident. One was that there simply was not proper response equipment along the line to immediately address the spill. That would then delay the startup of a train and so forth and create a further backlog.

Could the member talk about the need for bringing these matters together, about the proper maintenance of the rail and the increasing number of shipments of dangerous substances? I find it very interesting that there is wide public dialogue about the potential risk of shipping bitumen by pipeline, yet apparently a higher risk of--

[The Acting Speaker, Conservative, Bruce Stanton]

Order. Time is limited, even though we have 10 minutes.

The hon. member for Trinity—Spadina.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, because the entire supply and demand are so unbalanced, and because we are basically dealing with a monopoly, raising the situation where the government is very reluctant to act, many agencies, such as the auditor, who talked about the importance of tracking and following through on recommendations on dangerous goods that have been spilled, have not had their recommendations implemented. The Transportation Safety Board recommended ways to make sure things are done in a safe way. Yet there is a long list of recommendations of the board that are being ignored. The government has talked about the situation, but actually making things happen, such as having a standard voice recording in the cab so that we can find out what caused the accident, have not been accomplished yet, which is really unfortunate.

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

Mr. Speaker, we know that rail freight customers and users have been very unhappy. In fact, we know a large number of them have been very unhappy with the shipping of their goods across the country for some time. We know that over three-quarters of rail freight users are quite concerned. The hon. member has highlighted some of those concerns and has put forward some solutions.

Could the member elaborate on what some of those solutions would be in the context of a national transportation strategy, which I know she has called for, and how the bill could move toward a national transportation strategy?

[Olivia Chow, NDP, Trinity—Spadina, ON]

I will try to answer that question, Mr. Speaker, in the few minutes I have.

My private member's bill would accomplish all of the things rail customers want. My bill would cover all customers, whether they have existing contracts or not. My bill would provide a model agreement so that it would be much faster and easier for the customers and the company to come to a consensus and sign an agreement. My bill proposes that there be financial consequences for bad service delivery so that the customers are compensated if their grains do not show up on time or they end up rotting at port. Customers would not have to book several containers in case the train shows up late or early.

My bill proposes to deal with price gouging and the monopoly of power the rail company has. Unless we deal with that, the situation will still be one-sided. We have to find some balance between the customers and the companies. If not, the customers will continue to be gouged, and the services will continue to be unreliable. I hope my Conservative colleagues across the way will work closely with me and be non-partisan about it.

Let us fix Bill C-52 so that it works for all customers and shippers. Let us make sure that there are substantial consequences if the services are not reliable.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, I congratulate the member and I have a question for her.

I get the impression that railroads have been used less and less for many years now, and companies have a tendency to close unprofitable routes, such as the route between Gaspé and Chandler. The train goes to Chandler but no longer goes all the way to Gaspé.

I would like the member to tell me whether that same trend is being seen across the country.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, yes, in fact, what is happening is that our national dream is slowly drifting away as CN and CP are abandoning rail lines because they are not always profitable in this vast country of ours. Even though CN made $2.7 billion last year, it is unwilling to service some of the areas that are not turning a substantial profit. Thousands of tracks are being given up, whether they are for passenger rail or freight services. More trucks are on the road. VIA Rail is losing customers. It just had its budget cut by $20 million.

We need to re-examine our entire rail service so that we can come back to the Canadian dream of a rail line connecting all of us from coast to coast to coast.

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, it is a pleasure to rise today in support of Bill C-52, with the understanding that it is not exactly the bill that was needed. However, I have absolute faith that our critic, the member for Trinity—Spadina, will be in there valiantly fighting for the amendments to improve this legislation, which does not go far enough.

I also want to acknowledge and thank the member for the amazing work she has been doing on her transportation portfolio. I know in my riding of Newton—North Delta, one of the most critical issues for the residents there is to have a national transportation strategy to help provide a framework so that we can have good, comprehensive public transit that will help us get rid of the gridlock, for the movement of goods and for people. When people do not have to sit for hours and hours in traffic gridlock, their mental health improves and they are much more productive at work.

Today we are here to talk specifically about the amendments to rail freight provisions. We are talking about rail freight customers. We live in a huge country, which is geographically challenged, or I might say, advantaged. We have a diverse climate. When I left Vancouver last night at 11:20, it was still 6°C. Then when I arrived here to our beautiful, balmy weather in Ottawa, it was minus whatever.

Moving goods for mining companies, farmers and even for people who want to ship cars across the country, we realize that shippers have a huge geography to contend with. It was with that in mind that our forefathers had the foresight to build a national railroad. It is unfortunate that we have not been good caretakers of the national gift that was given to us. We have seen it face quite a few challenges. On the passenger side of rail, my colleagues who have rail service in their areas tell us how wonderful it is, but out where I live in B.C. we have had much of our passenger rail cut and the rest is not running that regularly.

When we talk about freight in Canada we are not talking about moving goods 100 miles or 300 miles, we are talking about moving goods thousands of miles across the country, going through mountainous terrain, our prairies, from coast to coast to coast. As well, there is the incredible challenge of our climate, yet we have to keep our freight moving throughout the year.

I am an absolute fan of trains, be they freight trains or passenger trains. Having grown up in England I had access to some of the best train service way back before the British privatized their train service. Britain is now looking to see how it can buy back the rail services and move toward nationalizing that national treasure once again.

I want us to look at some of the key facts surrounding this issue in Canada. We usually talk about quality service. However, here is a fact: 80% of rail freight customers are unhappy with their services. When I think that 80% are unhappy, that means that only 20% are happy. If I were teaching in my classroom today and I was grading a paper that was only 20% okay, it would not receive a very high mark or even a passing mark. As a matter of fact, it would be an abysmally failing mark, and I feel that is exactly what we are doing. We are failing our mining industry, our farmers and other shippers in industries that transport goods using the freight service.

Our services are so unreliable. They cost the Canadian economy hundreds of millions of dollars every year. If there were no other argument, surely my colleagues across the way could accept the fact that when it costs our economy hundreds of millions of dollars a year, it is an issue they need to address immediately. It is not something we should tinker with part of and then just leave alone for a long time.

By the way, I do not give much credit to my colleagues who are sitting in opposition either, the Liberal Party, because it was under them, under their stewardship, that the CN was privatized in 1995. They privatized the track. There is another way, which other countries are looking at where they keep the track and privatize the actual rail service. However, it was that kind of privatization, without checks and balances, without guarantees, without getting contracts in writing into the future, that is jeopardizing the transportation of goods. I want my colleagues to remember that.

We always have to look at our history. History is a great teacher. Basically what we are looking at here today is that if 80% of the people are unhappy and the unreliable freight service is costing us hundreds of millions of dollars each year, just think what it is costing the companies that invest. Think of the rotting crops for farmers who cannot get the service they need when they need it to move their goods from, let us say, the Prairies out to the west coast to be shipped away, or to the east coast. The transportation is stopped. Imagine the idled plants, even on our coastline, that are waiting for the railways to arrive, but they are running late and so they have backlogs. Imagine the mines that miss their shipments. These are the day-to-day realities that these industries have shared with us.

This is a missed opportunity by my good colleagues across the way to come forward with a comprehensive piece of legislation. This particular misstep will continue to hurt Canada's exporters, damaging our global competitiveness and costing us decent jobs. The bill takes a baby step in the right direction, but when we are dealing with hundreds of millions of dollars and peoples' livelihoods, baby steps are not always what needs to be taken. This is a missed opportunity for the Conservatives to address the bill in a comprehensive way.

What we find when we read the bill is that the protective measures do not even cover existing contracts between shippers and rail companies. As well, the legislation will only offer a narrow, costly arbitration process for failed negotiations for new contracts. Key demands, such as the shippers' call to include penalties for rail companies and service agreements, performance standards and an easily accessible conflict resolution process were basically ignored in this piece of legislation.

By the way, these are not the key demands of the opposition. These are not key demands that we have dreamed up. Our critic has done an amazing job consulting with the industries that feel the most impact.

Once again I would say the government is pandering to its corporate friends instead of the industries it needs to be supporting so that Canada can grow its export business and thus address its own economic strength.

Our rail transportation system, despite all its problems, is the backbone of Canada's economy, with 70% of all surface goods shipped by rail. As a matter of fact, if anyone has ever travelled through the Rockies by rail, there is a point where one can stand and see the beginning and the end of a train, because of the geography and the way the rail track was built. If anyone ever gets the opportunity, they should go see that. It is truly amazing. Watching that for what seems like forever, it really strikes home just how much Canadians rely on rail to transport our goods.

Pricing for rail freight services is also damaging Canada's shippers. Bill C-52 explicitly excludes pricing, despite the fact that many in the shipping community were calling for this very thing. One has to think, what is the driver for the Conservative government? It certainly is not listening to the people who need to move crops, who grow crops or mine minerals, or the people who are using the freight service. The government is not even listening to the shippers.

Canada's trade deficit is ballooning. I know the Conservatives like to live under the delusion that they are fine economic managers. However, when we look at the real world outside, it is a very different story. I would like to invite some of them to visit my riding and see that reality for themselves.

Canada's trade deficit is ballooning, reaching almost $2 billion in November. I am not talking about hundreds of dollars or hundreds of millions of dollars. I am talking about $2 billion, a number I do not think many of us could even write down or imagine how many zeroes come after the number two. We would have to go back to our high school days to remember that. We cannot afford to lose even more ground by taking little baby steps. This is the time when the government could have been bold, addressed all the issues and moved us forward in the right direction. We have to be competitive in the global market. Canada's products can only be competitive when we see an improvement in that figure of the 80% of people who are unhappy with the freight service.

Rail freight service is not only central to Canada's economy, we also need a strong freight service to take trucks off the roads and tackle greenhouse gas emissions. I am not going to try to persuade my colleagues across the way about the need for environmental protection. Whether it has been in the omnibus budget bill or other actions around the Kyoto protocol, the government has shown it has absolutely no commitment to regulations that protect our environment. As a matter of fact, it has shown it is not willing to make any movement toward making improvements to protect our environment.

At the same time, I feel it is my moral responsibility to point out to government members that, if it were improved and more people were happy with it and it were running on time, et cetera, at least our railroad service would take many trucks off the road. More people would use the freight service because they were happier with it, and thus it would be good for the environment.

I know that deep down, somewhere, even if not when they are sitting here in the hallowed House but when they are back at home with their children and grandchildren, Conservatives must think about planet earth and what we must do to protect it, if not for ourselves then for our children and grandchildren.

It would have made environmental sense to have addressed some of these issues in a more comprehensive manner. Rail freight is only one aspect where the Conservatives are slow to act. I could give many other examples, but I do not think there is enough time in the day.

From new rail safety measures, which we have been calling for, to cuts at VIA Rail and blocking the introduction of high-speed rail in Canada, Conservatives do not give Canada's rail network the attention it deserves. It is absolutely so. There is nothing more relaxing than sitting on a train and travelling to work and home. I have done this at another stage in my life, and I can say it is far superior to travelling by car to work and back and sitting behind the wheel getting all tensed up.

We are not the only ones who are saying that this bill does not go far enough. There are others who agree with us. As I said previously, the official opposition's critic, the member for Trinity—Spadina, has done an amazing amount of legwork on this. Actually, she has met with many of the movers and shakers in this area. She, herself, has formulated policies and amendments that she is bringing forward based on what she heard, not on some ideological shift way out there or a need to look as if she is doing something, but based on listening to the customers and those who move their freight.

Key stakeholders in agriculture, mining and the forestry industry associations have been calling for rail freight legislation for years; for example, and I am only going to name a few, Pulse Canada, Grain Growers of Canada, Forest Products Association of Canada and the Mining Association of Canada. They want, and we want, to have strong legislation to protect rail customers. However, once again the government has given in to inaction or a tiny baby step of action, which creates a great deal of dissatisfaction.

Let me just sum up a few things. Rail transportation is the backbone of our economy. More than 70% of the surface goods in Canada are shipped by rail. I would say that we need to make sure even more are shipped by rail, to get the trucks off our roads. Eighty per cent of service commitments for agricultural rail customers are not met by the rail companies due to delays, an insufficient number of rail cars, etcetera. That is quite a shocking figure. Agriculture cannot live up to its commitments 80% of the time because of the fault of the railway services. That is quite an eye-opener in itself.

The rail freight service review found that 80% of shippers are not satisfied, as I said earlier, but within that whole group, we have agriculture, a key backbone of our country. How can we live with a service where 80% of agriculture commitments are reneged on, not due to any fault of their own but due to the railway service?

We stand with the farmers, and we know how little respect my colleagues across the way have had for the farmers, and we stand with the mining and forestry communities to end unacceptable treatment and unreliable freight services from the big rail companies. We need a stronger bill and we will do everything we can. I have absolute faith in our critic. We will do that through amendments to protect rail customers, and we will work with the shippers to get them the fair and reliable freight services they deserve.

Unreliable rail freight services cost hundreds of millions of dollars in economic damages. Canadian jobs are on the line. Surely the time to act is now and not to keep waiting. Waiting for Godot will not solve this problem.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I have to admit that I find it stunning that there is much to-do about these improvements to the transportation system and that the government, through the bill, is going to introduce an arbitration system between rail companies and those who wish to ship their goods. When we actually look at the provisions, they are limited to new contracts. I do not want to put my hon. colleague on the spot; she may not be able to answer a specific question, but it raises the issue of goods that are shipped—mining, equipment, wheat. Surely in most cases there are long-term contracts that have been negotiated. I find the limited nature of this arbitration process rather stunning. Equally stunning is that it is not going to include shipping across the border into the United States and that there are not going to be any penalty provisions.

I wonder if the member could elaborate and speak about the limitations of these improvements that are being made to the rights of those who wish to ship goods by rail.

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, as a matter of fact, that is what really struck me today. By the way, I have had experience in arbitration both from the employer side and from the employee side. When I look at this legislation, I keep thinking there is so little here for the shippers themselves. The whole bill is still tilted in favour of the railroads. Going into a system, even when it is called arbitration, if through legislation it is tilted in favour of one party, then it cannot be called fair arbitration.

Also, to rule out the contracts that have already been signed, some for a number of years I would gather, would create multiple playing fields that would make it even harder and give the railroad corporations far more power centralized in their hands and leave the shippers very vulnerable.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the shippers have been waiting virtually since 2007 when it was suggested in a clear fashion that there was a disadvantage. They looked to Ottawa to provide a remedy, and today we have the legislation before us. Based on the previous question in terms of arbitration and the fact that we know there has to be a mechanism within the legislation, would the member provide what she believes that mechanism should be? Is it a final arbitration? How does she see an arbitration for a dispute between the shipper and the rail company? Does she have a solution for that, or does she see that solution coming out of committee? If so, when would she like to see the bill go to committee?

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, all the questions point out that the bill needs major fixing. One of the fixes is to create a more level playing field between the railroad companies and the shippers. Arbitration only works if there is a level playing field going in. If through legislation, things are tilted so much in favour of the railroads, then the shippers are going to have a disadvantage. I think all those things will get hashed out. I do not know what kind of an arbitration system this is. The ones I have known are that the arbitrator listens and, following the guidelines that are given, the final decision is made. There is no halfway measure when it comes to arbitration.

This also points out that there is a thundering silence from my colleagues across the way, either in speaking during any of the slots or even getting up to ask questions. It makes me wonder what they are trying to hide.

[Earl Dreeshen, Conservative, Red Deer, AB]

Mr. Speaker, I heard some of the discussion about how farmers and farm groups were not consulted in this, and I cannot let this go by. Maybe I was baited into this by the member's last comment.

This legislation 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, Canadian Canola Growers Association and the Western Canadian Wheat Growers Association. These are groups that understand the situation, and yet we hear comments that there was no consultation.

I am at the stage where I wonder what good news the NDP would ever support. Why can those members not support a bill of this magnitude, for which farmers and farm groups have been asking for so long?

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, let me make it very clear. I do not think I stood here and said I am opposed to this piece of legislation, nor has anybody else. We have actually said we support the bill going to committee where we will bring in some significant amendments to improve and add what we feel is significantly missing from this piece of legislation. We are going to be doing exactly that, based on what we have heard and on what those who ship goods are saying to us.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, the Green Party is in exactly the same position. We support the bill, but it is a very limited bill. It would provide the shippers of goods by freight access to an arbitration. That is what it does. It could do so much more.

I would like to ask my friend from Newton—North Delta if she does not agree. The committee might not be able to get at it because it exceeds the scope of the bill. However, this legislation could be used to leverage and push for more of a national transportation strategy that would take into account the need to move goods and people efficiently by rail.

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, whenever I think about railways I think of passengers. I also think of freight service, because I have watched freight trains as well. I know how significant rail freight is. I absolutely agree that, instead of dealing with things piecemeal, we need a national transportation strategy that would look at both the transportation of goods and the transportation of people. It is long overdue.

I urge my colleagues across the way to seriously consider supporting my colleague's move to bring forward legislation that would give us a national transportation strategy to take care of the movement of both humans and goods.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is with pleasure that I rise to speak to Bill C-52 this afternoon.

It is a bill that we have been anticipating for a good number of weeks now. In fact, the Liberal Party has been advocating for this legislation, from what I understand, since 2008, and for very good reason. We need to understand and appreciate just how significant our rail lines are to our nation. We do a phenomenal amount of transportation through those rail lines, from coast to coast to coast. Every community across Canada needs to have a strong, viable rail line or access to such a rail line in order to succeed. At the end of the day, CN and CP own a vast majority of all the capital infrastructure that allows us to transport the many goods and products moved every day.

In fact, living in Winnipeg's north end I often pass through the CP yards. We can go over the Arlington bridge and get a very clear indication of the massive size of CP, and that is the smaller of the two railways. CP does less than 40% of the overall transportation of goods and services compared to CN, which does close to 60%. When we drive over that Arlington bridge, we can look on either side and see huge compounds where trains are loaded, offloaded, and their contents transferred to go in different directions, and so forth. We can drive down Inkster Boulevard or Sturgeon Road in the north end, or take a multitude of different bridges that go over the trains, in any single day and see the number of trains, the hundreds of rail cars full of a wide variety of commodities.

Given the importance of our trains in that rail infrastructure, one would think that would be a higher priority for the Government of Canada to recognize—and when I say “to recognize”, that means to get the job done.

The issue that we are debating today is nothing new. As I indicated in a question previously, the shipping industry as a whole, the stakeholders in that shipping industry, have been calling for very specific action virtually since 2007, because of the sense of frustration they have felt over the years. That frustration is based on the sense of fairness.

To what degree is there fairness in the relationship between our rail lines and our rail operators, in particular, CN and CP, which handle about 95% of the traffic? There is a sense of frustration that there is no level playing field, that those two dominant rail lines have too much power and control over freight costs and the type of delivery provided.

I must applaud my colleague from Wascana. The member from Regina, Saskatchewan has been a long-time advocate for this change. I know first-hand because I have heard him on numerous occasions in the last couple of years speak of how badly we need to have the legislation that is before us today. I know he has worked with many of the different stakeholders to try to get a better understanding of why these shippers are in the position they are in, and why it is so critically important that we do more.

He has taken the time, not just in recent weeks or months but for years, to try to raise the profile of this issue with the government. I know that he has already had the opportunity to speak when it was first discussed at second reading. I think he has done a fantastic job in ensuring that the Liberal Party is well-positioned to understand this issue and, ultimately, to take it forward.

I believe that the member for Wascana brings a great deal of credibility as to why this is such an important issue, because he was a former minister of finance. As such, he understands the economics and contribution of our rail lines and how important they are to our overall economy and GDP. He brings an immense amount of credibility to the debate on this issue and has allowed the Liberal Party to be well positioned on it.

We are suggesting that the time has come for the bill to get out of the House and into committee. There are many stakeholders out there who have vested interests, some in the millions and tens of millions of dollars, who want to participate in this debate.

Many people may not realize that one of the largest stakeholders in the rail lines is Bill Gates, the founder of Microsoft, who has billions of dollars invested in CN. However, as much as I might like his product, I am very much concerned for the other end, the people who have the $500,000 farm investment or their life's earnings through generations of families and who want to get their product to market. They are the ones I am really interested in hearing from.

That is not say that CN, CP and the short lines should be denied profits. Only the New Democrats would attempt to do that. We recognize that profits are necessary in a capitalistic market to succeed. However, we also recognize that there is a responsibility to be fair, but we have failed in that. The people who have suffered the most as a direct result are the prairie farmers, the shop floor of a manufacturing business in Ontario, the mining that takes place all across Canada and family businesses. They rely on the rail lines to get their products to market and do not have much of a choice in terms of selection.

Whether wheat, barley or potash, there is a litany of things that a farmer or small corporation uses trains for to get their products to market. This is what they have to go up against. One report canvassing the farming community indicated that it could only rely some 50% of the time on rail cars being in the right place at the right time, even though they had placed their order already. How can one manage a farm operation in the face of this? I think that most if not all members of the House would recognize that is just not right and that there needs to be a consequence.

When we look at Bill C-52, we see a bill that is at least moving us somewhat forward. We are not necessarily happy with all of the details of the bill, but I suspect that there will be a number of amendments proposed once we get to committee, and we look forward to hearing these.

However, the real challenge for the government is to recognize that it has denied the industry the opportunity to provide that direct public feedback. It has held off on this legislation, not once or twice, but on several occasions. Not only did the Conservatives do one study, they did two studies. They have only been in government for six or seven years, yet they have had two studies on the issue.

We know for sure is that there is a high level of interest. From discussions and my understanding from the member for Wascana, we want to afford individuals who would like to come to the committee the opportunity to state their case, to make representations on what they feel is important.

What do I mean by saying that? We anticipate that this legislation will pass. The Liberal Party has indicated that it will co-operate on its passage to committee, because we believe it has taken far too long to get the bill before us today.

What we want in return is not something specific to the Liberal Party as much as it is specific to the different stakeholders out there. We would like to see the committee afford an opportunity those who want to come to committee to make presentations and express their concerns.

I believe that the government needs to hear what shippers and even the rail companies, CN and CP, have to say about the legislation. Given that the legislation has been on the back burner for so long, we recognize that there have been some mild, and I underline the word “mild”, modifications or changes that have afforded some marginal benefits. At least that is what some of the stakeholders have informed us, but nowhere near to the degree necessary.

I think it is very important that through the committee stage we do not try to put limits on how the members might get engaged in this. Sometimes there is even value in taking the committee off the Hill. There could be potential value in that in this situation.

At the end of the day, one of the things we are looking for is a very strong service level agreement, so that the industry stakeholders as a whole feel confident that there is something they can do to ensure that their product will get to market in a more timely fashion.

It saddens most Canadians when they hear of the waste that occurs because of delays or the lack of availability of cars. Those are very real issues that many producers have to face every year.

In the service level agreements, the producers are looking for a commitment in writing to some sort of penalty if the rail line does not live up to its commitment. I refer again to those small producers in particular, but also to all of the different stakeholders who depend so heavily on our rail lines, having their crops at certain stations at the right time in anticipation of their crop ultimately getting to market.

The same principle applies for other things. I am very proud to be a prairie member of Parliament. There is nothing like driving between Winnipeg and Carman and seeing eight or nine huge combines going through one field. One can see the tonnage of wheat being collected. Ultimately, it will end up on a train. The farmers need to feel confident that the train car will be there at the right time for them. Agriculture uses our railway significantly.

Our forestry industry is huge, whether in British Columbia, Manitoba or Atlantic Canada. There are minerals, again from coast to coast to coast, and chemicals of all sorts, as well as fertilizers. What about the oil and gas industry? Imagine how incredibly important the oil and gas industry is to our country. I disagree with the leader of the New Democratic Party. It is not Dutch elm disease. All of Canada benefits from our oil and gas production out west. I believe that the vast majority, 95%, of Canadians, would recognize the true value of it. Our rail lines play a very critical role in that area also.

The dependence on industrial and manufactured goods is very real. How many trains do we see coming across our country, from Ontario or Quebec, full of brand new vehicles destined for car dealerships? Many of them are pre-ordered. An anxious consumer is anticipating the arrival of his or her vehicle.

The list goes on. To get a good sense of how dependent we are on our rail lines, go to a major rail line, park outside for a day, and see the amount of train traffic that travels by. Watch the containers go by. Whether they are Canadian Tire train traffic, or Costco products, products from China, brand new automobiles, containers of Saskatchewan prairie wheat, Manitoba's and Alberta's endless commodities, or lumber from British Columbia, it is virtually endless. To really get an appreciation of how important rail service is to our nation, park outside a main line and watch the hundreds and hundreds of cars that pass every day and imagine the potential.

If one believes in the Canadian economy, as I do and the Liberal Party does, and that the potential is unlimited, one has to recognize that our rail line is going to play an absolutely critical role in the future development of our country. That is the reason I would ultimately argue that the government has been negligent. This has been an issue on the agenda since 2007.

We are glad to see it here today. We support the bill in principle. We want to see it go to committee. We want to have individuals make presentations and express their concerns. The idea is that the government will be receptive to the necessary amendments that would make the legislation better so that when it comes back at third reading, it will receive the unanimous support of all members of the House, given the very important role of our rail lines, which stakeholders and consumers depend on.

With those few words, I thank the House for the opportunity to speak.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Speaker, I thank my colleague for his speech.

In his speech he mentioned many positives about this bill, which we support.

Could he expand on what he would like to see in this bill? Aside from a dialogue between the various stakeholders, what would he like to see improved while the bill is in committee?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, there is a huge market to the south of us, the U.S. The bill is exceptionally vague. I think it is a major hole in this bill to not incorporate any level of assurance for the industry in terms of these service level agreements and what impact they would have on the transportation of product from Canada to the United States. That would be one major issue.

Short lines are another major issue. There are hundreds of miles of short lines. It is a relatively small percentage. CP and CN have probably about 90%, 94%, or 95% of the total industry. There is still that other 5% or 6% or so. That is just my best guesstimate.

It would be nice to get more clarification. That is why I would argue that what we really need is that the government have an open mind going into the committee stage and that it listen to the stakeholders and be prepared to amend the legislation. I suspect that there will be a number of amendments.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, at this point, can the member throw support behind a national transportation strategy? I do not know if the member's party has taken a position in favour of a national transportation strategy. I think we really need to look at this one relatively small but important piece of legislation in a larger context.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, a national transportation strategy is not new. One could probably trace it back through the last decade as one of those issues that needs to be dealt with. The Liberal Party has been advocating for it for a number of years. At the end of the day, I suspect that it is in all of our best interests.

There are opportunities in terms of passenger transportation. I would love to be able to hop on a train, for example, to go from Winnipeg to Regina. I cannot do that. Yet those are two very important communities, not only in my life but in the lives of millions, I would argue. The transportation corridor from the 905 belt to Montreal, Quebec City and Ottawa all the way down to Hamilton and Windsor is a wonderful opportunity.

There needs to be that overall transportation strategy. I suspect that at least three of the four political parties are going to have a detailed strategy going into the 2015 election.

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Speaker, I want to thank my friend from Winnipeg North for his compelling speech.

As a member of the agriculture and agri-food committee, I want to confirm many of the observations he has made with respect to the abuses the farming community has been subjected to. They include the condition of cars, which is so bad that upon arrival they have lost wheat through holes in the floors of the cars. There is the late arrival of cars, when farmers have been asked to have their produce available days in advance of the arrival of those cars. There is a big complaint from overseas about the inability to deliver on time.

I am just wondering if my friend could embellish a little and talk more about the abuses our farmers have suffered and how long overdue this legislation really is.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is, in fact, a very important issue, so I appreciate the hon. member raising the question.

At the end of the day, it is all about quality service. It is not good enough when one loads a product into a car and one actually sees seepage because of a container's poor quality. There needs to be more accountability, and that is, in essence, what the individuals who require this service are calling for. Today it is very limited. There is a great imbalance.

This bill is a step in the right direction. The question is whether it is going to be a very small step or a decent-size step? If it is a decent-size step, it would imply that the government is actually going to listen to some of the presenters at the committee stage. For it to be a decent-size step, there will have to be amendments to make this bill better legislation. If we do that, members will be able to address some of the issues my colleague has just raised.

This goes to the core of the issue. Shippers have to have the cars on time. Those cars have to transport that commodity to its destination at any one of Canada's coasts. That has to happen in an efficient manner that does not take away from the quality of the product being transported, which has been an issue raised by many individuals. They want their quality product to arrive in the same condition in which it went into the train. Who can blame them for that? After all, they want to have repeat clientele. They want to continue those agreements well into the future.

For example, members know that prairie farmers produce the best product in the world. They want that best product not only going into the cars but also departing the train as a first-class product.

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

Mr. Speaker, I would like to know what my colleague thinks about the NDP's criticism that Bill C-52 does not address rail fees.

When members of our party consulted exporters, many of them criticized the huge variations in prices, depending on which company they chose—CN or CP. Unfortunately, this bill does not address these price discrepancies.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I recognize that when one talks about freight rates, one needs to be cognizant of the fact that it is hard to put a set rate in legislation. There might be some guidelines one can incorporate in regulation in a very general framework as it is set up in the legislation itself. I would like to think that members will see some suggestions on that point.

There would have to be specific types of amendments. One has to be careful when talking about the market value of a box that contains whatever type of product. One has to leave a certain amount of that issue to the private sector.

I approach things with a relatively open mind. Hopefully, the government will do likewise. At the end of the day, it is about shippers and consumers.To a certain degree, it is also important for Canada's rail lines and their longevity. Members want CP and CN to grow and prosper. It is not about denying profits to these two corporations or the short lines. It is more about providing a guarantee of quality of service and a sense of fairness and that farmers in the prairies are not being taken advantage of because of the dominance of two rail lines.

When we go to committee, these are the issues we have to ensure are addressed. If we do not do that, then there are far too many individuals, groups, corporations and businesses that will lose out. I ask the government to do the right thing. I conclude by saying that I trust and hope that the government will seek and make the necessary amendments so that members can unanimously pass this legislation at third reading.

[The Acting Speaker, Conservative, Bruce Stanton]

Before the hon. member for Louis-Hébert resumes debate, I must inform him that I shall be interrupting him at 1:58 p.m. for statements by members.

The hon. member for Louis-Hébert has the floor.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Speaker, I am pleased to rise today to discuss this bill, as this may be the dawn of a new era in rail transportation. It has been my sense that the sector has been in decline for decades.

When a bill is introduced in the House, it is usually because there is some problem that needs addressing. Laws are not passed just for the sake of passing them. We do not set out to bore people. We are not in the business of hurting market sectors. We are here to make things better.

The Liberals acted hastily when they privatized CN in 1995, and they failed to think through the consequences. Monopolies were created in some regions of the country and duopolies in others, and we know what this led to.

In my riding, for instance, one of the consequences of the privatization has become a recurring election issue: the upkeep of the Quebec Bridge and its rail lines. The matter has been before the courts for seven years and is the direct result of privatization. The Conservatives only ignored the problem. When CN was privatized there was no consideration given to the consequences for the users of the different services. It is not worth mentioning VIA Rail because we all know what the problems with it are. We will have other opportunities to discuss this. The users of these transportation services have had problems for years.

The government has finally decided to act, but it is doing the bare minimum, and more needs to be done. We intend to support the bill at second reading and propose amendments to improve it.

If the Conservative government ends up introducing regulations, one can be sure that it is because the problem has dragged on for some while and something really must be done.

Is the fact that it is a private company the cause of the problem? No, the problem is that there is a monopoly. In this situation, there are two conflicting priorities: a company's need to make a profit and provide a dividend to its shareholders, and the service that it must provide its customers.

If there is no incentive created by competition, customer service suffers for the sake of shareholders' dividends. Moreover, an increasing number of sections of railway are being closed in rural regions, more and more services are being dropped and more and more cuts are being made to passenger service. This era has seen the decline of rail transportation.

And that is despite the fact that ours is a huge but sparsely populated country with vast distances to cover. That is why we need an efficient long-distance transportation system that causes as little environmental damage as possible. Rail transportation would fit the bill, but the government is letting the system go downhill.

The government waited years to act. It should come as no surprise that people using the service began to get together. I am not suggesting that they began to unionize, because that would freak some people out. People who use the system felt the need to talk to one another about how the level of service does not make sense. They started to exert pressure on the government because the level and quality of service were poor.

Globalization means that we have to deliver products all over the place, and quickly. Obviously, if someone has a product, be it from a forest, a mine, a farm or anywhere else outside a major centre, that product has to be packed up and shipped quickly. Global competition means that we need to provide this kind of service and we need the infrastructure to do it.

So the question is, how can we balance the need for a business to make a profit—be it a farm or a major corporation in a remote location—with the needs of many companies that often have no alternative form of transportation? Throw into the mix the need for transportation to be as green as possible. How can we bring these needs in line with each other? This has always been a problem.

That is why, in January 2011, Transport Canada released a final report on its rail freight service review. The committee's mandate included the following:

Conduct a review of the rail-based logistics chain...with a focus on service provided to Canadian shippers and customers...

Identify problems and issues with respect to railway service including those stemming from other elements of the logistics chain.

Rail transportation is one part of the logistics chain for shipping to various clients.

For shippers located on shortlines, determine if there are any problems with logistics and, if so, the source of the problem including service, operating, or marketing practices of the main-line carriers.

Signs were already pointing to a deep-rooted problem. At the end of the report, of course, there are a number of recommendations. There is a whole range. For example, the first recommendation is as follows:

The Panel recommends that railways, in collaboration with their stakeholders, continue to develop commercial measures to improve rail service.

In 2011, it was acknowledged that there was an issue. That was two years ago.

The second recommendation is as follows:

Prior to implementing changes in local train service, railways should consult affected stakeholders and provide a minimum notification period of 10 working days.

That recommendation relates to previously identified service issues.

And here is the third recommendation:

Railways should enter into good-faith negotiations to establish service agreements upon request by stakeholders...

That recommendation truly concerns the scope of Bill C-52, and the bill addresses only the third recommendation.

There is a fourth recommendation:

The Panel recommends that railways, assisted by a facilitator appointed by Transport Canada, should engage in negotiations with stakeholders...

That happened a bit later. I will speak to that in a moment.

And the fifth recommendation is as follows:

Railways should provide improved supply chain visibility through enhanced reporting.

Basically, there is a lack of communication between the service provider and the clients. Plain and simple. We could keep going.

Last year, in May 2012, the facilitator's report also came with recommendations.

The first recommendation is as follows:

Transport Canada should make the service agreement template...available to rail freight stakeholders...

There is mention of a service agreement template, a dispute resolution process, and so on.

This is a fundamental problem. Clients often have no choice. Even rural or more remote areas are producing goods.

That is the beauty of globalization. We can produce goods across the country and deliver them to anywhere in the world. To do this, we need world-class infrastructure. We have a serious problem when it is totally impossible for users to get adequate service.

We see that people are dissatisfied and have lost confidence. We also have to consider the economic consequences for users of this service, one of which is the erosion of market share. We often forget this, but we are sacrificing Canada's economic driving force.

That is why I think this bill is a step in the right direction. We are slowly trying to solve the problem through this legislation. Although it does not do everything we would like it to and it does not come close to creating a national transportation strategy, at least we are trying to come up with solutions. We are getting closer to something better for the entire supply chain from the perspective of producers in rural and remote areas.

If we do not address this issue, Canada's ability to compete will be compromised. God knows that Canada's competitiveness is important. We therefore cannot allow rail service and our providers' ability to improve that service to deteriorate.

[The Acting Speaker, Conservative, Bruce Stanton]

The hon. member for Louis-Hébert will have eight minutes to speak when the House resumes debate on the motion.

The House resumed consideration of the motion that Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), be read the second time and referred to a committee.

[The Speaker, Conservative, Andrew Scheer]

The hon. member for Louis-Hébert has eight minutes to finish his speech.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Speaker, when I had to interrupt my speech, I was talking about the report on the mediation that was unfortunately not successful. We tried to open a dialogue between the clients and the service provider. We were unable to resolve the problem and that is why we have this bill before us today.

CN and CP wanted nothing to do with this bill. But it might be a kind of wake-up call for these two companies. It is a little bill that does not do too much or ask for much and that we would like to see improved. For the rail companies it is a sign that everything is not just fine.

There are things to improve, and these companies will be tasked with improving them. If they do not, other more restrictive bills will be introduced. Even though, depending on the region, they have either a monopoly or a duopoly, they will have to develop a corporate culture based on customer service. They will have to find a balance between profit and customer service, so that customer service is not sacrificed for the sake of profit. That is the message we must get across.

I would now like to talk about the vision of transportation as such. In some respects, this bill manages a crisis. We have let the rot set in and we have waited until the very last moment. Minimal action has been taken. However, it is not our job here in the House of Commons to engage in short-term crisis management. Our job is to stamp out a vision for our country for tomorrow, for the day after tomorrow and for decades to come. Right now, we lack this vision.

I would therefore like to share with you some elements of a vision which has been dubbed, among other things, a national transportation policy. It would be entirely appropriate to address issue. It is my hope that once the bill passes second reading stage and has been referred to a committee, committee members will expand the debate to consider the overall evolution of the rail transportation system.

We live in a global world. We have a phenomenon called the Internet. It allows a supplier to advertise a product on the web and a customer anywhere in the world to buy that product. The logistics of delivering that product is the ensuing challenge. For Canada, a country of wide open spaces, the rail transportation system is absolutely critical to the process of delivering goods.

So then, it is important for us to continue focusing on this issue. However, I want to stress the importance of striking a balance. Much has been said about striking a balance between an industry’s ability to make a fair and reasonable profit and the possibility for captive customers to have a service that meets their needs and allows their business to grow. Such a service would help people stay in their regions and prevent a population exodus. It would be one way to develop resource regions. This matter is extremely important to us.

On the question of balance, we can take it further. We can talk about striking a balance between the transportation of people and freight. Even though there are problems with respect to freight transportation, passenger rail service often takes a back seat to freight transportation. How many times must passenger trains pull over onto a siding to allow a freight train to pass?

It all comes down to a matter of balance. Therefore, we need to examine all of these aspects and put an end to any short-term vision. We need to come up with a plan for a rail infrastructure worthy of the 21st century. This is important.

We are still living with an infrastructure that is a holdover from the 19th century, albeit an infrastructure that helped cement our national unity. Why not take another stab at improving it so that the companies that provide the service as well as the users and citizens can all benefit.

Finally, I want to stress that the main reason we want a national passenger and freight transportation policy in place is to be able to plan and make the right moves at the right time, rather than merely react to situations.

A business owner always looks to get a positive reaction from customers. Right now, there is no positive response and that is why this legislation is before the House.

In conclusion, I will say that this is a step in the right direction, a very small step. Everyone has agreed to support it. In fact, everyone is operating on the principle that a bird in the hand is worth two in the bush. So we are taking this small step today. We hope to improve service to suppliers. We hope the government will accept some of the amendments that will be proposed. Ultimately, we are probably addressing the most glaring part of the problem, but, since there have already been some reports and mediation attempts, and because we at least want to solve certain problems, I believe this requires cooperation by everyone, and especially by the various stakeholders, so that the House has to intervene as little as possible in the development of the railway system. It will be important for citizens, suppliers, customers, the economy and especially for Canada that we resolve that.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I thank my colleague for his speech. I am pleased that he mentioned the coexistence of passenger trains and freight trains.

I believe that coexistence, the role that CN has to play in our communities, is one of the bill's main themes. I know a lot about that because a railway passes through my riding. I will have occasion to say more about that later on.

Since this is a first step in the right direction, I would like to ask my colleague to elaborate on how long we could continue working with CN and move ahead with various projects, whether it be that of AMT, which wants to electrify the rails, or with the project we are considering today, the agreements between producers and railways.

I would like my colleague to talk about that because, in the NDP's view, cooperation and teamwork are part of an effective approach.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Speaker, I thank my colleague for his excellent question. In a fundamental way, it is all a matter of relations between the various groups, quite apart from numbers, profits and services rendered.

What is important, and what will have to be increasingly so, is that some companies do not really have any competition. We have to admit that fact. It was acknowledged in the rail freight service review report, which we have already discussed, that the competition was going to be tough.

So it is important for those businesses to be aware of the fact that, given their internal culture, they will have to start cooperating with others.

In a last-ditch effort, they have started to improve certain types of services, but that is unfortunately too little, too late for this bill. On the other hand, I believe that, if they are getting the message, we might perhaps have something better in future.

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

Mr. Speaker, first of all I am delighted to hear the hon. member indicate that he is going to be supporting the legislation.

I think it is important that members recognize that when we talk about Canada's freight rail system, we have to talk about it in a North American context since it really is a fully integrated system. Ultimately we have to recognize that while there are challenges within the system with respect to the shipper-railway relationship at times, even though that rarely happens, we really do have the greatest freight rail system in the world. It enables so much business and gives so much back to our economy.

Does the hon. member agree with the principle that first and foremost we would like to see market-based solutions, and that this mechanism should be used as rarely as possible, wherever there is a situation that cannot be solved between the shipper and the railway?

I think this is a good follow-up system. What the minister has put forward is a good system to support shippers and railways and to help them derive market-based relationships and solutions on their own. Would the hon. member agree with that?

[Denis Blanchette, NDP, Louis-Hébert, QC]

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

At the beginning of his question, he mentioned that there were continental relationships when it comes to shipping. That fact is undeniable. If there is one thing that CN and CP customers want, it is that their goods be delivered as quickly as possible. That is the problem. And the reason the government has decided to act after many years of standing idly by is that market-driven logic unfortunately failed this time.

Moreover, that is why, in my speech, I called on CN and CP to change their corporate culture, which is focused solely on profit, in an environment where it is really not possible to be ruled by completely market-driven logic. Indeed, you cannot create 10 competitors for CN and CP just like that. As members are aware, this kind of infrastructure makes it is quite difficult to develop competition.

I said in my speech that CN and CP should view this bill as a warning sign that things are bad and that they need to improve their practices. We are here solely because there is a problem that needs to be addressed through Bill C-52.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, earlier today I made reference to a former Minister of Finance, my colleague the hon. member for Wascana, and the efforts he has put in over the last number of years in calling upon the government to bring forward this legislation.

The need for the legislation has been there for a number of years. Initially, it started as a request in 2007. Liberals are glad we finally have the legislation here. We recognize there is a need for changes to the legislation. There is no doubt there will be a number of recommendations for changes once it hits the committee stage.

One of the questions an NDP colleague had posed to me was in regard to having freight rate charges within the legislation. I indicated that I would have a lot of reservations with regard to that. However, would the hon. member comment as to what the NDP might be thinking in terms of putting freight rates into the legislation?

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Speaker, I thank my colleague from Winnipeg North for his question.

I touched on the issue of committee work. In fact, I asked him a question regarding this during his own speech. I said that I wanted debate in committee broadened to go beyond the scope of Bill C-52 and focus on problems, so that rail transportation can get better.

I hope that my colleagues will agree with me regarding the need to open up debate and see what members have to say about other issues in the report that the bill does not address.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, I thank the member for Louis-Hébert. He raised a matter that is close to my heart: the importance of developing resource regions.

Early in the process of colonization, when Canada developed its coast-to-coast railway, the resource regions were not heavily populated. This engine of development was nevertheless put in place in order to promote progress nationwide.

In Gaspé, for example, where I was born, the freight train between Gaspé and Chandler has been removed, depriving small and medium-sized businesses of the development opportunities to which they are entitled.

Does the member for Louis-Hébert want bulk shipping to reach Canada’s remote regions?

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Speaker, I thank my colleague from Charlesbourg—Haute-Saint-Charles for his excellent question, since indirectly, that is what is at the heart of this bill. It is about the capacity of a vast nation like ours to service the entire country, regardless of the population density of its geographical sectors.

That is why the railways were built, and it is unfortunate that, in recent years, the focus on profit at all costs has made it difficult to develop and maintain businesses in Canada's most remote regions.

That is why it is important to once again strike a balance, a word that I have used on several occasions, between profit-driven logic and the capacity to support regional development.

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

Mr. Speaker, Bill C-52 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 fulfill its service obligations to the shipper.

In point of fact, clients of the rail transportation system, like farmers and mining companies, are victims of the near-monopoly held by railway companies: service interruptions, delays and other disruptive situations at Canadian National and Canadian Pacific are harmful to industries such as agriculture, forestry, mining and manufacturing, which do not receive compensation. A large proportion of the goods are intended for export. Poor rail transportation services damage the ability of Canadian exporters to compete on the international marketplace, particularly in terms of agricultural products.

Moreover, a number of shippers have difficulty, not just in getting good service, but in getting any service at all. Shippers complain that they are not able to sign freight contracts with the big railway companies. This situation is detrimental to Canadian exporters. Steps must be taken, especially because right now the trade deficit is very high. I would like to point out that the trade deficit reached $2 billion last November.

Statistics show that 80% of railway clients are dissatisfied with the service they receive. As the situation is one of a quasi-monopoly, it is important that the government take action to ensure that clients are better protected. It is the shippers who have to pick up the pieces if their goods do not arrive on time. This causes huge inconveniences.

When perishables are being shipped, the situation is disastrous, because by the time the goods arrive at their destination, they may be rotten or just not usable. This hinders Canada’s competitive position. For example, Canadian soybean growers are placed at a competitive disadvantage vis-à-vis their Argentinian competitors, not because of the quality of their product, but because of unreliable shipments. The growers should not have to bear the cost of this situation.

Rail transportation of goods is vital in many respects. First of all, since 70% of goods are transported by rail at some point, we need to have an efficient system. Secondly, rail transportation makes it possible to keep trucks off the roads, thereby limiting greenhouse gas emissions that result from the transportation of our goods. By ensuring that a certain number of trucks are not on the roads, we avoid putting additional pressure on our road infrastructures, that do not really need it.

I come from the Montreal area. Like my constituents in my riding of Saint-Bruno—Saint-Hubert, when I use the highways, I can see many trucks, and I can also see the state of the infrastructure, which is underfunded. Therefore, we need a rail transportation system that is efficient and accessible, so that we do not make the situation worse. Moreover, we need investments to restore our existing infrastructure.

Inaction on this issue will be costly for the Canadian economy. The situation cannot continue. Inadequate rail service is costly for Canadian businesses, and it is detrimental to the economy and to the labour market. In 2008, the government set up a panel of experts that studied the issue for three years. Their report was submitted in early 2011.

The government also initiated a mediation process that served only to show that Canadian National and Canadian Pacific lack the will to solve the problem and to provide adequate service to shippers. Although this bill could be improved, it is part of the solution.

Bill C-52 will cover only new service level agreements, not those that already exist. Many shippers will therefore continue to live with unreliable and unfair service, without having any recourse to dispute resolution if violations of existing service agreements occur.

Furthermore, arbitration is only available for shippers who are negotiating new contracts. Instead of providing fast, reliable dispute resolution for all shippers, Bill C-52 is offering a limited arbitration process for a small group of shippers. The proposed arbitration process may be too costly for shippers and require an unfair burden of proof by asking shippers to prove that they need the services of the rail company.

To find a comprehensive solution, we also have to consider the question of rates. While some members of the shipping community wanted to address problems with rates in this legislative process as well, the Conservatives made it clearly known that they will not be examining that aspect before the next legislative review of the Canada Transportation Act, in 2014 and 2015.

Of course we have to tackle the problems associated with service level agreements, but we also have to consider how we can make rail transportation more affordable. We have to tackle the problem in its entirety to ensure that our businesses, some of which are in rural communities, are an important element of the local economy.

The situation affects numerous sectors, such as natural resources, manufacturing, agriculture, forestry products, mining, chemicals and the auto industry. No one is really spared.

It is also important to note that the mining sector is the second largest employer in first nations communities, after the public sector, of course.

Improving rail services for shipping goods from mining companies could have a positive impact on the economic situation of the aboriginal peoples in some regions of the country. The government should be working with first nations leaders to improve their living conditions and the economic circumstances of the aboriginal people. There needs to be a sense of urgency to move quickly on this issue.

I will conclude by saying that it is most important that we not solve problems by halves. We have to tackle the problem in its entirety. I know that Bill C-52 is a small step forward, because this is a crisis.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, again, I want to emphasize the importance of the rail line industry to Canada in many different ways, primarily in terms of the economic impact it has for all Canadians. At the end of the day, as I have indicated previously, the need to do something or take some sort of action is there. It is very real, and it has been called on for a number of years already. Today we are now debating the issue.

The Liberal Party, in principle, supports the legislation to go to committee in anticipation that there will be amendments acceptable to the government, and obviously open it to the stakeholders. Does the member believe, as we believe, that it would be a tragic mistake for the government not to recognize the need to make amendments to the legislation, thereby giving it more strength to protect our shippers, our consumers and, to that degree, the rail lines themselves?

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

Mr. Speaker, I thank my colleague from Winnipeg North. I listened closely to his question.

We believe this is a first step in a crisis situation. The Liberals had until 2006 to introduce a bill, but unfortunately they did not do so. This is what we are suggesting. We are in favour of Bill C-52 going to committee, so witnesses can be heard and amendments will probably be made.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, this is totally shameful. I have seen the figures and I cannot get over them. I must note that I am not a member of that committee. The report says that 80% of rail shipping service customers are not satisfied. That is unbelievable. If I had a business and 80% of my customers were not satisfied, things would be in a bad way. That is a given.

How can the member explain that? Is it protectionism? Is it declining use? What is going on that results in customers not being satisfied? Do these companies have a monopoly on the railway?

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

Mr. Speaker, I thank my colleague for her question.

We are well aware that the Conservatives are protecting their friends in the big railway companies. By giving the railway companies what is essentially a monopoly, the Conservatives are treating Canadian shippers as if they do not matter. Unfortunately, that is the answer to the hon. member's question.

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

Mr. Speaker, given that 70% of our goods are shipped by rail and that it is very important to increase demand for rail transportation services and the quality of those services to reduce trucking and greenhouse gases, does my NDP colleague believe that the Conservative government is serious enough about improving Canada's rail transportation system?

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

Mr. Speaker, I would like to thank the member for his question.

We are discussing Bill C-52 today because nothing has been done up to this point, obviously. Unfortunately, the government waited until there was a crisis and the shippers and the NDP put pressure on it to introduce this bill.

This is not ideal, but it is better than nothing. That is what the shippers are telling us. They are not really satisfied with the bill, but they hope it will be improved upon in committee.

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

Mr. Speaker, again, I would like to thank the member for her answer. I completely agree with her.

I am also bothered by the fact that the Conservative government boasts about defending the economy and Canada's economic growth. I do not know if the Conservatives know this, but the poor quality of rail freight transportation services costs Canada's economy hundreds of millions of dollars each year. Since they have come to power, they have been twiddling their thumbs and have not been serious enough about improving and maintaining Canada's rail system. This robs the Canadian economy, our small businesses, our exporters and even our big businesses of hundreds of millions of dollars a year.

Does my colleague believe that the losses really are this big? Does she feel that the Conservative government should finally open its eyes if it truly wants to develop and grow the Canadian economy and inject money into our rail transportation system?

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

Mr. Speaker, I would like to again thank my colleague for his question.

As I mentioned in my speech, 80% of shippers are dissatisfied with the services provided by the two companies that have a monopoly on this means of transportation.

Instead of supporting the monopoly model, the Conservatives should instead look after small and medium-sized businesses. The government should pass legislation that has teeth in order to improve the level of service and try to compensate shippers, particularly in agriculture, who are incurring millions of dollars in losses, as I said.

Unfortunately, these shippers have to check for themselves if their goods arrived at the right place and in what condition they got there. At times, perishable goods have rotted by the time they reach their destination. We can imagine the kinds of losses these people incur.

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

Mr. Speaker, I will elaborate on what my colleague said. Just a few seconds ago, she mentioned that two rail companies, CN and CP, have a monopoly. She also mentioned that 80% of exporters are dissatisfied with the poor service, such as when goods do not arrive on time or in good condition.

When exporters want to shop around and get the best price or the best deal, they ask for bids from these two major companies, which, quite frankly, have a monopoly. There is also a big difference in rates. That is why I believe the NDP approach is reasonable.

What we find particularly unfortunate about Bill C-52 is that the Conservative government had a good opportunity to legislate or have input on the rate difference.

I would like to know what my colleague thinks of the fact that Bill C-52 says nothing about rates, which I believe Canadian exporters want the federal government to address.

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

Mr. Speaker, once again I thank my hon. colleague for the question. Indeed, what I criticized in my speech was the monopoly held by the two large companies.

I said that the Conservatives are unfortunately not encouraging small and medium-sized businesses. As my colleague pointed out, the losses will be huge. That is why we also want to talk about prices. When people have no choice, or when they have to choose between only two companies, what will they do with their merchandise? They are between a rock and a hard place: either they ship their merchandise with one of those two companies or they let their product rot, if it is an agricultural product.

It seems that all the other companies have no choice. There is no competition. There are no jobs when a monopoly is held by just two companies. Unfortunately, shippers really have no choice.

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

Mr. Speaker, it has probably become quite clear from my questions and comments that Canada's railway system is something I care about a great deal.

During my 10-minute speech, I will not necessarily focus on the details of the bill. My NDP colleague just did that, as did many other NDP members, including the hon. member for Trinity—Spadina, our transport critic, who is doing an incredible job in this area.

Bill C-52 affects me personally. We have heard a lot about how this bill will have a national impact and about its many deficiencies, which the NDP has criticized.

I just mentioned the fact that the difference between Canadian Pacific's and Canadian National's rates is quite significant, from one bidder to the next. This aspect bothers the NDP. We would have liked to see the federal government show some leadership on this. Unfortunately, this bill was introduced after five years of dragging their feet, and it was only introduced thanks to the hard work of my colleague from Trinity—Spadina, our transport critic. Fortunately, the NDP is the official opposition and it will hold this government to account.

In my speech I am not going to talk about the national impact or the consequences for big cities. I respect the people of Montreal and Toronto, for whom rail transportation means something different. However, I come from northeastern Quebec and, in the regions, the rail system is mainly used for the transportation of various goods.

Over the past few days, I took the time to find out whether our exporters in Saguenay—Lac-Saint-Jean are satisfied with the rail service they are receiving. Unfortunately, I came to the same conclusion as the other opposition members: there are many shortcomings.

I even managed to get my hands on a study conducted by the City of Saguenay. It is a few years old, but the conclusion was the same. I will share it with the House. This will bring something different to the debate since it pertains more to the regional reality.

This study has to do with issues around rail freight transport in Saguenay—Lac-Saint-Jean.

Editor's note: The findings in this report reflect discussions with most major regional users, including those in the pulp and paper, softwood lumber, fibreboard and aluminum industries, as well as smaller users in other industrial sectors. They basically reflect the comments made.

I just named the economic and industrial sectors that are very important in the region. We export a lot of these products. The people watching at home may be wondering what their rail system looks like. I will explain.

Two companies share the Saguenay—Lac-Saint-Jean railway system: CN and the Compagnie de chemin de fer Roberval-Saguenay or RS, a division of Alcan [or Rio Tinto Alcan]. The CN railway falls under federal jurisdiction and the line ends in Jonquière. The RS railway is a private railway that falls under provincial jurisdiction. The RS railway starts at the Port-Alfred facilities in La Baie and its primary purpose is to provide service to the Alcan plants in the region. As part of a confidential agreement with CN, however, RS provides service to the companies east of Jonquière, including clients from the Chicoutimi and La Baie industrial parks.

The city of Saguenay has two freight transshipment centres: Nolitrex (Jonquière) and Transit PAG (located in La Baie since January 2000), as well as one wood chip transshipment centre (Jonquière). Two other transshipment centres operate in Lac Saint-Jean, in Hébertville (Groupe Goyette) and La Doré.

Northern Quebec Internal Short Line (NQISL)

The NQISL operates the Saguenay-Lac-Saint-Jean, Chibougamau and Abitibi network for CN. Quebec has 11 short lines and private companies, including RS. Unlike the other short lines, which are independent entities that operate secondary lines for CN, CN has maintained control over the NQISL. The NQISL is a semi-autonomous division of CN, wholly owned by CN. The NQISL has a monopoly in the region and operates the largest rail network in Quebec, with 1,756 km of track, including 422 km in Saguenay-Lac-Saint-Jean.

NATIONAL FACTORS

Compared with all the rail companies in North America, the railway has adapted poorly to the new realities of transportation, including the just-in-time factor. Transportation times are long, rail cars get lost and the rates are less competitive, compared to the more efficient trucking industry, which has regained a large share of the market.

Following a string of budget cuts at CN at one point in time, rail car maintenance was neglected as was reinvesting in equipment. Today, the industry is faced with an aging fleet of rail cars. Certain types of rail cars, specifically closed cars that are not watertight, are in poor condition. This situation affects a region like ours in particular since the pulp and paper industry is directly impacted. According to our sources, CN is poised to modernize its fleet of pulp and paper rail cars. [I believe the modernization has already been done, since this study was conducted several years ago.] Other less important industrial sectors have been neglected, however, and will likely have to continue making do with outdated or ill-suited equipment.

CN’s operating system appears to be poorly adapted to the size of Canada and the unique characteristics of sub-regions like those in Quebec. CN’s national service centre is located in Winnipeg. Some customers can go to Vancouver for a price and to Winnipeg to request a rail car that will be sent from Edmonton to a transshipment centre in Montreal. From Montreal, the freight can then be shipped to the Saguenay. The transaction can then be billed in Toronto. Each time, a different person is involved in the process. The system is highly complex and rather daunting for the user. Customers can easily encounter many pitfalls. Another issue is the lack of knowledge of the Quebec market, especially a region like the Saguenay, as well as a strong tendency to apply national standards and rates, allowing little room for regional differences and for contact between a customer and a supplier.

Most of the customers who were consulted said that CN was not highly service oriented and took advantage of its monopoly, especially since the large-scale cuts in recent years. Mention was made of unilateral decisions where CN notifies rather than consults with its customers. [This happens regularly.] Another told us: “You want two rail cars and you get 20. When you want 20 rail cars, you get two.” Others spoke of lengthy delays for one thing or another.

REGIONAL FACTORS

In early 2002, the industry was hit with a major rail car shortage that affected all Canadian railway companies. The softwood lumber industry was primarily affected. Manufacturers picked up the pace of shipments to the United States before the American tax was scheduled to take effect. The softwood lumber industry was hopeful that the situation would sort itself out after May 23. Whether or not that happens remains to be seen. [Many years later, we can see that the situation has not improved.] However, even though this situation was exceptional, there had been a long-standing shortage of CN rail cars, except for major clients. In an October 8, 1999, report, Quebec's transport ministry stated the following about the Saguenay-Lac-Saint-Jean: “...because of the shortage of rail cars, regional transshipment centres may lose customers—indeed, some already have—to transshipment centres in Quebec City where rail cars are easier to obtain.” This situation does not adequately support regional development, nor does it encourage the NQISL to develop regional markets and seek new clients.

The NQISL seems uninterested in small customers, occasional customers and potential customers. Except for major users, most shippers get the sense that CN wants to focus on choice customers—aluminum and pulp and paper—while ignoring smaller customers and sectors. For example, occasional customers can wait weeks to get shipping rates for their goods.

The general consensus is that CN is using its regional monopoly to charge excessively high prices. This could make rail transportation unaffordable for small businesses and could cause larger companies to opt for other means of transportation, such as trucks, which put additional pressure on our roads.

For example, recently, a client got an initial quote of $9,280 to send 10 cars to Calgary. That was lowered to $4,390 following a single phone call to a CN higher-up.

For example, a major regional company got rates from Canadian Pacific out of Quebec City that were so much lower than CN's rates, they almost covered the cost of shipping goods by truck on Route 175 even though CP has a longer route through the Eastern Townships compared to CN's direct line between Quebec City and Montreal.

For an 11-kilometre segment, a major part of Saguenay's industrial base—Chicoutimi and La Baie—is served by a third company, RS, for which this is not a priority. Although RS provides very good service, this results in a prohibitive surcharge for shippers just for those few kilometres. This situation could cause problems in the future for the La Baie sector, which has 75% of the new City of Saguenay's industrial development space as well as major regional marine and air transportation infrastructure.

I would like to provide some other information about my region that may be relevant:

Transportation is a determining factor in the location and development of industry. Transportation is more important in regions such as ours than it is in larger centres. More than anywhere else, we need proper, modern, competitive transportation systems if we want economic growth, particularly given recent unemployment statistics...

The railway is an essential mode of transportation in the region. Trains carry approximately one-third of all goods shipped regionally or inter-regionally, 40% of goods shipped inter-regionally via ground transportation and two-thirds of goods shipped across the continent via ground transportation.

The NQISL is the only rail company that gives the region access to provincial, national and continental markets.

In 1996, the break-even point for an internal short line was 37 cars shipped per kilometre of track per year. In the region, the NQISL is definitely profitable, moving more than 61 cars per kilometre, which translates to more than three million tonnes of goods annually (57% of that being forest products).

I painted a regional picture of the rail transportation system and I would like to quote some local stakeholders, particularly the mayors of Saguenay-Lac-St-Jean municipalities. I will not limit myself to my own riding, Chicoutimi—Le Fjord, and I will even venture into the riding of the Minister of Transport, Infrastructure and Communities, who may not show the other side of the coin, since he will want to protect his government's bill.

I would like to read part of a fairly recent Radio-Canada article from November 16, 2010. In the article, people were complaining about rail service.

The town of Chibougamau and its municipal development agency are calling on the federal government to intervene to improve rail service to Lac-St-Jean.

The preliminary report just released by Transport Canada on railroads in Canada's small communities worries Développement Chibougamau, because the document talks about long-term solutions to improve service across the country, but it says nothing about the infrastructure on the Triquet-Faribault line, which links Chibougamau to Saint-Félicien.

Saint-Félicien is in the municipality of the Minister of Transport, Infrastructure and Communities.

The town of Chibougamau, Développement Chibougamau and Génivar submitted a position paper to the federal government last March denouncing the sorry state of the track, railway cars and service on the Triquet-Faribault line.

The general manager of Développement Chibougamau, Pierre D'Amour, also pointed out that mining exploration is booming in the region. “Our fear is that there will be downsizing and that less profitable rail lines will be shut down,” he said. “For us, that would be a catastrophe.”

Too slow

Chantier Chibougamau ships one-quarter of its production by train, but would like to ship more to improve its environmental record.

The company's communications officer, Frédéric Verreault, explained that, for the time being, it is impossible for them to increase rail shipments because the train travels at 40 km an hour owing to the condition of the tracks.

“A moose racing a train carrying our products would get to Lac-Saint-Jean faster.”

A rail shipment to Toronto takes more than a week; it can get there in 24 hours by truck. According to Frédéric Verreault, the decision about the shipping method is an easy one. “The just-in-time concept is central to our relations with our clients,” Mr. Verreault pointed out.

The Chantier Chibougamau representative would like the federal government to invest just as much in rail service as it does in seaports.

I will quote another newspaper article from one of our regional weeklies:

Last week, we published an item about the Forest Products Association of Canada (FPAC), which was urging the federal government to “act decisively” on the various problems associated with the rail transportation of goods. We have further information this week.

You will remember that, in 2008, the government committed to reviewing poor rail service provided to rural industries by establishing a review panel, which made recommendations.

However, today, the FPAC considers it inappropriate that all measures will be delayed for another three years.

The association pointed out that the government is counting on CN and CP to implement the changes on a voluntary basis and that regulatory measures will not be enacted until after 2013.

Last Friday, La Sentinelle contacted Susan Murray, executive director of public relations for the Forest Products Association of Canada, to find out if the government had responded to FPAC's press release entitled “Forest Industry to Government: Fix Rail Service Now”. She said that the government had not responded.

When contacted by La Sentinelle for comment on the FPAC's press release, the mayor of Chibougamau said she agreed with the association.

She also said that the railway is of the utmost importance for the region's mining and forestry companies, as well as those in James Bay and Matagami.

In her opinion, these companies are stuck because CN has not made any investments in its infrastructure for years.

She also wondered about future projects, namely those that will be implemented in the James Bay sector. “Will CN have the reactive capability to support these projects?” she wondered.

I would now like to mention what the Mayor of Saint-Félicien had to say.

...the Mayor of Saint-Félicien, Gilles Potvin, is also concerned about CN's lack of investment. Mr. Potvin is of the opinion that the Saint-Félicien-Chibougamau line is essential for the Saguenay-Lac-Saint-Jean region because it provides access to the port of Grande Anse. He said, “It is a key area for the future of the region. We have to be concerned about it.”

For the past few minutes, I have been talking about the state of the railway in Chambord, which is in the Minister of Transport's riding. Here is a newspaper article that was published a year after the two articles I just quoted. It reads:

Train Derails in Saguenay-Lac-Saint-Jean

CHAMBORD—Three cars derailed on part of the Saint-André line in the Chambord area of Saguenay-Lac-Saint-Jean late Sunday night/early Monday morning. According to Sûreté du Québec spokesperson Hélène Nepton, Sûreté du Québec was informed of the incident, which was allegedly related to a defective rail, at approximately 2 a.m.

It is disappointing.

In closing, I will let people draw their own conclusions about the fact that another train derailed in Chambord one year later, in 2011, because the track was not being properly maintained even though local stakeholders had asked the federal government to take action, to take responsibility and to invest in the railway.

I am proud to be from the Saguenay-Lac-Saint-Jean area and, as the member for Chicoutimi—Le Fjord, which is home to part of the CN and RS railway, I am calling for the federal government to take responsibility and finally invest in rail transportation. It is important for the Canadian economy.

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

Mr. Speaker, I am surprised by the member's comments. Over the last number of years there has not been a government that has invested more money into railways than this government, certainly not in decades.

The reality is that we put $1 billion into VIA Rail for improved tracking and new rolling stock in locomotives, which the member's party voted against. In 2006, we partnered with the government of Quebec to put in place a program to rebuild railway short lines with over $70 million, and the NDP certainly did not support that funding. We partnered with Genesee & Wyoming and the Canadian Pacific Railway to rebuild the Huron Central Railway between Sault Ste. Marie and Sudbury. I worked for some two and a half years to put the funding into that. It was the first time in history that the Province of Ontario had partnered with the federal government toward regenerating and rebuilding railway infrastructure in this country.

This government has demonstrated time and again, whether with Pacific Gateway, Atlantic Gateway or railways in general, that we are committed to improving railways in this country. We are committed to improving railway safety and we demonstrated that with a bill that has already gone through this place. We are dedicated and committed to improving rail service. This member should get on board.

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

Mr. Speaker, I would like to respond to my Conservative colleague's first point. He welcomes the investment his Conservative government has made in rail transport. However, I remind him that, in 2010, the people in the community, in Chambord, criticized the condition of the rails. That was not just one stakeholder, but rather a lot of people in the community.

I also believe the Conservatives were still in power when a derailment occurred in 2011. The Sûreté du Québec suspected a defect in the rails.

The Conservatives may be proud of the money the government is putting into rail transport, but it is clearly not yielding the desired results. I am not necessarily saying they are incompetent or poor managers of taxpayers' money, but people can draw their own conclusions.

Then my colleague said that the NDP could have voted for or against such and such a bill. The NDP is truly a very reasonable party. For example, this Bill C-52 is adequate. It could be better. It could resolve the disparity in rate-setting by companies that hold a monopoly. However, we are pleased that Bill C-52 is a step in the right direction and we will support it.

As we have previously seen, the Conservatives have introduced some atrocious bills despite their good intentions. I am not ashamed to say that we are opposed to bad Conservative bills. That is why I encourage my colleagues to support the initiatives of my colleague, the transport critic.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, I thank my colleague for his great speech. What I found interesting was his argument about how, even in the area where he lives, which is a little more remote than where I live in Toronto, rail infrastructure is critical to the economic development of that area. Earlier today in my speech I talked about how critical rail infrastructure is to a city region such as Toronto, both coordinating economic activity within that region and connecting that region to other economic activity. It seems that rail infrastructure, at least in Canada, has to be seen as a core component of global competitiveness.

Does my hon. colleague agree with that? If he does agree with that, what does he make of a government that sells itself as an economic manager, yet has taken years to actually deal with this problem of freight rail and the unhappiness of customers with the virtual monopoly we have in this country over freight rail services?

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

Mr. Speaker, I wanted to keep my feelings about the Conservative government's management of the railway system somewhat ambiguous. However, since my NDP colleague is urging me to state my position, I will simply say this amounts to incompetence.

The government is very cunning and is doing its best to make us believe the Canadian economy is in good shape. However, it cannot be effective with Canadian taxpayers' money by throwing it at the problem. As military procurement critic, my NDP colleague knows perfectly well how poorly the Conservative government is managing the military aircraft procurement files. It is not surprising that the money it throws or sprinkles around in the Canadian railway system, depending on the situation, is being wasted through mismanagement.

My colleague asked me what I thought about the role of the railways in economic growth. My answer to him is that I am proud that, in partnership with the Conservative government, we are going to have railway service in my region that links the railway to the Grand-Anse terminal so that our seaport can open and cargo can be shipped by sea and by train. So this is really a good opportunity for my region to develop its economy.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, it is 80% of the clients who are not satisfied. It is not just the people in the NDP.

The Conservative member says that they have invested money. I would like to invite him to travel, as a passenger, between Montreal and New York. I do not know where they invested their money, but there is some work that needs to be done here.

There is a reason why 80% of people are not satisfied. As the member said in his excellent speech, a moose would get there quicker. That is what he said.

What would my colleague like to say on this issue? There is quite a bit of discontent.

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

Mr. Speaker, my NDP colleague is absolutely right. People complain that the train does not go fast enough, at 40 km/h, because the tracks are worn out and poorly maintained. People want to be able to ship their goods. A number of executives and exporters in my riding prefer to ship goods by road, as the railways in our region are poorly maintained, and this results in more pollution.

Moreover, the ever-increasing price of gas does not help the SMEs and the corporations in our ridings, in my riding or my colleague’s, to make a place for themselves and win a share of the domestic and international marketplace.

I am proud that the NDP wants to upgrade Canada’s railway system. I just hope that the Conservatives will be able to deal with any price gouging that might arise from the CN and CP monopoly, but I do not have much hope for such a jaded government.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, a lot of the comments that I have heard are simply rhetoric. They are not fact-based at all.

Has the member actually looked into the improvements that have been made by CP and CN in terms of on-time delivery and on-time pickups from shippers right across this country? Has he noted the increase in rail freight traffic in this country in the last five years? Has the member noted any of these things, or is he simply here to spew rhetoric of a partisan nature?

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

Mr. Speaker, it is a shame that my Conservative colleague cannot see what is right in front of him.

I will repeat what I said in my speech. In 2011, that is, a year and a half ago, there was a train derailment in Chambord because the tracks were poorly maintained and worn out.

Am I to understand that all this money from the federal government was invested in the past six months and that we now have a perfect railway system in Canada? I want the Conservative government to open its eyes. They cannot claim that it was an exception.

The speech by my Conservative colleague cannot be taken seriously. He should go to my riding and to other ridings and see the state of the railway for himself.

[The Acting Speaker, Conservative, Barry Devolin]

Pursuant to Standing Order 38, it is my duty to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Ahuntsic, Aviation Safety; the hon. member for Algoma—Manitoulin—Kapuskasing, Aboriginal Affairs.

Resuming debate, the hon. member for Chambly—Borduas.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I am very pleased to speak to Bill C-52 today. The railway, or shipping by rail, is very important in my riding. As I often say in my speeches in this House, the river divides my riding in two, but the railway also does the same thing. This is not just a legacy; it is also a very important economic asset for us.

To begin, I would like to say a little about my experience since 2011 when I was elected, and even before that time, from what I hear from my constituents and other elected representatives in the region, in particular the mayors, concerning relations with CN and CP. This is very important in connection with the subject we are addressing today.

We need to look at the role these companies are called on to play in our communities and see what a key role the railway has played in the history of Quebec and of Canada. In any history course, even at the university level, we still talk about the railway as a core element of our country's collective history. When we look at it that way, there is a duty to work with the various stakeholders. Today, we are talking about the stakeholders that ship various products, in the farming sector in particular.

In my riding, I am in an odd situation when it comes to this subject. On the south shore, Montérégie is located right in the middle between Montreal and the more urban part of the south shore, but also in a somewhat more agricultural and rural area. Let us not forget that there are also farmers in my riding. I can think of neighbouring ridings, like Shefford or Saint-Hyacinthe—Bagot, where there are people in the farming community who use the railway. We can really see how much the railway connects those regions to Montreal, and beyond there to other destinations, including Quebec City, Ottawa, or the other end of the country.

When we consider these facts, we feel we must take action to support our farmers, but we also want to protect the communities living alongside the railways. We therefore need CN to work with us. That is why this bill is important. We are talking about agreements with shippers, but this is also an indication of the need to go beyond that and call on CN to co-operate more on other issues. Those issues all involve the same objective: improving and making better use of the infrastructure we have had for over 100 years now.

Getting back to my previous point, when I was talking about the work I had to do with CN, I have to say that it is not always an easy company to work with, quite frankly. I say that with all due respect because good things have been accomplished. I would not want anyone to think otherwise, and I am definitely ready to work with them. However, the fact that we needed a bill to make CN co-operate on one particular issue shows that the company could do with an attitude adjustment and a little more flexibility given that it has a monopoly or a virtual monopoly on rail services in my region and across Canada.

I have seen this problem on two particular files, including the rail electrification one. This AMT proposal would modernize and improve rail services. It would reduce costs for producers using the services and for public transit users. Yes, it would be expensive in the short term, but in the long term, it would provide economic, environmental and other benefits.

We have had to deal with a lot of problems on this file. CN categorically refused without offering any explanations or agreeing to talk about it. This is another very important aspect of the bill before us today even though it is about a different issue with CN.

As for the other file, I heard a comment on the other side of the House about increasing train traffic. That is interesting, because that is exactly the kind of thing we want to see. That obviously means that the economy is doing well, including the local economy.

However, this increase is combined with the phenomenon of urban sprawl, which we are seeing more and more in Montérégie, particularly on the south shore. People are leaving the Island of Montreal to move to the suburbs, including our region. They are building homes around train stations to be able to use public transportation. II am talking about commuter trains. So these homes are seeing an increase in vibrations.

My riding office in Saint-Basile-le-Grand is in an old train station. It is no longer in use, but, obviously, since it is an old train station, we are close to the tracks and we feel the vibrations. It is not a big deal to us. It does not happen too often when employees work from 8 a.m. to 5 p.m. or 6 p.m., for example. However, I think everyone can agree that it can be more difficult for someone who lives close by.

Speaking about the importance of the railway calls to mind some comments made by one of the mayors in my riding. Gilles Plante, the mayor of MacMasterville, told me as well as CN officials that while he did not want to hinder CN’s work or impede rail traffic, he did hope that a happy medium could be found.

Co-operation with CN on this front is necessary, but not always easy to get. We are still waiting for answers to requests made by citizens regarding rail traffic.

There is a reason why I bring this up and relate these stories of issues that I have been focusing on since being elected to represent my riding. As I have said before, the aim of the bill is to compel CN to negotiate agreements with shippers to prevent the company from unfairly benefiting from the monopoly it holds over our producers, in particular farmers.

If I might digress for a moment, I would especially like to congratulate the member for Trinity—Spadina for her work, for the bill she introduced, which made the minister realize that the time had come to act on this issue.

This bill is seen as a step in the right direction. However, hard work is needed to sustain this momentum. I am hearing from the farmers in my region and I know that some colleagues represent ridings where farming is even more prevalent. The message is always the same when the topic of public transportation or the railway system comes up. They acknowledge that this is a very important industry, one that needs to be modernized.

We lag far behind Europe in this area. Of course I am not saying that everything is wrong. I am sure that a government member is prepared to rise and say that everything is going well. I am not saying that things are going badly, but simply because things are not going badly does not mean that things cannot be greatly improved. This is true of the railway system. Things are going very well back home. People benefit from the service, but much more could be done. If improvements were made to the rail infrastructure, the costs in the short term would be great, but in the long term, as I said, users and shippers could enjoy lower prices.

As far as urban sprawl is concerned, as I said earlier, this is a positive phenomenon. It means that people are settling in our region, that the population is increasing, that more families are moving into the area and that our local economy is thriving. These are things that I am very proud of and very pleased to see. Mainly it drives many of the issues I champion in the House and in my work as a member of Parliament.

However, that makes life tough for farmers because municipal elected officials, regional conferences of elected officials, RCMs, members of the National Assembly and so on all wind up facing the same challenges: finding a way to promote urban sprawl and growth back home, but also ensuring that our farmers still have an environment conducive to their production.

There are a lot of local products in the Richelieu valley, where my constituency is located, and they are the pride of our region. Tourisme Montérégie has done a lot of work, and even in the surrounding areas, in Rougemont near Marieville in my riding or elsewhere, local products are of outstanding quality. People attending the Chambly Bières et Saveurs festival in the summer can enjoy beer—it is very good—as well as superior-quality food products. We want to continue producing those products. They are healthful and good for the economy, and they are also good for our heritage, even though that may seem like a cliché. That, in a way, is our physical and environmental heritage.

The work we are doing with CN is extremely important: we are looking for a way to juggle the reality of modernization with that of agricultural tradition, which is very important in my riding. That is why I am very pleased to support this bill at second reading. It is a step in the right direction, as a number of my colleagues and I have said.

However, I believe that the committee work will be very important, and the work to be done over the next few months and years even more so. As I emphasized earlier, we have to prod CN on other issues as well. We have to demand even more from those people and from all stakeholders involved in railway issues, who will show us the way because we find it hard to move CN on these issues.

I would like to go back to the vibrations issue. This is fundamentally important for this bill because, once again, we are talking about shippers. Freight trains are increasingly long and that is very good. However, we wonder, and we have also put the question to CN, how it is possible to reconcile these two realities. My office is located beside the railway, and I also live near it. Sometimes drivers want to cross the tracks, and it is nearly rush hour and along comes a train transporting freight from elsewhere in Canada. Then they realize that the train is nearly 200 cars long. Sometimes people wait a long time at the stoplight. We realize that some work still has to be done to reconcile this urbanization reality with the fact that these trains have to pass through.

I am not saying that this is not important. I am referring to the situation facing my colleague, the mayor of McMasterville. We want to keep this in our municipalities. We do not want to tear up the railway. It is part of our heritage and we know how much it benefits our communities. No one would ever say otherwise. However, I think we need to do some work on it. This bill urges CN to do something for farmers. We could also urge it to do more for Canadians in the regions.

The railway is such an important part of our heritage. I recall a Knights of Columbus dinner that was held in November. One of the members, Gilbert Desrosiers, who is very well known in my riding, received a painting done by a local artist whose name escapes me at the moment unfortunately. It was a picture of what we, back home, call the black bridge. There is a large CN logo on the bridge. It is hard to miss. Whether you are on the Richelieu highway, on the shore or in a boat on the Richelieu River, you can see this railway bridge. It is practically an institution in our riding. It is part of our heritage.

I say that half-jokingly, but I am also serious. It illustrates people's sense of belonging. We want to make this infrastructure work in our region because we know what a remarkable asset it is.

I know that I am revisiting issues that I have already raised. However, since I have the time, I will again address the issue of the electrification of the rail line. It is very important, and CN’s attitude to this issue poses a problem.

I often have conversations with my colleagues, who are ministers and members of the National Assembly. We all more or less have the same vision as far as objectives for public transportation are concerned. A common vision in the region is a good thing, and helps steer progress.

On the other hand, it is understandable that the AMT has projects and that CN is a source of friction. Indeed, they have differing interests and their situations are not the same. Yet, what has been most disturbing in this issue is the lack of dialogue. When this decision was made, the AMT did not seem to know why; CN simply said that it was too expensive, that that was that, and that it was no longer in the cards.

Had the original developers of the railway, both in Quebec and elsewhere in Canada, said that building the railway was too expensive, little progress would have been made. That is precisely the kind of mentality that CN and CP need to do away with. We do not deal with CN and CP as much back home, but these companies still have a role to play, and some of my colleagues do deal with them. That kind of mentality cannot be allowed. We know that it is expensive. We know that it is an investment. I believe that, in the long term, it is going to help reduce costs and promote the kind of environment that is so important for our farmers.

For example, the closer one gets to the Cities of Richelieu and Chambly—which are in my riding and are adjacent to the municipality of Saint-Jean-sur-Richelieu, in the riding of Saint-Jean—the more railways there are. However, they are mostly outdated and no longer in use. The municipality would really like to use this infrastructure and space. However, CP is dragging its feet, at least I believe that it is CP that is doing so.

All of this to say that when a municipality wants to use infrastructure and cannot do so, it is extremely problematic. When municipalities ask for answers, there needs to be an immediate dialogue. CN and CP have everything to gain by engaging in such a dialogue. It can only help them to do their job.

A CN representative, who I will not name out of respect, told me that if Canadians were to communicate directly with CN and tell them about their problems, CN would be in a better position to respond. However, that might not be so easy since these issues are localized. That is no secret. Residents in the region communicate with their elected representatives. Residents with those kinds of concerns call their mayor, municipal councillor or member of Parliament.

When citizens call elected officials and the elected officials contact CN, I think that this corporation should understand that it is time for action. The fact that it does not come directly from a citizen is no excuse not to act. We are very ready to act.

I appear to be very critical toward CN and CP, but it bears repeating. We understand they have had great success and that they are still successful. However, in certain respects, they must be more open and engage in more dialogue.

This is why I am pleased that this bill was introduced. The government has decided that these corporations must speak and work with people. There are certain standards to be met.

If this is representative of things to come in terms of the railway, in my riding in particular, then I will be quite pleased to continue supporting them and engaging in a dialogue with them.

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

Mr. Speaker, I am keenly interested in this issue. I have asked various colleagues this question. I would also like to ask my NDP colleague this question.

Does he believe that the Conservative government is taking Canada’s railway infrastructure seriously?

A little earlier, I mentioned that 70% of goods are shipped by rail. In order to move forward on the green economy, we must reduce road transportation and ship goods by rail more frequently. I hope the Canadian government will eventually agree to promote the green economy and play a leadership role.

Does he believe that the Conservative government is taking the issue seriously and that it is putting money and energy in the right places?

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I would like to thank my colleague for his question.

Because I come from the region where the railway plays such an important role, I feel bound to say that, for this day and age, the money invested and spending priorities are inadequate. What we are pleased about in this bill is that when we take a step in the right direction, it allows us to believe, to hope—we are optimists—that it will be the foundation of some good work on this issue, something that has unfortunately not been seen yet.

In my colleague’s riding of Saint-Lambert, which is just about next to mine, there have been cuts at the VIA Rail station which have had a negative impact on the services provided. Even if this is not exactly what we are discussing today, we have to consider the issue of infrastructure as a whole, as my colleague mentioned. These cuts cannot very well be something that is positive.

At the moment, there is a lack of determination and a lack of participation by those working in the field. I would hope that this bill is a sign that more attention, positive attention, will be paid to this issue, primarily for the people from Vallée-du-Richelieu and the people in my riding. If this were the case, I would be very happy to continue the discussion in a positive way.

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

Mr. Speaker, the member made a number of good points in his intervention. One of the things he indicated, which I happen to agree with quite strongly, is that it is important that we hold to account companies like CN and CP and others, which are large, private companies that are very profitable, and that we set specific expectations for them. That is why, for example, we brought forward the railway safety bill in the previous Parliament. It was a bill we worked on with other parties to come to an agreement on; then it had to be brought back in this Parliament as well.

The bottom line is that these are private companies, and sometimes when we are making an assessment of whether the money is being put in the right spot, we have to understand the railway system as a network. The member who spoke previously talked about how his freight rail service is now down to a class 2, which limits the speed to 25 miles per hour for freight. That is actually quite serviceable for freight, although not perfect. He spoke about having a derailment. Obviously, that is something we want to avoid. That is why we brought in the railway safety bill.

However, when we are talking about investments into rail, as an example, perhaps the greatest investment we could make to improve the efficiency of the Port of Montreal would be to improve the railway tunnel in the city of Windsor. Most people would not think of that, but it would actually improve the efficiency of the port services in Montreal.

I would like the member to expand a little on where he thinks we could better hold the railways to account. I think he is on the right track with that, and I think the bill is going in that direction.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

With “on the right track”, I will assume no pun was intended there

I agree with some of the points made by my colleague. I thank him for the question. This is a network and that is why we would like to see, as we are in fact proposing, a Canada-wide strategy that would enable us to make the appropriate investments at all levels, because what he said is entirely true.

The reason why the railway has a positive impact for farmers in my riding is precisely because the service goes to Windsor and farther beyond. That is a fact.

In terms of the fact that CN and CP are private enterprises, that is a difficult question. We agree on that, but when we consider the fact that the infrastructure was built by people from our region and elsewhere and that a lot of money has been invested in it, and also the government’s responsibility to ensure that we have a proper rail network, there is good reason for more dialogue between the government and CN and CP.

With this bill, certain obligations will be instituted, but this is the kind of dialogue that will happen more often. I realize that it is never easy to deal with that reality.

Lastly, with respect to Bill S-4 on railway safety, there were many points on which the parties agreed. I venture to hope this is an indication that we will be able to get along better, because it can only be a positive thing for my region if we continue to do that. I venture to hope.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I believe there are many different individuals and stakeholders who are following this debate because it is of critical importance. Issues have really been outstanding since 2007, because that is when industry, in particular individuals who rely heavily on shipping, said they needed to have some sort of legislative manner to start dealing with levels of service. There is a sense of optimism that finally we might see some sort of a bona fide service level agreement put into place, where ultimately there is a consequence or a potential for penalties and so forth. However, it is important that they be enforceable.

I wonder if the member would provide comment in terms of that aspect of the legislation, which seems to suggest that we would have some form of service level agreements that would appease a great number of the different stakeholders, on the condition that it is enforceable, that there are penalties, that it would provide for a better quality of service. That is one of the driving forces behind this debate. Shippers want to see better quality shipping being conducted, better service levels so when they want, need and have paid for a car that it will be there for the shipping of their product. Would the member want to comment on the service level agreement concept?

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I thank my colleague for his question. This is certainly something positive. However, there are obviously consequences associated with passing a bill like this one. It is somewhat pointless to have agreements between the stakeholders—the producers, the shippers and the railway companies, like CN, in this case—if they do not have the tools to enforce those agreements.

That said, this is to some extent the approach my colleagues will take when they examine the bill in committee and also look at the question of arbitration. We do want shippers to have the tools they need in order to take full advantage of this legislation. It is quite important that CN and CP be called on to make better agreements with shippers. But that may still pose a problem if the legislation and the legal situation tilt too heavily in favour of the railway companies.

My colleague and I have raised two very important points relating to arbitration, to ensure that we enact legislation that has teeth. Once the bill is passed, we are really going to have to make sure that the agreements made are complied with.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I am pleased to rise to discuss the bill, Bill C-52, an act to amend the Canada Transportation Act.

As the previous transport critic for this party during the 2008 to 2011 era, through that time I recognized that there was a great demand across the country for changes that would assist shippers in dealing with the duopoly of the rail system in Canada and the conditions that occurred.

Quite clearly, the concerns were greater among the smaller shippers than among the larger shippers. Therefore, the ones that could command the greatest use of the railway had greater opportunities to strike better deals. The problems lay in a stronger fashion with those that did not have the quantity and the continuity of freighting that would attract the rail systems.

I remember meeting with the pulse association, people who provide agricultural products that are not grain but beans, soy, peas and that measure of agricultural product, which is growing considerably in Canada but in smaller batches in different areas across the country. Their problems with getting their product through the rail system were paramount to them. They said they could not deal with the system as it is right now. The types of producers, the locations of those producers across the country and the nature of the product meant that the rail companies were not attracted to them as customers as much as they were to larger producers.

I will be very interested to see how it will play out across western Canada now with the loss of the single desk for grain, how that will play out with small producers, smaller aggregations of those who are moving grain.

The Conservatives sold the idea of getting rid of the single desk on the basis of enabling grain to be moved to different places by the producers in a fashion that would allow them to value-add to their product. Let us see what happens when this occurs in a system where the need for freight is paramount, where we have to move the product and where farmers are not protected by the larger system that existed under the single desk. We will see what that does and how it works. I am sure the committee will hear representation on that matter as well, as it moves forward.

In looking at the rail system, we have heard a lot of talk about infrastructure. The parliamentary secretary mentioned the great investments that the government has made in the rail system. I would raise, for instance, the investment the government is making in one of the big problems with our rail system, the level crossings. There are some 1,400 level crossings in this country. They are being added to incrementally by municipalities all across the country. The Conservatives identified $27 million a year over five years to invest in level crossings.

When we do the math, that does not turn out to be something that will really solve the problem we have with level crossings. Some level crossings can cost between $30 million and $40 million to fix. These are major requirements in the rail system.

If we take a good look at it, the rail companies are not primarily responsible for what has happened with level crossings. This is a co-operative effort that extends across governments, provincial highway authorities and municipal governments. Everyone has a hand in level crossings. Why does the federal government have to play a role? The federal government can be the final arbitrator there. With the profits rail companies are making, they should be a big part of this as well.

Of course, the government does not collect taxes in a decent fashion from corporations that actually make profits, and cannot reinvest for the public good and the good of those corporations. The chances of the infrastructure issues, that is, of rail being fixed across this country, are very remote if the present spending level of the federal government continues.

I am glad that the NDP has such a strong transport critic today, one who has pushed very hard on these issues.

The service agreement review went through and finished in 2011. Members are now seeing an act in front of Parliament, Bill C-52.

The first part of the bill sets up terms and conditions for contracts for railways and shippers. If a shipper wants to enter into a contract with a rail company, it can describe the traffic to which it relates, the services requested by the shipper in respect to the traffic, and the undertaking the shipper is prepared to give to the rail company with respect to traffic for services. How will one make sure that the rail companies will be well served when their cars arrive? How will all of this fit together?

Contracts, of course, do not apply to written agreements already in place. A company that has already established a written contract with a rail company is not available to deal with this under this legislation. They are locked in.

In the case of many of the larger producers, that may be to their advantage. They do not have to renegotiate anything. The ones that provide a lot of freight movement have a deal set up.

Seeing what is happening in the industry here with the failure of the pipelines that have been proposed for Canada, I would say that we are going to see greater rail traffic carrying oil and gas products across this country. That may change the dynamics of the rail system as well. The larger producers may find themselves competing with other very large producers as well. We will see how that plays out.

The second part of the bill deals with arbitration. Once one has established a contract or is unable to agree on a contract, there is a process of arbitration. That is good because, of course, it is sometimes very difficult to come to agreements.

Small producers in a remote location are looking for the rail company to arrive in a good fashion with the cars. They are going to leave them there. The cars are going to be in good shape. They are going to take the cars away after they have them filled.

There are many variations that have to be examined in a contract between two parties that carry out this kind of work. Is the shipper going to be ready to provide the product to fill all those cars when they are delivered at the site? If they are not, is there some measure of compensation to the company for leaving the cars there longer? If the company does not supply the cars in a good fashion, is there a way to compensate the shipper, who may be backlogged at the receiving area with the other mode of transportation that caused them to bring it to the railway? These are complex, detailed issues that have to be worked out between shippers and the rail company. Of course they will require some arbitration.

What is the hammer that the company keeps under this legislation when it comes to negotiating or dealing with arbitration? Under proposed subsection 169.31(4), the following applies:

For greater certainty, neither a rate for the movement of the traffic nor the amount of a charge for that movement or for the provision of incidental services is to be subject to arbitration.

There is the hammer for the company. It can set the rate for the cars sitting in the dock. It can set the rate for the movement of the material out of the area. It can decide the nature of the movement, the volume of the movement taking place, and how cost effective that is with its service charges that fit over top of that. All of those issues are not going to be subject to arbitration.

The company holds a very strong hand there when it comes to exactly what it is going to cost to do the work. Still, the arbitration should take into account the rates. In any business arrangement, the rates are very important. They cannot simply say “We are going to have a service contract, and you do not get to talk about the rates. The only thing you can talk about is what is going to happen”. Those two things have to work together.

The government, by excluding that from arbitration, has given the rail companies a very strong position in Bill C-52. I hope that it will be seen in committee as something that needs to be worked on. There needs to be some work done to make this fairer, more equitable to all of those concerned, especially the small producers across this country who do not have the leverage to make the deals, as was the case even before this bill.

After this bill there should be some leverage for those small companies so they can make sure that services are being provided to them in a good fashion at a reasonable rate. That is what we should be doing in government, being fair to both sides. The basis of government is trying to come up with solutions that work for all parties.

Some of the other concerns here also fit with small companies, the small shippers, such as the degree of difficulty they may have in working in arbitration, the timeframes that are outlined, the process that is outlined, all of which are very complex and very expensive. The costs will have to be borne by the shipper. The cost of the arbitration is to be split equally between the shipper and the rail company in all cases, according to this legislation.

How does that work? If the arbitration is in favour of the small shipper, they still have to pay the piper for the work they have done.

What I would like to see in this is some means of establishing rates and conditions that would apply across the country, so that some kind of equivalency develops among the arbitration systems and that, across the country, what is decided in one place has some relevance to what is going on in another, so that we have some fairness in the system.

I do not see that yet. Perhaps some of my Conservative colleagues who may have some ideas about that may want to express them. I think it is more likely to be taken up in committee, however. This bill needs a lot of work.

What is the record of this majority Conservative government in offering up amendments? I have to say it is abysmal. It is totally abysmal. These people do not believe in amendments. The Conservatives believe that what they put forward is good enough for the country. They are in charge and they know what is right. This is what has happened with almost every single piece of legislation that has gone through the House to date.

Where are the amendments? When I worked in the transport committee, when there was not a Conservative majority, we worked together, we looked at the issues and we came up with solutions that were mutually agreeable. Then we created amendments that we all agreed with.

Transportation is a fundamental and vital service to this country. It is not something that should be dealt with by parties working against each other. I was always very pleased with the previous transport committee chair, the member for Brandon—Souris, who was very fair and understood that transportation was a vital and important part of this country, which needed to be expressed as such.

This bill should be amended. It should be considered very carefully for what it actually accomplishes and what it should accomplish.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I would like to thank the hon. member for the Western Arctic for his comments, particularly toward the end of his speech, where I think he made one of the most important points in this debate.

There has been great frustration among the Canadian public on their lack of voice in the enactment of legislation by the government. Certainly, we have heard it in the Idle No More movement.

As the hon. member said, what could be a more important service than transportation for all Canadians?

Of course, our critic for transportation has done a great job in trying to push through a national transportation strategy.

I wonder if the member would speak about who he thinks should be able to come forward to the committee to express what additional needs they have, what changes should be made in the legislation and what kind of process should occur to ensure that the legislation does reflect the needs and interests of all users of the rail lines.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I think the committee could perhaps start with the witnesses who could talk about equality and fairness within the system. We might actually want to look at economists, perhaps some people who study these issues around the world, how rail companies work in this fashion, so that we could see clearly what is fair, what is likely to be fair, and how to present that in committee in a good fashion. I would say that would be a first step for this bill: to examine the ethics of the bill and how it would apply to the different parties who would be affected by this.

Then we would want to take that understanding and go to the actual shippers and make sure that we cover the wide variety of shippers in this country, geographically and by the type and size of material they are moving through the country, because they are all very significant players.

I would say that would be an interesting formation of the committee. However, whether the committee is ready to put that kind of effort into this remains with that committee to decide.

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

Mr. Speaker, I know that the member made a couple of points, including a couple I took issue with, not the least of which were his comments on corporate taxes and corporate tax rates. Of course, railways, CP and CN, are among the most heavily invested in by funds that are seeking solid, stable investments, such as OMERS pension fund and the Ontario teachers' pension fund and Canada pension plan and, of course, a wide range of private sector pension funds that look after members like the Canadian Auto Workers and so forth.

When the government takes less from those companies, it actually builds up their investments and pension portfolios, which is important, because we all have a stake in that, each and every Canadian in this country. Therefore, it is important that we do that.

He also mentioned that the bill would not get into rates. One of the reasons the bill does not get into rates is that the sector is already regulated in that regard. The industry actually has North American standards with respect to freight rates. These are put onto charts and railways actually work off those charts, and rates can be determined very easily as a result.

It is important that we have that because what we really have in many cases is a virtual monopoly. However, it is competitive from the standpoint that it is regulated and the government already looks at standardized rates for all North American railways.

One of the things that is really important to recognize, which I think the member does have an interest in, is that when we are looking at new development and how we are going to encourage investment in, for example, plan nord in Quebec or the Ring of Fire in Ontario or all of the natural resource wealth that extends into the territory the member represents, how are we going to ensure that these companies are prepared to make the investments, and the service requirements are met by these companies in those areas so that we can in fact explore these resources for the benefit of all Canadians?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, there were two questions. I will attempt to deal with the first one.

Of course, without government raising money, we cannot reinvest in things that require investment to increase productivity. If we increased productivity in the rail lines, we would then increase the profits of those rail lines. They could provide that to their shareholders.

There is a symbiotic relationship among all the things we do in this country. There is no separation into hard and fast units. Rail, and the way it has developed in Canada, has engaged most segments of our society. That is why government has a very important role. However, if government does not collect the money, it cannot invest. It is pretty straightforward.

There may be North American rates. However, quite clearly, there is also the provision of incidental services. I am sure that there is a lot of fudge room within those rates. Nothing can be delivered at the same price in the same time. Volume counts. The type of delivery and the conditions make a difference. All these things add to cost or take away from cost. To not have them in arbitration, to not have the finesse of the system available for arbitration, I think is something that will inevitably lead to abuse.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, to follow up, the member said that the freight rates should be going to arbitration. The first thing that comes to my mind is the importance of the arbitrator and how that arbitrator might be selected. I wonder if he could further expand on that point. How would he like to see an arbitrator, who would deal with issues that come out of Bill C-52, selected or appointed? How would he envision that working?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I think arbitration, by its nature, means that we want someone who understands the nature of fairness within the system. To have that, it has to be someone who fully understands the system but is not engaged in one interest or the other. There must be continuity, with the same logic applied to different areas of the country and the same methodology, which comes from continuity, in arbitration. I would say that if this system is going to be successful, it needs those qualities within the arbitration system. One is a dedication to fairness and the second is continuity.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I am pleased to speak to Bill C-52. I will be sharing my time with the member for New Westminster—Coquitlam.

Rail transportation is of particular interest in my riding. First of all, I would like to say that my party and I support this bill at second reading.

[Some hon. members]

Oh, oh!

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I would like my colleagues to take their conversations outside, as it is very distracting. That is all right, I will continue even though I have lost my concentration.

We know that—

[The Acting Speaker, Conservative, Barry Devolin]

Order, please.

The hon. member for Saint-Hyacinthe—Bagot has the floor.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, it is slowly happening.

[Royal Galipeau]

You are influential.

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

I am influential, as my colleague opposite stated. I will start again from the very beginning because I lost my concentration somewhat.

As I was saying, transportation is an issue I am interested in and something that is also important in my riding. I will talk about agriculture a little later. I talk about it often because it is important to me and it plays a large role in my riding.

First, it is important to state that my party and I support the bill at second reading. We know that 80% of railway users are dissatisfied with the service provided.

It is important to say that some amendments will have to be made in committee. The bill must be improved so that rail transportation really improves in Canada.

After years of discussions, the Conservatives finally introduced a bill in response to a number of complaints from rail customers that received inferior service from the major railway companies for a very long time.

I would like to go back to the speech by my colleague, the member for Chambly—Borduas. Earlier he referred to the railway as part of Canada's heritage and to the sense of belonging that people attach to the railway in Canada. In my opinion and that of the member for Chambly—Borduas, that makes it more important to invest properly in this mode of transport, a fundamentally important one in a country such as Canada, which is very large and sparsely populated.

It is also important to say that everyone must come out a winner: the railways but also rail transport service customers, such as farmers and mining companies, which are often victims of the railways' virtual monopolies. We are talking about service disruptions, delays and disturbances that hurt the agriculture, forest products, mining and manufacturing sectors, which are not compensated for the losses.

A large portion of those goods is intended for export, which is very important for Canada's economy. Those sectors must be able to rely on effective transport in order to export their goods, not to mention the fact that many goods, as in the agricultural sector, are perishable. Producers therefore cannot afford major delays or service disruptions. Their products must be exported immediately.

Shippers have difficulty obtaining fair, reliable rail transport services. Some are not even able to secure contracts with major railway companies, and those that have contracts often suffer long delays or simply do not have enough cars at their disposal.

This entire situation undermines the ability of Canadian exporters to remain competitive in international markets, particularly agricultural products markets, as I said earlier. Farmers already face numerous uncontrollable challenges. Consider weather issues, for example, such as early frosts, excessive rain or too much sun. Farmers already deal with situations that are not easy to handle. That is the case with all farmers in my riding: we never know what will happen with the harvests, whether we will manage to make it to the end or whether everything will go well. The government thus has some responsibility toward these people, who feed Canada's population, and it must assist them, in particular by guaranteeing that their goods are efficiently transported. That is already a first step.

Following years of discussion, expert panels, an attempt at mediation and consultations with stakeholders, the Conservatives ultimately had no choice but to introduce a bill in late 2012, not very long ago.

One reason this bill was introduced was pressure from the official opposition NDP transportation critic, the member for Trinity—Spadina, who does an excellent job on the transportation file. My colleague presented a private member's bill, the Rail Customer Protection Act. The government then finally moved forward with Bill C-52.

For too many years now, farmers and other business owners have been subjected to bad rail service, and Ottawa has not taken action. Bill C-52 is a step in the right direction, but it is far from being perfect, since it does not include some major demands from shippers. I think that its wording is a bit ambiguous, which could create some loopholes. That will have to be considered in committee.

The committee will also have to consider the stakeholders affected by the problems, so it will have to consult farmers, for example, as well as stakeholders from the forestry and mining industries. That would be worthwhile. As I said earlier, 80% of customers are not satisfied with the services. That is a big number. If I had a business and 80% of my customers were not satisfied, I would be on the brink of bankruptcy.

Canadian shippers deserve fair and reliable service. They also deserve to be protected.

Every year, this situation costs the Canadian economy millions of dollars. We are talking about jobs and about goods that are lost or do not make it to the right place. Every day, many industries have to deal with rotting crops, work interruptions in plants and mines, and missing cargo. This is a real problem. Clearly, it hurts shippers and, as I was saying earlier, it hurts our global competitiveness. It costs us jobs.

The current bill is a bit weak.

I have only one minute left. I always get carried away and I did not even get to half of what I wanted to say. That is okay. I will continue quickly.

I find that the bill is a bit weak. It does not necessarily cover existing contracts. That could be something to look at in committee.

I would like to close by saying that 70% of our goods are shipped by rail. That is a good reason to invest properly in this means of transportation and to protect the shippers who use this service so that they have a fair and reliable way of transporting their goods.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, we know that trucking is expensive. We need to rebuild and improve our roads. In the spring, there is freezing and thawing; it's a never-ending cycle. And so, in terms of bulk shipping, the railway really seems to be an ideal solution for the future and for the economic development of a country such as ours.

Does the hon. member not believe that a solution for the future could be a modern and efficient means of transportation, such as a modern and efficient railway that could be rebuilt from one end of the country to the other if we would choose what mode of transportation we want to focus on in this country?

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I would like to thank the member for her very relevant question. I wanted to touch on that point in my speech, but I did not have time.

At times, companies get frustrated and have no desire to use rail transportation because it is so inefficient. These companies turn to trucking. That is not ideal for infrastructure, namely roads. Roads degrade more quickly when trucks use them over and over again.

Investing in rail transportation infrastructure is a good thing; it is also good for the environment. The number of trucks on the roads will decrease significantly if the rail system is used properly. And, consequently, greenhouse gas emissions will be significantly reduced.

The environment is an essential part of quality of life for Canadians from a sustainable development perspective. It is simple: a reliable rail system is part of a sustainable development plan.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, I still have many questions to ask. If you give me the opportunity, I will ask others.

I would like to talk about local and regional development, as well as attractiveness. There are significant economies of scale when services are pooled. A transcontinental railway was built as our country was being shaped. There were far fewer people in the country then and there was not enough money to pay for such a project. It was achieved by investing in the country's development over many years.

Can the member talk about the possible economies of scale for our small businesses and about their development if they were to use intermodal transportation, such as the train, instead of trucking?

[Marie-Claude Morin, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, once again, I thank my hon. colleague for this very relevant question.

It follows the same principle as sustainable development and the environment, which I was talking about earlier.

For instance, eight SMEs, which have less goods to ship than a large company, could decide to get together and use rail rather than road transportation, since they are located more or less in the same place and their goods are going to roughly the same destination.

Our SMEs would be more profitable, because transportation would be cheaper, faster and more efficient. It would also be easier for them to develop a market across the country and maybe even internationally than if they used only road transportation.

And getting back to a sustainable development perspective, this would also reduce greenhouse gas emissions.

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

Mr. Speaker, I rise today not only as the member for New Westminster—Coquitlam and Port Moody but in my capacity as western economic diversification critic for the NDP.

Like my NDP colleagues, I will also be supporting Bill C-52, an act to amend the Canada Transportation Act, to send the bill to committee for further discussion. We do, however, have serious concerns with the bill as my hon. colleagues before me have pointed out, including the member for Trinity—Spadina, who is the NDP transportation critic. She outlined some of those concerns in her speech earlier.

Rail transport is the backbone of the Canadian economy. More than 70% of all surface goods in Canada are shipped by rail, so we can see how critically important it is to get this right. Eighty per cent of service commitments for agricultural rail customers are not met by rail companies because of issues such as delays, insufficient number of rail cars, inefficiencies and unreliable service. The rail freight service review found that 80% of shippers are not satisfied with the services they receive. Eighty per cent is a significant amount. Over three-quarters of all customers have a concern.

I just want to talk about the importance of rail to my riding of New Westminster—Coquitlam. Specifically I am talking about Port Moody where we are celebrating 100 years of history. Just this weekend I was at a book launch hosted by the Port Moody Heritage Society for Tracks in Time. Obviously the title is in reference to trains and the influence that trains have had on the development of our community and on the west coast, and in fact, of all Canada. The rail system is of critical importance to our community. We celebrate the Golden Spike festival in Port Moody every Canada Day. This just points to how important trains are to our community.

Talking about the importance of trains not only to the community but to the rest of my riding, it is important to focus on the efficiency and the service that trains provide to Coquitlam, Port Moody and of course New Westminster. It is important for the economy not only in my riding but in western Canada and indeed all of the country. It is critical that we look at ways to improve train service in this country.

I want to provide a bit of background. I know other colleagues have commented specifically about what the bill would do and would not do and some of its shortcomings.

Rail freight customers from farmers to mining companies are suffering from the virtual monopoly of power of the railway companies. In most parts of the country shippers cannot choose between rail service providers because they only have access to either CN or CP. Even in a few places where both rail companies provide access, one is virtually priced out of the market, leaving the shipper with no real choice. Shippers routinely suffer from service disruptions, delays and various forms of non-performance by CP and CN. Deliveries and pickups are not done on time or skipped completely. Frequently the number of ordered rail cars is not matched by the delivered rail cars and sometimes cars are damaged.

A broad range of industries are affected by the situation, especially agriculture, forestry and mining. In western Canada these industries play a significant part in the economy. Chemical and automotive businesses in the rest of Canada are also affected.

A large portion of these goods are destined for export. Lacklustre rail services are thus hurting Canadian exporters' abilities to compete in global markets. For example, soybeans from Argentina enjoy a competitive advantage in markets such as Japan and China because they are delivered faster and more punctual than soybeans from Canada, despite the fact that the total distance covered is significantly shorter for products from Canada. For years shippers have been unhappy but no concrete action was taken by the Conservatives. Since 2007 a “talk it out and wait” tactic was employed, starting with the promise of an expert review panel.

The rail freight service review started in 2008. The independent panel tabled its final report in early 2011. Half a year later, in the fall of 2011, the Conservatives initiated a mediation process that did not yield any results. Presumably, with the tacit backing from the Conservative government, CN and CP were unwilling to make any meaningful concessions. The mediation process, led by retired Conservative politician, University of Calgary Chancellor Jim Dinning, failed. Dinning released a report in June 2012.

The Minister of Transport promised government legislation on the topic to be tabled in the fall. Parallel to the end of the mediation process, the member for Trinity—Spadina tabled a private member's bill, Bill C-441, the rail customer protection act, in June 2012. The private member's bill, coupled with advocacy work from the shipping community, put pressure on the minister to follow up on his promise and actually table legislation.

The shipping community is organized in a coalition of rail shippers. The coalition is a loose and rather informal entity. Organizationally this group is attached to the Canadian Industrial Transport Association. The coalition consists of 17 members that represent mining, forestry, agriculture, chemical and manufacturing industries. One of the original 18 members repeatedly has been brought up in the U.S. Senate, both on the floor and in committee without decisive legislation as of yet.

The surface transportation board, a federal body, is working on regulations to address pricing and service issues, while judges have repeatedly supported shippers in court cases. I just wanted to point that out.

What is the NDP are looking for? What can be specific about?

We know farmers and the mining and forestry companies have been hurting for years due to unreliable freight services, without getting any help from Ottawa. To truly address the issue and also to give the NDP leverage in rural areas, the member for Trinity—Spadina has become an advocate for strengthening the shippers' position. She has been very active on this file.

The NDP position is quite simple. We are standing with business and exporters and we are committed to getting them the fair and reliable freight services they deserve. That will have an impact on not only western Canada but on the entire Canadian economy.

The member for Trinity—Spadina has worked on this issue, including forging ties with key industry associations and tabling an NDP bill. One of the goals is to continue to grow those ties with the NDP as the party that stands up for legitimate business interests and pushes back against market power abuses.

While Bill C-52 falls short on a number of stakeholder demands, it is prudent to support the bill as the shipping community is largely content with the legislation. They are also quite desperate to see some legislation address their issues.

The task is now to address the shortcomings and strengthen the bill to the benefit of the shippers and also to promote our involvement with the entire process. That is what we are doing here. We are trying to highlight some of those key issues that need to be worked on at the committee stage.

Bill C-52 will only cover new service agreements, not existing ones. Many shippers will be stuck with unreliable and unfair services, without any conflict resolution process in the case of violations to existing service agreements. Arbitration is only available for shippers that are negotiating new contracts.

Instead of offering quick and reliable help through conflict resolution to shippers, Bill C-52 would give arbitration a narrow scope for a small group of shippers and the outlined arbitration process could end up being too costly for companies like the Canadian Propane Association and others.

I want to finish by letting the House know there are others that support the position we are bringing forward. They are key stakeholders, like agriculture, mining and forestry industry associations, that have been calling for freight legislation for years, for example, Pulse Canada, Grain Growers of Canada, the Forest Product Association of Canada and the Mining Association of Canada.

In conclusion, I want to say that we are in support of it at second reading. The NDP will push for amendments at committee stage to protect shippers from the abuse of market powers through the right to comprehensive service agreements and conflict resolution processes.

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

Mr. Speaker, I was very pleased to hear the critic for western diversification talk about the importance of shipping and this legislation for western Canada. It was really great to hear the member speak about how important it is for our economy. He cited agriculture and potash mining, which is in my riding. I was very pleased to hear the importance he placed on the economy.

Looking at the whole picture of rail, would he deem the railway an essential service?

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

Mr. Speaker, the minister's question is critical. This is obviously a critical component of the economy. We have legislation that supports collective bargaining and the right for that to happen freely. We want to see fair agreements and processes in place that are democratic. We want to let those processes take their natural course.

We are definitely supportive of collective bargaining. We want to ensure that it is not just the companies getting the profits, which in CN and CP's case, are sometimes rather large profits. We also want to make sure that our workers are treated fairly, are properly looked after, have their fair share and have the right to be involved in the economics we enjoy in transportation field.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, Bill C-52 is there primarily because of concerns expressed by those individuals and stakeholders in the shipping industry, whether they are in agriculture, forestry, minerals, chemicals, fertilizers, oil and gas or industrial and other types of manufacturing. It is a fairly extensive list of individuals. Small and large businesses have seen this great imbalance that does not favour the shippers. This became apparent to the Liberal Party in 2007, when the stakeholders came forward saying that they needed to see some form of legislation. They came to the table and asked the government to do something.

One could argue that the bill before us today is a very small step, but it is a very important step. The issue is the degree to which the government is going to be prepared to accept amendments to improve the bill so that all members of the House enthusiastically support it. Would the member provide comment on the importance of the government listening to the stakeholders once the bill gets to committee so that we can improve it?

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

Mr. Speaker, it is a critical question, because we are hearing a large degree of support for moving the bill forward to committee for further discussion. We have not heard a lot of comment from the government side of the House on whether the members would be prepared to listen to the opposition to hear the concerns raised here.

I am hearing some degree of support. There may be an indication of support for listening to the comments we have raised. That is critical.

The member also mentioned small and medium-sized businesses. It is critical to mention that they are really the economic engine of the country. They also need to have a stake in this and have their concerns listened to and legitimately brought into this process so that this legislation reflects their ability to move goods across the country.

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

Mr. Speaker, I must say, I have rather mixed feelings as I begin my speech, because I feel like I have become an expert in the moonwalk, that dance move that makes you look like you are going forward when in fact you are going backwards.

When I first learned of the problems in the area of rail freight transportation, I had the impression, given the response and the private member's bill introduced by my colleague from Trinity—Spadina, that we were moving in the right direction. Today, however, when I see what is in Bill C-52, I really feel like we are taking a step backwards. Nevertheless, there are enough things in this bill that we do agree with for us to support it at second reading. In committee, we will try to make some changes and some significant improvements.

It is important to note that in 1995, there was a re-engineering and modernization movement that led to the privatization of CN and CP. That is no secret. A neo-liberal ideology prevailed over an objective analysis of the facts demonstrating the importance of this service, which is crucial to Canada's economic development. Although railways remain publicly owned in many countries, here in Canada, it was decided to go for broke, and since then, we have seen the privatization of profits and the socialization of costs.

Balance sheets and recent decisions relating to public transportation show beyond a doubt that the return paid to shareholders takes precedence over developing business services and moving goods and people. The reason I refer to moving goods and people is that a choice was made to prioritize shipping goods over carrying people, something else that is uniquely Canadian. Canada is one of the rare countries to have made that kind of choice.

I will leave it to my colleagues to imagine the passenger transportation challenges that await us in the years to come given that the coalition of private shippers has been complaining for years about the poor quality of the services they receive, and they are the priority clients.

Rail shipping is the backbone of the Canadian economy. Over 70% of all goods shipped by land go by train. The reason is relatively easy to understand: you do not need a university degree in geography to see that in our country, rail shipping is often bulk, and it would be difficult to replace it with shipping by truck. And shipping by boat, which is sometimes more economical than by train, is not available everywhere, for fairly obvious reasons.

Canada was built by the train, and the railway is a vital link between communities in an enormous country. So we might be surprised at the present state and poor quality of rail shipping services. The Conservative government is not the only one responsible for this situation, but it is guilty of not tackling the problem head on in time to rectify this situation.

Day in and day out, the Conservative government claims to be working for the Canadian economy, but everywhere in the country, businesses are suffering from unreliable service, the result of which is hundreds of millions of dollars in economic losses every year. In addition, poor service leads to higher prices for some goods, chemical fertilizers being one example.

To put it more simply, over 80% of rail shipping services customers are not satisfied with the services provided by rail carriers—in other words, nearly everyone. This is 80% of loyal customers. MPs may have experienced this themselves, as customers of a store or a business. They may have started by getting excellent offers so they would become customers, but as soon as they became regular customers, they were taken for granted. And then their relationship gradually deteriorated and all the benefits were offered to new customers to expand the customer base.

That is something we see in Bill C-52, when it says that agreements governed by the new law will be made only with new customers, new contracts. And so anyone who has been using the services for years, and who is a long-standing loyal customer—if we can talk about loyalty in the case of a virtual monopoly—will not have access to the same rules that Bill C-52 seeks to put in place.

Clearly, there is room for improvement. We could make these improvements in committee if the government would be open enough to come to the table and participate in meaningful discussions and listen to the best suggestions to get the best bill possible.

I would like to come back to the fact that 80% of customers are dissatisfied. Something had to be done and something still urgently needs to be done, but the Conservatives clearly have not done anything because this matter has been dragging on not just for weeks and months but for years.

Why have the Conservatives taken so long to do something? Here is what I think may be happening.

First, rail freight customers are often farmers or mining companies. These customers have to deal with large railways that have a virtual monopoly over rail transport. I spoke about this earlier.

In most regions of the country, shippers cannot choose a rail transportation company because they have access to only one or the other. Even in cases where the two railway companies are present, the competition struggles to play the role it should and to influence the basic economic principle of supply and demand.

Why do we now have to legislate? Why can the stakeholders not come to an agreement among themselves? In all likelihood, CN and CP benefit from the tacit support of the Conservative government and, in that context, they are not at all prepared to make real concessions.

The result, as has been mentioned, is that 80% of rail freight customers—shippers—are not satisfied with rail freight service. So, of course, they have asked the government to take action and to introduce legislation that would require CN and CP to reach agreements on the level of service provided to shippers. After years of empty words, the Conservatives are now being forced to act as a result of pressure from the shipping community and the NDP.

Under duress, the Conservatives finally introduced a bill designed to solve some of these problems after the NDP critic's bill was introduced last spring. That bill, which was entitled the Rail Customer Protection Act, was much clearer and covered all customers.

The government is using half-measures. Quite frankly, although the Conservatives' bill is a step forward, it is a weak step. Here are some reasons: the protective measures do not cover existing contracts between shippers and rail transport companies; the bill offers only a limited arbitration process for unsuccessful negotiations of new contracts; the arbitration is available only for shippers who are negotiating new contracts instead of providing fast and reliable help for all shippers; Bill C-52 will cover only new service level agreements, not those that already exist.

Furthermore, the fines mentioned in Bill C-52 would go to the government and not the shippers. We could talk all night about the amount of these fines, which seem a bit weak to me for such big companies. The ability to interact, discuss and negotiate is undermined when the fines go into the government's pocket, which supports what I was saying earlier that, rightly or wrongly, CN and CP probably feel like the Conservative government is in their corner.

I will move on from what is missing from the bill, since I am running out of time. I will no doubt have an opportunity to speak more to this in committee. I have a short conclusion.

Rail transport is not the only file on which the Conservatives have been dragging their feet. They implemented new railway safety measures. They made cuts to VIA Rail Canada and prevented the introduction of high-speed rail in Canada.

The Conservatives simply do not give Canada's rail network the attention it deserves.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Mr. Speaker, I would like to thank the member for making such an eloquent speech.

Does he believe that rail services are essential services?

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

Mr. Speaker, there is no doubt that rail services are crucial.

However, if the intention was to nudge me toward the topic of negotiation by talking about “essential services”, my 52 years on this planet have taught me not to take the bait.

I think the hon. member has his answer.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, in the member's opening comments he made reference to CN's privatization in the 1990s. I was not here in 1995 when that occurred, and I am not too sure how the New Democrats voted then. Is the member aware of how NDP members voted? Did they want it privatized? If they did not want it privatized, was he prepared to advocate that it should be purchased back?

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

Mr. Speaker, I never thought I would say this, but I have something in common with my Liberal colleague: I was not in the House in 1995 either.

I hope he will forgive me for not having done the research to know how the NDP voted at that time. If the question really is that important, I can do the research and send him a response by email.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I would like to put the same question to the hon. member and thank him for his speech on this important matter.

Two of the members on the opposite side, including the Minister of State for Western Economic Diversification have raised this bugbear of whether it is an essential service.

I wonder if the member would like to speak to the fact that if, on the one side the government does not believe that the transport of our goods across the country is important enough to protect those people who are producing bitumen, growing grain and shipping equipment east and west, why does the government feel it cannot intervene on that side to properly regulate, provide fair rates and equal access to fair service? However, on the other side it throws in the bugbear that if the rail workers should think maybe they are not being paid fairly or have proper pension plans and so forth, that is the time for the heavy hammer of government.

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

Mr. Speaker, I would like to thank the member for her very relevant and interesting question.

For a while now, the issue of “essential services” has been coming up almost every time someone gets up to speak.

I am sorry to be responding with a question. If they are so desperate to have us say that rail services are essential services, why have the members on the other side of the House given this issue so little attention for so long?

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, earlier we were joking with the member for Chicoutimi—Le Fjord.

He said that a moose would be faster than the train, or that the train takes the milk run, and so forth.

In any event, the member from Trois-Rivières might be able to back me up here, but I think this file has been mismanaged. I remember in the 1990s that businesses wanted to join forces to build lines between their companies and the railway. The rail company was refusing to transport their freight.

Does my colleague have the impression that use of the railway has been abandoned in Canada?

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

Mr. Speaker, it is obvious that many companies that had other options turned to other modes of transportation because of the obsolete service.

However, rail service is the only option for many companies and farmers and our rail service has outdated equipment and services.

There is every reason to be concerned and to quickly take action to address the situation because, whether we like it or not, rail service is also the mode of transportation of the 21st century.

[Alexandrine Latendresse, NDP, Louis-Saint-Laurent, QC]

Mr. Speaker, I am here today to speak to Bill C-52, which would amend rail transportation legislation.

It really surprised me that I could find something to be angry about in a rail transportation bill. Perhaps "angry" is a bit strong. Exasperated may be a better word.

What could I find so exasperating in an attempt to provide recourse for unsatisfied users of rail shipping services? It is very simple. It is as though the government is pretending to fix the problem to give the illusion that it is taking action. Members will notice that I said "exasperating" and not "surprising", since this is becoming a trend.

Bill C-52 is another example of the Conservative government's chronic mismanagement. Rail transportation fuels Canada's economy. Of all the countries in the world, Canada is one that was built by the railway. The railway was behind every aspect of our growth.

The quality of rail infrastructure still has a direct impact on Canada's entire economy today. This is not news to the government; it knows that.

Usually, the Conservative government—as patriotic as ever—would defend our businesses' access to the rail system. Nearly 150 years ago, at the start of our Confederation's growth, it was the country's lifeblood. It was an almost heroic era when Canada dreamt of defying the world.

That was the 19th century. While the situation is quite different today, it is easy to explain. Rail companies are extremely prosperous and make ridiculous profits. And that is understandable because without them, Canada would be paralyzed and would have almost no economy.

A crucial detail that I should point out, even though it may be useless to do so, is that there are only two rail companies in Canada. The minister spoke of a “duopoly” when describing the situation, and that was fine in the first hour of discussion. But I do not like that term because “duo” means “together”, not just “two”. And that is the crux of the issue.

The ridiculous profits I mentioned keep piling up. Let us face it, there really is no competition. These two companies share all of Canada's rail transportation business and more, and they always have. These are two major, historic Canadian companies, if we can still call them Canadian now that they have been privatized.

That is the government's only motivation: do not upset the large corporations that are raking in huge profits. If any disputes arise between those companies and the small shippers, let us give the companies the power to shut them up quickly. Some would even say with nickels and dimes.

One might speak out and say that it is counter productive, that it is irrational to do that. Yes, that is true, but this would be forgetting that, first and foremost, these people, the government and the railway companies, know each other and talk to one another. These people are perhaps not exactly in collusion, but they definitely share certain sympathies. Yes, they are sympathetic to one another.

In addition, in the intellectual shackles of puritanism, which is the basis of the entire Conservative approach, it is clear that the fittest gets his power directly from God and must not be opposed. Success comes from God almighty. Put that all together and there you have the inspiration for Bill C-52 and for everything else, of course.

Here is what bothers me about the result, Bill C-52. I already know how the Conservatives will respond: “The economic recovery is too fragile. We must not make any waves. We have to ensure that we have everything going for us. We cannot do anything to compromise the railways' efficiency, not for the measly crumbs, not for a company worth, at worst, $100,000.”

After all, we are not reinventing ourselves. These people are not likely to engage in such deep reflection now in the middle of February.

This is the same old story. After dragging its feet for so long, now the government is stubbornly defending a characteristically weak and contemptuous bill. Let us rename it: Bill C-52, an act that says that railway companies can break any contract they like for $100,000, and be done with it. What a bargain.

Rail lines are real structures that result in exchanges and economic benefits that are just as real. There is a direct impact at all levels of economic life. If remote shippers can no longer rely on the two national companies, they might not exist at all. If shippers are neglected, they and their communities are not being allowed to participate in the country's development.

All paths starting on the margins lead to the centre. Coming from a government that claims it will leave no stone unturned to achieve prosperity, it is rather strange. For people who take every opportunity to proclaim to the world that supporting the right is the best way to ensure the well-being of business, it is more than revealing.

Is that the Conservative government's great recovery plan for outlying regions? Yes, undoubtedly. Bill C-52 is striking proof. Develop resources, process them, but do not try to sell them because all the railway cars are taken. This is more proof that there is no plan and that this will have to wait, again. However, be happy, there are a lot of people lined up to talk to the government and you can chat with them. There is the manufacturing sector, my entire generation and all aboriginal peoples of Canada. You will surely find something to talk about to pass the time.

I would like to acknowledge the work my colleague from Trinity—Spadina has done on the issue before us today. I say "colleague" because that is how we refer to each other here, even though I would prefer to use a word that better represents the respect I have for her. She not only wants to do everything, she can do everything. If the official opposition transport critic says that she has met with all of the stakeholders, it means that she has met with all of the stakeholders, even the ones who were hiding. And if she says that a clear majority does not like anything in this bill, it means that there is damning and incontrovertible evidence.

The government can pull all kinds of adjectives out of the Oxford English Dictionary to defend itself, evade the issue and have us believe it worked very hard to restore balance, but no one is listening. That is what I find so exasperating. I hope I am being clear. I find the gaps in logic between what this government claims it is doing and what it is actually doing appalling. The urgent need to fix the problems with the rail companies was a perfect opportunity for the overconfident Conservative government to show that it could do its job. And what happens? It is the first to jump into bed with the rail companies. Nothing gets in the way of love, not even having the lights out.

When Canada has a problem, it would make sense to look elsewhere to see if other countries have found solutions, not to copy them, but to at least draw some inspiration from them. We do not live in a vacuum. And I mean that in a geographic sense, because intellectually speaking, it is obvious that the other side has sucked people in with their empty rhetoric.

Over the past 50 or so years in Canada, the concern that we used to have for our rail system has all but faded. When passenger rail travel became less common, trains and the incredible rail system that stretches like fingers across the country no longer captured our imagination as they once did. The superhuman effort that rallied half a continent quickly died. Yet trains in Europe are flourishing. How often have I heard Quebeckers talk about travelling in Europe and how astounded they were by the quality of rail infrastructure in the European Union?

The pride that you feel is overwhelming when you arrive at Berlin's central station and see “Bombardier” in huge, white letters in the middle of the large window. But you quickly see the unbelievable difference between the European trains that Bombardier builds and the antiquated trains we have here because there is no political will.

The European Union will stop at nothing to ensure that its rail system, which is a huge tangled web of railways that it inherited from the national systems of 27—soon to be 28—countries, is the most competitive in the world. Europe understands our own historical example better than we do ourselves. Without an outstanding, competitive rail system, our country would almost not exist. Bill C-52 may look like a simple legal adjustment concerning a situation that the public can quietly neglect. In fact, quite the opposite is true: it is the government that is neglecting it. When blood flow is cut off to an organ, it dries up and dies. And nolens volens, the rest of the organism will die along with it. That may be a somewhat silly and dramatic image, but it is fair to a certain extent.

In closing, a country is like a house and Canada is like a house built on a beautiful, huge plot of land. It is a land of dreams. We can build little out buildings, create gardens and build a chicken coop. The house itself, which is already huge, could easily be improved, since we have the wood and the carpenters needed to do so. When the NDP has the last word in the affairs of the house, we will work hard to make this house, which we all share, more comfortable, more manageable and even more beautiful. We will add new rooms for children and grandparents, as well as a library and bicycle storage.

For years the Liberals spent their time changing the carpets and arguing about what to call the house, and the Conservatives boarded up the windows because it was too drafty and heating is too expensive. You have to spend money to make money. The right-wing faction should understand that.

The Conservatives need to create jobs in rail transportation instead of allowing themselves to be wooed by the rail companies who have everything to gain by seducing them. In any case, that has already happened, and here is the result of their six years of efforts: Bill C-52.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I appreciate the comments, but not all of them, especially at the tail end. I like to think that the Liberal Party has done exceptionally well in supporting our rail line industry.

To highlight that particular fact, I would go to the member for Wascana, who has been a long-time advocate, as I indicated earlier, someone who has been raising this issue for the last couple of years in particular, since 2007: the stakeholders.

Many of the stakeholders came forward and said we needed to bring in some sort of legislation that would enable a fair playing field between the shippers and the rail providers, CP and CN. That is what we are focusing our attention on, because there is an imbalance of power.

Having said that, we recognize that Bill C-52 is but a small step forward. I argued earlier, and will repeat it now, that we are hoping the government will be receptive to a number of amendments to the legislation once it gets to committee stage, thereby allowing a fair playing field so our shippers can feel comfortable knowing that their car will be there when it is supposed to be, that the quality of the car will not take away from the product once it gets to the market. Those are the type of assurances they want.

I wonder if the member might want to focus some of her response on the fact that it is absolutely, critically important that the government amend this legislation when it goes to committee. Does she not agree with that?

[Alexandrine Latendresse, NDP, Louis-Saint-Laurent, QC]

Mr. Speaker, I would like to thank the hon. member for Winnipeg North for his question. That is the reason we decided to support this bill. Despite it all, we think that we have to go in that direction.

Like him, we agree that many amendments should be adopted in committee. We therefore want Bill C-52 to go to committee and for the amendments proposed by his party and ours to be seriously considered and possibly adopted.

I am fully prepared to be hopeful and optimistic. However, statistically speaking, if we look at the number of bills that have been amended in committee since the Conservatives got a majority, chances are not in our favour. Still, we think it is important to continue in that direction.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I would like to thank the hon. member for Louis-Saint-Laurent for her speech, particularly the lyrical ending, which truly motivates us to move toward the future, a move that she strongly advocates. She demonstrates the ambition she has for our country and for the constituents she has the pleasure and honour of representing.

Let us face it. If we look at the government from a business perspective, we are currently taking a step backward by always engaging in rearguard fights and even abandoning our heritage.

I really enjoyed hearing the hon. member for Louis-Saint-Laurent's perspective and the powerful imagery she used. I would like her to continue to encourage us to dream by taking us farther and sharing her plans for the future with us in this House.

[Alexandrine Latendresse, NDP, Louis-Saint-Laurent, QC]

Mr. Speaker, I would like to thank the hon. member for Beauport—Limoilou who is such a wonderful colleague. He always encourages us to go farther. I am very grateful to him because he is part of the reason why I am here now. He was one of the first people to encourage me to go into politics over five or six years ago now.

So, he is partly responsible if I am now in this position where I can defend these ideals and try to build a Canada that better reflects who we are and that will listen to my generation, something that has practically never been done to date. This will allow us to have a Canada where no one is left behind. I therefore thank him very much for his contribution.

[The Acting Speaker, Conservative, Bruce Stanton]

Before we resume debate with the hon. member for London—Fanshawe, I will let her know that we do not have quite enough time for the full 10 minutes. When we get to 6:30 p.m., we will come to the end of the usual time allocated for government orders for today. However, I will give the hon. member an indication of when we need to wrap up.

The hon. member for London—Fanshawe.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, rail freight customers, from farmers to mining companies, are suffering because railway companies have a virtual monopoly when it comes to the vital rail lines that Canadians need to get goods to market.

In most parts of the country shippers cannot choose between rail services because they only have access to either CN or CP. Even in the few places where both rail companies provide access, one is usually priced out of the market, leaving the shipper with no real choice.

Shippers routinely suffer from service disruptions, delays and experience all kinds of examples of non-reliable performance by CN and CP. Deliveries and pickups are not done on time or are skipped completely. Frequently the number of ordered railcars is not matched by the delivered number of railcars and sometimes cars are badly damaged.

When a shipper contracts a specific number of railcars, that shipper needs to know those cars will be available. Anything other than this kind of reliability is bad business and bad management. Unfortunately, we know that 80% of the service commitments for agricultural rail customers are not met by rail companies.

After years of talking, the Conservatives have finally tabled legislation to address a number of key rail freight customer grievances after years of inferior service by the big rail companies. Bill C-52 is a step forward, but is far from a perfect solution.

Key demands from the shipping community have, quite simply, not been addressed. Bill C-52 would also create loopholes because of its ambiguous language. The Conservative language is weak. Its protective measures do not cover existing contracts between shippers and rail companies and offers only a narrow, costly arbitration process for failed negotiations for new contracts. Key demands like the shippers' call to include penalties for rail companies in service agreements, performance standards and an easily accessible conflict resolution process were ignored.

While NDP members will support this legislation, we will also push for amendments at the committee stage to protect shippers from the abuse of market power through the right to comprehensive service agreements and conflict resolution processes.

Rail transport is the backbone of Canada's economy, with 70% of all surface goods shipped by rail. It is crucial to make rail freight services work for both rail companies and shippers. We cannot take the importance of the railroad for granted.

It is also critical to note that current pricing for rail freight services is also damaging Canada's shippers. Bill C-52 explicitly excludes pricing, despite the calls from all parts of the shipping community to address the pricing regime. This has a significant impact on Canada's trade deficit, which is, by the way, ballooning. It reached almost $2 billion in November alone. We cannot afford to lose even more ground when it comes to global competitiveness for Canada's products.

A broad range of industries are affected by the situation created by the virtual monopoly of current rail service providers. I have already mentioned agriculture, but we must not forget other key industries like forestry and mining as well as chemical and automotive businesses. Many of the goods produced by these industries are destined for export.

Lacklustre rail services are hurting Canada's exporters' ability to compete in global markets. 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 that needs to be covered is significantly shorter for products from Canada.

Rail freight is not only central to Canada's economy; we also need strong rail freight services to take trucks off the road and tackle greenhouse gas emissions. While the overall share of surface transport for goods remains high for rail, frustrated companies switch to trucking where possible and the environment loses.

Rail freight is only one aspect where the Conservatives are slow to act. From new rail safety measures to cuts at VIA Rail and blocking the introduction of high-speed rail in Canada, Conservatives do not give Canada's rail network the attention it deserves.

The bill has taken a long time to come to the House. For years, shippers have been unhappy but no concrete action was taken by the Conservatives. Since 2007 they employed a talk it out and wait tactic, 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 in the fall of 2011, the Conservatives initiated a mediation process that did not yield any results. Presumably with the tacit backing from the Conservative government, CN and CP were unwilling to make any meaningful concessions. The mediation process, led by retired Conservative politician and University of Calgary chancellor Jim Dinning, failed. Dinning released his report in June 2012 and the Minister of Transport promised government legislation on the topic to be tabled in the fall.

Parallel to the end of the mediation process, fortunately, the member for Trinity—Spadina tabled private member's Bill C-441, the rail customer protection act, in June 2012. The private member's bill by the member for Trinity—Spadina, coupled with advocacy work from the shipping community, put pressure on the minister to follow up on his promise to actually table legislation. However, CN undertook a massive lobbying effort last year, first to prevent any effective bill, then to have it watered down. Dozens of documented visits to government offices and a media campaign show the determination of CN to keep the status quo.

Rail customers have banded together now and are organized in the Coalition of Rail Shippers. The coalition is a loose and informal entity, but it wants something positive for its industry. It wants something positive for the people who produce the goods, who create the wealth in this country, the men and women who do the work to make this country tick and be productive.

Shippers are having a hard time getting fair and reliable freight service, and that is simply unacceptable. We can and should do better for those that rely on our rail system. Our manufacturers, farmers and resource industries depend on our rail system. If rail were made more fair and affordable, consumers would also see an advantage.

This is a country that emerged as a strong, independent nation because of the accessibility of our railways. Let us not abandon those who would continue to build our Canada.

[The Acting Speaker, Conservative, Bruce Stanton]

Order, please. The hon. member for London—Fanshawe will have two and a half minutes remaining for her remarks when the House next resumes debate on this question and the usual five minutes for questions and comments.

The House resumed from February 4 consideration of the motion that Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), be read the second time and referred to a committee.

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

Mr. Speaker, I have mixed feelings about Bill C-52. This is difficult because I want to encourage our rail services and I support the bill. However, there are significant gaps not addressed by the legislation that absolutely need to be brought forward. In committee we will try to make some needed improvements to the bill.

My colleague from Trinity—Spadina consulted several experts, including exporters, and many of them brought up the issue of price. Absent from Bill C-52 is the important and unregulated discrepancy in rail fees, for example, between CP and CN. Why are existing discrepancies not addressed in the bill? Rail freight transportation must be more efficient and effective. It needs to provide reliable and sustainable services. Unregulated rail fees are another aspect to look into and this can be done at committee.

Trains move goods and people. Trains are a key mode of transportation for Canadians in the 21st century. I myself try to travel between my riding of Notre-Dame-de-Grâce—Lachine and Ottawa by train as much as possible.

Rail freight transportation provides a service to our Canadian farmers and producers who ship their goods to market by train. This mode of transportation is essential to Canada's economic development, but does it currently benefit our farmers, producers and our Canadian shippers' associations as much as it benefits CN and CP? Does it benefit public transportation as much as it supports commercial interests?

A look at balance sheets and recent decisions at CP and CN show that these companies are run for their shareholders, not for the users of public transportation or small family businesses that rely on rail freight transportation. This decision was a choice, a choice made to serve shareholders and profits over customers. We have seen this before and we know this leads to poor quality services.

The Coalition of Rail Shippers has been stating for years that it receives poor quality services from CN and CP because of this pricing issue, and they are priority clients. Listen to the private shippers. They tell us that CN dictates the market. CN is the largest player in Canadian rail freight transportation. According to a report by the Coalition of Rail Shippers presented at the Canadian maritime conference in 2010, “CN and CPR together control 94% of the market by revenue”.

This market lacks competition, innovation and regulation. This is not the way to support Canada's economy or to encourage Canadian success. It is important that Bill C-52 gives freight shippers the right to enter into service agreements with railway companies and establish an arbitration process in the event of a dispute. This is what freight shippers told us they needed.

Rail shipping is the backbone of the Canadian economy. Transport Canada estimates that over 70% of all goods shipped over land go by train. The reason is easy to understand. In our very big country, rail shipping is often in bulk and it would be difficult to ship these large quantities by truck. Shipping by boat, which is sometimes more economical, is not available everywhere for obvious reasons.

Canada was built by train and the railway is a vital link between faraway communities on a vast land.

I would like to talk about an activity that I did in my riding. I organized a screening of a movie called Rocky Mountain Express. Its filmmaker is based in my riding. About 100 of us watched this wonderful movie, which talks about the history of the train in Canada and how it built the west of Canada. It was amazing. It really showed us how our country was based on rail.

We might be surprised by the poor quality of rail shipping services in Canada right now. The Conservative government is not the only one responsible for this situation, but it is guilty of inaction on this file. Day in and day out the Conservative government claims to work for the Canadian economy, but Canadian businesses are suffering from this unreliable service, the result of which is hundreds of millions of dollars in economic losses every year. This affects a broad range of industries, especially agriculture, forestry and mining.

The rail freight service review found that 80% of rail shippers are dissatisfied with the services provided by rail carriers. This is 80% of loyal customers. Unreliable service and high prices continue to hurt rail customers. This issue is not addressed in Bill C-52. We, the official opposition, will continue to push for fair pricing for all shippers, prices that are in line with the services received from carriers.

That is something we do not see in Bill C-52, which says that agreements governed by the new law would be made only with new customers and new contracts. Therefore, anyone who has been using the services for years, and who is a long-standing loyal customer, would not have access to the rules that Bill C-52 seeks to put in place. Clearly, there is room for improvement. We could make these improvements in committee if the government would be open enough to come to the table and participate in meaningful discussions and listen to the best suggestions to get the best bill possible.

I would like to come back to the fact that 80% of customers are dissatisfied. Something had to be done and something still urgently needs to be done, but the Conservatives' inaction has been going on for years. Why have the Conservatives taken so long to do something?

Here is what I think may be happening. First, rail freight customers are often farmers or mining companies. These customers have to deal with large railways that have a virtual monopoly over rail transport. In most regions of the country, shippers cannot choose a rail transportation company because they have access to only one or the other. Even in cases where the two railway companies are present, the competition struggles to play the role it should and to influence the basic economic principle of supply and demand.

Why do we need to intervene now and legislate? Why can the parties involved not come to an agreement themselves? In all likelihood, CN and CP benefit from the tacit support of the Conservative government and, in that context, they are not at all prepared to make real concessions. The result is that rail freight customers, the shippers, are not satisfied with rail freight services. Therefore, they have asked the government to take action and to introduce legislation that would require CN and CP to reach agreements on the level of service provided to shippers. After years of empty words, the Conservatives are now being forced to act as a result of pressure from the shipping community and the NDP.

Under duress, the Conservatives finally introduced a bill designed to solve some of these problems after the NDP critic's bill was introduced last spring. That bill, which was entitled the rail customer protection act, was much clearer and covered all customers.

The government is using half measures and here are some examples. The protective measures do not cover existing contracts between shippers and rail transport companies. The bill offers only a limited arbitration process for unsuccessful negotiations of new contracts. The arbitration is available only for shippers who are negotiating new contracts, instead of providing fast and reliable help for all shippers. Bill C-52 would cover only new service level agreements, not those that already exist. Furthermore, the fines mentioned in Bill C-52 would go to the government and not to the shippers.

We could talk all day about the amount of these fines, which seem a bit weak to me for such big companies. The ability to interact, discuss and negotiate is undermined when the fines go into the government's pocket, which supports what I said earlier, that CN and CP probably feel as if the Conservative government is in their corner. The Conservatives simply do not give Canada's rail network the attention it deserves.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, I would like to congratulate my colleague on her excellent speech and for having the courage to give it in the language of Shakespeare, which is not her mother tongue.

Arbitration is not an option in every situation. While this bill is a step in the right direction, arbitration should be more flexible, but still have rules. Rules are needed to provide a framework for arbitration and negotiation.

Would it not have been easier to insist that arbitration be used in every dispute?

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

Mr. Speaker, I would like to thank the member for his question and his comment.

As I said at the beginning of my speech, we will support this bill, which is based on the bill introduced by the member for Trinity—Spadina last spring.

But I will say again that it is lacking many elements, and arbitration is one. That is why the bill needs to be studied in committee, as soon as it gets there.

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

Mr. Speaker, I enjoyed my colleague's speech.

An NDP member worked very hard on this bill. For some time now, the NDP has been calling for improved rail freight and rail transit contracts. This is very important, especially for the forestry industry. People in Chapleau, Kapuskasing and Espanola count on this service and appreciate that the train still runs through their communities.

Could she explain how the bill could be of more help to industries, specifically the forestry industry?

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

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

Canada's railways are essential to the forestry, mining and agriculture industries. This bill will help those sectors manage supply and demand.

Canada is one of the only countries that has decided to put moving goods ahead of moving people. And we should continue to do so, because our country is so vast. There are some places we simply cannot get to by truck. In northern Ontario, for instance, sometimes the train is the only reliable mode of transportation.

This bill will improve things in that regard. It will give shippers that sign transportation contracts a more level playing field for negotiations with CN and CP, which together earn 94% of train revenues in Canada.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Speaker, I thank my hon. colleague for her speech.

I share her disappointment, especially considering that, as she said in her speech, the railway has been so fundamental to the history of this country. As a method of transportation, it has really lost its lustre.

I wonder if the member could describe how she sees railway transportation in the 21st century. What would it look like? What direction should it take? At the same time, this will illustrate how this bill does not meet the expectations.

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

Mr. Speaker, I would like to thank my colleague for his question.

As I mentioned, I take the train. Unfortunately, I do not take it every week because sometimes I need my car. However, I try to take the train as often as I can when travelling between my riding and Ottawa. The train takes 15 minutes less than driving.

In my opinion, the 21st century train is not like that. It is much more user friendly and attracts clients. When I get on the train, I can take up four seats because unfortunately there is no one around me.

We have been talking about high-speed trains for a long time. There is a lot to do. But what stands out is how expensive it is to take the train right now. Two companies have a monopoly. The intent of the bill is to improve service for everyone.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, in today's context of a free trade environment and a free and highly competitive global market—hardly anybody talks about globalization anymore these days, by the way—the key is to develop a healthy trade environment that is conducive to the development a modern, flexible, solid and reliable infrastructure.

Rail transportation in Canada represents a significant share of the economy. It contributes approximately 70%. In Quebec, the figure is slightly lower, and in the rest of Canada, slightly higher. This creates another problem too: more trucks on our roads are a threat to another infrastructure. Nevertheless, approximately 70% of all freight in Canada is shipped by rail.

It is consequently essential for these freight services to be profitable not only to the rail transport companies, but to shippers as well. The cost of rail freight services is a problem for Canadian shippers.

By failing to address some of the issues surrounding fees, the bill disregards the demands being made by some groups from the shipping community. As I mentioned in my preamble, in establishing a free, highly competitive market, the freight transport link in the chain is extremely important to the development of our economic strategy, and in particular for the prosperity of some regions in Canada and Quebec.

We are nevertheless going to support the bill at second reading today. The wording of the bill amends the Canada Transportation Act to require railway companies, when asked to do so by a shipper, to prepare an offer to enter into a contract that sets out the steps it must take to discharge its obligations to the shipper. It also establishes an admittedly rather rigorous process to set out the stipulations in such a contract if the shipper and the railway company are unable to reach agreement.

That was the gist of the question I asked my colleague from Notre-Dame-de-Grâce—Lachine a short while ago, and it may not have been particularly clear. What I wanted to say was that when you end up in arbitration in a negotiation, it is because something has not functioned properly in the prior discussions. This leads to legal proceedings in which there is often a winner and a loser. It is of course difficult to find a formula for dealings between a SME shipper and a multinational that would make everyone a winner, and this will not change. It would also have been useful to look into other options through which negotiation between the parties may have been facilitated.

The bill would also amend provisions concerning air transportation, with a view to rationalizing internal procedures, as well as a number of other provisions concerning the administration of the act, which are still, I might add, exceedingly complex. When the goal is to improve the situation and enhance a sector of the economy, it is important to make things easier.

However, given that the short title of the bill is the “Fair Rail Freight Service Act”, I am skeptical about its purpose. The ambiguous wording implies possible loopholes, as I mentioned, particularly in view of this government sense of equity, which is to give more to the big fish and less to the small fry.

Let us not forget that the Canada Transportation Act is an umbrella statute that governs a number of air and rail transportation markets, and that dates from 1996. Among other things, it bases the national transportation policy on establishing free competition between carriers and different modes of transportation. When a shipper in a remote part of Canada has to deal with a specific transportation company, that shipper has no choice but to find a way to negotiate a deal with Canadian National or Canadian Pacific.

An update was therefore both desirable and justified, because the players in this economic sector have been complaining for many years about chronic problems of service inefficiency and reliability from the rail network owners.

The fact is that 80% of clients and shippers say they are not satisfied with rail transport services in Canada. It is partly for that reason that they have asked the government to act, and introduce legislation requiring the main carriers, CN and CP, to reach agreements with shippers on the level and quality of services.

In reality, shippers have difficulty in obtaining fair, reliable and punctual rail transport services. Some of them cannot even get contracts with the large rail carriers, and those that do have contracts experience significant delays more often than not, only to be told that they do not have enough cars available to ship their goods and meet demands for service at the same time.

The level of dissatisfaction is high enough to prompt important questions about respect for business on the part of the major carriers, and here I am once again talking obviously about Canadian Pacific and Canadian National. As I have said, freight transport is a vital link. In remote areas and in the regions, it is important for rail transport to operate as a means of support for a number of sectors of activity, such as agriculture and forestry. In times gone by, in a neighbouring riding in the Eastern Townships, the municipality of Richmond had a port that was one of the most important transshipment points for freight in Eastern Canada. When market forces were allowed to operate without hindrance, Richmond suffered greatly from a limited choice of carriers and inferior infrastructure—it has to be said—and there was a striking decrease in population and, inevitably, a rise in the unemployment rate.

Nor should we forget that in some remote points in our great country, and now I am talking about my part of Quebec, we are often dealing with small carriers as well as American transport firms that move freight through border areas, as is the case in my riding. Some stretches of railroad have even been sold to American companies, which ship freight by rail as far as the Canadian border.

We therefore have to admit that we definitely need legislation to regulate and consolidate an economic sector that is not just important, but often vital in many rural regions of Canada. I am referring once again to remote regions. Since I became a member of this House, I have always defended the rural regions. It is those regions that give our country its identity. When they are vibrant and prosperous, they represent the very identity of Canada. I see no problem in letting market forces operate, but we must nevertheless help small companies, small carriers and small shippers, because they generate a large portion of the total freight volume in the regions.

The poor quality of rail transport services for freight thus costs the Canadian economy, particularly our many rural communities—as I have repeatedly said—that are already seriously threatened by the downturn in manufacturing and forestry, hundreds of millions of dollars every year, and hundreds of thousands of jobs.

Many industries in Canada have to deal day after day with losses caused by deteriorating crops that have languished too long in poor conditions waiting for transport services, with work interruptions in plants and mines for lack of parts, or with shipments that are missing or lost somewhere in the transport network.

Poor rail service hurts Canadian shippers who must meet the just-in-time standard. I do not know if my colleagues know what that means. It means that if I order it today, I want it yesterday. That is how it works in goods production and business in general. Poor service also hurts our global competitiveness and costs us hundreds of thousands of jobs. It can even cause corporations and SMEs to close their doors. It has also resulted in the rural exodus, which truly saddens me.

Having said that, a large part of the supply chain of our industrial, agricultural and forestry economy relies on a transportation system that must be effective and efficient if these economic sectors are to remain competitive in the global marketplace.

That is why shippers need measures that will reassure clients that this country's carriers will deliver on rates, fulfill their contracts and have the infrastructure needed for smooth operations.

In closing, I would say that the bill clearly does not go far enough. The government seems to believe that good faith will carry negotiations. However, I would like to point out that experience has shown that, when big business holds the upper hand, the small entrepreneur must be vigilant. That is not the right approach in some economic sectors.

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

Mr. Speaker, I thank my colleague for his speech and for sharing his passion. He noted in his speech that there was a particular situation in his riding. He mentioned that some railway segments belong to American companies. We talked about that.

I think it is important for my colleague to say how this bill will affect the situation in his riding, how it is good for his riding and what could be done to improve the situation further. If my understanding is correct, the railway lines that belong to the United States are causing some problems in the municipality. I would like my colleague to discuss that point.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, I thank my colleague. The problem is that we are no longer dealing with one carrier, but rather with two or perhaps three. So we are negotiating at several levels. These are small shippers in a remote region.

If, after taking the time to negotiate contracts with the big companies, you then have to go to the American parent company that owns a rail segment to negotiate—because they have no other choice but to negotiate with it as well—and if we have no standardized economic measures to assist these small entrepreneurs, they will once again lag behind the big companies, which negotiate as they see fit. The small entrepreneurs are being left to fend for themselves.

As I previously mentioned, some sectors, such as agriculture and forestry, have been left to their own devices.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I spent nine years working on the railway as a signal maintenance man. Prior to that, I grew up with my father working on the railway, one of the things that was crucially important and that we saw everywhere we went in our own travels.

I lived in a little town called Plaster Rock, New Brunswick. If I wanted to go to Moncton, I took a train. Today, in northern Ontario, the Ontario Northland Railway is shutting down. These smaller communities, such as the one I grew up in, rely upon that service, and the current government and the previous government have allowed that to slip away. It is not a luxury. In many instances, it is people's sole mode of transportation. We sometimes have to question where the oversight is. Where are the people who should be standing up for these workers?

I know the member for Timmins—James Bay, the member for Sudbury and others from that area have worked hard. Our northern Ontario folks have worked hard to try to keep that railway. However, where is the government on that?

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, I thank my colleague. Unfortunately, the government is not around to protect those regions whose economies are hanging by a thread or, in some instances, by a railway.

A region has been abandoned in the riding of Richmond, next door to my constituency. Before Sherbrooke, Sawyerville was the biggest port for goods in my riding, the biggest freight station in eastern Canada, and it was abandoned as a result of decisions made by governments in the 1940s and 1950s, and even in the 1930s.

Regions are being abandoned, and people have no choice but to come to our offices and ask for help. They say that we have the power, that we can help them and keep their infrastructure. We should invest in that infrastructure in order to create employment. When infrastructure is reliable and viable, it creates employment. And it is viable, since we are talking about agriculture, forestry and manufacturing, industries that are extremely important to the survival of those regions.

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

Mr. Speaker, I would like to follow up on the comments by my colleague from Hamilton East—Stoney Creek.

Can my colleague talk about the fact that a lot of rails are being removed?

In Sault Ste. Marie, CAT has worked very hard to get rails and to upgrade the lines.

Considerable importance must be attached to rail freight, but rail transit must benefit from that as well.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, because of a lack of investment in this infrastructure, there are sections of track that have been abandoned and can no longer be restored, unless millions of dollars are invested.

We must therefore continue to maintain the tracks we have left, and especially not make the provinces and municipalities, some of which have populations of only 500, bear the burden alone. They cannot carry the economic burden of restoring railway tracks.

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

Mr. Speaker, I am pleased to have the opportunity to join my colleagues in speaking to Bill C-52.

Because I represent a rural region, this issue is very important to me and my constituents. I thank my colleagues who spoke before me and who have done a good job of highlighting these very important aspects.

If the bill is enacted as it now stands, it will 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 fulfill its service obligations to the shipper.

Bill C-52 also provides for the creation of an arbitration process to establish the terms of such a contract, if the railway company and the shipper are unable to agree on a fair and equitable agreement after lengthy negotiation.

The bill comes in response to numerous pleas from shippers all over Canada and the hard work and unflagging efforts of my colleague from Trinity—Spadina, whom I would also like to congratulate.

After years of discussion, through both the panel of experts and consultations with stakeholders, and after my colleague’s bill was introduced last year, the Conservatives realized they had a duty to present this bill, at last. It is an attempt to respond to the complaints from rail shipping services customers who are being offered poor service by the biggest companies, which have a virtual monopoly over the market.

It is really high time that this government examined the problems in this situation, because the difficulties experienced by shippers everywhere in Canada are quite real and have a direct impact on the economy, particularly in rural regions.

In Canada, as several of my colleagues have said already, over 70% of freight is shipped by rail. However, a study of rail shipping services shows that 80% of shippers are dissatisfied with the services they receive. This is probably because 80% of the commitments the big companies made to them were not honoured. Clearly there is a problem and it is time for the government to take action.

Here we have the rough outline of a bill; there is still much to be done.

At present, the situation is hard on the shippers. Rail freight customers have trouble obtaining fair and reliable service. Some customers cannot even obtain contracts with a major railway. Some with contracts have other difficulties, such as serious delays, the insufficient number of railcars available to transport all the goods their industry requires, or the countless interruptions in service that decrease their profits and may eventually result in lost jobs.

The fact that shippers often do not have a choice of carrier is also a serious problem. They have access to CN or CP, but not always to both. Those who have a choice between the two companies still have to pay too much, especially small businesses in rural ridings. Such small businesses often are just getting by and then have to pay these fees. That makes it very hard for them.

The situation I have described affects many sectors of the economy, including natural resources, agriculture and forestry. To a large extent, these industries produce goods for export, but they are at a great disadvantage because of the poor quality of the rail services they depend on.

The cost of services, the major gaps in the rail network and the way the system operates are all detrimental to Canada's overall competitive position on the world's markets, in addition to causing job losses and costing our economy hundreds of millions of dollars.

The most seriously affected industries are found mainly in the rural areas of the Canadian west, and in British Columbia, Quebec and Ontario. It is a widespread problem and will affect thousands of people across the country. They need the government to act quickly and they need legislation that goes further than Bill C-52 does currently.

I think of my riding, Portneuf—Jacques-Cartier, where a number of large businesses employ thousands of people all over the area. Although they are located far from the major urban centres, they are served by rail lines—for freight, at least.

I think of the many small and medium-sized businesses all across my riding, and some large firms as well, such as Alcoa in Deschambault-Grondines, Ciment Québec in Saint-Basile or Graymont in Saint-Marc-des-Carrières.

At one time, the Bowater plant in Donnacona was served by a rail freight line. Now, unfortunately, the business has shut down. It has declared bankruptcy and limited the former workers' access to pensions. That is another matter we can debate at another time, I hope.

As I said, these businesses represent a large part of my riding's economic activity. They need good-quality, reliable rail services in order to plan their freight shipments, to be efficient, to grow and to contribute to economic growth and development in the region.

I also think about the farmers who depend on railways to ship their produce all across the country. I think about the forestry industry. which has been such an important part of the economy throughout the region, particularly in Saint-Raymond de Portneuf, Sainte-Brigitte-de-Laval, Lac Beauport and Stoneham-et-Tewkesbury. This industry has been neglected by the government and, on top of that, suffers from the problems affecting the railway network.

As I mentioned, Bill C-52 is a step in the right direction. It has some good elements in it. This is why I will be supporting it at second reading, so it will be sent to committee where it can be considered and improved.

Among other things, some consideration must be given to the safeguards that Bill C-52 sets out. These safeguards will not cover existing contracts between shippers and railways, which will leave many clients with no recourse. A few shippers will be able to benefit from certain safeguards when they negotiate their new contracts, but all the others that have already signed contracts with the big companies will have to endure the unfair treatment that already exists. They will have very few options, just the very limited ones available now.

In addition, the arbitration process set out in Bill C-52 must also be given further consideration. The process is very limited and is likely to be prohibitively expensive for the shippers. They will not necessarily be able to go all the way to the end of the process and defend themselves against big corporations, which often have many more resources. This aspect of the bill must therefore be re-examined.

Another troubling element is the fact that Bill C-52 totally ignores the issue of the high rates that shippers are charged by transportation companies. This has been one of the most important demands by shippers for years now. As I mentioned, they have to deal with a virtual monopoly, and sometimes even with a real monopoly because they have no options, aside from one of the two main railway companies in their area. Small shippers and small companies that need railway services have practically no bargaining power. They have to accept the rates they are charged without being able to fight back against the railways. This issue has been ignored by this government for many years now. It is still ignored in the bill that is before us today at second reading. I hope the Conservatives will support the amendments that the NDP will be putting forward, because it is high time that action was taken.

Canada’s trade deficit is increasing. If I am not mistaken, it was $2 billion in November. We are losing ground on international markets, but the Conservatives continue to drag their feet when it comes to rail transportation. We need to go beyond Bill C-52. We need to protect our shippers, and we must also provide our country with a genuine nation-wide strategy for rail transportation, both for passenger and for freight transportation.

In my riding, only one municipality has rail service: the municipality of Rivière-à-Pierre. It is located in the northwestern corner of the riding, on the rail line that goes to Saguenay–Lac-Saint-Jean. These trains provide services primarily to hunters who go out into the wild and enjoy nature up there. There are very few passengers. The government must take action.

Let us start with Bill C-52, but let us go further and develop a real strategy for the railways.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I thank my hon. colleague for her speech.

She mentioned that it is sometimes difficult to provide adequate service to small communities. She mentioned Saint-Basile. People often confuse the names because there is municipality called Saint-Basile-le-Grand in my riding. It is important to note the name of the municipality. Otherwise one would be talking about her region, the Quebec City region.

A similar situation exists in ridings like mine and hers, where we are close to a large city, but not really part of it. We try to co-operate with CN and act as an intermediary to help these businesses. In my experience, as I said in my speech on this bill, it can be difficult to work with CN or CP. These companies are sometimes indifferent, since they have their monopoly, and they can be a bit stubborn. We are quite willing to work with them to improve the lives of the people affected by rail services.

I wonder if she could tell us a bit about her own experience and if she has found the same thing. Or perhaps she could use this opportunity to remind the House why it is important to encourage CN to have agreements like the ones proposed in this bill.

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

Mr. Speaker, I would like to thank the hon. member for his question and his anecdote about Saint-Basile. I agree that this can cause problems. However, to give hon. members a better idea of where to find Saint-Basile, it is located in Portneuf, not in Quebec City. Perhaps that will help a little the next time.

It is of the utmost importance that we continue to try to work with CN and CP to improve rail service across the country. I cannot stress this enough. In my speech, I mentioned that there are several large companies in my riding that depend on the rail system in the region to ship and receive the materials they need for production.

I am thinking about Alcoa, among others. The manufacturing of aluminum requires the transportation of a huge amount of raw and other materials. Every shipment that arrives late or not at all harms our companies' productivity and Canada's competitiveness on world markets.

This problem must be resolved quickly so that our rural communities, such as those in my riding and in the ridings of many of my colleagues from all parties, can continue to grow, develop and retain jobs. These jobs are extremely important for our rural regions.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, I would like to commend my dear colleague on her speech and on the work she does to represent the people of her riding. I know that she is very active and that she does excellent work.

In my riding, a little investment in the rail system is vital because I represent a rural riding. I find it upsetting that people cannot get into town. This would be a wonderful solution to ensure affordable and environmentally-friendly public transportation.

I am wondering whether the situation is somewhat similar in my colleague's riding.

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

Mr. Speaker, I thank my colleague and would like to return the compliment. I know that he works hard in his riding and it is very much appreciated by his constituents.

Indeed, investment in passenger transportation in rural regions is one aspect of this issue that is unfortunately too often ignored and that should be put at the forefront. As for access to public transportation, my region is comparable to Pontiac. The only public transportation that exists is the bus. The people in this region set it up themselves. They arranged for access to these services, which they did not have before.

There used to be passenger rail service, but that was many years ago. The train goes to one community, which is at least an hour from Quebec City by car. The train is the only way to get to Saguenay. We really need a plan so we can ensure that our rural regions will have access to the same public transportation services available in other areas of the country.

It is similar to the commuter train principle in Montreal. It could be developed in the regions. This would benefit everyone and would revitalize our rural communities, where this is desperately needed. We need to provide this access to the major urban centres. It is environmentally friendly and will help reduce greenhouse gas emissions.

Families will be able to move back to the regions, communities will be rejuvenated and there will be economic growth and development. This measure would benefit the ridings of Pontiac, Portneuf—Jacques-Cartier and others across the country.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, I am very pleased to speak today about a bill to improve the rail transportation system.

On this beautiful snowy day, we are getting back to rail transportation. It is probably the means of transportation that is least affected by the bad weather we are having today.

As I said, I am pleased to speak today about a bill to improve our rail transportation system. I will be clear from the outset: we will support this bill in order to send it to committee.

We will also support it because the majority of shippers are mostly or partially satisfied with it. We are going to respect their position and support this bill.

There is something that sets us apart from the other parties recognized in this House: we listen carefully to the opinions and needs of Canadians and our country's businesses.

We consult them because we want to know what their needs are. That way, we can develop good public policies. We are not jamming measures down the throats of Canadians and businesses. At times, the party in power takes steps and imposes measures that no one wants.

However, my colleagues and I strongly believe that this bill must be amended since it does not fully meet its objective. The best that can be said for this bill is that it is only a half measure.

Many of the demands of shippers were not included in the bill. What is more, the wording is very ambiguous. Some provisions must be examined more thoroughly in committee because they could potentially create loopholes.

The scope of Bill C-52 is also limited since it will cover only new agreements and, unfortunately, will not apply to existing agreements. That is a bit ridiculous. The bill is supposed to help shippers but, in reality, it applies to only a small number of them. Those who already have an agreement will be left to fend for themselves and will be at the mercy of the large CP and CN rail companies.

Shippers will have to make do with low quality services until their contract ends.

How can the Minister of Transport believe that this is a good bill that meets the needs of all shippers if it targets only a small fraction of existing agreements?

Certain shippers wanted to tackle the issue of tariffs during the legislative process, but the Conservatives made it clear that they would not address that issue until the next legislative review of the Canada Transportation Act in 2014-15.

In most regions of the country, shippers have no other choice than to use CN and CP. Canada's rail transportation market is basically a quasi-monopoly. Having the dominant position in the market allows the rail companies to charge often exorbitant prices, and shippers are put in a position where they have no choice but to accept the price charged by the rail company. That is what happens when this type of market is not regulated enough.

The goal in committee will be to seek amendments that prevent potential abuse of power by requiring service level agreements between shippers and rail companies.

We also need to establish dispute resolution processes. This bill offers only a limited arbitration process. It is available only for shippers who are in the midst of negotiating new contracts. It will not apply to existing agreements.

Instead of offering fast, reliable dispute resolution for all shippers, as we are asking for, the bill is limited to a small group of shippers. The proposed arbitration process may be too costly for many shippers. The burden of proof may be unfair if they have to prove that they are in need of services from the railway.

We would also like to see tougher penalties included in the agreements in relation to service levels, in order to compensate shippers for service disruptions, damage and loss of productivity.

As it stands now, the bill provides for penalties of up to $100,000, which would be paid to the federal government rather than to shippers. Since shippers must cover their losses, this would obviously impact the price they charge consumers. We lose on two fronts, because it hurts consumer prices, and it makes Canadian businesses less competitive and less productive in international markets. Considering that CN made about $2.7 billion in profit in 2012, penalties need to be higher to really act as a deterrent.

Let us be very clear: 80% of rail freight customers are currently unhappy with the rail service. They are victims of the near monopoly held by railway companies.

That near monopoly impacts sectors like agriculture, mining, forestry and auto manufacturing. Missing rail cars and other disruptive events result in rotting crops, service disruptions and delays. There is no compensation for all the forest, mining and manufacturing products that are wasted this way, many of which are actually intended for export.

A number of factors disrupt economic activity in these sectors and impede Canada's economic prosperity. These resources and products are largely intended for export. Unfortunately for these industries, those who cause disruptions pay no compensation.

I will continue...

[The Speaker, Conservative, Andrew Scheer]

Order.

I have to interrupt the hon. member, as we must now proceed to statements by members.

After question period, the hon. member will have three minutes left for his remarks.

The House resumed consideration of the motion that Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), be read the second time and referred to a committee.

[The Acting Speaker, Conservative, Barry Devolin]

The hon. member for Châteauguay—Saint-Constant has three minutes left.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, before being interrupted by question period, I was talking about elements that destabilize economic activity in certain industries.

Unfortunately for the industries, they are not compensated by the parties responsible for these disturbances. We are talking here about hundreds of millions of dollars every year. Seventy per cent of our goods are shipped by rail. Considering the $2 billion trade deficit and fierce international competition, we cannot afford to opt for the status quo or for a half measure like the one proposed in Bill C-52. This situation, unfortunately, gives a trade advantage to our competitors around the world. They have the capacity to deliver their goods more rapidly and more punctually, despite the fact that our Canadian products often have a shorter distance to cover.

Unfortunately, for too long now, the government has not wanted to act. The Conservatives have been waiting since 2007 to introduce this bill, and when we take a look at their inaction and the cutbacks they have made over the past few years, we may conclude that they do not understand how important our railway system is.

On our side of the House, through the bill introduced by my colleague from Trinity—Spadina, we have conveyed the shippers’ demands in an attempt to restore the balance in their relationship with the railways. Canada needs a national transportation strategy.

Greater use of rail transportation would have a positive impact on the quality of our environment and would help reduce greenhouse gas emissions significantly. Unfortunately, when shippers cannot obtain services from our only two rail service providers, they will rely even more heavily on trucking, which will have a negative effect on our economic activity from an environmental point of view. We sense a lack of commitment by the Conservatives to our railway network, as evidenced by the lack of investment in railway infrastructures.

We must therefore restore the balance between the railway companies and shippers. Our position is a simple one: we are on the side of businesses and exporters, and we are determined that they should receive the railway services they deserve and that they need. As usual, this government is on the side of big businesses that have a near-monopoly and is not interested in protecting SMEs through a bill that would have given them a leg up in international markets. If the government ultimately gives in, it will be attributable primarily to co-operation among the various industrial associations that banded together to advocate for legislative changes to the Canada Transportation Act.

Therefore, I would ask the government to work with us when the bill is being considered in committee. The competitiveness of our companies and our SMEs depends on an efficient rail transportation system. Canada’s economic vitality also depends on it. Our businesses need good services in order to make investments and create jobs. We will therefore support this bill. We ask that the government co-operate with opposition MPs to improve the bill and contribute to Canada’s solid economic growth.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I thank my colleague from Châteauguay—Saint-Constant for his speech. He showed empathy for the groups who are faced with these difficulties and will feel the impact of the bill tabled in this House.

We will support the bill, despite its serious flaws. For example, I am very concerned to note that, in the arbitration process, the burden of proof will rest solely on the clients and not on railway companies.

Does my colleague share my deep concerns regarding the impact of that approach?

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, I would like to thank my colleague for his excellent question.

Indeed, it is one of our concerns on this side of the House. Small businesses are penalized, because they have to prove that they were adversely affected by the lack of service. That provision needs to be reviewed in committee and improved. My colleague is absolutely right.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Mr. Speaker, I would like to emphasize the all-encompassing scope of my colleague's speech. Could he expand more on his remarks about the environmental impact associated with road transportation, as compared to rail transportation?

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

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

Indeed, rail transportation has a much smaller impact on the environment than trucking.

Someone said that rail freight transportation was not adapted to the reality of remote places in Canada. Since they are often not adequately served by railways, all too often they have to rely on trucking as an alternative. But using that method of transport has a much greater environmental cost.

Rail and train services offer more benefits to businesses and leave a smaller carbon footprint.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I am pleased to have 10 minutes to talk to the House about my party's viewpoints and my own on Bill C-52, which I have here in my hands. This government bill amends the Canada Transportation Act.

I would like to preface my remarks with a comment on the atmosphere here this morning. We are talking about and debating a government bill, but none of the MPs who have agreed to debate this bill in the House belong to the governing party. There are three possible reasons for that, reasons that may be unknown to members of the public, who I hope are listening on CPAC.

It may be a strategic move to put a lot of pressure on the opposition members, forcing them to work hard in the hope that they will exhaust their resources. But I have news for the government: we have many very young MPs who can work very hard for long hours. If that is its tactic, perhaps it should think of a new one.

If that is not the case, then it might be something that worries me a little more: contempt for the parties affected by its own bill, perhaps even contempt for the work of parliamentarians. We belong to a Parliament. When we are here on the Hill, we are paid very well to do our jobs as parliamentarians.

The government introduced a bill of major importance to the Canadian economy, but its members could not even be bothered to stand up in the House to explain their government's position. That reminds me of the time a few years ago during an interview while Parliament was prorogued when the current Prime Minister—only for another two years—came right out and said that he thought shutting down Parliament would be better for the economy. He was quite serious when he said that.

After considering all the possibilities, we think we have the answer. We see this as a very clear demonstration of the utter contempt this government has for our parliamentary duties. All modern legislation has regulations. Many members of the current government seem to live in a fantasy world of libertarianism. We sometimes wonder if it should not be called the conservative libertarian party of Canada, whose answer to everything would be the invisible hand of the market.

In good legislation, there is no place for that kind of fantasy. Furthermore, I challenge any one of my colleagues across the floor to name a single piece of legislation, from anywhere in the world, that has followed that logic through to its conclusion and has been beneficial for the people. It simply does not exist.

Modern legislation needs to strike a balance among people—the buyer and seller, those who need a service and those who provide that service.

There are near monopolies or duopolies, as in the case of credit cards and rail freight transportation. There are just a few huge companies that provide a service to thousands of users. It is impossible to think that, within such a completely unbalanced framework, the invisible hand of the market can balance everything. That is impossible.

That is why it is our duty as parliamentarians to ensure balance and some degree of fairness, and to promote commerce not just for a small number of huge companies, but for all Canadian companies.

Let us come back to the bill before us today, Bill C-52.

I would like to point out that my party and I will be supporting Bill C-52, despite its many weaknesses. We will do so mostly to address the needs of this country's rural areas. But this bill is merely half a step, and not quite in the right direction.

However, out of respect for people in rural areas, who really need to have their processed goods and raw materials shipped efficiently, even a small, flawed, sideways, ill-conceived step is better than nothing. Therefore, we will be supporting this bill.

I was saying earlier that we are dealing with a duopoly that has created a ridiculous situation: 70% of our primary processed materials, our natural resources, are shipped by rail by two companies. Eighty per cent of shippers are dissatisfied. It is impossible that 80% of the country's entrepreneurs have suddenly caught the “complaints” bug for no reason. We have to think of the consequences of this situation.

At present, some shippers are unable to enter into reliable and clear agreements that would allow them to provide services themselves to other companies, even internationally, with reliable transportation.

Shippers that have an agreement regularly have to deal with delays that are so long they result in catastrophic scenarios where assembly lines in Canada are slowed down. I will say it again because it is such a big problem: time and again assembly lines are slowed down. It is not because people are not qualified or are not willing to work. It is because they are waiting for parts that have been delayed by an inadequate rail transportation system. This represents tens, if not hundreds of millions of dollars in lost efficiency.

For other shippers, it is a question of the lack of availability. For example, a certain tonnage of materials could be shipped to China, but shippers are unable to sell their products. It is not for lack of supply or because they cannot meet demand. It is because the link between Fermont and China is slowed down by poor rail service. How do you put a price tag on such losses in a global economy?

I would like to point out a fairly disturbing aspect of the Conservative's approach to the economy. They spend a lot of time botching free trade agreements. They have been signing agreements with many countries as quickly as possible, even if the agreement is flawed and provides for much less than what Canada could require. The Conservatives are focusing on quantity.

Meanwhile, they are not making the necessary efforts to ensure that Canadian companies remain competitive. Some ways of achieving this would be through decent transportation, a credit card system that does not charge exorbitant fees, and a research and development program. Although our Canadian entrepreneurs have a great deal of expertise, we must make their job easier so that they are able to be competitive.

The government has not managed to do that, but it is rushing to open markets left and right by signing agreements that are all too often flawed.

To summarize, the Conservatives do not care about keeping companies competitive. We should not be surprised to see an increase in our trade deficit, which recently reached $2 billion.

The bill is flawed and was introduced only because one of our colleagues, who introduced a bill on the protection of railway customers, exerted a lot of pressure. Her bill was clearly worded and truly designed to help those experiencing this problem.

As I mentioned earlier, the bill is weak, particularly when it comes to the arbitration process, because it puts the burden of proof solely on shippers.

One of the clauses of the bill says that both parties must consent to arbitration. As a result, if a large company says that it does not want arbitration, the case will end up in court. My colleague from Côte-Nord can attest to this. An SME could, once again, end up in court with a mega-corporation. We know how these types of situations turn out.

We will support this bill, but we hope that it will be improved by the standing committee.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, I thank my colleague for his excellent speech and his interest in rail transportation. I imagine that this is an important issue in his riding as well. He asked a question about arbitration, and he only had the time to touch on it briefly at the end of his speech.

I would like him to talk about the disadvantages small businesses experience when dealing with a giant like the rail company. I would like him to explain in greater detail why small companies are at a disadvantage in such a situation.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I thank my colleague for his question, which will allow me to be a bit more specific.

There are two sides to the problem. The cost of the arbitration process will be paid by both parties. I repeat that in this country there is a duopoly. Two massive companies regularly face off in arbitration with medium-sized companies and sometimes even small companies with far fewer resources, but the cost is the same.

I would like to read out a provision that really concerns me:

No party to a confidential contract is entitled to submit a matter governed by the contract to the Agency for final offer arbitration under section 161, without the consent of all the parties to the contract.

So people have a contract and go to arbitration. What happens if the big company says no? They will end up in court and the costs will be insane.

If a massive company like CN does not want a potentially damaging issue to move forward, we know what will happen: it will drag out for years or decades, because the company is strong enough to drag things out. In the meantime, SMEs will have to wait for fair service.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Mr. Speaker, I would like to thank the member for his passionate speech. I can tell he is committed to rising in the House to defend the interests of the people in his region, in his riding. We can see it in his everyday work.

Unfortunately, my colleague did not have enough time to say everything he wanted to say about this bill. I would like to give him the chance to continue and perhaps to conclude with a thought of his own. Unfortunately, in the House we do not always have enough time to share our ideas, our opinions and those our of constituents.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, in fact there is one other aspect that is just as important as the others that I wanted to bring to the attention of the House, and that is the fact that, generally speaking, rail services are underdeveloped in this country.

We missed an historic opportunity during the 2008-09 post-recession recovery planning phase. For example, of the billions of dollars spent by developed nations to recover from the 2008 recession, South Korea put a large percentage into rail networks. Why? I believe it was trying to achieve two things. First, rail transportation is one of the sectors that creates the most jobs. Second, when the IMF eventually evaluates whether the country's economy is healthy or not, railways are something tangible. The money invested in them did not disappear; it was spent on goods that are part of the country's inventory.

South Korea did not squander its resources on programs that do not always produce results in the long run. It invested in transportation. Now that the crisis is coming to an end, South Korea has a high-performance network to offer its people and businesses. Did the Conservative government have even an ounce of the wisdom the Koreans did? Absolutely not.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Mr. Speaker, in my speech on rail transportation in Canada, I will focus on the need to support rail services. The aim is to reduce road transportation and to support environmental and social objectives.

As is my wont, I will tie this speech to personal experience by focusing on the industrial boom that is currently occurring in my riding. For those Canadians and parliamentarians who keep up with current events, the riding of Manicouagan is presently undergoing a mining boom and unprecedented industrial development.

The remainder of my remarks will focus on iron mining and hydroelectric projects and the announcements that have been made regarding them.

Despite the announcements by various governments, freight transportation occurs mostly over land. Freight to major work sites is primarily shipped by road trains. There are projects under way all along highway 138, between Quebec City and Sept-Îles, and even as far as Natashquan, which is where the highway ends. A little over 1,000 km separates Quebec City and Natashquan. It is possible to get there via Saguenay—Lac-Saint-Jean. Highway 138 also goes to Saguenay—Lac-Saint-Jean. Freight can therefore be transhipped and transported on highway 138 via Saguenay—Lac-Saint-Jean.

Highway 138 is currently in a terrible state of disrepair. This is not because of a lack of investment in upgrading and maintenance. It is the result of heavy vehicle traffic. I travel regularly from Ottawa to Sept-Îles. It is a 14-hour drive. I can tell you that it is not safe to drive along some stretches of highway 138.

Despite everything that has been done, new repairs and upgrades are required every year. Road train traffic undermines all these efforts. The weather conditions also affect the maintenance of highway 138. It is quite dangerous to drive on some stretches of highway 138. Drivers who travel on highway 138 often have to deal with road trains and trying weather conditions. The media often report accidents involving road trains on highway 138. I am not saying that it is the norm and that accidents occur every week, but they happen enough to warrant me mentioning them today.

Highway 138 presents a problem in terms of both greenhouse gas emissions and public safety. These are concerns that warrant public attention.

In my speech, I will mention the three major rail transportation companies. There are rail transportation companies in my riding, but they are private companies.

The company Québec Cartier Mining, which is located in Port Cartier, provides rail transportation. Moreover, QNSL, Quebec North Shore and Labrador, which is now the property of Rio Tinto—that is what I was told yesterday when I did my research—also provides rail transportation. Finally, there is Tshiuetin Rail Transportation Inc. It specializes in transporting passengers traveling as far as Schefferville. The company also transports iron ore. That is what I was told when I did my research.

Québec Cartier Mining ships freight from Port Cartier to Fermont. Quebec North Shore and Labrador, Rio Tinto, transports to Wabush. Tshiuetin Rail Transportation Inc, which is the third biggest passenger carrier after CN and CP—I was also told his—transports passengers to Schefferville, but has to borrow a stretch of track owned by QNSL, which is Rio Tinto Alcan.

Establishing a rail transportation network that connects Sept-Îles and Baie-Comeau is a priority, especially given the intermodal maritime–rail facilities that are located in these major cities in my riding. Maritime and rail transportation connecting these communities would significantly reduce trucking between these two points, thereby minimizing the number of accidents that result from poor road conditions and interaction between commercial and non-commercial vehicles.

Based on my experience, which is shared by industry specialists, it is important to combine different modes of transportation in my riding, including the blue highway—sea transportation—, and transport by truck or rail. This will make for an effective transportation network and not put undue pressure on the road network, which is currently the case.

Announcements were made regarding the La Romaine project, for which some of the construction material will be transported by sea. However, no concrete results have been seen yet in Havre-Saint-Pierre and the project is not yet underway. Most freight is still shipped by road.

Trucking also includes the transportation of prefabricated homes and modular units. It can be a real problem to pass a trailer transporting a modular or prefabricated home when driving on highway 138 for 7, 10 or 14 hours, if going to Natashquan.

All these factors create a need for federal authorities to invest in the development of the railway system, and particularly to ensure that these three private players do not have a monopoly. The fact is that, in the end, because they are private players, competing companies simply cannot use the tracks, unless they do like Tshiuetin Rail Transportation Inc., which must pay $50,000 per trip to use QNS&L's tracks.

Right now, competition on tracks that were built by a corporate entity is not tolerated. That is why there is a need for the government to invest and ensure that all users can benefit from the railways and infrastructures.

Industrial development in Manicouagan and the increase in international investments in the mining sector justify a significant involvement in railways by the state, to give a national dimension to infrastructures, which would then be made available to every player in the industry.

Given the many announcements of foreign investments, if all foreign partners who show up on the north shore and in Manicouagan decide to build their own rail lines, they will multiply. In my view, and in the view of many stakeholders, it would be more effective to share already existing and functional tracks and infrastructures, given their lifespan.

Now, we have to wonder whether the development of the trucking industry as the only carrier is really not the result of an oil and trucking lobby. This is another issue that was brought to my attention, since I was told that, not to long ago, Quebec had a good railway system and that it was dismantled in the 1990s. That said, I am not an expert on this issue.

I humbly submit these views to the House.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, as the member for Drummond, I want to thank and congratulate my colleague for his very good speech.

As he pointed out, railroads are very important in addressing climate change and environmental issues. Rail service was key in building Canada, but it has now fallen by the wayside.

The Conservative government has neglected our infrastructure. It has not done enough to subsidize, fund and promote public transit, which includes rail as an important pillar.

Could my colleague explain the importance of rail for the environment and tell us how the government could promote rail transportation much better by investing in our infrastructure, so we can benefit from a better means of transportation?

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

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

What we are observing is a blind delegation of the parameters for building and establishing these private rail systems. That is what we are seeing at present in my own riding.

I referred to Tshiuetin Rail Transportation, which carries people in partnership with the Innu and Naskapi. That is noteworthy nevertheless. I mention it today as an excellent initiative, but it is in the private sector. So this problem exists.

The environmental impact that road transport involves or can have is obvious. You should see the colour of my car after I have travelled on highway 138 alongside extended tractor-trailers for the entire trip. That is a simple demonstration that there are constant greenhouse gas emissions. There are emissions that exceed the established standards. This is quite simply a real problem.

The federal authorities need to have the genuine will now to invest in these alternative measures and in creating a rail network. Perhaps this is not as applicable for the 700 km between Quebec City and Sept-Îles, but there are sections of highway 138 that could be improved if heavy equipment were transported by rail.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, my colleague has given a very good description of the situation in his region in terms of how to use all the networks for transporting and shipping goods in a remote region. I would like him to speak a little more about what would be particularly acceptable, as a mode of transport, especially in terms of the environment and the economic situation and life in his region.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

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

It is important to be consistent. For instance, it was announced that the Route Bleue, which goes through my region, would be maximized. We are still waiting for that to happen. We are waiting to see this wishful thinking—which was announced to placate the population—put into action. The same thing happened with the announcements made regarding the Romaine project.

I would point out to my colleagues that the Route Bleue and the St. Lawrence River are being underutilized at this time for heavy equipment transport. This would take considerable weight off of highway 138, which is already in very bad shape. Furthermore, considering the mileage on my 2012 vehicle, the rocks that are all over the road and the state of my windshield after driving on that road for a few years, I would say that using the St. Lawrence more to transport heavy equipment would be a much better idea.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I am pleased to speak today to Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration).

I will say right away that we will support this bill at second reading, even though it is flawed.

Some 80% of rail freight service customers, that is to say shippers, are not satisfied with those services. They asked the government to take action and to introduce legislation compelling CN and CP to enter into service agreements with them.

As I mentioned, this bill is a first step, but it is not a panacea, on the contrary. Shippers are having trouble getting fair and reliable rail freight services. Some of them cannot even sign contracts with major railway companies, which experience significant delays or do not have enough cars at their disposal.

The Conservatives finally introduced this bill to address some of those problems after the NDP critic tabled her bill introducing the rail customer protection act last spring.

The NDP transport critic did a very good job on railways. She is also working very hard on public transit and has suggested that we have a national public transit strategy. The Conservatives should entertain that strategy, but they are unfortunately still turning a deaf ear. It would be good if they listened to all these good ideas on public transit.

As I mentioned earlier in asking my honourable colleague from Manicouagan a question, the railway is Canada's raison d'être. It is a historic and essential factor for Canada. The level of service has been declining for some time now. The government has stopped investing in infrastructure, and legislation does not have enough teeth to force businesses to invest in that infrastructure.

Consequently, we are using the roads and trucking far too much, when we could be using the railway. The benefit of doing so would be considerable, not only for our roads, which are being damaged, but also for the environment because the railway is a very environmentally friendly mode of transportation.

Bill C-52 is a first step in the right direction, but it is far from perfect, since major demands by shippers have gone unheeded. Its ambiguous wording, for example, creates potential loopholes. The NDP will seek amendments at the committee review stage to prevent any abuses of market power by requiring that service agreements be reached and putting in place conflict resolution processes.

Rail freight services are currently of poor quality, and this is costly for the Canadian economy. In fact, it costs hundreds of millions of dollars every year. Many industries in Canada have to deal with rotten crops, work stoppages at plants and in mines and missing freight on a daily basis. Poor rail services hurt Canadian shippers and undermine our global competitiveness, in addition to costing jobs.

We should rely much more on the railway, but in order to rely on it, it has to be efficient and first-class, so that businesses and SMEs use it more and more. In my region of greater Drummondville, the railway is an important industrial element, but it is not used as much as it could be. If we had a railway that was more efficient, more available and more reliable, and on which we could rely, I am sure that businesses in my region would use it more. This would be a win-win situation on all levels: our competitiveness, our economy and our environment.

The Conservatives have not provided enough money for our infrastructures. Because of this, we now have a huge quality deficit, and one example of it is the poor condition of our network of railway tracks.

In addition, the Conservatives’ bill is very weak in that its safeguards do not cover existing contracts between shippers and railway companies, and it provides only a limited arbitration process in cases where negotiations on a new contract break down. Furthermore, we need to have a more global vision, as I mentioned earlier.

Railway transportation is the backbone of Canada’s economy, as 70% of our goods are shipped by rail. It is therefore essential that railway services be advantageous both for shippers and for our railway companies. The high cost of railway services also has a negative impact on Canadian shippers. Bill C-52 explicitly excludes the issue of rates, ignoring the demands of certain shippers’ associations.

We should not forget Canada’s trade deficit, which continues to escalate. According to Statistics Canada, our trade deficit reached $2 billion in November 2012. This is clear evidence of the Conservatives’ failure. Not only does the Conservative government have the highest budget deficit in Canada’s history, but in addition, our trade deficit is clear proof of its failure across the board.

The fact that it ignored railway transportation is just more evidence of its economic failure. As I mentioned, 70% of our freight is shipped by rail. We must give much greater consideration to railway infrastructures and take a more global viewpoint. Not only was Canada built by the railway, which has quite a history in Canada, but in addition, the railway is clearly the way of the future. All modern societies are investing in railways. All societies that have a long-term vision are investing in the railway infrastructure.

We have been asking for a long time for a national public transit strategy that would include the railways. Unfortunately, once again, the Conservative government has failed. This is a very serious matter.

I am now going to digress from talking about Bill C-52 to make a brief aside. Recently, the environment commissioner issued his latest report. I would like to thank Mr. Vaughan for all the work he has done. In his latest report, he has done an excellent job for Canada and the environment. In the report, he mentions the annual financial support, in hundreds of millions of dollars, nearly $1 billion in total, that the Conservative government continues giving to coal, oil and natural gas, even though the money could be put toward a national transportation policy. This is very important. We think of public transit, but we should also be thinking about freight transportation. They go hand in hand. We will have to revisit this notion.

Everything is interrelated. Transportation is related to the environment and to our economy. It is all part of the same thing. Unfortunately, as we have shown, the Conservative government has the largest budget deficit in Canada’s history, as well as a trade deficit that reached $2 billion last November, according to Statistics Canada. In addition, there has been a lack of investment in infrastructures. I would like to add that 80% of shippers are unhappy with the services provided by our railway system.

This is clear evidence that the Conservatives have failed. The NDP must absolutely take their place so that we can implement a national transportation strategy. This will help the economy, the environment and transportation overall.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Speaker, there are many farmers in my region, in the towns of Saint-Clet and Saint-Polycarpe. These people would like to use the railway to ship their goods, if only the rates were reasonable.

Members may not know this, but two rail lines, Canadian National and Canadian Pacific, run through Vaudreuil-Soulanges. We are a hub for the country and the movement of goods.

I can say that farmers were disappointed with what the government did not do, with its lack of action to improve rail fees.

Could the member talk about the challenges facing farmers these days, when the world is facing economic difficulties?

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I would like to thank my colleague from Vaudreuil-Soulanges for his very relevant question.

As I mentioned in my speech, that aspect is missing from the bill. It is another example of how the Conservatives failed with this bill. We will support it, but unfortunately, certain aspects of it need to be improved, including fees. That is problematic.

If we want to encourage the use of the railways and if we want farmers in a given region to be able to use them, fees needs to be affordable and accessible. If fees are made more affordable and if heavy trucks are pulled off our roads, we will improve our roads, our economy and our environment.

Railways are the way of the future. I believe that Bill C-52 is a step in the right direction, but it is not enough. Unfortunately, the Conservatives do not have the courage to finish the job concerning fees.

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

Mr. Speaker, rail transport is not the only file on which the Conservatives have been dragging their feet. They implemented new railway safety measures, made cuts to VIA Rail Canada and prevented the introduction of high-speed rail in Canada. The Conservatives simply do not give Canada's rail network the attention it deserves.

When you stop and think about it, this network is very important, especially for our rural areas, and northern Ontario. In places like Hornepayne, North Bay and even Kapuskasing, this issue is very important regarding both freight and passenger service.

Can my colleague tell us a little more about the benefits for manufacturers, and indicate whether more passenger trains and more freight trains would in any way benefit people travelling by car?

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I thank my hon. colleague for this very relevant question. She explained the situation very well in her preamble.

And that is why I would like to come back to the national transportation strategy proposed by my hon. colleague, our transport critic, in her bill.

I hope the Conservatives will have a look at it, because what we really need is a comprehensive vision—one that involves investing in infrastructure and investing in our economy, especially our regional economies. This vision involves protecting the environment and protecting our roads, which would be better for everyone if they were in better shape.

Indeed, my hon. colleague painted a clear picture of the situation. Bill C-52 is merely a drop in the bucket in terms of this problem. A much more comprehensive, more overall vision is needed.

We in the NDP have a vision that includes the economy, the environment and a national transportation strategy.

[The Acting Speaker, Conservative, Barry Devolin]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Conservative, Barry Devolin]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Acting Speaker, Conservative, Barry Devolin]

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Transport, Infrastructure and Communities.

(Motion agreed to, bill read the second time and referred to a committee)

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

Mr. Speaker, I ask that you see the clock at 1:30 p.m.

[The Acting Speaker, Conservative, Barry Devolin]

Is that agreed?

[Some hon. members]

Agreed.