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.

Opposition Motion—Canadian Economy

[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 under-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 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.

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

Thank you very much, Madam Chair.

I would like to move my motion that I put on the order paper on Tuesday, so I know we have it.

It's the one I read it out earlier today, so I won't read it again. I know it's been circulated to all the members.

In introducing and speaking to my motion, I made a lot of the comments I wanted to. I'll just reiterate that I introduced this motion for two reasons: the first being that we are dealing with an omnibus bill addressing a number of issues within numerous modes of transportation. The second would be that the members opposite, the government members, wanted to see us expedite the study of this bill, which I think demonstrated the need to address certain measures in the bill in a more timely way than others perhaps. That led me to ask at the last meeting if the members would be willing to break out the part of Bill C-49 that addresses the measures that are due as a result of the sunsetting of Bill C-30. As I was not able to get an answer then because of time constraints, I introduced the motion.

I want to respect and believe in my colleagues' desire to provide clarity and certainty to our producers. As I've pointed out, I don't think the time frame he's outlined within his motion will make any difference. That window has closed. I think the only way to redeem it is to break out this section of Bill C-49 and do a study as expeditiously as possible.

Thank you, Madam Chair.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

My thanks to Mr. Badawey for this motion.

The first thing is that the date of our work does not matter to me. We are elected to do this work. As soon as it is necessary, we will be there. It could be in July, August or September. That's not really the issue.

However, there are some questions I cannot find an answer to.

First, let's face it, Bill C-49 is an omnibus bill because it amends 13 pieces of legislation. If we meet before work resumes in September to answer questions about Bill C-30, we will be late because the deadline is August 1 or July 31. I do not understand why we would meet in September to solve a problem for which we would already be late.

If I were told that we would be meeting for one or two weeks, holding two to four meetings to deal urgently with what needs to be done for grain transportation, it would be one thing. However, I also see that we want to study Bill C-49 in the interval between the dates proposed in the motion and the return to the House for the new session. In that case, I say no.

Before I vote in favour of the motion, I would like to get an idea of how many hours we want to spend on Bill C-49. No less than 13 pieces of legislation are affected. There is no way that we will manage to do it properly in four meetings. That doesn't quite make sense. I wonder where the urgency to work in September comes from if we are already late.

Can we have an idea of the time that we want to spend on Bill C-49, to see if we have time to cover all the topics? I know that the first come, first serve game works, but there is also a motion coming up that proposes that the minister be asked to split the bill so that we can quickly study what is urgent and take the time we need to study the rest of the bill.

If I have to vote on those motions in the order in which they are moved, because I do not have the information I need and the ruling has not been made to ask the minister to divide his bill so that we can deal with what is most urgent and study the rest afterwards, I will unfortunately have to take issue with that. However, that's not because I don't want to work in September.

[Vance Badawey, Liberal, Niagara Centre, ON]

As I alluded to at the last meeting, colleagues, you will recall that we conducted a study on freight rail transportation in 2016 and, more specifically, the transportation of grain and agricultural products. We heard from numerous stakeholders that the measures in Bill C-30, also known as the Fair Rail for Grain Farmers Act, including extended interswitching, were not in fact ideal. The legislation was often characterized as a temporary band-aid, hastily applied after the grain-handling crisis in 2013 and 2014, a piece of legislation with many flaws.

Many farmers and other shippers felt that the 160-kilometre extended interswitching did not go far enough. Notably, sectors such as mining and forestry, in particular, pointed out that they too would like to benefit from interswitching but were usually outside the 160-kilometre radius. At the same time, rail companies objected to the rates not being determined on a commercial basis and argued that this would be a disincentive to them as regards making needed investments in their infrastructure.

In the absence of a solution that could address these various conflicting interests, this committee ended up passing a motion calling on the government to extend the provisions for interswitching that were due to sunset for one year, until August 2017, but only until such time as the minister could find a better—and I want to stress this point—longer term solution.

The good news is that with Bill C-49, the proposed transportation modernization act, the minister is proposing just such a long-term solution, including a new measure, calling for longer haul interswitching, which will be available to captive shippers within a 1,200-kilometre radius.

I understand that the initial reaction from shippers, including farmers, has been very positive thus far. However, there will be a legislative gap between when the interswitching provisions in Bill C-30 sunset in August 2017 and when Bill C-49 receives royal assent, assuming it does, likely sometime later this year, depending upon how long it takes to get through the House and, of course, the Senate. Some shippers are understandably concerned about this gap and would like to start benefiting from the new and improved measures contained within Bill C-49 as soon as possible. I know our government has heard these concerns and wants to help, and I'm sure that members of the committee, especially those in sensitive areas such as Saskatchewan, have heard the same concerns.

I understand that the government House leader has indicated a willingness to deal with Bill C-49 at second reading and get it to our committee before the summer adjournment. If that in fact happens, I propose that our committee meet prior to the House's returning in the fall to study Bill C-49. This would provide us an opportunity to hold extended meetings and do a lot of work in a relatively short period of time. Ideally, we could even complete our study before the House gets back in September.

I think this would go a long way to speeding up the process and delivering results for our grain farmers and other captive shippers who are eagerly awaiting the passage of this bill and will certainly be supportive, in our view, of the certainty that this bill will provide.

Bill C-49 also includes a number of other important measures, notably a passenger rights regime for air travellers that is long overdue and that I'm eager to start studying.

I hope our colleagues in opposition will join me and the rest of the members of the committee in supporting our farmers and agree to hold the meetings prior to the return of the House in September. I know that on this side of the table we're prepared to do that work. We're prepared to bring this bill forward, we're prepared to support our farmers, and we're prepared to expedite this process to hopefully get Bill C-49 through and fill the gap between the August 1 sunsetting and the passage of this very important bill.

Thank you, Madam Chair.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I understand, from our discussions, that the government House leader has indicated a willingness to deal with Bill C-49 based on some of the comments made, both by the committee and by the opposition in the House of Commons, with respect to bringing it to second reading and getting it to this committee before the summer adjournment.

If this happens, I would propose that our committee meet to study Bill C-49 prior to the House's returning in the fall so we can attempt to expedite this—again, based on some of the comments we've heard here in the testimony, as well as comments made specifically by the opposition in the House of Commons.

Madam Chair, this would provide us with an opportunity to hold extended meetings with the stakeholders and do a lot of work in a relatively short period of time to deal with the issue, as was articulated by members of the opposition in the House. There is a need to expedite this because of the sunset clause attached to Bill C-30.

As part of our work program moving into the fall, that's what I would propose, and I think it would go a long way toward speeding up the process and delivering results for our grain farmers and other captive shippers who are eagerly awaiting the passage of this bill. It would certainly provide them with the service levels they expect.

As members of the committee understand, Bill C-49 also includes a number of other important measures, notably a passenger rights regime for air travellers. Our studying this is long overdue, as well as hearing from those who are being impacted dramatically by it.

Madam Chair, I would throw that out there for discussion. Hopefully, we can get to this sooner rather than later because of the expediency it well deserves and needs.

[The Chair, Liberal, Judy Sgro]

They will be here for the first hour on Thursday. Thank you very much. I'm really glad when we can work together.

Now we have 15 minutes left to talk about committee business: what we have outstanding that's coming to us or that we still have to deal with.

We have Mr. Bratina's motion on water quality, which we have to deal with before December 1. We have a draft report on infrastructure that our analysts have done, which we have not gone back to review. We can take action on it, or we can simply leave it there until the fall, depending on the will of the committee on those two issues.

Legislation-wise, at some point we're going to have Bill S-2, Bill C-48, and Bill C-49. That's the legislative agenda ahead of us, over and above all the other issues that we'd like to dealt with.

As we look forward to the committee business ahead of us, we should sort out how we're going to deal with some of it. Bill C-49 is a very important piece of legislation, given the fact that it affects the issue of the sunset clause in Bill C-30.

That's what's ahead of us. We need to sort out how we are going to get these issues dealt with in the couple of meetings we have left.

I'm going to open the floor.

Mr. Badawey, go ahead.

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

Also making sure we have a transportation system that works.

Can I get some brief comments on transportation because I know it's very important. Bev and I were on the committee when we had the transportation crisis. We dealt with Bill C-30. The new government prolonged some of the provisions in Bill C-30, which we're happy about. There's the importance of transportation in Canada, and then I'm going to ask a quick question of the NFU.

[Claire Citeau, Executive Director, Canadian Agri-Food Trade Alliance]

Thank you, Mr. Chair.

Thank you for inviting me to speak on behalf of the Canadian Agri-Food Trade Alliance, the voice of Canadian agriculture and agri-food exporters.

CAFTA represents farmers, processors, and exporters from the beef, pork, grains, oilseeds, pulse, soy, malt, and sugar sectors. CAFTA members account for 90% of Canada's $54 billion agriculture and agrifood exports, supporting 940,000 jobs across Canada.

To illustrate the important contribution of our sectors to the Canadian economy, I'll give you some numbers. In terms of GDP, Canadian agriculture and agrifood exporters generate a direct and indirect GDP of $30 billion for agriculture and $65 billion for food manufacturing. In terms of employment, our sectors represent 352,000 direct and indirect jobs in agriculture, along with 588,000 direct and indirect jobs in food manufacturing.

The specific contribution of our sectors is similar to the direct contribution of entire sectors such as universities, financial investment services, and arts and entertainment, and is even much greater than the contribution of the aerospace manufacturing sector.

Competitive access to global markets through free trade agreements is our top priority, and at the top of the list are Europe, Japan, and the Asia-Pacific region. Access for Canadian agriculture and agrifood products is a core benefit for Canada in the CETA agreement. CAFTA has long been a champion of the CETA agreement and of increased trade with Europe. We have attended many negotiating rounds and have met regularly with the negotiators and the government to ensure that the negotiated outcomes would provide real benefits for our exporters.

CAFTA was able to immediately and unequivocally voice its support of the agreement in principle when it was announced in October 2013. We were also pleased by the conclusion of the negotiations earlier this year and were present in Brussels for the signing of the historic deal. CETA offers tremendous potential and secures substantial access to one of the world's few billion-dollar markets, and it does so ahead of our major competitors.

With a population of 500 million people, the EU is the second-largest importer of agrifood products in the world. In 2014 Canada shipped $3.2 billion in agriculture and agrifood products to the EU, led by wheat, soybeans, oilseeds, pulses, canola oil, frozen foods, and maple syrup. This is only about 5% of our total agrifood exports. Really, our exports should be much higher.

CAFTA has expressed support for CETA as the EU market has the potential to result in significant benefits for our exporters. The agreement could drive an additional $600 million in beef, $400 million in pork, $100 million in grains and oilseeds, and $100 million in sugar-containing products, as well as a further $300 million in processed fruits and vegetables. Taken together, this is $1.5 billion in new Canadian agrifood exports to the EU.

This is assuming that negotiated outcomes provide for commercially viable access. Canadian agrifood exports to the EU currently face high tariffs, with an average of 14%. On day one of implementation, tariffs on almost 40% of products will be eliminated immediately. The tariffs are not the only part of the access equation, and for some sectors, non-tariff barriers are as important as tariff reductions.

In CETA, Canada and the EU have committed to working together to advance a number of non-tariff issues, and today, unfortunately, it is clear that commercially viable access that was promised for all exporters may not be fully achieved for some time, and certainly not by the time the agreement is implemented. CAFTA has long stated that in order to achieve meaningful access, CAFTA members needed to have both tariff and non-tariff barriers fully resolved before CETA implementation.

To date, the issues that remain outstanding include the timely approval of biotechnology traits, the timely approval and re-evaluation of crop-input products, and the approval of meat-processing systems. Throughout 2014 and 2016 CAFTA has strongly encouraged the completion of respective legal and political processes related to CETA while simultaneously completing the technical discussions so that the stated benefits can be realized in the form of commercially viable access for our exporters.

We've stated that our support for the implementation of CETA will be based on the extent to which the negotiated outcomes result in commercially viable access. Last August our members met with officials from Global Affairs Canada and Agriculture and Agri-Food Canada to discuss the value of a CETA implementation plan for Canadian agriculture and agrifood exporters as part of a path forward.

Today, given the slow progress that the EU is making to resolve these issues, CAFTA gives conditional support to the implementation of CETA, with three conditions.

First, CAFTA will support the implementation of CETA if the Government of Canada commits to a well-resourced advocacy strategy and a comprehensive CETA implementation plan for Canadian agricultural and agrifood exporters to achieve real access for all exporters. Such plans will focus on ensuring that the negotiated outcomes result in commercially viable access, including but not limited to the grains and oilseed sectors and the meat sector through the establishment of high-level working groups.

Second, CAFTA asks that the committee today recommend in its report on Bill C-30 that the Government of Canada commit to the CETA implementation plan for Canadian agricultural and agrifood exporters to ensure that negotiated outcomes result in viable access for our exporters. It must be noted that this implementation plan will need to remain in effect until such time as the market access outcomes contained in the agreement become commercially viable for all of our exporters.

Third, CAFTA asks that the Government of Canada exert every effort to resolve as many of the outstanding technical barriers as possible during the interim period between now and the date the agreement is implemented.

In closing, more work needs to be done. Due to the strong potential and CAFTA's history of working collaboratively with government, CAFTA supports the passage of Bill C-30 and the implementation of CETA with the three conditions outlined above. CAFTA will be pleased to report to the committee on a regular basis on the progress achieved for Canadian agricultural and agrifood exporters as CETA gets implemented.

Thank you.

[Greg Northey]

We see the provisions in Bill C-30 as building blocks that go into the overall strategy. No one of them is the solution, but they certainly represent key directional ideas for how things should go. A provision that hasn't been discussed a lot is this idea that the agency was given powers in Bill C-30 to award expenses for non-performance, and the general concept of financial consequences when a railway fails to perform is an important one. It goes to this idea that we talk about financial consequences. The idea's there and it's been established, and now we can build on it.