Mr. Speaker, I rise today to speak to the government's response to the Senate's amended version of Bill C-49, the transportation modernization act.
The Conservatives know that the rail transportation system is vital to the economic well-being of our country's economy. The Prime Minister and his Minister of Transport have been dragging their heels on addressing the serious needs of our transportation systems and the impact on our economy.
By way of background, in 2014, then minister of transport, the member for Milton, launched the statutory review of the Canada Transportation Act a whole year early. After the Emerson report was presented to the Minister of Transport in December 2015, he then spent over a year consulting on the consultations before finally introducing Bill C-49 in May of 2017.
Despite the year delay between the Emerson report and the introduction of Bill C-49, the bill was seen as so important that the transportation committee came back a week early at the start of the fall session to hear from as many stakeholders as possible. The committee heard over 40 hours of testimony on the bill. It was necessary to hear that many hours of testimony on the bill because, despite the Liberals' claim otherwise, it was an omnibus bill.
The bill deals with airlines, air travel, ocean shipping, rail safety, and the railway and rail shipper relationship. It would make dramatic changes to the acts and regulations of each of these modes of transportation. The minister has continually spoken about the need to pass the bill as quickly as possible in response to the difficult situation shippers face due to the government's choice to allow the Fair Rail for Grain Farmers Act to lapse.
There have been several opportunities that would have facilitated the faster passage of the rail portion of the bill. For example, I introduced a motion to split the rail section out of Bill C-49, which would have allowed a more speedy review and passage of that section. Unfortunately, this suggestion was dismissed out of hand as the minister preferred to leave the bill in its omnibus form, despite the warnings that doing so would result in a slower process.
Over the course of the testimony at committee, witnesses told us they had numerous amendments they wanted to see made to the bill. However, they recognized that the government would not likely be open to hundreds of amendments, so most of the stakeholders focused their energy on just three or four key amendments they felt were absolutely necessary for the bill to be workable.
At the transport committee, my Conservative colleagues and I, along with our friend, the member for Trois-Rivières, put forward many of the focused, reasonable amendments suggested as a minimum by the witnesses. Sadly, the Liberals were tone deaf to these suggestions and rejected all but a few of our amendments. Further, of the few amendments that were accepted, in most cases a Liberal member had already proposed the same or a similar amendment.
Therefore, for the Liberals to say they accepted many of the amendments put forward by the opposition members at committee would be a stretch. It is not surprising to me that many of the amendments we proposed, and which the Liberals rejected, were picked up by our hon. colleagues in the other place.
This brings me to the Senate amendments and the Liberals' response to them. The Liberals are accepting one amendment and tweaking another, and both deal with the proposed new long-haul interswitching regime.
By way of background, the previous Conservative government had introduced extended interswitching to help grain farmers get their world-class products to the coast by encouraging competition in the rail service industry. Most, if not all, of the shipper and grain industry stakeholders I have met with over the past few years appreciate the extended interswitching remedy. They are disappointed that the extended interswitching was replaced in the bill with the complicated long-haul interswitching system.
Stakeholders fear that the new LHI system will not create the competitive environment that extended interswitching did. A major problem with LHI, raised by multiple witnesses, was that the shipper would be forced to use the nearest interchange point even if it were in the opposite direction of the product's final destination.
Essentially, this would mean that many shippers would have to send their products in the wrong direction in order to connect with a competing railway. Multiple stakeholders suggested a simple, common-sense fix for this problem, which was adding the line “in the reasonable direction” to the clause, ensuring that no shipper would have to send his or her product potentially hundreds of kilometres in the wrong direction to use the LHI remedy.
This change was so clearly reasonable and necessary that the member for Trois-Rivières and I introduced the same amendment to that line completely separate from one another. Unfortunately, the Liberal members on the committee voted against this simple fix. However, and this should not come as a shock, this small reasonable amendment was introduced and adopted by the members of the other place. Now the government is accepting the amendment. Why did it not accept our suggestion last October? Is the Senate amendment more acceptable because it did not come from opposition members? I certainly hope such partisanship is not the reason for this decision.
As I mentioned at the beginning of my speech, an efficient and well-functioning transportation system is critical to the Canadian economy. Many industries rely on rail to get their product to market, including Canada's mining, forestry, and manufacturing industries. In this motion, the Liberals are rejecting vital amendments that would help address systemic problems in our rail transportation system that would hamper the national and international competitiveness of the industries I just mentioned. The Liberals continue to ignore the good faith work of the opposition, the opinions of the other place, and a multitude of expert witnesses.
The Mining Association of Canada, representing shippers that account for 19% of all exported goods, released a statement delineating its concern and frustration regarding the minister's refusal to accept amendments to the final offer arbitration, or the FOA process. This process is one of the only remedies that captive shippers, meaning shippers who have access to only one railway, have when they are faced with uncompetitive rates.
This is what it had to say:
The amendment on FOA, introduced by... a member of the Independent Senator’s Group--and supported by all but one member of the Senate Transport and Communications Committee, was also supported by a coalition of eight captive shipper industry associations.
The amendment would have increased data transparency in the FOA process, which is the only remedy available to captive shippers to seek rates more like those that might prevail under conditions of effective competition, to address its erosion by CN and CP. [The minister's] response in a motion sent to the House of Commons erodes FOA even further, strengthening CN and CP, and leaving captive shippers at their mercy. In his motion to Parliament, [the minister] does not provide a rationale for rejecting the amendment. Instead, he repeats arguments regularly made by CN and CP and ignores or defies the state of the law regarding the purpose of FOA, undermining the ability of the most captive shippers to obtain competitive rates and levels of service.
François Tougas, a lawyer with McMillan LLP and a transportation expert, who also spoke at our transportation committee hearings on Bill C-49, gave this analysis of the minister's motion that we are debating today:
The motion tabled by the Minister of Transport not only rejects the Senate amendment, but further enhances railway market power over captive shippers. Rather than retaining the status quo, the motion asks the House to give credibility to an interpretation that (a) contradicts what Canadian courts have said about the FOA remedy and (b) further tilts the current imbalance in the FOA remedy in favour of the railways. The Minister's support for Class I railways inflicts additional harm on those few shippers who are permitted to access final offer arbitration (FOA). The Senate amendment would have entitled a shipper to obtain a determination of the railway's cost of transporting its goods to assist an arbitrator in FOA to determine whether to select the offer of the carrier or the shipper. Now, the Minister has publicly declared that FOA is not a cost-based remedy but “rather a commercially-based process to settle a dispute during a negotiation of a confidential commercial contract”. There are at least four things wrong with this statement:
First, the Federal Court of Appeal (and the Alberta Court of Queen's Bench) declared FOA to be a form of rate regulation and an arbitrator appointed under FOA to be a regulatory authority. Ignoring the courts, the Minister has adopted the losing position of the railways before the courts.
Second, railways can now quote the Minister in support of their position, that costs have nothing to do with rates. While the average businessperson will understand this statement to be incorrect, arbitrators will be asked to take it into account. Shippers who already are exposed to daunting odds in the use of FOA, will face yet another hurdle.
Third, nothing in the FOA remedy requires the outcome to be a negotiated confidential commercial contract. Whether a railway accepts a contract on the terms set out in an FOA award is 100% up to that railway. Because it can transport the goods under tariff, a railway does not have to enter into a contract.
Fourth, by failing to accept the Senate amendment, the Minister is condoning the railways' efforts to undermine the viability of the FOA remedy as a means of challenging rates and conditions of service that railways can impose unilaterally. The Senate amendment would have allowed a shipper to compare rates offered by the railway to rates that would prevail under conditions of effective competition. Instead the government motion will entrench the railways' market power or dominance over shippers who must use the railway to which they are captive for all or part of their shipments to domestic markets.
I know that these sections of Bill C-49 are very technical and, while they may never make the headlines, these small changes can mean success or failure for entire industries. The minister's rejection of this reasonable Senate amendment will have serious repercussions for the entire transportation system.
After weakening final offer arbitration, the Liberals have utterly eliminated the efficacy of the Senate's amendments regarding the Canadian Transportation Agency's “own motion” power. The other place amended Bill C-49 to give what is called “own motion” power to the Canadian Transportation Agency. With this power, the CTA would have been able to investigate broader breaches of a railway service's obligations rather than being limited to investigating only a specific complaint. This power would allow the agency to investigate systemic issues, for example, the recent failure of the railways to provide adequate service for grain shippers. However, the minister all but rejected this amendment.
This government motion makes the term “own motion” a farce. By definition, if the agency must seek political approval before beginning an investigation, it does not possess “own motion”. Further, the motion additionally erodes the term “own motion power” by stating that the minister can set any terms and conditions he or she deems appropriate.
François Tougas commented on this change as well. He stated:
The Minister's motion refers to a desire for appropriate government oversight but the Minister's proposed amendment contains no provision to ensure accountability in relation to this discretion to interfere in the work of an independent tribunal. Under the Minister's amendment, the government does not have to respond to an Agency request for authorization at all, or to do so within a reasonable time period, does not need to make its the decision to grant or withhold authorization public, does not need to disclose terms and conditions imposed on the Agency and does not need to provide a rationale for any decision to interfere with the Agency's exercise of its mandate.
The Minister already has the ability to direct an Agency inquiry at any time. The shipping community is facing repeated and prolonged service failures, and the extended failures over these past many months have not prompted the Minister to exercise that ability. The fact of these failures and the impact of these failures was regularly communicated, sometimes on a weekly or daily basis, and resulted in no action by the Minister. If the Minister was not willing to exercise that ability in this crisis, what would it take to authorize an Agency investigation?”
This amendment by the Liberals to the Senate's amendment is yet another blow to our shippers and its repercussions will be felt throughout the Canadian economy.
I will move on to locomotive video and voice recorders, or LVVRs, as we refer to them, and what the government is doing with the Senate's amendment on LVVRs.
While in committee, we heard from witnesses regarding the introduction of LVVRs. They voiced concerns with who would have access to this data and what it would be used for. The minister assured the committee that Transport Canada would protect the information and only allow it to be used in certain circumstances, including the term “proactive safety management”. The Liberals voted down an amendment brought forward by my NDP colleague and supported by the Conservatives to limit the accessibility of this data to only the CTA and only after an accident to be used for investigative purposes.
The Senate passed its own amendment, which also limited the accessibility of LVVR data to incident investigations. The minister has chosen to ignore this amendment as well. Let us be clear. This is a serious issue, so serious that the Privacy Commissioner took the unusual step of writing to the transport committee during its study to raise his concerns. I have quoted him in the past, but considering the obstinate refusal of the minister to accept any amendments in this area, it bears repeating. He stated:
Our underlying concern is that proactive safety management is a purpose that could be broadly interpreted in practice, potentially encompassing employee output measurement or other performance-related objectives. Train operators have pointed out that certain rail routes are extensive and could result in drivers being recorded continuously over 60-70 hours while operating the locomotive. In our view, allowing rail companies to have broad access to audio and video data for non-investigatory purposes has a greater impact on privacy, and could open the door to potential misuse of the data or function creep.
Further, Teamsters Canada, the union representing the employees who will be affected by LVVR, feels betrayed by the government. Don Ashley of Teamsters Canada put it this way: “Teamsters Canada Rail Conference are extremely disappointed in the Minister's continued callousness toward the rights of working Canadians and the erosion of privacy rights afforded to every other Canadian. This began with the disregard of the thoughtful amendments of the opposition parties in the House along with the opinion of the Privacy Commissioner and continued with his latest dismissal of the Senate's amendment regarding LVVR.”
It is not only rail where the minister has ignored expert witnesses. The highly publicized and so-called air passenger bill of rights was sent to the other place as more or less a blank slate. The minister intended for Transport Canada to govern by regulation, giving the government cover for any issues that may arise. This led air passenger rights advocates to call the section nothing more than some sort of sham. The Senate's amendments gave the air passenger bill of rights some degree of form. However, all the changes brought forward by the other place are opposed by the minister.
There is so much more I could say about the bill, for example, the shocking decision to remove transparency from the airline joint venture application process. However, in the interests of time, I will leave my comments there, and will state in closing that it seems, despite urging the quick passage of the bill, the minister and the party opposite have slowed progress in almost every way, resulting directly in the problems facing grain farmers over the last number of months.
As I already mentioned, the government allowed the fair rail for grain farmers act to sunset. It refused to split Bill C-49 into two bills to speed up its passage. It blocked many reasonable technical amendments, thereby forcing the other place to pass them and send the bill back to the House, and now it is refusing to accept many of the Senate's amendments. This refusal will only serve to slow down passage of the bill even further. If the House votes in favour of the minister's motion, Bill C-49 will then be returned to the Senate once again.
Shippers, especially farmers, need the government to pass legislation to help them now. They do not need the minister to play legislative ping-pong because he refuses to listen to stakeholders.
In conclusion, I move:
That the motion be amended by deleting all of the words after the word “That” and substituting the following:
“the amendments made by the Senate to Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts, be now read a second time and concurred in.