Bill C-30 (Historical)

Fair Rail for Grain Farmers Act

An Act to amend the Canada Grain Act and the Canada Transportation Act and to provide for other measures

This enactment amends the Canada Grain Act to permit the regulation of contracts relating to grain and the arbitration of disputes respecting the provisions of those contracts. It also amends the Canada Transportation Act with respect to railway transportation in order to, among other things,
(a) require the Canadian National Railway Company and the Canadian Pacific Railway Company to move the minimum amount of grain specified in the Canada Transportation Act or by order of the Governor in Council; and
(b) facilitate the movement of grain by rail.

Bill C-49—Time Allocation Motion

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Madam Speaker, I would like to clarify for the member what has been done in the act. It is a complex act.

The extended interswitching of 160 kilometres was a temporary measure that was put into the Fair Rail for Grain Farmers Act. It was a temporary measure that was put in place because of the exceptional circumstances in 2013 and 2014. It has been replaced by something that is more comprehensive, called long-haul interswitching. It does apply to grain out to 1,200 kilometres, not 160 kilometres, but it also applies across the country and to all commodities.

This is the approach we have taken to fix something that has needed to be fixed for a long time. I will point out that after bringing in Bill C-30 in 2013-2014, the government had a golden opportunity to modernize freight rail legislation. Why did it not do it?

Opposition Motion—Canadian Economy

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Madam Speaker, I am pleased to rise this evening to contribute to this debate on the complete failure of the Liberals on this economic file.

For a government that would have us believe it is all about the middle class, as it is wont to add that at the end of every statement it makes, for example, more ethical government for the middle class, a Liberal commissioner of official languages for the middle class, new standing orders for the middle class, better innovation for the middle class, and a carbon tax for the middle class, it is remarkable just how out of touch Liberals are on the most important issues facing the middle class: jobs, the economy, and affordability.

On housing, for example, as the price of homes rose significantly faster than inflation in Toronto and Vancouver, the Liberals decided to implement a one-size-fits-all mortgage policy designed to cool down the housing markets of Toronto and Vancouver. Unfortunately, this policy is having a similar impact across the country, regardless of whether Canadians live in Warman, Saskatchewan or Queen West, Toronto.

Before the Liberals made these changes to the mortgage rules, a person with $50,000 pre-tax income could qualify for a $277,000 mortgage. Now, that same person qualifies for a mortgage of $222,000. This change makes buying a first house more difficult for many. Several people looking to buy their first home, and realtors, have raised concerns about this policy with me. However, these changes have not had the attention they deserve, considering the disproportionate impact they are having on first-time homeowners in smaller communities where housing prices are typically more affordable.

The Liberals are also tone deaf when it comes to western Canada. On May 12, the Minister of Transport introduced the oil tanker moratorium act, a bill that his own political staff conceded would only impact the future development of Canada's oil sands, and no other activity in northern British Columbia. Let us think about that.

It was not enough for the Liberals to reverse the independent National Energy Board's 2014 decision to approve the northern gateway pipeline subject to Enbridge fulfilling 209 conditions. They decided to go one step further by opting to handcuff future governments should they want to diversify Canada's energy exports. Bill C-48, the oil tanker moratorium act, will do nothing to enhance marine safety in British Columbia. U .S tankers will continue travelling up and down the coast between Alaska and Washington state.

This is the epitome of political irony. Venezuelan oil in Quebec is okay. Saudi Arabian oil on the east coast is okay. Canadian oil in Vancouver is okay. Alaskan oil in northern B.C. is okay. However, Canadian oil in northern British Columbia is not okay. Blocking tidewater access for western Canadian energy producers was not enough. To add insult to injury, this year's federal budget removed incentives for small companies to engage in energy exploration in Canada.

Furthermore, the new carbon tax will disproportionately impact energy-producing provinces. What the Liberals fail to realize is that Canada does not have a monopoly on the production of energy. In North America alone, western Canadian producers are competing against companies operating in the Gulf of Mexico, Alaska, the Permian Basin, and the Bakken formation. As the U.S. is making important efforts to reduce obstacles to energy development, Canada is going the other way.

Capital and expertise in this sector is very mobile, and Canada is in very real danger of being left behind. Canadian firms and foreign investors will not invest in the Canadian economy if the overall cost of doing business vis-à-vis our American counterparts is higher, as has been mentioned. However, the energy sector is not the only sector being targeted. Western Canadian shippers, and especially captive western Canadian grain shippers, are feeling particularly ignored by the Liberal government.

Unlike Ontario and Quebec, where many products can be trucked to their final destination or to a port for overseas export, western Canada is particularly reliant on rail to get product to market. That is why the Minister of Transport's inaction on critical and time-sensitive rail transport issues is leading to uncertainty for both shippers and railroads. Both need it as they negotiate shipping rates for the season and invest in the required infrastructure to keep products moving to market in a timely manner.

That is why, over the past several months, I have asked many times whether the government intended to renew or build on the sunsetting measures of Bill C-30 before they expired on August 1, 2017. The response, time and time again, was that the government recognized the urgency to get this done and that legislation was forthcoming. Unfortunately the Liberals now acknowledge that the key measures in Bill C-30 will sunset before any replacement legislation can receive royal assent and become law.

Since the transportation modernization act was introduced on May 16, the government has set aside less than two and a half hours to debate it, with the Minister of Transport taking the floor to lead off debate at 9:45 p.m. on a Monday night. This means there will be at least a two and a half month gap from when Bill C-30 measures sunset and Bill C-49 receives royal assent.

By the time this legislation has passed, the majority of contracts for the year will have been negotiated with the law in flux. Because of the government's mismanagement of its legislative agenda, these popular measures will sunset without any replacement, and shippers will be the worse off. What is worse is that while this two and a half month gap will negatively impact both railways and shippers this year, the replacement legislation will weaken shipper protections from what they are today. While something is better than nothing, the transportation modernization act is not a replacement for the Fair Rail for Grain Farmers Act.

What the government is proposing in its omnibus transportation legislation is to take a little used existing remedy called a competitive line rate and rename it long haul inter-switching.

Under a competitive line rate, a shipper could apply to the agency to set the competitive line rate, the designation of the continuous route, the designation of the nearest interchange, and the manner in which the local carrier shall fulfill its service obligations. We know from history that this remedy was infrequently used because of the prerequisite that the shipper must first reach an agreement with the connecting carrier and the two main carriers effectively declined to compete with one another through CLRs. While the requirement that the shipper must have an agreement with a connecting carrier prior to requesting a CLR has been removed, the greater issue is whether the terms imposed by the connecting carrier will be acceptable to the shipper.

While railways do have a common carrier obligations, we know there are ways to avoid doing a haul. For example, both railways have set the price of hauling uranium so high that it is no longer economical for it to be shipped by rail. Furthermore, while long haul inter-switching will be extended to 1,200 kilometres or 50% of the total haul distance, the first inter-switch location from any captive shippers in north Alberta and northern B.C. will be located within the Kamloops-Vancouver corridor, where inter-switching is not allowed beyond 30 kilometres. Therefore, these captive shippers will not be able to utilize this remedy to increase railway competition.

By borrowing and spending in good times, the Liberals have made it harder to deal with real crisis. According to the PBO, even a minor recession would cause deficits to be as large as during the great recession, and that is before considering the fiscal costs of any response.

The Liberals have mismanaged Canada's finances and have closed many doors for economic development. Unfortunately, the full effects of their policies have not reverberated across the entire economy yet.

The choices the Liberals have made to date are not random. They are the result of an overarching vision of picking winners and losers. Right now, my province is coming out on the wrong side of nearly every Liberal policy decision.

For a government that professes to be focused on the middle class, first-time homebuyers, farmers, shippers, and energy workers are all feeling left out in the cold.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Mr. Speaker, I am pleased to rise today to speak to the opposition day motion brought in by my colleague, the member for Selkirk—Interlake—Eastman, which indicates that the government has been very ineffective with respect to the care and due diligence of this nation.

In particular, I want to say that damaging Canadian industries and diminishing Canadian economic stability, as he has pointed out in his motion, are certainly things that we care about every day in the House. We hear it from our constituents when we get back to our constituencies on weekends and during constituency weeks. It is certainly a situation that I have heard about quite regularly from my constituents.

My colleague, the member for Durham, has just pointed out that there is a huge deficit in place in Canada although the Liberals talked about small deficits during the election campaign. They have outgrown that by $30 billion, which is about 30 times what the Liberals said they would have. That is terrible mismanagement. Our future generations are going to have to pay for that every day of their lives as they move forward, not to mention the fact that all of us in this chamber today will share in that burden as well.

There are three major areas of concern that the member has pointed out: the softwood lumber deal, the carbon tax, and in particular, the current rail service agreement with respect to rail transportation in the Prairies.

The member has talked at great length about the softwood lumber deal, so I do not need to say much more. Suffice it to say that thousands of jobs are dependent upon an agreement between Canada and the United States. With the tariff that has been put in place by the United States today, we clearly see that the government did not have an answer when it came up with about $870 million as payment to cover some of the costs that will be borne by our industry. We need to find long-term leadership with respect to this matter. These stopgap measures are not good enough. That is what we are seeing in the other areas too.

The carbon tax that the government has implemented or is forcing upon provinces is certainly something that is going to continue to put people out of jobs. There were 200,000 jobs lost in Alberta alone. There are jobs lost in my constituency. We have a very small oil industry in western Manitoba, most of which is in my constituency. People have been put out of work there as well. We are only seeing some stability back in that area because of the stability in the price of oil right now, as well as an upgrade in the American economy. There has been a bit of a boost there. That is giving us some stability right now in Canada. However, it is very nebulous as to how long that may continue and if it will be on a long-term basis.

The area that I want to speak about today is mainly the current rail service agreements that ensure that our farmers can get their products to market.

In the spring of 2014, through the winter of 2013, our government brought forward Bill C-30, the Fair Rail for Grain Farmers Act, with our transportation minister, at the time, and our agriculture minister. They did an exceptional job of putting a program in place that would allow farmers some protection with respect to the movement of grain. There were extenuating circumstances, for sure, that winter. At that period of time, we had some of the coldest weather we have ever had. However, we are used to that in Canada, particularly in western Canada, so that is not an excuse with respect to being able to get grain to port on time.

There were three or four areas that were very important in that whole venue with that act. One of them was allowing interswitching to move up from a 30-kilometre basis to 160 kilometres, which made it quite effective to have a bit of competition in the industry, which we do not have most times when we have two railroads with, basically, a duopoly with respect to being able to move grain in the Prairies.

Trucks can only move so much grain effectively and we do not have the processing plants to process all of the grain in the Prairies. In fact, at that particular time, about 50% of the grain in Canada was going for export. That is why we desperately need to have that kind of openness and a bit of protection against the movement of other products. We cannot just leave grain, because of the massive volumes of it alone, and because it is basically in a captive area. It has to be grown every year. It has to be moved and marketed, perhaps not all in one year, but it does have to be moved, and it is a perishable product in the long run.

That is why it is so important that we move forward for Canadian families and businesses on the Prairies and in Canada as a whole, because wheat contributes greatly to the gross domestic product of our nation. Millions of jobs in Canada depend on the shipment of grain in the agricultural industry.

The minister has brought forward Bill C-49 but there is great concern as to whether it will have any teeth and whether it will get passed before we rise in the House for the summer. I commend the minister for bringing it forward, but I would encourage him to talk to his colleagues and move forward with it. If the bill does not move forward there is going to be a huge gap in this whole area. Bill C-30 will take over again, and it dies on July 31. That would leave the huge gap I referred to earlier and farmers will go into the coming harvest without any type of rule or regulation in place that will allow for the convenience of knowing the conditions under which grain can be shipped for the coming year.

I referred to interswitching rights earlier. Long-haul interswitching could be utilized. It certainly allowed for competition within that 160-kilometre radius. Interswitching is a tool that we brought in with Bill C-30. It is a much better rule than using competitive line rates, which have been in since the change in the Crow benefit in 1995. Competitive line rates, while sounding good, really were an ineffective way of providing the certainty that farmers and grain companies would have some competition. That is why the grain companies and the farm groups have joined together to lobby the government to put a stronger rate in place, a much stronger and more useable mechanism to use in that area.

A number of groups in Saskatchewan, and a growing chorus of western Canadian groups, have called for an extension of the Fair Rail for Grain Farmers Act that we had in Bill C-30. I am calling on the government today to extend that again. It was extended once by the government but it needs to do it again. That will provide fairness and equity and predictability in regard to the movement of product into the fall.

The government is talking about proroguing the House. If the House is prorogued this summer or early in the fall, the legislation would die on the Order Paper and the government would have to start all over again. This would provide unpredictability in the industry for some extended time down the road. It would be the spring of 2018 at the earliest or the fall of 2018 before we would have any kind of predictable rules to carry on with the movement of grain products in western Canada and to get grain to port in the just-in-time fashion that is required today to meet the markets that we built up so extensively through the 40-some free trade agreements that the Harper government signed with our trading nations. Keeping markets open is one of the best things that a government can do in relation to our agricultural industry.

The government needs to also look at the coordination of the grain grading system between Canada and the United States because there is much grain movement back and forth. A lot of livestock goes back and forth. Having sat on the western standards committee of the Canadian Grain Commission for a number of years as a farm representative, I know how important access to the U.S. is.

There are other things that I would ask the Minister of Transport to do. One of them is to get the Minister of Agriculture on side to move forward with some of these areas as well. He is looking at removing deferred grain tickets, cash tickets, and that would not be helpful to farmers either. The Minister of Agriculture needs to move more quickly in regard to the PED virus in hogs and cleaning trucks in Manitoba.

There were nine cases last month, and there has still been no action on that to make sure we maintain a strong hog industry.

All of that fits into the transportation of product. We are talking about the transportation of grain, but the movement of livestock is part and parcel of the use of grain on the Prairies.

I look forward to any questions.

Rail Transportation

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, a closer look at Bill C-49 reveals that the Liberals are trying to sell shippers a weaker version of the Fair Rail for Grain Farmers Act. Adding insult to injury, the pro-shipper measures contained in Bill C-30 will sunset on August 1. As a result of the minister's delay tactics, farmers will be forced to negotiate next year's contracts without the benefit of a law.

This omnibus bill is too late for western shippers. Will the minister now separate the rail shipping measures for expedited scrutiny?

Transportation Modernization Act

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, I hope I can comment sufficiently on the question from the member for Sherbrooke.

Bill C-30 really looked at grain. It was looking at a bumper crop situation and it had to do something. It was really a Band-Aid solution that focused on the grain market.

In the case of today's market and what we propose in Bill C-49, we would also be handling lumber. We are looking at softwood lumber being an issue in the United States. We are looking at new markets in Asia. How do we get lumber to either coast, and a lot of it? Lumber would be something that we would want to address. In the case of mining, resources coming out of the ground, how do we get that efficiently to market? How do we get auto parts to market in southwest Ontario?

It is really more than just a Band-Aid solution for grain. We need a comprehensive solution that is part of an integrated transportation strategy. Bill C-49 addresses that need.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, it is my pleasure to speak today to Bill C-49, which proposes amendments to the Canada Transportation Act to advance the efficiency and competitiveness of our freight rail system. This is especially important to Guelph, which is home to one of Canada's three federally chartered railways.

The Guelph Junction Railway was established in 1886 by a special act of the federal government to foster economic growth in Guelph and in the surrounding communities. The City of Guelph has owned the railway since 1908. The GJR operates 38.6 kilometres of track that runs from Guelph Junction near Campbellville, Ontario, to Guelph's northwest industrial park. It is a strategic line that runs between the Canadian Pacific Railway and the Canadian National Railway.

Canadian exporters today have the advantage of the lowest freight rates in the world, even lower than in the United States, and a track record of significant investment by the railways that is essential for keeping these rates low in the future. However, even the strongest system has room for improvement, and we have heard concerns from both shippers and railways through our consultation process. We have heard in particular about system bottlenecks and other constraints that slow the movement of our goods. We have heard about delays in shipping that can affect our nation's reputation for reliability, and about regulations that dampen investment in the network to everyone's detriment.

Canada's rail system is the backbone of our export trade. It moves our goods to destinations across the country, to the United States, and for export overseas. The conditions we establish now, in 2017, will be essential for our nation's long-term growth and prosperity.

Following extensive consultations, our government is proposing new measures that would lay the groundwork for future success.

The bill would promote greater efficiency and investment in the system for the benefit of all Canadians. First, the bill proposes a new competitive access tool for shippers that would allow them to obtain better options for service and rates. This new tool, long-haul interswitching, would allow a shipper served by only one railway to access a competing railway at a rate and on service terms set by the Canadian Transportation Agency. Long-haul interswitching has been designed to meet the needs of captive shippers across a wide range of sectors: grain, forestry, and mining just to name a few. It would apply at a distance of 1,200 kilometres or more to ensure that some of our most remote shippers could benefit.

By providing competition between railways, this measure would improve system efficiency in moving goods to market, and at the same time, railways would be fairly compensated for their services and for the cost of maintaining infrastructure. The agency would set the rates under this measure based on comparable traffic. This would help prevent the risk that railways might unde-invest or even close their lines due to lack of revenue.

As a part of this, we would allow extended interswitching in the prairie provinces to sunset as planned on August 1. Many members will recall that this measure was adopted in 2014 under the Fair Rail for Grain Farmers Act in response to the unique challenges in the grain handling and transportation system at that time and in that season.

Most challenges no longer exist, and extended interswitching is problematic in many respects. It only applies up to 160 kilometres and only in the prairie provinces. It does not cover other shippers in Canada who have told us about railway service issues. Its rates are far too low to compensate railways for moving the traffic, which would erode investment over time. A key beneficiary of this measure is not the shipper community but the American railway, the railway that scoops traffic away from Canadian railways but makes comparatively little investment in the Canadian network.

Long-haul interswitching is a far better tool as it would apply across sectors and across regions of Canada.

The grain sector would be far better off, as all captive grain shippers would have access to this competitive tool, not just those falling within a specific zone. The railways would be compensated appropriately to ensure that the system runs smoothly and grain moves to market effectively. The proposed new measure is also being carefully structured to minimize the risk of American railways unfairly taking traffic.

Many members will recall that the Fair Rail for Grain Farmers Act also imposed minimum volumes of grain to be moved by the railways. In our consultations, we have heard that this had negative effects. It benefited specific shippers to the detriment of others. It was good for the large companies, but not for the farmers. More importantly, the unique challenges of 2014, and that growing season, no longer exist. For these reasons, the volume requirements would be allowed to sunset as planned on August 1.

Our government recognizes the importance of moving grain and other commodities efficiently to market. Greater transparency on how well the system is working is obviously critical to efficiency. That is why Bill C-49 would require railways to report publicly every year on their plans to move grain and to manage weather-related disruptions. They would also need to report service and performance metrics that help them measure how the system is doing. The agency would have clear new authorities to hold an inquiry into any emerging issue at the minister's request. These measures would help all parties to keep track of emerging problems and work together to find solutions before the crisis point hits.

Importantly, this bill would provide shippers with the ability to maintain reciprocal financial penalties in service agreements. Applying penalties for service failures would encourage the most efficient service possible. Our rail system can only flourish within the right regulatory framework. To promote system efficiency, the bill would also modernize the Canada Transportation Act. For example, it would update the insolvency regime for railways, which dates back to 1903 and cannot address the complexity of modern business arrangements.

The railway industry must invest significantly in the network to keep it running safely and smoothly. That is why this bill also proposes measures to promote continued investment. For example, it would loosen shareholder restrictions on CN Railway that have been in place since it was privatized in 1995.

Bill C-49 would also fix problems with the maximum revenue entitlement, which caps the revenue per tonne that CN, CP, and Guelph Junction can earn for moving western grain. I just threw in Guelph Junction. It would fairly credit their investments in the network, and encourage them to obtain new modern hopper cars. It would also promote the movement of grain by containers, which is an innovative way to provide service and extra capacity at peak periods when the system is full. Again, this would apply across all regions of Canada, including Guelph.

Together, these amendments would achieve the goals of a competitive, efficient freight rail system, a system in which commercial forces drive efficiency but legislative backstops are in place to ensure that the system is fair, balanced, and transparent, a system in which the conditions are right for low rates, future investment, and future success.

I urge colleagues to adopt Bill C-49 as quickly as possible so that we can serve our farm community.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I know this is something that is very near and dear to the member's heart.

Coming from Alberta, knowing that the Fair Rail for Grain Farmers Act was actually addressing issues that grain farmers in the Prairies were experiencing, I can tell members that what we have been hearing from stakeholders, as they have begun to review the legislation and as they have begun to take these two pieces of legislation and compare them, is that they are confused. They do not understand exactly what the changes are meant to accomplish. They believe that the devil is in the details.

While they continue to look at this, they continue to highlight the fact that these measures in Bill C-30 are sunsetting on August 1. There will be a gap. That is why we asked the committee to consider calling upon the minister and the government House leader to break out at least the measures in Bill C-49 that would address the measures in Bill C-30 so that we could at least address the concerns of our shippers and our producers as they are bumping up against that August 1 deadline.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, on the contrary, I think I pointed out at the beginning of my speech that what we have in front of us is an omnibus bill. We actually tried, in committee, to encourage the members to consider breaking out the different modes of transportation so that we could actually study them more effectively, and in fact, expedite those measures that are in Bill C-49, which were meant to replace the measures that were in Bill C-30.

My answer is absolutely not. However, I think that we could have taken a more systematic approach and not had all of these measures included in an omnibus bill, which is probably not going to get the due consideration it needs.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I want to thank my hon. colleague for her question and for the work she did while she was on the transportation committee. I believe she was the member who was pushing for the committee to set in place a timeline for us to conduct the review of Bill C-30 to ensure that we were not bumping up against the deadline that we now seem to be bumping up against.

Definitely, rail safety was one of the first studies we undertook, when we were first elected, as part of our first session.

What is really interesting is that there have been a number of studies and very little action on the studies the committee has undertaken. As the member noted, the minister has stood up many times saying that rail safety is his number one priority. I find it somewhat curious that the ink was barely dry on the government's announcement that it would begin the review of the Railway Safety Act when it included a measure like the LVVR measure in this act, when it was about to launch a review of the Railway Safety Act. I do not know if this is by design or default, but it seems a somewhat incoherent approach to all matters in the transportation file.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I am pleased to rise this evening to debate Bill C-49, the transportation modernization act, at second reading.

The bill could simply be renamed the transportation omnibus act for the number of different bills being amended, with many of changes being more than just technical in nature. The Air Canada Public Participation Act, the Canada Transportation Act, the CN Commercialization Act, the Railway Safety Act, the Canadian Transportation Accident Investigation and Safety Board Act, the Canadian Air Transport Security Authority Act, the Coasting Trade Act, the Canada Marine Act, the Bankruptcy and Insolvency Act, the Competition Act, the Companies' Creditors Arrangement Act, the 2009 Budget Implementation Act, and the Fair Rail for Grain Farmers Act are all being amended.

How this squares with the Liberal election promise not to use omnibus legislation is beyond me. Do not get me wrong, I am not complaining about an omnibus bill, just the fact that the Liberals did and then made a promise they knew they would not keep. Furthermore, when I introduced a motion in transport committee last week calling on the committee to write to the Minister of Transport and his government House leader to ask them to split the bill into the following sections, rail shipping, rail safety, air, and marine, to provide an enhanced and possibly expedited scrutiny, every single Liberal member voted against it without even a single comment as to why.

I found this vote particularly ironic, as it was the Liberal member for Niagara Centre who raised the idea of expediting the passage of the bill in the first place, in order to provide grain farmers with a greater amount of certainty as they negotiate contracts for future shipping seasons.

The more measures that a bill contains, the more time it takes to provide adequate scrutiny. Separating the bill would be the easiest way to facilitate expedited passage, and thus my motion calling on the bill to be split into several parts.

Unfortunately, Liberal members were unwilling to split the bill into these natural divisions. This does not inspire confidence that when the bill eventually does reach committee, the Liberal Party members will be open to any amendments. While Bill C-49 is supposed to be the Minister of Transport's legislative response to the 2015 Canada Transportation Act review led by the Hon. David Emerson, it would appear that what we have before us is a bill that is designed to change the channel from some of the bad news that keeps piling up for the Liberals.

The government's communications strategy for this legislation has overwhelmingly concentrated on the air passenger compensation regime that is being introduced, and not the other very consequential measures. Here is what the Minister of Transport posted on his Twitter feed as he introduced this legislation, “These air passenger rights will ensure that travellers are treated like people, not just a number.”

Like many members here, I travel a lot and only have positive things to say about all the employees working for the airlines and at our airports. Of course, on occasion, flights do not go as we hope, but the Minister of Transport appears to be willing to pit passengers against airlines rather than fixing the structural problems in Canada's aviation regime.

This legislation does not spell out what the compensation regime will be, just that there will be one. The bill states that after consulting with only the Minister of Transport, the Canadian Transportation Agency will make regulations concerning carriers' obligations toward passengers. However, for even greater clarity, subsection (2) of proposed section 86.11 states that the Canadian Transportation Agency must comply with any instruction from the minister with regard to setting regulations concerning carriers' obligations to passengers.

What this means is that the Canadian Transportation Agency is tentatively responsible for setting what financial penalties a carrier would have to pay to the passenger in the case of a service breach, unless the minister is dissatisfied with the level of prescribed compensation that the CTA decides is appropriate, in which case he or she can dictate what that level of compensation will be.

It is noteworthy that the agency will, by law, only be allowed to consult with the Minister of Transport concerning the setting of these regulations, and not with consumer advocate groups, airlines, airports, Nav Canada and other stakeholders in the sector.

I do not understand what the purpose of consulting only the minister is. If the Canadian Transportation Agency is to be an arm's-length organization, this legislation clearly diminishes its independence. If the minister will not allow the agency to independently set the parameters of the passenger compensation regime, he should just spell out in legislation what it will be and let members of Parliament and stakeholder groups decide whether this is a good proposal or not.

If this legislation were truly aimed at reducing the cost of travel for the passenger, while increasing service and convenience, the minister would immediately lobby to have the government's carbon tax, which will make every single flight more expensive, withdrawn. He would reform the air passenger security system, which was universally identified as a major irritant for all passengers during the Canada Transportation Act review by all the organizations that participated in the process.

While it would be preferable to have the sections of the bill dealing with air and rail examined as stand-alone pieces of legislation, I can only surmise that the government's complete mismanagement of the House's agenda has led us to the point where an omnibus transportation bill is what we have in front of us today. At least we have finally begun debating something in the transport sector, now that we are two years into the government's mandate. So far, the only achievement the minister has to show in terms of legislation is the act to amend the Air Canada Public Participation Act.

Let us talk about Bill S-2, an act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another act. This was first introduced by the government's representative in the Senate 13 months ago and passed third reading in the Senate on February 2. The minister claimed that Bill S-2 was a priority in his speech to the Montreal Chamber of Commerce in November 2016, yet it has not been touched since.

On May 12, just days before the introduction of the legislation we are debating today, the Minister of Transport introduced the oil tanker moratorium act, a bill that his own officials conceded would only impact the future development of Canada's oil sands and no other activity in northern British Columbia. Equally concerning about this oil tanker moratorium, which could be renamed the oil pipeline moratorium, is that there is considerable support among first nations on B.C.'s coast for energy development opportunities, but the wishes of these first nations are being ignored. For the Liberals to move forward with this tanker moratorium without properly consulting coastal first nations is extremely hypocritical.

The Liberals go to painstaking lengths to emphasize the amount of consultation they undertake, but it is becoming more and more apparent that their interest in consulting is about being told what they want to hear and not about listening to differing views. If anyone needs further proof that Bill C-48 was introduced only for political purposes, it is that this moratorium has been introduced as a stand-alone bill and not as part of this omnibus package we are debating today.

The Minister of Transport's silence and inaction on critical and time-sensitive transport issues, especially rail transport, is leading to uncertainty for both shippers and the railroads, which both want certainty as they negotiate shipping rates for the season.

That is why over the past several months I have asked many times whether the government intends to renew the sunsetting measures in Bill C-30 before they expire on August 1, 2017. The response I have been given time and time again is that the government recognizes the urgency to get this done and that legislation is forthcoming. Unfortunately, the Liberals have made a muck of this, and the key measures in Bill C-30 will sunset before any replacement legislation can receive royal assent and become law.

Last week in the transport committee, a Liberal member moved a motion calling on the committee to begin its consideration of this bill, Bill C-49, in September, before the House begins sitting, to expedite the study of the sections of the bill that deal with the shipping of grain. While Conservatives have no objection to considering this legislation in September before the House returns from the summer break, government members fail to realize that our producers needed them to turn their attention to this months ago, as the measures will sunset on August 1 of this year. At best, there will be a two-and-a-half-month gap between when the measures in Bill C-30 sunset and replacement legislation is in place.

By the time this legislation has passed, the majority of contracts for this year will have been negotiated with the law in flux. Because of the government's mismanagement of the legislative agenda, these popular measures will sunset without replacement, and shippers will be the worse off.

This is important to note, because for a combination of reasons, including a lack of rail capacity, preparedness by railways and shippers, weather, and the size of the crop, western Canada's 2013-14 grain crop did not get to market in a timely manner. Consequently, the previous Conservative government introduced Bill C-30, which gave the Canada Transportation Agency the power to allow shippers access to regulated interswitching up to 160 kilometres, mandated that CN and CP both haul at least 500 tonnes of grain per week, and introduced a new definition of adequate and suitable service levels. With this extension, the number of primary grain elevators with access to more than one railroad with the extended interswitching limits increased from 48 to 261.

These measures were met with universal support from the members of the shipping community, because even if they did not use interswitching, they could use it as a tool to increase their negotiating position with the railways, as the shippers knew exactly how much the interswitch portion of the haul would cost them.

At the same time, the government announced that the Canada Transportation Act statutory review would be expedited, and it began a year early to provide long-term solutions to the grain backlog of the 2013-14 shipping season and other problems in the transport sector within Canada. The hon. David Emerson, a former Liberal and Conservative cabinet minister, was tasked with leading the review. This review was completed in the fall of 2015 and was on the Minister of Transport's desk shortly before Christmas. The minister then tabled this report in mid-February 2016 and promised wide consultations on the report. As the key measures of Bill C-30 were going to sunset on August 1, 2016, and parliamentarians were hearing from the shipping community that it would like to see these extended, Parliament voted in June 2016 to extend those provisions for one year.

In the fall of 2016, the Standing Committee on Transport, Infrastructure and Communities undertook a study of Bill C-30 and held a number of meetings on the merits of these measures and whether they should be allowed to sunset. We were assured that if we lived with this extension, these issues would be dealt with by August 1, 2017.

The vast majority of the testimony heard was supportive of maintaining the 160-kilometre regulated interswitching limit at committee, which is why the committee's first recommendation was the following:

That the Canadian Transportation Agency retain the flexibility provided under the Canada Transportation Act by the Fair Rail For Grain Farmers Act to set interswitching distances up to 160 km, in order to maintain a more competitive operating environment for rail shippers with direct access to only one railway company.

Anyone who has read this bill will know that the government ignored the committee's main recommendation. At some point during this debate, I hope to hear from Liberal members on the transport committee about whether they believe that the government was right to ignore the committee's recommendations, and if so, whether the entire committee study was just a waste of time.

Basically, what the government is proposing with this legislation is to replace the 160-kilometre interswitching limit with the creation of a new long-haul interswitching tool that would be in effect between Windsor and Kamloops on hauls of up to 1,200 kilometres, or up to 50% of the length of the entire haul. Shippers would be charged the regulated interswitching rate for the first 30 kilometres of the haul and then a Canada Transportation Agency-determined rate, which would be determined on a case-by-case basis based on the price of a similar haul, for the remainder of the distance to the interswitch point. Shippers would only be able to interswitch at the first available interswitch point within the zone.

What the government has done is take a little-used existing remedy, called a competitive line rate, and rename it long-haul interswitching.

Under a competitive line rate, a shipper could apply to the agency to set the amount of the competitive line rate, the designation of the continuous route, the designation of the nearest interchange, and the manner in which the local carrier would fulfill its service obligations. We know from history that this remedy was infrequently used because of the prerequisite that the shipper first reach an agreement with the connecting carrier, and the two main carriers effectively declined to compete with one another through CLRs. What we do not know is what the difference will be at a practical level between this new long-haul interswitching and the existing competitive line rates.

Like competitive line rates, long-haul interswitching is a much more complicated system for shippers to use, and the jury is still out on whether this will achieve the minister's stated objective of improving rail access for captive shippers. When Bill C-30 was first introduced, there was universal support among shippers for the extended interswitching. So far, very few organizations I have spoken to can say that this tool is better.

In conclusion, this much is certain: the key measures in Bill C-30 will be allowed to sunset on August 1, before this legislation receives royal assent. The Liberals have had nearly a full year to get new legislation in place but failed to do so, and shippers will suffer the consequences.

Canada remains one of the most expensive jurisdictions in which to operate an airline, and it is about to become even more so with the imposition of a national carbon tax. This bill does nothing to address the systemic cost issues, which are passed on to passengers, that were identified by the Transportation Act review. As has been the case with almost everything with the current government, optics trump everything, and this bill exemplifies that.

Transport, Infrastructure and Communities

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Mr. Speaker, I know that the provisions that have been prolonged are very important to keep. One aspect that keeps coming up when I speak to farmers is the importance of data sharing and predictability, knowing when things are happening, when they are going to arrive. That is something that we had brought up and when Bill C-30 was at committee, we wanted to make sure that there was better data sharing, transparency. That is something that I think would be very important for shippers, not just agricultural products, but everyone would like to have better data sharing like we see in the U.S. If the U.S. can do it, why can we not do it here?

That is something that would help everyone. It would make sure there is more predictability and information sharing and then we could look into penalties to make sure that when delays are not respected, whether it is the railways or at grain, that there is some kind of reciprocity. That is very important too. I am really looking forward to seeing what the government comes up with and working together to make sure that we get our grain and our transportation going in Canada so that we can respect our international trade agreements.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

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

I think many of the provisions passed in Bill C-30 are really important for the industry, as well as for ensuring the safe transportation of agricultural products and other goods. I am really pleased that the government moved a motion at the last minute to extend many of those provisions once again. I think we need to keep those provisions, including the one on interswitching, for example. All the stakeholders and farmers told us repeatedly that they were really happy with the decision regarding the extension of interswitching distances to 160 km.

Perhaps we could consider the possibility of extending that distance, since, as members know, Canada is vast and transportation is rather complex. I would also like to see what comes out of the consultations being held by the Minister of Transport, Mr. Garneau. I look forward to hearing about that and I hope to have some news when the House returns this fall. I also think the Minister of Agriculture and Agri-Food could show a little more initiative on this.

The House will recall that Bill C-30 was introduced by the former minister of Agriculture and Agri-Food. This directly affects producers and therefore we must consult these experts. I hope that the Minister of Agriculture and Agri-Food will show more leadership and, together with the Minister of Transport, will ensure that producers have fair and adequate service.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Mr. Speaker, I am pleased to speak today about the motion from the Standing Committee on Transport, Infrastructure and Communities.

We have been calling for the Liberal government to take action on the grain transportation file for a long time. The report simply requests that the changes set out in Bill C-30, which expire in August 2016, be extended for one year. I agree with that request and will support it when it comes time to vote.

Before explaining why it is important that the government extend these provisions of Bill C-30, I would like to give my colleagues in the House a little bit of background about the grain transportation crisis. About two years ago, I spoke specifically about Bill C-30 in the House.

The combination of an excellent harvest and a harsh winter uncovered major flaws in our grain transportation system that cost farmers and the Canadian economy between $7.2 billion and $8.3 billion.

Although the government at the time had known since the fall of 2013 what our farmers would be up against, Bill C-30 was its belated response to this major crisis. The opposition parties and stakeholders had to pressure the government for months before it did anything.

Unfortunately, the bill did not go far enough. What is more, it was temporary, as members can see from the provisions that expire in August.

The Premier of Saskatchewan said that the bill was flawed and disappointing. Throughout the crisis, the Conservatives acted as if the situation was out of the ordinary, even though farmers had clearly indicated that the system was broken and the duopoly of Canadian Pacific and Canadian National over the market was allowing the companies to provide inadequate service without fear of repercussions. There is still an imbalance of power between farmers and the railway companies.

In an attempt to address the many shortcomings in Bill C-30, my party proposed a number of amendments: implementing mandatory reporting of the price of grain throughout the transportation system; requiring adequate service in all corridors; ensuring that producers in all affected regions would be consulted about the regulations; requiring the government to work with the provinces to develop and implement a plan for open access running rights to ensure effective competition in the rail service; imposing a moratorium on the closure or delisting of producer car sites; increasing fines and directing those revenues to compensation programs for producers; and opposing the temporary nature of the provisions in Bill C-30, which suggested that systemic structural problems were actually temporary and exceptional.

Unfortunately, all of the amendments that the NDP presented in committee were rejected. By the end of winter 2015, the delayed delivery of more than 11,000 grain shipments prompted us to try again. Despite Bill C-30, there was another crisis.

As a result, I moved another motion in the Standing Committee on Agriculture and Agri-Food for the immediate study of problems related to the transportation of grain and agricultural products. Subsequently, my colleague from Sydney—Victoria moved a motion in the House.

His motion, which was adopted unanimously on April 22, 2015, called on the House to recognize that an increase in rail service and capacity is essential to the livelihood of Canadian agriculture and that changes to legislation are needed to address the structural gaps in our system.

When I spoke to the motion, I made sure to emphasize how important it is for the government to listen to all stakeholders. That point is important and remains valid.

The current government should improve the system. It should implement the recommendations of all stakeholders, the experts, and especially farmers.

I am pleased to see that the Minister of Transport said that he would take the Emerson report as advice only and that his government would consult stakeholders before making any decisions.

I can tell him right now that producers and shippers are not keen to abolish maximum revenue entitlement and interswitching. Stakeholders all agree, as do the parties here in the House, that these two measures should be removed.

As Dan Mazier, the president of Keystone Agricultural Producers, said:

“The report doesn't address [the lack of competition in grain transportation] at all, and this is the fundamental thing those in the grain industry believe lies at the heart of all of our problems.”

Since the beginning of the year, stakeholders have also all agreed that it is important to extend the provisions of Bill C-30, which expire on August 1. All of the groups I met with mentioned this to me. The members of the Standing Committee on Agriculture and Agri-food received many letters to this effect from such organizations as Alberta Barley, Alberta Canola, Alberta Pulse Growers, Alberta Wheat, and Grain Growers of Canada.

They wrote to us to encourage the fact that we need to act very quickly and that the pro-competitive measures introduced in Bill C-30, the Fair Rail for Grain Farmers Act, do not expire on August 1.

Among the other measures, the legislation provided for the establishment of minimum grain volume targets for railways, gave authority to the Canadian Transportation Agency to establish regulations governing rail service level arbitration, and provided for the extension of railway inter-switching distances from 30 km to 160 km, in Alberta, Saskatchewan, and Manitoba.

Parliament must pass a resolution prior to August 1, 2016 to extend these elements of railway regulation or Canadian shippers will lose these important shipper protection measures.

The report presented to the House by the Standing Committee on Transport, Infrastructure and Communities goes precisely along the same lines. That is why we support it. However, the government must adopt a long-term vision and address producers' concerns. This is important. A number of agronomists and officials at the Department of Agriculture and Agri-food have said that crop yields would only increase.

If the government does not improve our system, we will see more crops like those we saw in 2013 and more crises like the one we experienced in 2014-15. The government must show leadership and must implement long-term solutions for producers.

I sincerely hope that the Liberal Party will keep its promises on this issue and that its decisions will be consistent with what it said and did when it was in the opposition. It is one thing to get all worked up to defend producers when one is in the opposition, but it is another thing to do so when one is in government.

Since the beginning of their mandate, the Liberals have not had a great record on agriculture and agri-food, but they now have an excellent opportunity to take action and to stand up for producers. We hope that they will take this opportunity today and will take action quickly.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I would like to say at the outset that I am sharing my time with the member for Berthier—Maskinongé.

Before I proceed with my speech, I just want to comment on the mention made by my colleague in the Conservative Party. I have been working very closely with the NDP agriculture critic, sharing great frustration with the breadth of the issues in transportation and that for this area of agriculture, it makes common sense for those who are dealing, day in and day out, with agriculture issues that maybe these matters to do with the transport of our agricultural products should be going, at least in part, to the agriculture committee.

We will continue to pursue that. Lord knows and those of us who are on the transport committee know that we have a lot to deal with anyway.

I feel confident in sharing that prairie farmers will be greatly relieved that the government has at long last, and at the very last possible moment, taken action to extend the time period for the application of the emergency legislation enacted last year under the Fair Rail for Grain Farmers Act.

One important provision, as we have discussed here, of that law postponed the expiry of the extended access by farmers to interswitching from 30 to 160 kilometres until August of this year. Were this action not taken, farmers would have been greatly disadvantaged.

Greg Sears, chairman of the Alberta Canola Producers Commission supported this extension, which is also endorsed by the Agricultural Producers Association of Saskatchewan, the Canadian Canola Growers Association, the Barley Council of Canada, the Canadian Oilseed Processors Association, Cereals Canada, Prairie Oat Growers Association, Grain Growers of Canada, Pulse Canada, Western Grain Elevator Association, and the Inland Terminal Association of Canada. They all support this.

Mr. Sears said:

Extended interswitching is being used by grain shippers and is emerging as an effective tool to provide better rates and service between two Canadian Class 1 railways, as well as other North American railways. Time is of the essence to ensure this provision does not lapse before parliament adjourns for the summer.

Farmers, especially in the Prairies, need better access to interswitching to get their crops to market. This was identified as a key issue in the Emerson report, but extended rights under the Fair Rail for Grain Farmers Act are set to expire August 1 of this year. This means that many farmers could lose access to markets this season, which would lead to severe hardship.

On May 13, at the request of the Canadian grain, canola, and pulse growers, I put this exact request to the government on behalf of agricultural producers. I asked that the government commit to legally extending these rights for fair rail before the House rises in the summer. While the Prime Minister made a commitment in April of this year, it was not until today that any action occurred.

This motion will ensure extended access for at least another year. For this coming year, Canadian grains and pulses will potentially reach markets in a timely manner. This is critical to provide expanded options for producers to access markets, thereby making grain sales more competitive. However, as grain producers have advised, they require longer-term solutions than just a one-year extension.

Again, as Greg Sears has expressed:

Truth be told, all farmers would benefit from 1,000 kilometre interswitching or open running rights because there are still major farming areas not receiving any benefit from the extended interswitching, such as the Peace region of Alberta that is over 500 kilometres north of Edmonton.

As Mr. Sears reminds us, agriculture is among the most trade-dependent sectors with the majority of product exported. He reminds that rail remains the only economical option to ship those products from prairie to port.

This makes prairie producers almost entirely dependent on the railways for the long-term viability of our Canadian farms. Farmers are reminding us that Canada cannot afford a repeat of the 2013-14 shipping debacle and the damage to the Canadian agriculture industry as a reputable supplier of high-quality grains and oilseeds.

In the farmers' view, these measures are critical to correct the imbalance of market power controlled by the railways. As submitted by the Agricultural Producers Association of Saskatchewan, further measures will be needed to “address the fundamental problem of railway market power as the primary factor constraining rail service and commercial accountability in the grain transportation system.”

The president of the Canadian Federation of Agriculture, Humphrey Banack, an Alberta farmer, has said that extended access to interswitching is critical in order to hold rail companies accountable. He recommends that the extension continue, at a minimum, until after the Emerson report is considered and acted upon by the government in a process, he stresses, of direct consultation with the agricultural producers.

As my Conservative colleague has stated, what would be absolutely critical is that, as the government moves forward to review the Emerson report and all of the issues that arise out of the Fair Rail for Grain Farmers Act, the producers themselves play an active part at the table and not be peripheral. It is absolutely critical to our economy at this time, particularly in areas such as Alberta, where the economy is suffering. Agriculture has always been an important part of the revenue for my province and contributes to the wider Canadian economy. It is absolutely necessary that we get this right and that we do not let the rail companies continue to, frankly, railroad our farm producers.

I am very happy to support the motion, which I contributed to at committee. It is very important that any review of the motion be further expedited so that the farmers have some kind of clarity and are not left hanging, as they were this year, right to the bitter end.

Opposition Motion—Canadian Dairy Industry

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Mr. Speaker, my colleague and I are both veteran members on the agriculture committee, and we are on the same page on a lot of issues: trying to study the TPP at committee, looking at the Emerson report, and making sure that some of the provisions in Bill C-30 actually stay in place. However, when it comes to supply management, the TPP, and CETA, there was a compensation package announced by the previous government, and we did not see a follow-through by this government. There is so much uncertainty.

I knew the Canadian milk producers were going to be okay if there were some kind of compensation, but that is not on the table anymore. We have been dealing with milk proteins for the last few years. The situation is getting worse. There are companies that have built up in the States and have a lot invested in it. There are millions of dollars at play.

We have to stand up for Canadian farmers here. I am standing up for my constituents and for the supply-managed sector. We need to see the government standing up for farmers and taking care of this milk proteins issue, because we are going to see farmers sell their quotas, close up their farms, and leave.

Therefore, we are asking for the government to take concrete action, confirm to us today, with a date, when it is going to stop milk proteins coming into Canada, and reassure Canadian farmers instead of letting us be had by the Americans.