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.

[Greg Northey, Director, Industry Relations, Pulse Canada]

Thank you, Madam Chair and members of the committee, for the opportunity to discuss Bill C-49 with you.

Pulse Canada appreciates your focus on this bill and your efforts to expedite the study prior to the return of Parliament. We submitted a brief to you, and I will touch on a few of the recommendations contained within it.

Pulse Canada is a national industry association that represents over 35,000 growers and 130 processors and exporters of peas, lentils, beans, chickpeas, and specialty crops like canary, sunflower, and mustard seeds. Since 1996 Canadian pulse and specialty crop production has quadrupled, and Canada is now the world's largest producer and exporter of peas and lentils, accounting for one-third of global trade. The value of the industry's exports exceeded $4 billion in 2016.

The market for pulse and specialty crops is highly competitive, and maintaining and growing Canada's market share in over 140 countries that the sector ships to is a top priority for the industry. Pulse and specialty crops are the most multimodal grain crops in western Canada; 40% of our sector's exports through Vancouver are containerized. Efficiently managing the logistics in these supply chains drives the competitiveness of our sector. As such, predictable and reliable rail service is central to ensuring this competitiveness and economic growth.

It is through this lens that Pulse Canada has assessed Bill C-49. Will it deliver improved service, increase rail capacity and competitive freight rates to the small and medium-sized shippers that constitute much of the pulse and specialty crops sector? Pulse Canada believes that Bill C-49 has the potential to deliver these outcomes, but we would like to offer some recommendations to ensure that the bill delivers the results that government intended, that shippers need, and that the overall Canadian economy expects.

Increased competition is the most effective way to deliver improved service capacity and rates, and this is where the proposed long-haul interswitching rate regime holds the most potential. The competitive forces that extended interswitching delivered to the rail market as a result of Bill C-30 were directly beneficial to pulse and specialty crop shippers, and the sector would like to see the long-haul interswitching deliver the same results.

You have heard significant and detailed recommendations on how to improve LHIR today. So I would only like to reiterate one point: excluding large groups of shippers from accessing the provision or limiting a shipper's access to the nearest rail competitor when the next competitor may offer the best combination of service, price, and routing, significantly decreases the potential impact of this provision. For LHIR to work as intended, by letting market forces and competition prevail—a point shippers and railways agree on—it should not be artificially limited through a list of exclusions that cuts out huge swaths of the economy. These exclusions should be removed to allow shippers and railways to operate under LHIR in as competitive an environment as possible. This will bring maximum benefit to shippers, railways, and the Canadian economy. This would also help reduce the differences in interpretation and intents as well as the expected legal challenges that will plague decisions with this remedy for years to come.

I will now focus on provisions of the bill that are intended to help increase supply chain transparency. Creating a competitive environment with balanced commercial relationships requires a transparent freight rail system so that all involved can make commercial decisions based on timely and accurate information. To achieve this, the bill proposes two significant new data regulations and a transitional provision that would require railways to provide service and performance data based on the model used by the U.S. Surface Transportation Board. This is a good start. However, Bill C-49 proposes that this data will not be available to the commercial market until a full year after royal assent. When the data does become available, the bill allows a three-week lag between collection and publication of this data.

In the U.S. case, the railways and regulator began publication of this data within three months after it was ordered, and it was available publicly one week after the railways provided it to the regulator. With a concerted effort by shippers, governments, and railways, and an amendment to Bill C-49, Pulse Canada believes Canada can match, at minimum, the timelines set in the United States and fulfill the intention of Bill C-49 to provide timely data to the commercial market.

As recommended by the committee in your report on Bill C-30 in December, Bill C-49 has introduced a significant new requirement for the railways to provide confidential, commercial, and proprietary data to the Canadian Transportation Agency.

As you identified, this data is important, as it would permit the agency to more effectively identify and investigate issues in the rail system and exercise its authority to issue orders to railway companies. This is the point that Scott Streiner identified yesterday as an important issue, and it's one that Pulse Canada believes in as well. However, Bill C-49 limits the use of this data by explicitly specifying that it can only be used by the agency to calculate long-haul interswitching rates. Requiring this data from railways, but narrowing its application, severely limits the impact of this new regulatory provision and does not fully achieve the intent for the data to support the agency's delivery of its statutory responsibilities. Equally important, this data could be used to fully measure the impact of Bill C-49 and allow for evidence-based assessments as the bill is implemented.

To conclude, I'd like to address the proposed changes in Bill C-49 that will remove containerized grain from the maximum revenue entitlement. Pulse Canada understands that the government's intent with respect to this policy change is to incent innovation in the container supply chain, increase container capacity, and improve levels of service. These are valuable outcomes, and we must collectively ensure they are achieved, as removing this traffic from the MRE could potentially negatively impact the Canadian pulse and special crop sectors' international competitiveness. The focus, then, must be to ensure that other provisions in Bill C-49 set the necessary conditions for this change to the MRE to be a success and to truly result in more service and capacity. The data recommendations I discussed earlier will help ensure that everyone can measure the policy outcome, but Pulse Canada has recommendations on other provisions within the bill that will ensure that the remedy suite available to shippers in the event of service failure or costing disputes is functional.

First, the reciprocal penalty provision and the accompanying dispute resolution process introduced for service level agreements is a valuable change that will establish commercial accountability between shippers and railways. We applaud the government for introducing this. To ensure that it functions effectively, Pulse Canada asked the committee to consider clarifying that the intent of these penalties is to be sufficient to encourage commercial accountability and performance while recognizing the differences in economic power of small shippers compared with that of the railways.

Second, for small and medium-sized shippers and containerized shippers no longer shipping under the MRE, it will be essential that the general strengthening of the agency's information and dispute resolution services introduced in this bill, Bill C-49, is effective. The agency having the ability to attempt to resolve an issue a shipper may have with the railway company in an informal manner provides shippers with a less confrontational, more cost-effective and timely way to resolve service issues without having to bring a formal level of service complaint to the agency. These are barriers facing shippers when considering accessing agency provisions, and this is why the agency has stated they will increase outreach to shippers. It has nothing to do with the agency “drumming up business”.

To fully realize the potential of this provision, Pulse Canada requests the committee to consider clarifying what it means for the agency to take action on informal resolution. Our view is that taking action can include a wide variety of activities, including such things as questioning, site visits, requesting information, investigating, etc. Clarity on this issue would help during the implementation of this bill. Ultimately, however, Pulse Canada views agency own-motion powers, which has been discussed at length today, as the most efficient and effective way to address disputes and network issues and strongly urges the government to consider the agency's request to be granted these powers.

Finally, I'd like to briefly touch on a provision in Bill C-49 that is specifically focused on the grain sector. The requirement in clause 42 of the bill that railways self-assess their ability to move grain during a upcoming grain year and identify the steps they will take to enable grain to move can be an extremely powerful provision that can establish the basis for measuring railway activities against their plan both during and at the end of the grain year. To strengthen this provision and ensure it delivers the intended outcome, Pulse Canada offers recommendations in our brief to enhance that section to clearly set the parameters for the type of information railway companies must provide. For the pulse and special crops sector, better defining these parameters provides an additional platform for the monitoring and assessment of the impact of the decision to remove containerized grain from the MRE.

Thank you.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Yes, so extended is what you recommend. I would recall for my friend that it was in our Bill C-30, but let's forget that it was a Conservative measure. This is what people asked for, and it's what would help.

Is there any other recommendation or any other issue you would like to see addressed in this bill?

Mr. Audet, you talked about safety. Of course, there are the recordings that can be heard after the fact, but you think the focus needs to be on training. What would you like to see in Bill C-49 to that effect?

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I would comment first off that the session that we've been having this past week has been very non-political and today that changed, which is giving me the opportunity to respond. I want to make three points based on Mr. Blaney's comments.

If in fact Bill C-30 was good legislation, why did the previous government also introduce the sunset clause? The second point is why did we hear loud and clear from the witnesses criticizing long-haul interswitching during the fair rail for grain farmers study? Lastly, why did the previous government also take it upon itself to commission David Emerson to review the system, as well as propose long-term solutions as seen in Bill C-30?

My apologies, but I had to correct the record.

[Perry Pellerin]

In Saskatchewan, especially with some of the short-line grain shippers, access to what was in Bill C-30 would allow some new businesses to take a look at our short lines as an opportunity to build on to give them access to other class 1s. The way it's structured right now, I think new business would be reluctant to build on the short line, because you might as well at least get within that 30-kilometre zone to give you those options.

To be honest with you, I think my answer would have been that if we didn't have Bill C-30, this one's worse. I'd rather not have it at all compared with what we had before, if that makes sense.

[Lucia Stuhldreier]

This map will look different from the description of the excluded corridors, but realistically any shipper in that area that's shipping traffic to the Vancouver area, to terminate on a rail siding there, would not be able to use this. We can draw a very similar map for Quebec to show that some of the most captive shippers in the northern part of that province will have exactly the same problem, because their only connection to any other carrier will be in that Quebec-Windsor corridor.

Quite apart from these things, though, one of the underlying issues that WCSC has with this remedy is that it will fundamentally succeed or fail with the willingness of any one of the railways to act as a connecting carrier and to compete for that traffic using long-haul interswitching. Just like its predecessor the CLR, that can make or break that remedy. We haven't seen any willingness to do that, to compete using CLR since the early 1990s, and we don't see anything in the long-haul interswitching remedy that changes that dynamic.

On top of that, the scope of traffic that's eligible for long-haul interswitching, geographically as well as in other respects, is much narrower than what could theoretically take advantage of competitive line rates.

Third, there are a number of hurdles built into this remedy that don't currently exist with CLR.

From that perspective, and given the experience with CLR, even though we may have seen some willingness to compete up to 160 kilometres under the Bill C-30 regime, we haven't seen anything beyond that. CLR has been on the books that entire time. We're concerned that we're not going to see what is really required, which is a willingness to compete on the part of CN and CP—certainly in western Canada the majority of interchanges is between those two carriers—that is necessary to make a remedy like this work.

Yes, the requirement for an agreement with the connecting carrier is taken away, but the fact that people haven't been able to get that agreement is really just a symptom of that underlying, more fundamental issue, which is that CN and CP have “declined to compete”. Those, I want to make sure you know, are not my words. Those are the words of the statutory review report that was issued in 1992. They were repeated in 2001, and I think there was also something along those lines in the most recent report.

[Kevin Auch, Chair, Alberta Wheat Commission]

Thank you, Madam Chair.

My name is Kevin Auch, and I am pleased to appear before this committee this afternoon alongside our industry partners from the Western Canadian Shippers' Coalition and the Western Canadian Short Line Railway Association to provide a producer perspective as part of this committee's review of Bill C-49, the transportation modernization act.

I am chair of the Alberta Wheat Commission, an organization dedicated to improving the profitability of over 14,000 wheat farmers in the province of Alberta. I also farm in southern Alberta near the town of Carmangay.

I am here today because rail transportation has been one of the commission's top priorities since its inception in 2012. Costs associated with railway failures are ultimately passed down the supply chain to producers. As a price-taker, I cannot adjust the price of my product, so ultimately, these increased costs reduce my profitability. They also negatively impact my cash flow, making timely bill payments an issue.

These challenges are not unique to my operation. They are widespread and that is because when it comes to rail transportation in Canada, the agriculture sector operates in a monopoly environment. Most of the elevators where farmers in western Canada deliver their grain have only access to one railway, leaving both shippers and farmers captive to monopoly carriers.

This is a significant problem because wheat is a crop that relies heavily on export markets and rail transportation to ship our product from the Prairies to port terminal facilities along the west coast and Thunder Bay, as well as our neighbours to the south of the border. While we appreciate this government's efforts to increase market access for farmers through the establishment of free trade agreements, we will lose credibility with international buyers if we are unable to fulfill their orders due to railway failures. We experienced this in 2013 and 2014 when buyers simply sourced their grain from other countries. Canada's reputation as a reliable supplier to global markets is at risk.

Canada's grain supply chain is making significant investments in order to take advantage of new and growing market opportunities. We are seeing major expansion both in port terminal and country elevator capacity. Grain companies have invested hundreds of millions of dollars to ensure they are ready to service growing international markets, and farmers are preparing to take advantage of these opportunities as well. Farmers' significant investments in research as well as new and innovative technology have led to significant yield increases over the years. In fact, just last month CN Rail announced this growth when they implored the Canadian government to invest in new rail infrastructure in order to accommodate the influx of grain. In 2017, CN moved a record 21.8 million metric tons of grain.

My point is that ensuring adequate rail service is paramount to the growth of our sector and Canada's reputation as a reliable supplier of grain to international markets.

AWC appreciates the government's commitment to legislation that will ensure a more responsive, competitive, and accountable rail system in Canada. We believe that Bill C-49 is in fact an historic piece of legislation that paves the way for permanent long-term solutions to the rail transportation challenges that Canadian farmers have faced for decades.

That is why AWC is pleased to see the inclusion of provisions aimed at improving railway accountability, including shippers' ability to seek reciprocal financial penalties, a clear definition of adequate and suitable service, and enhanced interswitching—all measures that AWC has long advocated for. Bill C-49 also contains important provisions that will enhance the inquiry powers of the Canadian Transportation Agency and require that data on rail system performance be made available to the public.

Furthermore, AWC supports the decision to retain the maximum revenue entitlement with modifications that will reflect individual railway investments, incentivizing innovation and efficiency.

With respect to the role that reciprocal penalties play in this legislation, railways have always had a variety of measures that govern shipper efficiencies, including asset use tariffs. These tariffs are used to penalize shipper failures through monetary fines in order to gain shipper efficiencies. For example, when the railway spots cars at my local elevator and the grain company fails to load them within 24 hours, the grain company faces automatic monetary penalties. On the other hand, if the railway shows up two weeks late, there are no penalties. Therefore, the railways are the only link in the grain logistics supply chain that are not held to account.

In order to create an efficient supply chain, one with balanced commercial accountability, railways need to be held accountable for service failures.

We were recently made aware that CN Rail has included a form of shipper tariffs in about 70% of their service-level agreements. On the surface this seems like good news, but these tariffs are limited to a failure to spot cars and still neglect to address common challenges, including timely delivery or the provision of accurate information. We are encouraged to see that CN has taken some steps to increase railway accountability, and we are confident that the provisions outlined in Bill C-49 will ensure that, going forward, penalties are truly fair and reciprocal.

In addition to increasing accountability, reciprocal penalties will create the incentive needed for railways to focus on performance and invest in the assets that can improve efficiencies. This recommendation positions railways to compete in order to drive efficiencies, lower shipper risks, and ultimately better serve foreign markets for Canadian exports.

Under Bill C-30, which expired on August 1 of this year, extended interswitching provisions proved to be a powerful competitive tool for grain companies. Bill C-49 proposes that, under some circumstances, interswitching distances will be increased to 1,200 kilometres, but unlike the previous extended interswitching option, there are conditions within the new provisions that seem to contradict the true intentions of the legislation, making them less effective than the provisions under Bill C-30.

For example, the previous interswitching provisions allowed shippers to access any interchange within 160 kilometres without the need to obtain a permit from the Canadian Transportation Agency. The provision outlined in Bill C-49 stipulates that shippers must seek permission from the originating carrier or obtain an order from the agency to access the interchange, and it must be the interchange that is closest to them. Not only do these changes make interchanging more onerous and complicated, they can essentially render the provision useless in a variety of scenarios, including if the interchange in question does not service the appropriate corridor. In other words, if it moves the product in the wrong direction, if the nearest interchange cannot accommodate the size of the car load, or if it is serviced by the wrong rail company, the nearest competing line does not necessarily have lines running the full distance to the shipment's final destination.

To address these challenges we would ask the committee to consider the amendments put forward by the crop logistics working group, of which AWC is a member, that would allow shippers to access the nearest interchange that can accommodate their requirements with respect to the direction, size, and preferred carrier.

Costs incurred by shippers are ultimately passed down the line and on to producers. That is why our members are also concerned about the formula outlined in Bill C-49 to determine the rates associated with long-haul interswitching. Proposed subsection 135(2) directs the agency to set a rate not less than the average of the revenue per tonne kilometre of comparable traffic. In our view this encourages monopoly rate setting as it is based on revenue as opposed to a cost-plus model. Rates should allow for a reasonable profit, but should not reflect those previously charged in a monopolistic environment.

In closing, the Alberta Wheat Commission strongly supports the quick passage of Bill C-49 because we believe it will help to correct the imbalance between the market power of railways and captive shippers. We encourage the federal government to continue the conversation with Canada's agriculture sector as it works to develop the regulations to support the spirit and intention of the legislation, which seeks to create a more responsive, competitive, and accountable rail system in Canada.

With that, I would like to thank the committee for the opportunity to share the producers' perspective with you today, and I invite any questions you may have with respect to the comments I've made.

[Wade Sobkowich]

I could take this one, and then maybe Norm could.

We've definitely seen an increase in harvest volumes year over year. We have an upward trend. If you take a look at the last five years, we're now talking about a crop of 65-million tonnes being an average crop. Man, if we'd gotten that number 10 years ago, we would have been busting the rafters of our elevators. We definitely have more and more grain coming off the fields during harvest time. That's attributable to changes in agronomic practices and changes in technology. Farmers are operating with better practices and that sort of thing.

If your question is what has changed to give us comfort that we won't end up with a similar situation to what we had when we started seeing some of these big crop volumes, from our perspective nothing has changed. We don't have a change in the competitive environment. When we had Bill C-30 and we had extended interswitching, we had a glimpse of a change in the competitive environment, but that has sunsetted. We don't have Bill C-49 passed yet, so really, nothing has changed in the competitive environment and nothing has changed in the legislative environment to give us comfort that if we don't get something passed here, with tools we can use like reciprocal penalties, we won't go back to the situation we had in the past.

Does that answer your question?

[Sean Fraser, Liberal, Central Nova, NS]

If we can, I'd like to again shift gears and go into some questions about interswitching, and I'll start with Mr. Al-Katib.

We heard during our prior study on Bill C-30 from some folks not in the grain industry that, “Gee, we'd really like to have this, too.” It impacted a certain geography and a certain industry. Although it was put forward, really, in an environment where we were dealing with a bumper crop and terrible weather, the fact that we can be introducing competition where there is none seems to me like a good idea. Is there any reason that we shouldn't be extending this to different industries across the entire country?

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

Thank you very much, Madam Chair.

I just want to follow up on some of my colleague's questions around long-haul interswitching as it goes to the extended interswitching that was in Bill C-30. I thought I heard you say that some of the measures in Bill C-30 have been carried over in Bill C-49, but in fact there are no measures in place right now when it comes to interswitching or long-haul interswitching or extended interswitching because that legislation was allowed to sunset on August 1, before this legislation has received royal assent. So right now our shippers are without any ability to do any kind of long-haul or extended interswitching. Is that correct?

[Helena Borges]

I have looked at all of the recommendations that were in your study of Bill C-30. I believe you had 17 recommendations. We've gone through all of those, and I would say that we have addressed them all, as well as actually implementing some of the recommendations you had in there and allowing some to sunset. Those that sunset are two that were in Bill C-30. We have a rationale for letting those sunset: it is basically because the situation has changed considerably since 2013-14.

I don't believe there is a gap. I think we have addressed all of the recommendations well. In fact, I would say that we have gone beyond in addressing other recommendations that the CTA review panel put forward and for which stakeholders have been asking for a few years.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Good morning. I'd also like to welcome you back.

In your opinion, do you think there's a gap between Bills C-49 and C-30?

Transportation Modernization Act

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

Mr. Speaker, it is my privilege to rise today to speak to Bill C-49, the so-called transportation modernization act.

Before I go any further, I would like to say that I will be sharing my time with the member for Saskatoon—University. I look forward to his presentation on this as well. He comes from a neighbouring province to the west, and he also has a great knowledge of what is required in this field.

It is a privilege to put on the record again, as I had the opportunity to do with our opposition day motion on Monday this week, how important the movement of grain is to western Canadian farmers, as my colleague just said. However, it is not just important to the farmers but to the whole industry and economy of western Canada, which affects us all. We are one of the largest exporters of grain in the world with regard to the percentage that we grow.

I think the changes that have come forward in the bill would be somewhat detrimental, although there are a few that will work very well on the grain side.

Bill C-30 was brought in by my colleagues when we were in government due to the conditions that took place in the Prairies in the winter-fall of 2013 and the spring of 2014. I will never forget that because that is when I was elected as a member. Having farmed in western Canada all my life prior to getting into politics, I certainly know the importance of making sure that we have a reliable system of moving grain and exporting it, not just for the farm community but for the logistics of the rail companies and the port authorities and facilities on the west coast, east coast, and in Thunder Bay. At that time, there was also some grain movement through the Port of Churchill.

Before I get into too much of that, I would like to say that what we need to do in the Prairies with regard to the evolution of the transportation system, as we move forward, is to make sure that we look at processing more of these grains on the Prairies than we have in the past. I was in the room with the minister from Regina—Wascana, which I believe was his constituency at the time, in 1995, when the Crow benefit changed and was taken away. I lobbied to make sure that happened. I did that because my farm was located halfway between Vancouver and Montreal at the time, and we would have been faced with the highest freight rates on the Prairies, right in my kitchen.

We did that so that our future family members, our children, in western Canada would have a job locally by processing more of that grain. That is one of the key reasons for a lot of the lobbying that went on in those days to make changes not just to the rail system but to the way grain was marketed. My colleagues in the House have also brought forward the opportunity to allow farmers to sell their own grain and do their own marketing, which is key to the future development of more processing plants and those types of facilities in the Prairies.

The processing of grain is an example of how important this can be. We have rail lines that begin in Winnipeg and pretty well run parallel out to Portage la Prairie, and then branch off to Calgary and Edmonton through the west. That is why the interswitching that my colleague has brought in, and extending it from 30 kilometres to 160 kilometres, was a great advantage for farmers and competitive rates in the Prairies. It did not only work for them but also for the grain companies. It gave them the ability to have a bit more competition.

The types of things that we gained from the 160-kilometre range of interswitching would be taken away in this new bill, Bill C-49, which I think is a detriment to the longevity of the competitiveness we could have. One example is that we can only do it at a point where that interswitching is available. If one's grain is in northern Alberta or the Peace River areas of northern B.C., the first point of interswitching is Kamloops.

Of course, then one cannot really have much competition for all of that grain in northern Alberta and the Peace River area, if one cannot get access to a competitive rate until it gets to Kamloops. I worked there in the early seventies. I know the city well. It is a great place. I know my colleague from Kamloops agrees with me. This would not allow the type of rate competitiveness that we could have seen in the Prairies.

Bill C-30 also mandated the rail companies to carry half a million tonnes each of grain per week to catch up on some of the backlog that was there at that time. This bill just allows them to continue to talk. It does not mandate a level of grain shipments. That was for a period of time until that backlog got taken care of, which happened later on that summer. We hope we do not see those kinds of conditions, but we do have cold weather on a regular basis in western Canada in wintertime and there was a lot more at stake than just the cold weather in forcing that grain back on to the Prairie farms at that time.

There may be some opportunities here. We cannot haul all of the grain in the Prairies by truck. It has to get onto a rail system at some point. Now that there are more opportunities for farmers to move their own grain, I have young farmers coming to me every day talking about the movement of their grain north-south by truck. Some of that is entering into the United States.

We also purchase a lot of grain in feed form, and that sort of thing, from the U.S., and we need to look at continuing to expand our processing. We need to make sure we continue to have that mechanism to move the grain and also to import from the United States.

We also need to make sure that we are continuing to process even more of the product we have on the Prairies. That is being done in many places in Saskatchewan and Alberta. Some of it is being done with the expansion of our livestock industries, because they consume an awful lot of feed grains in western Canada, which then gets moved in another form. Most of it ends up being slaughtered in some of the largest processing plants in the world in Alberta, in Brooks and High River. We know there is an opportunity there to continue to move that product.

It is being done in Manitoba with the largest pea processing plant in the world, coming to Portage la Prairie. It is a $400-million investment by a French company. The Manitoba government is putting very little infrastructure money into this, other than connecting the hydro lines and natural gas.

These are the kinds of investments we need. I know Bill C-49 will not be as good as Bill C-30 was, as far as that goes. It also speaks to other areas though, such as the air industry and marine industry as well. We need to make sure that while there are changes taking place, they are not detrimental to the future of those industries as well, because we do rely quite heavily on our export ports, particularly on the marine side, to be able to export and move this grain.

Bill C-49 eliminates some of the things that were good parts of Bill C-30, particularly in regard to ordering the railways to compensate any person for expenses caused by the railway's failure to fulfill service obligations.

I will end there and see if anyone has questions before my colleague, the member for Saskatoon—University, takes over.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, I am pleased to rise and add my remarks to the debate on Bill C-49.

Before I begin, I would like to take a second to acknowledge a very poignant moment today in the House. I was here when the Clerk, Marc Bosc, arrived for his last shift here in the House of Commons as Acting Clerk of the House, as we have heard from a number of sources.

Mr. Bosc was the person who welcomed the members who had been newly elected in 2015 to the House. It was a very emotional time for us. To us, Mr. Bosc is the Clerk of the House, because he is the only one we have ever known. Mr. Bosc has always been there for us and has always shown the utmost professionalism. He was respected by all, at least by everyone on this side of the House. Mr. Bosc has always served with enormous professionalism, and we have always respected him.

For me, Mr. Speaker, it was a very poignant moment to see him enter the chamber this morning and take his place before us, to begin his final sitting day in the House of Commons. I trust that Mr. Bosc will always hold a place of honour here in Parliament.

In closing, we found out about this rather suddenly. I would have liked the opposition parties to be consulted more on the process to replace the Clerk. No offence to the incoming Clerk, but I just wanted to take a few moments on behalf of my colleagues, myself, and my family, who shared in all the emotion that we experience when we first arrive here, to acknowledge Mr. Bosc's excellent work.

Mr. Bosc has been here much longer than I have, but like me, he has seen his share of governments and their different approaches to ensuring that their bills get passed.

Bill C-49 is another example of the government using closure to prevent giving the opposition opportunities to speak to this bill or criticize it. By the minister's own admission, this bill is quite complex, and it will make significant changes to Canada's transportation industry. Even so, we will have just a few of hours of debate to discuss it and raise what I think are some very important points.

Why is this especially troubling in the case of Bill C-49? It is because this bill does not amend just one or two sections or one or two acts. It amends 13 pieces of legislation.

For the past two days, I have been listening to the arguments given by the Minister of Transport who says that the opposition is overreacting, since 80% of the changes proposed in Bill C-49 will amend just one law, and therefore the opposition has no reason to protest so loudly. What? How is that an argument? It is as though one section of an act were more important than another. If the 20% of Bill C-49's clauses that amend 12 other laws are not all that important, why bother including them? Why are we talking about them? If they are not that important, if everything is focused on just one law and the opposition is outraged, why keep the other 20% of the amendments? Why not remove them and create another bill with those amendments and consider it separately? It does not matter, because everything is in the same bill.

Clearly, this argument simply does not hold water. It is particularly troubling. As members know, I have been a member of the Standing Committee on Transport, Infrastructure and Communities since I arrived in this place. Obviously, transportation affects all Canadians in every field. Transportation has an impact on the daily lives of all Canadians, whether we are talking about the transportation of goods or people.

They say this is a complex bill, that they will not give the opposition much time to talk, and that, since 80% of it is specific to one act, there is no need for us to protest so loudly. I think the minister should go back to the drawing board, take another look at what is in his bill, and think carefully about the repercussions that each amendment in Bill C-49 will have on the day-to-day lives of all Canadians.

Here is the lowdown on Bill C-49. The Liberals' omnibus transportation bill will establish a new air passenger rights regime; liberalize international ownership restrictions for Canadian air carriers; enable the Minister of Transport to consider and approve joint ventures by two or more airlines; update the Canadian freight system; require railways to install audio-video recorders in locomotives; expand the Governor in Council's powers to require major railway companies to provide rate, service, and performance data; and amend the Canada Marine Act to allow port authorities to access Canada infrastructure bank loans.

However, there is nothing there. According to the Minister of Transport, a few hours of discussion are enough to address all of these issues, since he did not think that the opposition had anything relevant to say during the first hours of this debate. Why would the government want to continue listening to opposition members provide supposedly irrelevant information when it can simply expedite the process by muzzling them? At least, that is what the minister seems to think.

Since when are opinions that differ from the government's irrelevant? The big problem with the Liberals is that, when we do not agree with them, on this or any other issue, they feel threatened and under attack. They think that anyone who does not share their opinion and does not think like they do is irrelevant, and so they have no reason to take any interest in what those people have to say in the House. That explains a lot.

It explains a lot, such as Motion No. 6 and the many time allocation motions that have been imposed on us since the beginning of this session. It explains the infamous discussion document that the Leader of the Government in the House of Commons tabled to supposedly improve the way the House operates. When we read that document carefully, we learned that the Liberals' intention was once again to avoid hearing what the opposition parties had to say.

It is not complicated. When things do not sit well with the government, it decides to muzzle dissenting voices that cast grey clouds over Liberal sunny ways. Well, I have news for the Liberal government. The official opposition and all the other opposition parties, I am sure, have no intention of staying quiet. We have no intention of letting changes slip through. We have no intention of completely agreeing with everything the Liberals put in front of us. We have no intention of being the people who enable the Liberal Party to push through their entire election platform. That is not our role here. Our role is to present criticisms.

As an aside, let us talk about the Liberal platform. It did not take long for the Liberals to realize that much of what they wanted to do is simply impossible. They promised big spending and small deficits. They kept only one of those promises. They are spending big, but they have come to realize that that requires huge deficits. That is something the government does not want the opposition to criticize. They would like us to keep quiet and just watch them and applaud them because they really like applause. That is not what we are going to do. That is not our role.

Let us come back to Bill C-49 because it seems like we are off topic, that we just keep providing an overview, and that we keep talking about everything but Bill C-49. Let us talk about Bill C-49 and what it amends. As I was saying, it significantly amends 13 different laws and has repercussions on three modes of transportation. This legislative measure will weaken legislative protections for shippers and western Canadian farmers.

We want to concentrate on proactive measures to make travel less expensive and more convenient for all travellers. This would include abolishing the carbon tax, instead of the Liberals’ plan to establish reactive compensation that will benefit only a small segment of the population.

This bill provides very little detail about the proposed air passengers’ bill of rights, and it does not have the support, in its current form, of many passengers’ rights advocates. Also, port authorities and their wholly owned subsidiaries will have access to loans and loan guarantees from the Canada infrastructure bank. There is an inconsistency here. That does not make any sense to me, since this bank does not exist yet. It remains a proposal for now, and it is held up in another house, for very good reasons.

Like us, the senators think that the infrastructure bank warrants its own bill, given the impact it will have and the $15 billion that the government intends to provide to it. That is $15 billion from Canadian taxpayers to be given to a board of directions to manage on our behalf without any accountability to Parliament.

These points alone justify our opposition to the passage of Bill C-44, which is currently being studied on the other side in its current form and includes all these budget measures as well as creating the infrastructure bank. I hope that people will get the message.

In Bill C-49, they already assume the outcome. Port authorities are being given approval to access loans from the non-existent infrastructure bank. What I do not understand is that the government, ever since it began telling us about the infrastructure bank, keeps saying that it will be an independent bank. As an aside, the process to find the president for this non-existent bank has already started.

Therefore, the infrastructure bank, which does not exist, will be made up of a so-called independent board of directors who will manage the money given to them by the Liberal government. At the same time, these supposedly independents will be told that they have to invest $1.3 billion in Montreal’s Réseau électrique métropolitain and provide loans to port authorities. To sum up, here is an independent infrastructure bank that will not be independent and does not yet exist. However, we are being asked to approve a clause of the bill that will allow port authorities to secure loans from this infrastructure bank that will be created in the near future.

It is clear that something is not working, that they are improvising, and that the minister wants to move quickly. We do not understand why he insists on moving so quickly. Some will tell us that it is because they want to settle the matter of Bill C-30 before it expires on July 31 in order to protect western grain producers in their rate negotiations with the railways. That could be the case, but that is not what is going to happen, since even if Bill C-49 is rushed through today or Monday and is referred to committee, the committee meetings are scheduled for September.

The committee was prepared to meet in July if the government agreed to hive off all the measures concerning Bill C-30. That would have allowed us to study them quickly in order to avoid having a legal vacuum for western grain producers. These meetings could have been held before August 1. The committee was prepared to meet in the middle of summer, during vacation—at least, the opposition members of the committee were. That would have been a major sacrifice for some of us to show up and study a bill to help western grain producers.

Why was the official opposition prepared to do that? Because we get that this is important. Right now, grain producers are concerned about what is going to happen this fall if there is a legal vacuum. We do not know exactly how the market will react. These people are negotiating right now.

We see another problem here. I myself am not a grain producer. However, several of my House of Commons colleagues represent western Canadian ridings, and they know a lot about grain production. From what I understand, grain producers usually harvest their crops in the fall. What time of year is busiest for grain producers? The fall, when they are bringing in the harvest.

The government is going to ask grain producers to testify on Bill C-49, which will have a major impact on their future, in the fall. The government is going to ask them to leave their machinery and their fields so they can come testify in Ottawa in September. That is when they should be in their fields doing their work, doing what we support them doing, and making their contribution to Canada's economy by producing and working. This makes no sense.

That is why the opposition was prepared to agree to move quickly on that part of the bill. We were prepared to let many things slide in order to move quickly. Why? Canada's grain producers are far more important to us than adding another number to our legislative record. The farmers need us to come to Ottawa to protect them, stand up for them, and help them succeed. That is our role.

If we are not taking extraordinary measures to get Bill C-30 passed before the deadline, then there is no urgency to justify speeding up the process and muzzling the opposition. The government probably does not want to let the opposition speak because it does not want to hear arguments like mine in defence of western grain producers.

I want to talk about another initiative that was very well received by the public, I admit. This was the main point in the message from the Minister of Transport. Indeed, he wants to create an air passengers' bill of rights. This is urgent. Like all of us, all Canadians who have flown over the past few months have seen the coverage of some of the dramatic incidents that have taken place in the U.S. Since the bill announced the creation of an air passengers' bill of rights, we thought we would get some information. We thought we might be told what to expect, but no, all the minister did was mandate the Canadian Transportation Agency to begin consultations that will eventually lead to regulations and, at some point, the air passengers' bill of rights.

Do we really need a bill to ask the Canadian Transportation Agency to begin consultations on a bill of rights? It makes no sense. There is no need for urgency when it comes to Bill C-49, apart from the legislation protecting western Canadian grain farmers; on that, we agree.

We believe that the only way to go and the only explanation or justification to make this measure acceptable, to make this gag order acceptable, would have been to split the bill and immediately pass the measures in Bill C-30, in order to make certain temporary measures permanent. We were ready to go ahead with that, but everything else could have waited; there is no need to panic. The only emergency here for this government is to silence the opposition. The government is not ready. It is improvising and presenting measures that just do not make sense.

For all these reasons, and despite a few good measures in the bill, the official opposition cannot support Bill C-49.

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.