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.

Fair Rail for Grain Farmers Act

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Mr. Speaker, I will pay attention to your comments.

The agriculture industry is a very important economic driver in Canada. As many of us know, it supports farmers, suppliers, food processors, and all other stakeholders in the food industry.

Grains are a big part of our agriculture industry, with 15 million hectares of wheat, barley, oats, and rye grown by farmers in fields right across this country, with the majority on our prairies.

In 2013, Canada produced over 52 million metric tonnes of these grains. Some of our largest commodities are canola—I think we are one of the biggest producers in the world—wheat, corn, pulse crops, and barley. From those yields, over 50% is exported, and the rest is used in our livestock industry. It is also used by millers and brewers, and there are many other uses, such as for biofuels.

As many of us know, this year was a bumper crop. It is because of the technology farmers used, everything from the tillage systems to the varieties. They had some good weather on their side also.

Last November, I had the opportunity to take part in an agriculture outreach tour in the western Prairie provinces in an effort to meet with farmers and identify important areas to tackle in my critic role.

After we visited farmers in Manitoba, Saskatchewan, and Alberta, even early on in the fall, it was evident to me, and should have been evident to the minister, that the grain handling system was not proving capable of meeting industry demands. I witnessed first-hand the mounds of crops that were piled right up to the rafters. They were piled in garages and piled outside. It was amazing the amount of product that had still not been moved.

Upon returning to Ottawa, the situation after last fall, of course, got worse. We saw that with the big losses for some of these farmers, who could have been selling their product. Grain prices were going down. Even the government came out with an estimate that over $8 billion was lost to the prairie economy because of that.

Over the last few months, farm leaders from across this country have been meeting with our leader, the member for Papineau, and our Liberal agriculture team. Along with me, we have the members for Malpeque, Winnipeg North, Guelph, and of course, the member for Wascana, who was front and centre during the emergency debate and in keeping an eye on things.

The Conservatives were warned about the situation by the opposition and industry members a long time ago, not just by the farmers but in this House during the emergency debate the Liberals pushed forward. One would think it would have come from the Conservatives. Their members, coming from the grain region, should have been pushing for an emergency debate. However, we pushed for it on this side, and we appreciate that the Speaker allowed us that late night of debate on the situation.

The minister responded through the winter with some cash advance payments and a review panel to look into the disaster, but it was too little too late. Ships were idle at the ports. We all know about that. We had ships from Japan that were turned around. They had to go to Seattle. They had to go to the United States, imagine, where they were loaded up in a day, while they were waiting here for weeks to be loaded. It was a bad reflection on us.

There were also meetings in Singapore. One of the biggest issues among all the producing countries was, “What is going on with Canada? How come Canada has such good growers but cannot get their grains to market?” We were really getting a black eye on the international scene.

On farms, they were operating, and their debts were going unpaid. It took a lot to put that big crop in and harvest it, with the price of fuel. Meanwhile, they were not moving their grain.

It is blatantly clear that the Conservatives need to take another look at their failed rail act, Bill C-52. That was introduced last June. They scrapped the Wheat Board, and all of a sudden, there was nothing to protect farmers after that. Bill C-52 would have been the spot for that. There were amendments recommended, which they refused to put in.

What happened after that? There was nothing to help the imbalance in the market power of farmers and railroads. Many prairie farmers agreed that the amendments to this legislation were needed to clearly define service levels and to make it easier to fine rail companies for transportation bottlenecks. However, all our proposed amendments, which would have strengthened the position of the shippers and farmers, were unanimously defeated.

As a result of Bill C-52's deficiency, farmers watched their big bumper crop sit in their backyards, as customers around the world wanted our number-one quality product. We also saw customers in Canada and in the United States looking for our product and not being able to get it.

This winter in the House of Commons, the Liberals demanded that the Conservatives take action. The Conservatives finally came forward with this emergency legislation on grain transportation, which we are talking about today. We know it as Bill C-30, and it is to fix the shortcomings in the previous bill.

As mentioned by other members, the Standing Committee on Agriculture and Agri-Food studied the new bill, and although it was rushed, it provided a tremendous opportunity to improve the legislation. Many witnesses came from across Canada and many good ideas were brought forward. After hearing the testimony of dozens of farmers and stakeholders, it was obvious that this new law needed some adjustments if it were really going to enhance the entire supply chain on a long-term basis.

The bill also failed to define what rail service levels should be, to create an objective measurement of rail performance, to provide for damages payable to farmers, to clarify farmers' grain delivery rights, or to create reciprocal penalties when obligations are not fulfilled on any side.

These are the same complaints we heard last year, but once again, the Conservatives unanimously voted against all opposition amendments put forward to strengthen the bill and address the ongoing concerns.

Although this has been delayed and is weak legislation, the other problem, as many farmers know and the House knows, is that the sun will set on the bill in two years. Therefore, this is really only a short-term step to help out. How will farmers or anyone in the supply chain look at the future if this is only going to last two years?

With good farming practices and climate change, I believe that we are going to have more and more bumper crops. This is not going to be a totally abnormal year. This could be a year that is going to be the norm. If that continues to happen, there has to be something in place that will guarantee that farmers are being taken care of.

The bill is a small step in the right direction, and our party will be supporting it, because this has been delayed long enough. Farmers are out planting now. They have grain still in piles in their backyards. They are trying to get money to pay for fertilizer, seeds, and chemicals. What is happening? The grain in the bin is not going to pay for those supplies. The legislation has not passed yet.

We have to have some signal for the international community that is buying our grain. I mentioned what happened in Singapore. We have to show that the House of Commons in Canada is serious about making some moves to help move grain shipments. Every time a disastrous backlog like this develops, our international reputation as a reliable grain shipper suffers, and we lose customers.

I alluded earlier to our own processors and farmers. We have a very large livestock and food processing industry in this country. We ship a lot of our grains and oats to the United States. Most people do not realize that Cheerios come from Canadian oats. They were concerned in the United States that they would not get enough oats. What was happening did not affect just our international reputation.

At committee we heard from the former chair of the B.C. Agriculture Council, Garnet Etsell. There is a billion dollar industry in the Fraser Valley. Their poultry industry is amazing. It is one of the largest concentrations of poultry in Canada. We were told in committee that poultry farms were only a couple of days away from running out of grain. Imagine having that size of livestock industry with a couple of days of grain in the bins and seeing the trains go by and not even helping out the local farmers.

Some of them were forced to buy trucks, costing them $100 extra a tonne to ship in grain from Alberta. Their returns are fixed, and they are not going to get more because they have to ship products in. It was not really addressed in this bill how we are going to help local farmers who consume that grain.

It is key that the federal government have a long-term strategy so that our high-quality grains will be able to get to our customers around the world and around the country and so that this does not happen again. We will be going back to the drawing board. If the government is wise, we will sit down after this legislation goes through and look at a long-term vision for our farmers and our country so that we continue to be a number-one supplier of grains in the world.

We realize that there are other products out in our western provinces that are doing well, such as potash, coal, and oil. We do not believe that they should all of sudden stop shipping their products because we have a good crop. We have to look at investing in our transportation system. We have to sit down with the railroads to make sure that this is happening, but right now it is not happening.

I am looking forward to a time when the farmers' biggest concern is getting the crop planted and harvested and having buyers. They should never have to worry about getting it from their grain bins to the consumers around the world. It is our obligation as the federal government to always be there for them and to make sure that it happens. In the last few years, we have. I say that we have, because it is technically the Conservatives, but at the end of the day, it is the responsibility of the House to make sure that it does not happen again and that the system is in place to help farmers succeed.

If a young person is looking at getting into agriculture, there is great opportunity out there. However, to see what has been happening in the last year would discourage any young person from getting into it, knowing that they could do everything they could to produce a product but that they could not get it to the customer.

I will leave it at that, and I will open it to questions from any other members in the House.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I do not think, as my colleague said, that there is any question that there has been only short-term economic damage to producers as a result of the government's inaction on how to handle the system changes as a result of killing the Canadian Wheat Board. There is serious long-term economic damage to the western grain industry as well, in terms of lost markets. We have shown this year that we are not the reliable supplier we once were.

There were clearly concerns expressed at committee by the domestic industry in B.C. that there is a gaping hole in this legislation in that there are no assurances that the grain companies will have the supply cars to move domestic product for the B.C. livestock industry. As a result, they had to truck it there, at a cost disadvantage compared to the rest of the country.

Additionally, it was mentioned at committee by Ian McCreary, a farmer, that:

The current problem has no solution under the current regulatory framework. Shippers are the only ones with standing with the agency. Shippers are the grain companies, which are making record profits from the current basis; thus a solution through the agency is unlikely.

However, the penalties the government is claiming to propose in this legislation go to the shippers, which, as Mr. McCreary said, are really the grain companies. We already know that the grain companies are ripping off producers because of the situation farmers find themselves in.

I ask my colleague if this legislation actually deals with the problem of paying penalties to the grain companies rather than to the people who are losing the money, the producers.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Mr. Speaker, I thank the member for Malpeque for all of his hard work on this file and for working with me for farmers out west.

My colleague mentioned the situation with respect to local livestock producers who were not getting the product they needed. The railroad companies have told us that the government wants to crack down on them and they will be required to move thousands of tonnes of grain, which by the way, the Saskatchewan premier says is not enough. The railroad companies have taken the so-called low-hanging fruit. They went to where they could quickly get the grain and jammed up the system. There was nothing in place concerning farmers in Fraser Valley. There was nothing telling rail companies to ensure some of that grain was sent to the people in Canada or even in the United States who needed it. The member was right when he said there was nothing there.

I read another interesting thing in The Western Producer. I might not have my figures exactly right. When the Wheat Board was in place, the cost of transporting a bushel of grain from the prairies to port was around $1.50 with probably 50¢ more for various charges. That came to a total of $2. Farmers are now saying that $4 is coming off their product. If they were getting $8 that has been reduced to $4. With the system that was in place before, those farmers would have been getting $6. That is why there is an $8-billion loss out there.

[Brent Rathgeber, Independent, Edmonton—St. Albert, AB]

Mr. Speaker, we have been told that the amendment that I am concerned about that would empower the Canadian Transportation Agency to award compensation to shippers was passed unanimously at committee, but we heard from the NDP agriculture critic that that was not their first choice. He indicated that some other tribunal, such as the Canadian Grain Commission, might be in a better position to adjudicate disputes and claims for compensation.

I understand the hon. member also sits on the agriculture committee. I wonder if he agrees with some of my concerns that the Canadian Transportation Agency, which is a regulator, is ill-equipped to assess claims for compensation and to interpret service agreements. Would he agree that perhaps some other mechanism for awarding shippers, or producers who suffer damages as a result of the breach of service agreements, might have been a better way to go?

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Mr. Speaker, the member has some legitimate points. There might have been a better tribunal. As I was just reading in The Western Producer, a lot of farmers think that if they have to take somebody to court or a tribunal they are obviously going to be the ones to lose.

We should have some policing out there, but that is not what we really want. We want the system to work so hopefully nobody will have to go through a tribunal system. We hope nobody will have to go to a tribunal system. We hope Transport Canada will never have to deal with that. That is what we were pushing for. If there were enough teeth in the bill then we would not have to go there. That is what we focused on. We do not want farmers appearing before some tribunal on a constant basis to get what they desire.

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

Mr. Speaker, I am pleased to speak on the importance of this legislation and it passing as soon as possible. As the minister said, the fair rail for grain farmers act would hold solutions that would benefit farmers and the entire value chain. It contains clear and achievable measures to help ensure Canadian shippers have access to a world-class logistic system that gets their grain to market in a predictable and timely way.

To give members a quick review of the bill, the fair rail for grain farmers act would: one, amend the Canada Transportation Act to set out minimum volumes of grain in extraordinary circumstances that railways are required to transport; two, create the regulatory authority to enable the Canadian Transportation Agency to extend interswitching distances to 160 kilometres from 30 kilometres for all commodities on the prairies; three, amend the Canada Grain Act to strengthen contracts between producers and shippers; and, four, establish regulatory power to add greater specificity to service level agreements, as asked for by all shippers.

This bill would help ensure that Canadian producers can leverage our ambitious trade agreements and maintain our reputation as a reliable supplier of high-quality products. Taken together, these measures offer market-based solutions to helping farmers get their products to market quickly and efficiently, while securing Canada's reputation as a world-class exporter.

Since day one, our government has put farmers first in all of our policies and programs in agriculture, and this is what we are continuing to do. This bill would address the immediate needs of Canadian farmers and I call upon all members of the House to move this legislation forward without further delay and to include the government's amendment, which would put more teeth into the service level agreements and bring more accountability to the railways.

Of course, we acknowledge the Speaker's ruling on this matter. However, our government feels very strongly that this amendment is necessary to get grain moving and it must be included in the bill. We are responding to feedback from many stakeholders. Therefore, I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following:

“Bill C-30, An Act to amend the Canada Grain Act and the Canada Transportation Act and to provide for other measures, be not read a third time but be referred back to the Standing Committee on Agriculture and Agri-Food with the view to adding a new clause providing that the Canadian Transportation Agency may order a company to compensate persons adversely affected when the company fails to fulfill its service obligations”.

[The Acting Speaker, Barry Devolin]

The amendment is in order.

Questions and comments? Resuming debate.

Is the hon. member for Malpeque rising on a question and comment?

[Wayne Easter, Liberal, Malpeque, PE]

It is a question on this amendment, Mr. Speaker.

There were quite a number of shortcomings in the legislation that we outlined in some of the questions—

[The Acting Speaker, Barry Devolin]

If I could clarify with the member, is he rising on a point of order related to the amendment or is he raising a question for the hon. parliamentary secretary?

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I am raising a question on the amendment.

I am wondering if the mover of the amendment can tell me. The amendment seems quite narrow and there are other shortcomings that are clear in the bill that have been asked for by producers. One was, as I mentioned in my question, the assurance that the rail companies would have to move grain into the domestic market in B.C., where producers are already paying about $100 more as a result of having to truck grain in. Will that be allowed to be reincorporated into this bill?

How will this amendment deal with the fact that under the act, the grain companies are determined to be the shippers? As I said earlier, the grain companies are the ones making excessive profits right now at the expense of primary producers. Is there any way of ensuring that the penalties go to producers when the grain companies are determined to be the shippers under the act? Does this amendment deal with that particular point?

The last question is this: how can there be assurances that this is drawing grain from the total region and not just where the railways think they can gain the best volume at the lowest cost?

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I would like to assure the member that when the committee first reviewed the bill, it reviewed it in detail. There were numerous meetings, additional meetings that were scheduled, and additional witnesses brought before committee in order to have a full airing of points of view and opinions regarding the bill.

I would say as well that during the clause-by-clause analysis, there was full discussion on all aspects contained within the bill. Concerns were debated within committee and were determined by committee.

The member is right. What I would like to achieve with the motion is that the bill goes back to committee with a view to adding a new clause, providing that the Canadian Transportation Agency may order a company to compensate persons adversely affected when the company fails to fulfill its service obligations.

I would say that many of the points, in fact all of the points, that the member is raising today in the House have already been raised in committee and been dealt with in committee.

The other thing I would mention is that in our debate in committee, the member knows this quite well, there are regulatory processes that will be followed that will allow further consultation with industry to address some of the concerns that this member has brought forward.

[Brent Rathgeber, Independent, Edmonton—St. Albert, AB]

Mr. Speaker, I am just curious if the parliamentary secretary can advise the House as to why he believes the motion will achieve its intended purpose in light of the Speaker's ruling, which would advise this House that an amendment at committee cannot go outside of the original purposes of the bill. Does he not accept that Speaker's ruling, and how does he square his amendment with the Speaker's ruling?

Second, I was wonder if he could advise the House, under which standing order he is making this motion, given that the bill has already been reported by committee to this House.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Mr. Speaker, as I said in my comments, we respect the ruling of the Speaker, but the question has now been put to the House, and we are asking Parliament to determine whether the bill can be sent back to committee with a view to incorporating the clause that is in question.

It will be the House that decides, and then the bill will go back to committee, and committee will have the authority to determine whether or not to include it, given the direction that will be established here in the House, based upon proceedings that are about to follow.

[The Acting Speaker, Barry Devolin]

Is the House ready for the question?

[Some hon. members]

Question.