Bill C-30 (Historical)

Fair Rail for Grain Farmers Act

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

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

Fair Rail for Grain Farmers Act

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

moved that the bill be read the third time and passed.

Mr. Speaker, it is indeed a pleasure to report Bill C-30 back to the House.

The bill addresses the immediate needs of Canadian farmers, bulk shippers, and our overall economy. Our government knows our economy needs a supply chain that works today and tomorrow, with the capacity to move what is produced.

I was proud to speak to the benefits of this bill at the agriculture committee last month. I understand the committee had a very extensive series of meetings, including testimony from over 20 stakeholder groups. The committee heard from the entire supply chain from farm to port, and from a wide range of commodity shippers, from wheat to oats to barley, as well as from fertilizer, mining, and timber groups.

I was pleased to see a strong will around the table to work toward industry-led solutions focused on service and private sector responsibilities.

This is a piece of comprehensive legislation, and opposition and government together appreciate the non-partisan work of the committee to date, along with all of the witnesses that came forward. By working together, we were able to strengthen the bill, which, I would like to note, passed through the committee with unanimous support. I thank the committee members for that.

It was extremely unfortunate that the member for Edmonton-St. Albert turned a deaf ear to those farmers and shippers by attempting to deprive them of meaningful service level agreements, or SLAs. His point of order accomplished nothing but delaying the much-needed measures in the bill.

I want to be clear that these parliamentary games, while unfortunate, will not deter our government and the opposition from amending Bill C-30 to include service level agreements with reciprocal penalties. Testimony shows that the majority of stakeholders support the bill and what it sets out to accomplish.

During the committee's consultations, shippers of all commodities applauded this legislation, but they also asked the government to go further. They asked us to put more teeth into service level agreements to bring day-to-day accountability to the railways. Responding to this feedback, my parliamentary secretary introduced an amendment at committee on behalf of the government.

The first part of the amendment would give the Canadian Transportation Agency the authority to

...order the company to compensate any person adversely affected for any expenses that they incurred as a result of the company's failure to fulfill its service obligations...

By “company”, of course, we mean railways.

The amendment allows shippers who enter into service level agreements to be directly compensated for any expenses they incur as a result of the railways' failure to meet those service obligations. This includes compensation if the shipper is out of pocket for costs such as demurrage, contract defaults, or penalties. It goes further than the reciprocal penalties that many in the industry have requested, because it applies to any level of service complaint under the Canada Transportation Act. This is a market-based solution that would help get all bulk commodities moving and continuing to move.

The second part of the amendment reads:

...or, if the company is a party to a confidential contract with a shipper that requires the company to pay an amount of compensation for expenses incurred by the shipper as a result of the company's failure to fulfill its service obligations, order the company to pay that amount to the shipper

This measure is equally important, because it allows compensation to be paid within a commercial contract. It would encourage the shippers and railways to come to the table and set their own terms and agree on SLAs with reciprocal penalties, should they so desire.

The goal is to level the playing field and provide better tools for shippers when railway companies breach their service obligations.

We are working to continue to improve the efficiency, reliability, and predictability of the entire supply chain. I am pleased to say that strengthening SLAs has the support of industry, the provinces, and the opposition, and I thank them all.

Industry groups that support this needed amendment include, but are not limited to, the Inland Terminal Association of Canada, the Barley Council of Canada, the Canadian Canola Growers Association, Cereals Canada, the Mining Association of Canada, the Canadian Fertilizer Institute, and the Freight Management Association of Canada. It covers all of the spectrum.

The importance of the bill cannot be understated. I recently returned from a trade mission to South Korea and Japan, where, alongside Canadian industry, I spoke directly with international buyers of Canadian grains about problems incurred in our immediate past. I assured these buyers that our government was not taking this situation lightly and explained the details of Bill C-30 to directly address their concerns. These buyers were pleased to hear that our government was taking this needed action to ensure Canada's reputation as a reliable grain shipper, and they thanked our government for acting quickly.

Farmers and all shippers need our government to pass the bill, as amended, as expeditiously as possible. Our economy and Canadian jobs are relying on us to act.

Crop yields show every sign of continuing to grow through better technology, higher yielding, more disease-resistant varieties and better agronomic practices.

Shippers of all bulk commodities that rely on rail are growing their businesses exponentially and are demanding increased capacity to get those products to a burgeoning marketplace. That is why we must move forward to strengthen the supply chain now for the next crop year and beyond.

Bill C-30 holds solutions that would benefit the entire supply chain. I urge everyone in the House to work together to pass this important bill, with this needed amendment, as quickly as possible.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, we do indeed support the bill, although we do not believe it goes far enough.

Certainly, the minister's point that the movement of grain is important to the economy, and trade is important, it makes no sense to go out there and sign trade deals when we cannot get our product to market. Transportation is functional to marketing and we believe the bill goes some distance to assure that transportation takes place in a timely fashion.

However, the bill falls very short in one area, and that is price transparency for producers. We know now that the spread between the export price and the price paid to producers is much greater than it was last fall. In fact, some would say that producers were getting 87% of the export price last fall, and now they are getting about 48%. This means the grain companies or someone in the system is profiting extensively at the expense of the farmers.

When the minister brought in legislation to allow this new selling system to take place, why did he not incorporate in either this bill or in previous legislation the requirement that the logistics would be in place to ensure that there would be proper movement, proper transparency in terms of pricing to farmers so farmers could be assured they would get their fair share of the market price?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Speaker, the gist of what the member for Malpeque has spoke about, and I agree with most of what he said, is the basis price. This is the price that the grain companies would offer a farmer on that day, at that time and in that place. This is reflective of their inability to move that grain to market. It was a market signal to say “If we're going to buy your grain, we're going to buy it so cheaply. We can afford to store it”.

The good news is less than 1% of Canada's record production in western Canada last year was sold at that lower basis price. Those are actual numbers from the Grain Commission. This is good news in that farmers were not forced or pinched to sell at that level, but we need to see more transparency in those numbers.

There are some holes in the way that is projected now so that farmers are not necessarily right up to speed, should they so desire it. They are all very much technically inclined, and they will know at a moment's notice the price being offered. They need to know what the export price is and what they are being offered in their own community.

They now have the ability to move that grain much farther than they did under the old single desk system under the Wheat Board. They are not confined to a permit book that forced them to sell to one particular point of entry. They can actually put it on their truck and take it where they need to now. That has given us some competition to keep that price where it should be.

We are seeking ways, through regulatory packages attached to this legislation, that will give that transparency to farmers on a day-to-day basis.

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, I thank the minister for his kinds to the opposition in that we did say we would sit down and work together, and we have managed to do that, albeit we have hit a bump in the road, it would seem with the piece that, to use the minister's words, put some teeth in the bill. My colleagues in the Liberal Party and I were trying to put a whole mouthful of teeth in the bill, if we could, but unfortunately we did not quite get there.

I have a couple of specific questions, because I will be rising on debate, so I will leave some of my comments until then. Could the minister report to the House the most recent statistics about how many railcars were delivered by CN and CP last week and how much grain was moved to port? Does he know whether those ports were the Port of Vancouver, or was some of it heading north or was some of it heading south?

I recognize it is a bit technical in the sense that he may not have all those numbers absolutely precise. I appreciate the fact that if he has to round that up, I will never hold him to that if he were off by a few cars here and a few tonnes there. I would not come after the minister in question period and say that he told me it was this or that. I recognize that this question is somewhat spontaneous. However, I think there is a need to know how many cars are supposed to be there, because the ramp up should be now complete for CN and CP.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Speaker, I want to thank the NDP and the member for Welland, who sat on the committee at times, for the great work that they did in moving this forward as expeditiously as we have. We need to take it from the red zone and past the goal post. I am looking forward to that today.

With respect to his specific point on the number of cars and the amount of grain moved, the railways are within the target that was set for them. I do not have a corridor-by-corridor breakdown in front of me, but the vast majority of the grain is moving to Vancouver where the ships are sitting. Grain is moving to Thunder Bay. As I understand it, there are four boats in store at Thunder Bay right now and another 10 to 15 coming up through the canals and the lakes now to take advantage of what is in store at Thunder Bay. The overabundance of boats that were in Vancouver are being loaded and moved out as expeditiously as can be done. Also, a small amount of grain is starting to move into the southern corridors.

Part of this legislation would give Mark Hemmes of Quorum Corporation the oversight capacity and far more powers to give us that breakdown week-by-week, corridor-by-corridor. He was never able to give us the corridor specificity going south or east of Thunder Bay. We will now have that captured with the regulations under this legislation.

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

Mr. Speaker, why does the minister believe the Canadian Transportation Agency is the appropriate body to award compensation to shippers. He undoubtedly knows that the agency is a regulator with no experience with respect to the assessment of damages. Nor does it have the procedures in place to properly assess damage claims that are put to it.

I am curious as to why the chair ruled out of order the amendments proposed to create a compensatory scheme inside the Canadian Transportation Agency without giving it any mechanism to properly assess claims.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Speaker, when the agency is assessing these claims, it would be assessing what is spelled out in the contracts that have been defined between the railways and the shipper of whatever commodity it happens to be. The great people at the CTA have the economic skills and the ability to do exactly that. The Minister of Transport has the right people in place to make those adjudications should they be desired and needed.

We are hopeful that the railways, with this extra tool in the kit of the shippers, will not have to take advantage of that adjudication. However, should they do it, the CTA is more than capable of handling that.

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, let me start by suggesting for the government, as the minister has acknowledged, the hard work by this side of the House in working on a piece of government legislation. When both parties, the opposition parties and the government, seize the opportunity to work on legislation, that can happen. This is a prime example of how the House can actually function when it comes to legislation, without the need to ram it through under time allocation or closure. That should be the model the government members look to when they bring in legislation, that perhaps there is a sense that the other side can work together with them on it.

I would suggest that the Conservatives should look to the Minister of Agriculture and Agri-Food in the future, in the sense of seeing how that could happen, as well as looking to those of us on the opposition benches who may be responsible for those particular portfolios, who could help them do that. Where it is not feasible, then let the House do what it normally does, and that is to have debates on legislation so we can improve it.

What we witnessed today with the Speaker's ruling is that when we get into a time crunch, albeit a time crunch that we put on ourselves, we make mistakes. As members of the committee, opposition and government, we agreed to try contract the time because of the emergency need of Prairie farmers to move grain. Even though we agreed to get this done expeditiously, mistakes happened, at least from the perspective of the Speaker, who ruled that it was an inadmissible amendment. The dilemma was that with the time frame in which we were dealing a mistake slipped through, but was then caught.

The member for Edmonton—St. Albert pointed it out to the Speaker, which is the member's right to do, and the Speaker ruled in an appropriate fashion. That should be a cautionary tale to all of us. When we rush legislation, mistakes get made, and we need to find ways to correct them.

Even though we are trying to accomplish something, we end up with a mistake on a procedural matter, not of legislation. The opposition parties agreed that we needed to find a way to get compensation all the way back to the farmer, not just necessarily the grain company. However, I use the pun intentionally when I say that sometimes a half a loaf is better than no loaf at all. In the parlance of people in the grain industry, they would be happy to sell some grain to make half a loaf because at the moment there is far too much grain on the Prairies. The expectation is that by the end of this crop year, which is July 31, there will still be 22 million tonnes of this year's grain left over when next year's crop comes in, so we will still see this need to move.

Clearly the legislation, from our perspective, moved the goal posts somewhat. Unlike the minister's analysis of being in the red zone and needing to get across the goal line to score a touchdown, I would suggest we tried an onside kick and we did not quite catch it. We are literally at a point where we have moved a bit, but we did not get to where we needed to get. Speaking for the New Democrats as the opposition, we have come to the realization and conclusion that this legislation needs to move forward. We intend to continue to support the legislation and move it forward.

It is important, albeit not as much as we would like, but in life we cannot get all of the things we want. However, this should be a cautionary tale for the government side. We want to work together and help the government with legislation. However, perhaps those members ought to also understand that when we put forward amendments, they are not frivolous, but are actually helpful and there are times when maybe they should accept them. I recognize the Conservatives do not have to take them all, and perhaps sometimes none, but when it comes to this type of legislation, we are working together. The minister has very graciously acknowledged that, which I appreciate and extend back to the minister.

His co-operation from the get-go was absolutely first rate. He ensured that we were informed ahead of time, so we knew it would come. When we are given that type of briefing, we greatly appreciate that. All opposition parties were given that, which was absolutely important to do because we worked together to do this. The next step is that sometimes our amendments are worth considering.

I would hope in the future that there will be other opportunities to do this again. It would go a long way to making things function the way they should, and we could actually take the next step where we really do consider all amendments from all parties. They may well indeed be worthwhile and helpful.

Let me just say, on behalf of the opposition, that we intend to support the bill at third reading, which was our intention from the beginning. The commitment to the minister was to try to help in the best way we knew how. We believe we have fulfilled and kept the promise we made to the minister at the agriculture committee. As the loyal opposition, we said we would do that, and we intend to do that.

I am hopeful that we will see the bill progress into law, so we can start to help farmers across the Prairies. This is what it is all about. It is about helping those farmers on the Prairies who have been suffering for a long period of time, and some may continue to suffer. I think the minister and I recognize that, and I am sure my colleague from the Liberal Party also recognizes that. Unfortunately, there will be some farmers who will get caught in this, for whatever reason. It will not be a good situation for probably a minority of farmers, which is the real pity of it all.

I look forward to the bill being implemented and to other opportunities where the government extends a welcoming helpful hand. We look forward to working with government members, and if the legislation would indeed help farmers, we will be there to make sure farmers get that help.

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

Mr. Speaker, this has been a long process. I mean, this should have been done a year ago, of course, when the first rail bill came forward. If the government had listened to the recommendations at that time, we would not be sitting here. Even when the bill before us came forward, if some of the amendments had been in the bill, we probably would have had unanimous consent here today, but we do not.

We even heard from the Conservative members for Cypress Hills—Grasslands and Prince Albert, who wanted more teeth in the rail act, but they are not there. We also heard that from our witnesses when they came with their suggestions.

My question for the member is this. How important would it have been to have something in the bill on the short lines and producer cars, to make a change in how the transportation of grain would affect and help the farmers?

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, my colleague is absolutely right. I think one of the major pieces we were trying to help the government understand and get into the legislation was this whole idea of short-line railroads and producer cars.

I realize it is a little technical, but basically a producer car is a rail car into which the farmer loads the grain. He does not have to go to an elevator, but it is parked on the railroad siding. Short-line railroads are exactly that: short lines, which are short pieces of rail that are privately held and not run by the major railways. Those could have been a major component in making sure there was more of a competitive situation for farmers, because if a farmer loads his own car and sends it out to the Port of Vancouver, he is not paying the elevating charge to have it handled that he normally would.

I think this was a missed opportunity, but in life that quite often happens. My colleague and I, and our colleagues on the opposition side at committee, stressed the need for short lines to be involved and producer cars to be made available, because the stories we heard from farmers were that they were not available.

I think that was a missed opportunity for the government, which is why I said earlier in my speech that I would hope in future, when we are saying things that we believe are helpful and constructive, that the government actually hears what we are trying to say in a non-partisan way. We are trying to make this a better bill, because that is what it is about. We agreed from the beginning that we would work together.

However, my colleague has pointed out the short line and producer cars, which is exactly the piece that would have made the bill better, and it would not have been ruled out of order. It would have been a clear amendment. We lost that opportunity, but it does not negate the fact that we need to move this along because some of it will help farmers, not to the degree we would like, but at least it gets us moved down the field a bit.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I did not want to pass on the opportunity to be able to express what I believe has been a great deal of frustration for our Prairie farmers.

It is sad to see literally piles of wheat in fields because the storage bins are full. That is throughout the Prairies. Then in the Pacific Ocean, we have empty ships, sitting and waiting.

There is obviously a huge gap that needs to be filled in between those. That is where the government has really dropped the ball. It is important that we have legislation here today, but we do not believe it goes far enough. There is so much more that the government should have done to protect the interests of our farmers.

My question for the member is as follows. Would he not agree that it is great to see the sense of co-operation in getting this bill passed today, but that the government could have and should have done a whole lot more in terms of making it better legislation? We have lost that opportunity, at least in the short term, to be able to address many of the other needs of farmers that could have been incorporated in better legislation overall. Would the member agree with that?

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, the member is correct.

Part of what we were trying to accomplish, and the reason we said to the minister at the beginning that we would be helpful in moving the legislation is that we wanted to do exactly that. We wanted to find a way to help farmers who literally had millions of tonnes of grain sitting on the Prairies.

There are two truths to that. Some of it is in bins, for sure, and some of it is in elevators, but a lot of it was sitting on the ground, literally on the Prairie ground. Some was covered by tarps. I witnessed when I was in Saskatchewan not long ago that some of the tarps are gone.

When there is a bit of a thaw and rain, the wheat gets spoiled. A farmer said that I should come back to Saskatchewan to hunt deer, because they are going to be the fattest deer ever seen due to the amount of grain they will eat, which is just sitting on the ground.

It is true; they will be. The dilemma with that is that it is now contaminated. It cannot be sold for feed because of the contamination. We lost some time, and we lost some opportunities.

My colleague, the member for Sydney—Victoria is right. This could have happened through the rail service agreement a year ago, but it did not happen. We cannot look back and say it should have been, could have been, and we hoped it would be. It did not happen.

Now we are at a point where we have moved it a bit but not nearly enough. There were some things we suggested that would have moved it even further. They were not taken up by the government side. Maybe in hindsight it is looking at them and wishing it had, but that was, again, an opportunity missed.

I look forward to getting this moved forward, to at least getting this amount done for farmers. Farmers are looking for a signal from all of us here that we understand the dilemma they face. It is real. It is not just a statistical number. It is real for them and their families, and for many of them it is a question of their livelihood and going into further debt when they cannot move the grain. If they cannot sell it, they do not get paid. That is the reality of not moving their product.

The bigger issue across the country, of course, and the minister addressed it during his speech, is reassuring our international customers. We saw through testimony at the committee that Japan had said it was going to buy somewhere else because Canada was not a reliable supplier. The Canada brand has become “not reliable supplier”. That is a shame.

Farmers across this country have spent decades building that Canada brand to the point where we were seen as producing the finest quality wheat in the world and as the most reliable supplier, on time with good delivery. Now we are seeing that erode so quickly.

We all know, in a competitive marketplace, how quickly customers get frustrated and simply say they can go somewhere else, and because they can go somewhere else, they do not need to get it from us. That is a shame.

We are going to have to work hard on that. Farmers will redouble their efforts, no doubt. I would look to the government and suggest it is going to have to redouble its efforts, as well, to ensure that at the end of the day we find those customers and convince them that they need to come back, because we can and will be again not only the best in the world but a reliable supplier of that great grain that is grown on the Prairies.

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

Mr. Speaker, I am curious as to whether the hon. member believes that the Canadian Transportation Agency is, in fact, the right body to issue compensation or whether claims for compensation ought to go to a different tribunal, court of law, or arbitration? Why does he believe that the CTA has the expertise to adjudicate claims when, before the amendment to Bill C-30, that was not something the CTA had ever been called upon to adjudicate?

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, there were a number of suggestions as to where the decision body would be placed. New Democrats made some suggestions about where we thought perhaps the arbitration process should be, but those amendments were not taken up.

All I can say to the member for Edmonton—St. Albert is that we made some suggestions that the government did not like or did not agree with. We felt that perhaps one of the models to use was the CGC, the Canadian Grain Commission, which actually has an arbitration process now. We felt perhaps that would be the body where we would put it. The amendments in my name talked about the process being adjudicated through CGC, but we included all the way back to farmers, not just to the handling companies or the shippers, as the amendment calls for.

At the end of the day, New Democrats did not win that, so we felt we needed to find a way to get some sort of compensation from the railways to some folks in the system. That is where we ended up, but unfortunately, you correctly raised the issue, which is within your rights to do as a member of the House, and the Speaker has ruled accordingly, and that is where we find ourselves today.

[The Acting Speaker, Barry Devolin]

Before we resume debate, I would like to remind the hon. member and all others—I believe this is the fourth time in less than 24 hours—that they need to address their comments to the Chair, not directly to their colleagues. The four times were not just this member, but he and his colleagues.

Resuming debate, the hon. member for Sydney—Victoria.