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.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, now that we have been sitting for a week under our Conservative government's plans for a harder-working, productive and orderly House of Commons, I would remind all hon. members of what we have been able to achieve since just Victoria Day.

Bill C-48, the technical tax amendments act, 2012, was passed at report stage and third reading. Bill C-49, the Canadian museum of history act, was passed at second reading. Bill C-51, the safer witnesses act, was passed at report stage and we started third reading debate, which we will finish tonight. Bill C-52, the fair rail freight service act was passed at report stage and, just moments ago, at third reading. Bill C-54, the not criminally responsible reform act, was passed at second reading. Bill C-60, the economic action plan 2013 act, No. 1, was reported back from committee yesterday.

Bill S-2, the family homes on reserves and matrimonial interests or rights act, was passed at report stage and we started third reading debate. Bill S-6, the first nations elections act, was debated at second reading. Bill S-8, the safe drinking water for first nations act, which was reported back to the House this morning by the hard-working and fast running member for Peace River, has completed committee. Bill S-10, the prohibiting cluster munitions act, was debated at second reading. Bill S-12, the incorporation by reference in regulations act, was debated at second reading. Bill S-13, the port state measures agreement implementation act, was debated at second reading. Bill S-14, the fighting foreign corruption act, was debated at second reading.

We will build on this record of accomplishment over the coming week.

This afternoon, as I mentioned, we will finish the second reading debate on Bill C-51. After that, we will start the second reading debate on Bill C-56, Combating Counterfeit Products Act.

Tomorrow morning, we will start report stage on Bill C-60, now that the hard-working Standing Committee on Finance has brought the bill back to us. After I conclude this statement, Mr. Speaker, I will have additional submissions for your consideration on yesterday's point of order.

After question period tomorrow, we will get a start on the second reading debate on Bill S-15, Expansion and Conservation of Canada’s National Parks Act. I am optimistic that we would not need much more time, at a future sitting, to finish that debate.

On Monday, before question period, we will debate Bill S-17, Tax Conventions Implementation Act, 2013, at second reading. In the afternoon, we will hopefully finish report stage consideration of Bill C-60, followed by Bill S-2 at third reading.

On Tuesday, we will return to Bill S-2 if necessary. After that, I hope we could use the time to pass a few of the other bills that I mentioned earlier, as well as the forthcoming bill on the Yale First Nation Final Agreement.

Wednesday, June 5 shall be the eighth allotted day of the supply cycle. That means we will discuss an NDP motion up until about 6:30 p.m. This will be followed by a debate on the main estimates. Then we will pass to two appropriations acts.

Next Thursday, I would like to return back to Bill C-60, our budget implementation legislation, so we can quickly pass that important bill for the Canadian economy.

Fair Rail Freight Service Act

[The Speaker, Conservative, Andrew Scheer]

Pursuant to an order made on Wednesday, May 22, the House will now proceed to the taking of the deferred recorded division on the motion at the third reading stage of Bill C-52.

Call in the members.

The House resumed from May 29 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 third time and passed.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, the member made reference to those who are involved in grain farming. One of the things I had the opportunity to speak to when referencing Bill C-52 was how unfortunately the government, as exemplified in this bill but also generally in their approach across the country including passenger rail, leaves Canadians shortchanged.

I will use the example of the cuts to Via Rail that services Churchill, a port, as the member will know, that has historically been very involved with exporting grain. However, as the Wheat Board was gutted, it has missed out as well.

I am wondering why this member and his government are willing, time after time, to shortchange those hard-working farmers in farming communities when it comes to delivering fair, equitable access to rail services for passengers but also when it comes to making sure that industries are able to get a fair deal on rail transport.

[Pierre Lemieux, Conservative, Parliamentary Secretary to the Minister of Agriculture]

Mr. Speaker, Canada's agriculture and food industry creates jobs and promotes economic growth.

That is why our government remains committed to working hard to help this vibrant industry continue to grow. We are investing in innovation to allow our farmers to remain competitive, and we are opening up trade in order to help farmers get the best price for their wheat and barley crops.

Our government wants to reduce red tape so that farmers can spend their time working the fields, not filling out forms. It wants to help farmers increase international sales through the most aggressive trade program in our country's history.

Of course, if farmers are going to serve these overseas markets, they need efficient and effective transport systems to get their product to port, and that is what Bill C-52 is all about.

Last year, Canada's grain producers exported some $17 billion in world-class grain products, representing up to 85% of their total sales on the farm. These dollars not only drive growth on our farms; they also drive growth for our economy and jobs for Canadians, from combine operators to truckers to port terminals.

Our farmers and our economy depend on efficient, effective and reliable rail service to move these crops off the farm to our valued customers in Canada and around the world. In fact, last year Canadian farmers paid over $1 billion to move regulated grain by rail. On the prairies, grain travels an average of 1,400 kilometres to reach a port destination.

Thanks to the fair rail freight service act, the government is contributing to strengthening this vital link between the farm and the consumer's table. The fair rail freight service act also supports our government's program to promote economic growth and long-term prosperity across our great country.

Our government is committed to ensuring that all shippers, including grain shippers, can negotiate agreements that bring greater clarity and predictability on service. With this proposed legislation, we deliver on that commitment.

This bill is good news for Canadian farmers, and I am pleased to report that it has been welcomed by the farm leadership across all of the major exporting sectors in agriculture.

For instance, the Canadian Federation of Agriculture said:

Passage of Bill C-52 will provide a legislative tool needed to make railways more accountable to its customers. It is a good first step in improving rail service and costs to industry.

The Grain Growers of Canada said:

We fully support the federal government's aggressive trade agenda and global commerce strategy. Timely and efficient rail service is a critical part of Canadian farmers' market access so this will help us be more globally competitive.

Also, the general manager of the Canadian Canola Growers Association said:

The railway is a critical link between our farms and our export customers. To fully capitalize on the new trade opportunities being pursued by Canada, shippers need this legislation to ensure Canadian agri-food products reach our customers in a reliable and timely manner.

Clearly, farmers believe this bill would help them grow profitable businesses by building a strong and effective supply chain. Bill C-52 would do that by giving shippers, including farmers, the right to a service agreement with railways.

The core of the bill is a new process to establish those agreements when commercial negotiations are not successful.

This provision will be a powerful tool for our agricultural sector, since it will strongly encourage shippers and rail companies alike to negotiate a commercial agreement. The fair rail freight service act will help farmers grow their business.

The bill would bring clarity and predictability to the commercial relationship between the shippers and the railways, and it recognizes the need for railways to manage an efficient rail shipping network for the benefit of grain shippers and the entire supply chain.

To put Bill C-52 in perspective, it is part of our government's broader commitment to work with industry to build a modern and dynamic grain industry in Canada.

Of course, marketing freedom for wheat and barley farmers is a key part of that strategy. The sky did not fall under marketing freedom, as some doomsayers had predicted. Quite the opposite in fact, farmers new-found freedom is breathing new life into the grain industry across the prairies.

Farmers are saying that wheat is a cash crop now, and that they can sell their wheat and barley when and where they want, locally or south of the border, at harvest time or later, whenever the market is right for them.

They can also maximize the profit they make from their crops by shipping their wheat as soon as it is harvested and freeing up storage space for other crops such as canola or peas.

The modernization of the Canada Grains Act is part of our effort to provide Canadian farmers with a 21st century grain industry.

These changes, which received royal assent in December, will reduce farmers' regulatory burden and cost, improve the Canadian Grain Commission's producer payment protection program, and eliminate mandatory services that are no longer required, saving producers up to $21 million in extra costs.

To ensure that we stay the course in this exciting new direction for our grain industry, the Minister of Agriculture has renewed the mandate of the crop logistics working group. This forum of experts from across the industry will work to improve the performance of the supply chain for all crops through stakeholder collaboration with a focus on innovation, capacity and measures of performance.

As well, Agriculture and Agri-Food Canada continues to work with Transport Canada on an in-depth analysis of the grain transportation supply chain to make a strong system even stronger. Farmers, grain marketers and the railways are partners in a world-class industry that brings us the food on our tables.

Canadian railway companies and farmers have helped build our great nation. They will also help prepare our country for a bright future by delivering high quality grain to the world's steadily growing population.

This bill before us takes an important step towards a stronger and more efficient rail network to help farmers build their businesses and keep our economy on track. I am pleased that all members in this House are supporting this bill, because it is the right thing to do and it is good for our Canadian farmers.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

This is actually quite insulting, and most of all, undemocratic. The Conservatives are forcing us to sit until midnight from Monday to Thursday, and yet this makes the 37th time we have a time allocation motion. Talk about mixed messages.

We want to discuss the issues, but the government limits the time for debate again and again. In addition, these are badly thought-out bills riddled with flaws. I will list them a little later in my speech.

This has been an ongoing trend with the Conservatives since they came into office. I am specifically thinking of omnibus Bills C-38, C-45 and C-60.

I speak of the Conservatives' incompetence because they are bringing forward bills full of flaws and weaknesses. They are not holding proper consultations. In committee, recommendations from many of the witnesses are rejected out of hand, as are the amendments proposed by the NDP, or anyone else for that matter.

They realized that Bill C-38 was flawed. Then they made hasty additions to Bill C-45 to rectify the other bill they had just introduced.

This makes no sense at all. It lacks credibility. It shows a lack of respect for the democratic process, for the people who were consulted and for those who were not. It shows contempt for the elected officials who serve the people who rely on them to make decisions. We cannot make good decisions because we cannot have a debate and carefully examine everything that should be considered. So yes, it is insulting and an outrage.

The official opposition will support Bill C-52 because it is, finally, a first attempt at establishing the right to service agreements between rail companies and shippers.

This is the first step that shippers have been waiting for for decades. It also establishes an arbitration process, led by the Canadian Transportation Agency, to impose penalties in the event negotiations fail and for violations of arbitration decisions. There are therefore constructive, positive elements, but there are also a number of elements that shippers and the official opposition were calling for but that were rejected.

Four NDP members proposed amendments, based on recommendations from shippers. Those members were the transport critic, the member for Trinity—Spadina; the deputy critic, the member for Trois-Rivières; the member for Notre-Dame-de-Grâce—Lachine and the member for York South—Weston.

What were those amendments and recommendations? I will explain them. They were not that complicated, and they would have really helped shippers.

We recommended including details about the service agreements. It seems to me that service agreements should, at the very least, be signed and contain details. I do not understand why that was rejected. We asked that the term “operational” be deleted because it would limit the ability to negotiate and arbitrate service agreements. Again, that seems to go without saying. It does not make much sense to limit the measure we are trying to implement. We wanted to include a dispute resolution mechanism in service agreements for breach of contract. We also asked to limit the ability of railway companies to levy penalties and charges that are not in the service agreement.

The rates are already exorbitant and the railway companies are abusing their power. Since there are only two main companies, there is a quasi-monopoly when it comes to shipping freight. The rates being charged to the shippers are too high. They prevent the entrepreneurs and the shippers from being competitive on the international market. We cannot even limit the capacity of the rail carriers to charge penalties that are not included in the service agreement. Nothing good will come of that either.

We proposed limiting arbitration when service agreement negotiations break off and issues are raised by the shipper. The last amendment sought to limit the capacity of rail carriers to raise network-related problems during arbitration.

All these amendments could have improved Bill C-52, but they were not considered. They were completely rejected.

Again, we are here to let the House know that people are not happy about this.The bill has other flaws. What about lost revenue. The Conservatives claim they want to strengthen the economy, but they are diminishing the capacity of the regions to prop up their regional economy, given that the affected sectors are the farming, forestry, mining, manufacturing and natural resources sectors. Most of these sectors are in remote regions.

The Conservatives are contradicting themselves again. They would have us believe that their position and their bills are best, but then they sabotage everything they are trying to do by not taking the time to do proper research. They do not take the time to consult the experts in the areas affected by their bills. That is part of the incompetence that we are talking about here.

Shippers are currently paying the price of service disruptions, damage to their crops and service delays by railways. What is more, they have no other option. As many of my colleagues have said, 70% of surface goods are moved by rail in Canada, and 80% of these shippers are not satisfied with the service they received. That is serious. That means that service is considered to be poor in four out of five cases.

That is why these types of agreements needed to be made after all these years. However, now that they are finally being made, they are more negative than positive. The money from the $100,000 penalties imposed on railway companies under this bill is not used to compensate shippers. Instead, it goes to the federal government. Yet, it really should be given to shippers who create jobs and who have to pay late fees and fees for services that the railways failed to provide.

This money is being sent to the wrong place. What is more, these penalties do not really act as a deterrent since we know that companies such as CN are making $2.7 billion in profit a year.

In short, we are going to allow this bill to move forward, but it has many shortcomings. We must listen to experts on this.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Mr. Speaker, I am rising in the House to speak to Bill C-52, concerning rail freight. This is another bill we are debating under a gag order, which has been imposed for the 37th time.

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

Mr. Speaker, there are two points that my friend across the way and I can agree on. I am going to leave the tragic case of the circus elephant behind because I am not sure that this bill directly speaks to that particular provision. I do not see it in the legislation. There are two things that we can agree on. One is the importance of rail. Eighty per cent of all of our freight moves on rail.

The second is that we have a particular challenge posed to us in Canada in that we have two large rail companies that almost entirely dominate every sector of the market. In the U.S. and in other circumstances there are other options for those shipping products. Canada has a duopoly. These companies have been shown by the Competition Bureau at various times to collaborate and coordinate, to raise prices, to offer less service without retribution because they know they are the only options people can go to.

We only get to address the rail system every once in a while. Does my colleague believe that any steps in Bill C-52 would do much to go after the service fees that have been talked about by many shippers in this country? They have had problems and real concerns that the pricing may be non-competitive. When there is a market with only two players in it, non-competitive pricing can pose a real problem to such a fundamental industry as the shipping industry in Canada.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, that is right, my hometown killed an elephant. It was back in a day when rail was king. It was a day when everything moved on the rails and some things, I guess, had to move out of the way.

This bill would bring Canada and the rail system in Canada back to those days of service by our railways. They were days when goods and resources were moved by rail.

There is no question that rail transportation plays a central role in the success of our resource companies and our resources in this economy. In fact, Canada's natural resources industries are the largest users of rail freight services in the country, even to this day. Taken together, Canada's forest, mining and energy industries account for two thirds of all carload rail traffic in Canada. We know that the manufacturers and suppliers to these vital industries and many other vital industries, which provide everything from trucks to pipelines, also depend on railroads to transport their products and materials to market.

Our goal is to provide Canadian shippers and railways with a means of agreeing on service levels and ensuring a more effective supply chain. That is exactly what this proposed legislation will do. With this new legislation, we are highlighting the important role that railways play in supporting our economic prosperity. The goal of the legislation is to encourage railways and shippers to work together and it creates a strong incentive for them to do so.

Bill C-52 is designed to provide shippers with greater reliability and predictability in rail service. It is essential to the success of our natural resources industries. It recognizes the needs of shippers in doing their business and the needs of railways to manage their rail assets effectively. The relationship between railways and shippers is vital to Canada's economy as a whole. We know that when shippers can move more volume, it means more exports, revenue and jobs in Canada.

Here is the bottom line. Improving rail service in Canada will help to unlock the potential of our great natural resources. As most Canadians realize, there is a great deal at stake.

Here are some statistics. In the mining industry last year, more than half a million carloads of coal, sulphur and fertilizer were transported by CP Rail. In 2012, CP Rail alone moved 67,000 carloads of forest products. Many of those in urban ridings may have only sat at a crossing and watched that economy move by them as they impatiently waited for the gate to go back up. However, in rural and resource Canada, that is money going by. In fact, it is about $20 million worth of goods a day.

Additionally, Canadian Pacific recently indicated in its 2013 outlook that its crude oil by rail prospects continue to strengthen as the company expects to move to double the movement of crude oil to 140,000 carloads annually by 2015. That is from today's current volume of 70,000 carloads. That is a doubling of carloads of oil being moved by train.

It would be a lot more efficient to move it by pipeline, I suppose.

Right now, natural resources are directly and indirectly driving almost 20% of the nation's economy and supporting over 10% of all the jobs in Canada. Natural resources are poised to play an even greater role in the future. Our opportunities for growth in Canada's resource sector, arising from the rapid economic ascent of some of the world's most populous countries, are unlike anything we have seen in our history. We have estimated that there are some 600 major resource projects currently under way in Canada or planned in the next 10 years, worth approximately $650 billion in investments.

While global economic conditions may be a factor in investor decisions to move forward, the size and number of the projects is substantial. Whatever the short-term obstacles, the longer-term outlook is one of increased value and a demand for Canadian resources.

We can point to tremendous opportunities that are happening right now across the country, from oil and gas in Alberta, to liquid natural gas in British Columbia, to offshore gas in Newfoundland and Labrador, to new discoveries of minerals and metals in the Ring of Fire in Ontario and in northern Quebec. These opportunities will continue for many years to come.

For generations, agriculture and natural resources have brought employment, growth and opportunity to every region of Canada. We must continue to harness this potential. Long-term growth and development in many of these sectors depend upon our railways and their ability to get the products to market.

In a recent report, the International Energy Agency emphasized that global energy demand will continue to grow by more than one third by 2035, being led by emerging economies like China and India. These trends represent opportunities for Canada's energy exports in helping to meet growing global energy needs. Because one thing that we know for sure is that these growing economies will need resources, resources that are abundant here in Canada, such as minerals and metals, lumber, oil and gas. This trend underscores the urgent need for Canada to diversify our energy export markets, such as that of Asia-Pacific.

Growing and emerging economies highlight the urgent need for Canada to develop infrastructure to export our resources to new markets and to ensure that our railways run smoothly.

Simply put, we know that developing an efficient transportation system is crucial to ensuring that our resource industries can compete globally.

The fair rail freight service act would provide the tools to build a strong and efficient rail network in Canada. This important legislation would support Canada's resource sectors as they continue to create jobs and prosperity right across this country. In these challenging economic times, it is good news for our natural resources sector and good news for all Canadians. With this new legislation, we would build on our country's legacy of railway and natural resources. We would be setting the stage for a brand new era of growth and prosperity in Canada.

Just as we mentioned at the beginning, the country started with a growth in railways and a use of railways to transport those resources from coast to coast and to build this country.

The resource industry today, in Canada, requires this act and railways to ensure that the resource industry can supply the world.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, it is great to be here tonight, even at this hour. I guess it is great to be here this morning, now. I appreciate the opportunity to discuss Bill C-52.

The Conservative government has proposed new legislation to improve Canada's freight rail service—

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, despite the recent interruption, we have to deal with the serious issue of Bill C-52, all the same.

The bill does in fact respond to some of the concerns of shippers, as has already been mentioned. The members of the NDP are still standing, they are still awake, and they are still ready to debate all the bills that have an impact on Canadians and the people in my riding.

The thing that is important to remember in this bill is that, in committee, shippers and businesses made six fair and reasonable proposals that would lead to something that was equitable. Unfortunately, the Conservatives flatly rejected those proposals, despite the fact that these were recommendations made by experts, by people who know the field and its problems.

I do not understand why the Conservatives stubbornly insist on going in one single direction and on taking a purely ideological view of everything they do.

[Costas Menegakis, Conservative, Richmond Hill, ON]

Mr. Speaker, I rise today in support of Bill C-52, the fair rail freight service act. The purpose of this bill would be to amend the Canada Transportation Act in order to improve the reliability and predictability of rail freight service in Canada.

Over the past years, Canada's economy has managed to thrive amid a turbulent global economic downturn. Our success is in great part due to our Conservative government's focus on strengthening our economy. Bill C-52 would greatly improve Canada's rail freight service and consequently contribute to protecting and fostering the growth of our economy.

A great number of Canadian businesses, from grain and forest products to coal and chemical products, use rail services to ship their goods across the country or around the world. The range of sectors that rely on rail is reflected in the range of witnesses who testified on this bill at the Standing Committee on Transportation, Infrastructure and Communities. As my colleague, the hon. Minister of Agriculture and Agri-Food, said, “This bill is good news for Canada's farmers as it will help ensure all shippers are treated fairly by the railroads”.

Now let me explain how we reached the step of introducing this great legislation, and why all members of this Parliament should support it.

The years prior to 2008 were a time of unprecedented growth. Increased trade with Asia contributed to capacity constraints in the transportation system. In 2008, the government launched the rail freight service review to look into issues of rail service reliability that were brought to our attention by stakeholders. As part of the review, the government appointed an independent panel of three eminent persons to develop commercial and, if required, regulatory solutions to improve supply chain reliability. During the review, the panel held broad consultations with 85 shippers, railways and other stakeholders, and received over 141 written submissions. In December 2010, the panel submitted its final report to the government. It recommended several measures to improve rail service.

For example, the panel recommended the use of service agreements to define the commercial relationship between a shipper and a railway. It also recommended having a facilitator work with industry to develop a commercial dispute resolution process.

Our Conservative government agreed with the review's commercial approach and carefully reviewed the panel's recommendations. In March 2011, in a response to the panel, we announced a number of measures that we would undertake to improve the efficiency, effectiveness and reliability of the rail-based supply chain. Our commitment goes beyond the panel's specific recommendations in order to benefit the entire rail-based supply chain. Let me quickly go over the government's response.

The first measure we implemented was a facilitation process to develop a template of what service agreements could look like in a commercial dispute resolution process between shippers and railway companies. On October 31, 2011, the government appointed an independent facilitator, Mr. Jim Dinning, to work with shippers and railways. In his final report to the minister, Mr. Dinning provided clear direction for both shippers and rail companies, moving forward. This included a template service agreement and a streamlined dispute resolution process for parties to use in their commercial negotiations. This government believes this process served its intended scope and purpose. We successfully brought shippers and railway companies to the table to jointly pursue practical solutions that reflect their needs and the reality of their day-to-day business together.

To support these commercial tools, our Conservative government committed to tabling this bill that would also give shippers a right to a service agreement with the railways, and provide a process to establish an agreement should commercial negotiations fail. Bill C-52, the fair rail freight service act, would do just that. It would give shippers a right to service agreements with the railway companies, and would outline a low-cost, timely and efficient arbitration process to establish such agreements, if shippers and railway companies cannot agree commercially of course.

This legislation would align well with what the review panel recommended in its final report. As shippers told the Standing Committee on Transportation, Infrastructure and Communities, this piece of legislation would serve as a strong backstop to commercial negotiations.

First and foremost, the new provisions would create a strong incentive for the parties to negotiate service agreements commercially and to use legislation only as a backstop if commercial discussions fail. This reflects the panel's focus on commercial approaches to addressing service issues. If parties cannot negotiate an agreement commercially, the new provision outlines an arbitration process under the auspices of the Canadian Transportation Agency, which shippers would access to establish one.

The new provision prescribes service elements at a high level. Framing the provision broadly gives shippers the flexibility to ask for what is important to them, such as the number of cars needed for a shipment. This is in line with the approach suggested by the panel. It would also give the arbitrator the flexibility to tailor the service agreements to each case. If appropriate, the arbitrator could impose elements such as performance standards and communication protocols.

The new service arbitration process to establish an agreement would be fast, matching the 45-day process the panel proposed, although it could be extended by 20 days at the discretion of the arbitrator in some of the more complex cases. The arbitrator's decision on service would be final, binding, confidential and non-appealable. All told, this is a strong new provision that would improve rail service and make it more predictable and reliable.

Shippers echoed this sentiment during the hearings held at the Standing Committee on Transportation, Infrastructure and Communities and said that the new provision would enhance their leverage to negotiate commercially with railways.

To quote the testimony of the Canadian Propane Association on the bill at the standing committee, “...it contains all the mechanisms...we requested some years ago: a right to a level of service agreement, an arbitration process, and administrative monetary penalties”.

While introducing this legislation is a key component of our Conservative government's response to the rail freight service review, it is not the final piece. In collaboration with Agriculture and Agri-Food Canada, Transport Canada is currently leading an in-depth analysis of the grain transportation supply chain to focus on issues that affect that sector and help identify potential solutions.

Finally, we are also committed to establishing an industry round table covering commodity sectors in the near future. The commodity supply chain table would provide a forum for commodity exporters, railways and other members of the commodity supply chains to address issues that affect commodity freight systems. This would be an excellent venue for all players in commodity supply chains to work together to improve the reliability and competitiveness of Canada's export market.

As members can see, our Conservative government is well on its way to fulfilling its commitment to help ensure that Canada has the rail system it needs to support a strong economy and our domestic and international trade.

Bill C-52 is a comprehensive package that supports the government's focus on economic growth, job creation and prosperity for Canadians. We are working to benefit the entire rail transportation system. As shippers and railways move forward in defining their bilateral relationships through service agreements, and as stakeholders come together under the commodity supply chain table, it will be important for parties to work collaboratively to improve the efficiency, effectiveness and reliability of the entire rail-based supply chain.

In closing, I strongly encourage all members of the House, from all sides, to vote in favour of this very important legislation.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Speaker, my colleague has really hit the nail on the head. As you know, Mr. Speaker, our government's number one priority is jobs and economic growth. That is what is at the foundation of Bill C-52. It is to help support Canada's economy, to support our important resource centre, particularly in the western parts of our country, and to ensure that our resource industries, our small and medium-sized businesses, can get their products to market.

We are a trading nation. It is absolutely critical that businesses can rely on transportation networks, in this case our rail networks in the country, to sell their products, to get their products to market and to do that efficiently and effectively. That is exactly what this legislation will do.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Speaker, I am very pleased to rise this evening to speak to Bill C-52, the fair rail freight service act. The bill would amend the Canada Transportation Act to improve the reliability and predictability of rail freight service in Canada.

From the birth of our nation at Confederation to the present, railways have played a very critical and significant role in the forming of our great country. However, the world has changed over this period. Revolutionized by changing technology, the globe has been made smaller by faster, more efficient means of transportation and communication.

At the same time, the fundamentals of our economy have stayed the same. We are a trading nation and we need a transportation system to move our products to market. Nowadays shippers have a range of choices: air, rail, truck, marine when they transport their products to market. Shippers make business decisions regarding how best to transport their goods to market and the quality of service is a key component of this.

The “just in time” world has changed customers' expectations of service, making them demand greater precision and reliability. The fierce competition of the global economy combined with Canada's size and proximity to markets increases the pressure on service as we compete to sell to the world. Each mode works to respond to these demands. In our diverse economy, a shipper's transportation requirements depend on what he or she needs to move and the best mode of transport to get it there.

For example, pharmaceutical companies rely on air cargo to move medicines around the globe quickly and under controlled conditions. Retailers rely on trucks to move food and consumer goods from distribution centres to stores to serve shoppers. Of course our natural resource sector and manufacturing sector rely on rail to move raw materials and finished goods such as automobiles to market.

Our Conservative government has an interest in how the entire transportation system functions in support of the country's trade. Economic growth remains this government's top priority. This is demonstrated by our transportation and trade corridor initiatives that promote the efficiency and effectiveness of the system as a whole to bolster international trade.

To keep our transportation system as competitive as possible, we work with other levels of government and multiple stakeholders to ensure that we have appropriate policies and programs in place. Effective rail policy and legislation is a core element of our Conservative government's approach to ensuring the transportation system remains prepared to support our trade agenda.

Rail plays a prominent role in our economic success because it creates efficiencies by its economies of scale. It offers a means to transport bulk commodities and heavy goods over long distances at a relatively low cost. Because of this, rail has remained a critical part of our economic success and our ability to trade, especially as we promote our responsible resource agenda. This is why our government has made rail freight service a priority and has brought forward Bill C-52.

The Canada Transportation Act contains measures that contribute to the productive functioning of a rail-based supply chain and shippers' ability to obtain the rail service that they require.

The Canada Transportation Act provides a series of provisions that shippers can use to address rate and service issues. To start, if a shipper feels that a railway's rate is too high, the shipper can challenge the rate through the final offer arbitration provision of the Canada Transportation Act. Both the shipper and the railway present their cases before an arbitrator, and the arbitrator selects one of the offers to establish the rate.

In addition to the rate or the price for moving traffic, a shipper may feel that the railway's charges for additional services, such as the cleaning of cars, are too high. Through another provision in the Canada Transportation Act, the shipper can complain about such extra or ancillary charges to the Canadian Transportation Agency. If the agency finds the charges are unreasonable, the agency may establish new charges.

Finally, if a shipper feels that the railway has not been fulfilling its obligation to provide suitable and adequate service, the shipper can seek redress under the level of service complaint provision. The agency would investigate the complaint and determine whether the railway has fulfilled its obligations. The agency has broad powers to order corrective measures if it determines that the railway is not fulfilling its obligations.

The Canada Transportation Act clearly provides shippers with a suite of measures to help them manage their commercial relationship with the railways.

Bill C-52 would constitute a new provision on service to assist shippers. The new provision provided in the fair rail freight service act is an additional measure that would complement the existing suite of provisions under the Canada Transportation Act, some of which I have just described. The bill's goal is to provide shippers with the right to a service agreement and a process to establish one in the event that commercial negotiations fail.

Increasing the clarity and reliability of rail freight service is important to shippers. Shippers told us they would like to have a comprehensive service agreement in place in order to plan their business. Bill C-52 would provide this by giving the arbitrator the ability to impose detailed elements of service. Specifically, an arbitrator could establish operational terms that railways and shippers must follow to move traffic. This could include commercial or communication protocols, with internal escalation procedures and performance standards and metrics as appropriate. Operational plans to address potential service failures could include recovery plans to address how to recover from a force majeure, and finally, there could be the provision of incidental services by the railway and whether the railway can charge for the operational terms and incidental services that the railway is required to provide.

The new service arbitration provision would provide shippers with a fast 45-day process to have the terms of the rail freight service established if they cannot negotiate them commercially.

Bill C-52 would create a new enforcement mechanism to hold railways accountable for providing the imposed service. Administrative penalties of up to $100,000 for violation could be issued to a railway company if the agency confirms a breach of an obligation in an imposed service contract.

Bill C-52 would provide shippers with a powerful new tool to strengthen rail freight service, in addition to the existing provisions. Shippers would still retain the right to use any of the other measures in the act, which shippers told us was very important.

Shippers have supported the introduction of the bill as critical to addressing rail freight service issues and improving their leverage with the railways.

In conclusion, throughout the history of this great country, freight rail transportation has played a vital role in developing our economy. Many shippers rely on rail to get their products to market efficiently, predictably and at competitive costs. When they have challenges with their rail service or with rates, they can use existing measures in the Canada Transportation Act.

The fair rail freight service act, Bill C-52, responds to shippers' needs for better rail freight service. In a fast, powerful and effective manner, our government has made this a priority. I hope that all members join me in supporting the bill.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I thank my colleague who, in passing, does an excellent job as leader in the House of Commons.

The same thing can be said for the Standing Committee on Environment and Sustainable Development, on which I serve. Experts put forward recommendations and, unfortunately, most of the time, they are not followed.

For weeks, for months, it has been recommended that we carry out a study on combatting climate change. Climate change is a top priority for all Canadians and for the people of Drummond, who raise the issue with me every day. Yet the Conservatives flatly refuse to conduct a study on combatting climate change in the Standing Committee on Environment and Sustainable Development.

The same thing occurred here regarding Bill C-52. Experts who know what they are talking about, who are well versed in what is really needed, proposed six reasonable recommendations. Yet, because of a deliberate, ideological, head-in-the-sand attitude, or plain arrogance, perhaps, as my colleague so astutely pointed out, the expert recommendations unfortunately fell on deaf ears.

We are going to vote in favour of the bill because it at long last addresses needs that have been evident for years. Yet this is not enough. Once again, the Conservatives have missed a golden opportunity to do something positive.